Secretary, Department of Families, Housing, Community Services and Indigenous Affairs and Dagmara Rydel
[2012] AATA 143
•2 March 2012
[2012] AATA 143
Division GENERAL ADMINISTRATIVE DIVISION File Number(s)
2011/2976
Re
Secretary, Department of Families, Housing, Community Services and Indigenous Affairs
APPLICANT
And
Dagmara Rydel
RESPONDENT
DECISION
Tribunal Deputy President Robert Nicholson, Deputy President
Date 2 March 2012 Place Perth Decision:
1.The decision of the Social Security Appeals Tribunal made on 24 June 2011 is set aside.
2.There be substituted for that decision a decision that the respondent is not eligible to receive the baby bonus in respect of her child Lucia.
.....(sgd) Mr R Nicholson..................
Deputy President Robert Nicholson, Deputy President
Catchwords
SOCIAL SECURITY – family assistance – baby bonus – eligibility – FTB child – absences from Australia - applicant ineligible as taken to have been absent from Australia for more than three years – decision under review set aside.
Legislation
A New Tax System (Family Assistance) Act 1999 (Cth) – ss24(4) and (5).
Cases
Secretary, Department of Families, Housing, Community Services and Indigenous Affairs and Evtushenko [2011] AATA 596
REASONS FOR DECISION
Deputy President Robert Nicholson
2 March 2012
DECISION UNDER REVIEW
The decision of the Social Security Appeals Tribunal on 30 June 2011 to set aside the Centrelink decision to reject Ms Rydel’s claim for baby bonus and substitute the decision that the respondent Ms Rydel is eligible for baby bonus for Lucia.
These reasons are drawn significantly from the written submissions of the applicant, the respondent Ms Rydel having expressed her agreement with the facts as set out in the applicant’s facts and contentions dated 31st October 2011.
FACTS
Ms Rydel first departed Australia on 16 January 2004 and returned to Australia from 1 December 2004 to 27 December 2004 and from 13 December 2007 to 2 January 2008.
Ms Rydel gave birth to Lucia on 11 April 2010 in Pertuis, France.
Most recently Ms Rydel and Lucia returned to Australia on 22 December 2010.
Ms Rydel contacted Centrelink and attempted to claim family tax benefit (FTB), baby bonus (BBY) and child care benefit (CCB) on 18 January 2011.
Ms Rydel commenced a separate claim for FTB, BBY and CCB on 10 February 2011 which was recorded as lodged on 28 March 2011.
On 8 April 2011 Centrelink wrote to Ms Rydel confirming her FTB claim had been granted and advising that she could not be paid BBY as she had been absent from Australia for more than 3 years.
Ms Rydel requested a reconsideration of the decision on 19 April 2011 which was affirmed by the original decision maker on 21 April 2011.
Ms Rydel requested a review on 29 April 2011 and on 27 May 2011 a Centrelink authorised review officer affirmed the decision.
On 24 June 2011 the Social Security Appeals Tribunal (SSAT) set aside the decision to reject Ms Rydel’s claim for BBY and substituted its decision that Ms Rydel was eligible for BBY for Lucia.
On 25 July 2011 the Applicant lodged an application for review with the Administrative Appeals Tribunal (AAT).
ISSUES
The issues to be decided in this appeal are whether Ms Rydel was eligible for family tax benefit in respect of Lucia within 26 weeks of Lucia’s birth and so eligible to be paid baby bonus in respect of Lucia.
APPLICANT’S CONTENTIONS
The relevant legislation is contained in the Social Security Act 1991 (the SS Act) and A New Tax System (Family Assistance) Act 1999 (the FA Act).
Section 36 of the Family Assistance Act details when an individual is eligible for baby bonus in respect of a child. Section 36 relevantly provides, in part, as follows:
36 When an individual is eligible for baby bonus in normal circumstances
(1) An individual is eligible for baby bonus in respect of a child in any of the 4 cases set out in this section.
Parent of child
(2) First, an individual is eligible for baby bonus in respect of a child if:
(a) the individual is a parent of the child; and
(aa) the child is an FTB child of the individual; and
…
(b) the individual either:
(i) is eligible for family tax benefit in respect of the FTB child at any time within the period of 26 weeks starting on the day of the child’s birth; or
(ii) would be so eligible except that the individual’s rate of family tax benefit, worked out under Division 1 of Part 4, is nil; and
...
The Secretary does not contest that Ms Rydel is a parent of Lucia and submits that paragraph 36(2)(a) of the FA Act is satisfied.
The Secretary does not contest that Lucia is an FTB child as described in subsection 22(2) of the FA Act and submits that paragraph 36(2)(aa) is satisfied.
The Secretary contends that paragraph 36(2)(b) of the FA Act can only be satisfied if Ms Rydel is eligible for FTB in respect of Lucia at any time within the period of 26 weeks starting on the day Lucia was born, on 11 April 2010, i.e. at any time by 11 October 2010 (or would be so eligible except her rate is nil).
The Secretary submits that eligibility of an individual for FTB in normal circumstances is prescribed by Subdivision A of Division 1 of Part 3 of the FA Act.
Section 21 of the FA Act sets out when an individual is eligible for FTB, and section 22 of the FA Act sets out when a child is an FTB child of another individual (the adult). Section 24 of the FA Act describes the effect of certain absences from Australia.
The Secretary does not contest that Lucia meets the requirements contained in subsection 22(2) of the FA Act to be an FTB child of Ms Rydel.
The Secretary does not contest the SSAT’s findings that Ms Rydel was an Australian resident and that Lucia was her FTB child and satisfies the criteria in subsection 21(1) of the FA Act.
However, the Secretary contends that the main issue to be decided is the effect of subsections 24(4) and 24(5) on Ms Rydel’s eligibility for FTB, and therefore her eligibility for baby bonus.
The Secretary submits that subsection 21(2) of the FA Act provides that, despite satisfying subsection 21(1), Ms Rydel is not eligible for FTB if another provision in Subdivision A applies.
The Secretary submits that section 24 of the FA Act is a provision within Subdivision A of Division 1 of Part 3 of the FA Act and is relevant in Ms Rydel’s case. The Secretary submits that, under section 24 of the FA Act, an individual’s eligibility for FTB may be affected by certain absences from Australia. Relevantly subsections 24(4) and (5) of the FA Act say:
24 Effect of certain absences of FTB child etc. from Australia
...
Maximum period of eligibility for family tax benefit while individual overseas
(4)If an individual leaves Australia, the maximum period for which the individual can be eligible for family tax benefit during that absence from Australia is the period of 3 years beginning on the first day of that absence.
(5)If:
(a) an individual who has been absent from Australia for more than 13 weeks, but less than 3 years, returns to Australia; and
(b) the individual leaves Australia again less than 13 weeks later;
the individual is taken not to have returned to Australia for the purposes of subsection (4).
The Secretary contends that the application of subsections 24(4) and 24(5) of the FA Act are the substantive issues for consideration by the Tribunal in deciding if Ms Rydel satisfies paragraph 36(2)(b) of the FA Act and to be eligible for baby bonus for Lucia.
In Confidential and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2010] AATA 26 the AAT considered the application of subsections 24(1) to (3) in relation to an absence from Australia in excess of 3 years in respect of an FTB child. The Secretary contends that the current application is concerned with the effect of s 24(4) and (5) on Ms Rydel’s eligibility for FTB.
In Rahim and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2010] AATA 946 the AAT considered Mr Rahim’s absences from Australia, prior to making an effective claim on his return to Australia, irrelevant as no eligibility for FTB existed prior to him returning to Australia and the claim did not relate to this period. The AAT concluded that eligibility must exist before an absence can preclude eligibility under section 24(4) of the FA Act.
In Secretary, Department of Families, Housing, Community Services and Indigenous Affairs and Evtushenko [2011] AATA 596, which concerned eligibility for baby bonus, and is similar on the facts to the present application, the AAT considered the effect of subsections 24(4) and 24(5) on Ms Evtushenko’s eligibility for FTB. Ms Evtushenko departed Australia in August 2000, returning for short periods (of less than 13 weeks), until returning to live in Australia permanently in October 2010, when she claimed baby bonus for her child, born overseas in October 2009. The AAT decided that s 24(4) was to apply to Ms Evtushenko’s first absence from Australia. By the combined effect of subsections 24(4) and (5), it decided that Ms Evtushenko was absent from Australia since August 2000. It found that throughout the 26 week period following the birth of her son, Ms Evtushenko had been absent from Australia for more than 3 years. Subsection 24(4) operated to make her ineligible for FTB within 26 weeks of her child’s birth, and she was therefore not eligible for baby bonus for her son (see paragraph 18 of that decision)
Senior Member Britton found:
16. Section 24(4) provides that if the adult claimant leaves Australia they will be eligible for FTB for a maximum period of three years commencing on the first day of “that absence”. I cannot agree with the SSAT, that s24(4) should be construed as meaning ‘that absence’ only comes into effect when the adult claimant becomes eligible for FTB by having an FTB child. The language of s 24(4) is clear and unambiguous. The error in Ms Evtushenko’s submission and the SSAT’s decision is that it conflates the capacity to become eligible for FBT and the eligibility itself. Section 24(4) is concerned only with potential eligibility. It provides a grace period of three years in which the potential may become actual. When, after three years of continuous absence, that time elapses, a person who remains absent from Australia loses the potential eligibility he or she had enjoyed until he or she returns to Australia for the relevant length of time.
Ms Rydel left Australia on 16 January 2004. The Secretary contends that, in Ms Rydel’s case, ‘the first day of that absence’ for the purposes of subsection 24(4) was 16 January 2004. By the operation of subsection 24(4) of the FA Act, Ms Rydel had a potential eligibility for FTB while absent from Australia for a maximum period of 3 years beginning on 16 January 2004, i.e. until 15 January 2007.
The Secretary contends that, as Ms Rydel’s returns to Australia from 1 December 2004 to 27 December 2004, and from 13 December 2007 to 2 January 2008, were each for less than 13 weeks, then under subsection 24(5), she is not taken to have returned to Australia for the purposes of subsection 24(4) of the FA Act.
The Secretary contends that the maximum period for which Ms Rydel could be eligible for FTB during that absence was 3 years, beginning on 16 January 2004, and so she ceased to be eligible for FTB from 16 January 2007 in accordance with subsection 24(4) of the FA Act, until she returned to Australia on 22 December 2010. Ms Rydel’s return to Australia on 13 December 2007 was for less than 13 weeks and so, by the operation of subsection 24(5), she was not taken to have returned to Australia for the purposes of subsection 24(4).
The Secretary contends that Ms Rydel did not return to Australia again until 22 December 2010 which is more than 26 weeks after the birth of her child, Lucia, on 11 April 2010.
The Secretary further contends that Ms Rydel’s eligibility for FTB was affected by subsections 24(4) and 24(5) in deciding whether Ms Rydel was eligible for baby bonus for Lucia. The Secretary contends that Senior Member Britton’s interpretation of subsections 24(4) and 24(5) in Evtushenko was the correct interpretation of those provisions, and, further that the decision should be followed in the current application, being similar on the facts.
The Secretary also contends that, by the operation of subsections 24(4) and 24(5), Ms Rydel was not eligible for family tax benefit for Lucia at any time within 26 weeks of the birth of Lucia on 11 April 2010, and so paragraph 36(2)(b) of the FA Act is not satisfied and Ms Rydel is not eligible for baby bonus in respect of Lucia.
The Secretary therefore seeks an order that the decision of the SSAT on 24 June 2011 is set aside and a decision substituted that Ms Rydel is not eligible for the baby bonus in respect of Lucia.
REASONING
In my opinion the applicant has correctly expressed the effect of the law. The applicant Secretary has taken into account the effect of subsections 24(4) and 24(5) and it is those provisions which apply to exclude the claim by Ms Rydel. I accept that Senior Member Britton has correctly expressed the effect of these provisions as quoted above.
Accordingly I conclude that the decision of the SSAT made on 24 June 2011 should be set aside and a decision substituted that Ms Rydel is not eligible for the baby bonus in respect of her child Lucia.
I certify that the preceding 39 (thirty nine) paragraphs are a true copy of the reasons for the decision herein of Deputy President Robert Nicholson.
...(sgd) T Freeman.................
Associate
Dated 2 March 2012
Date(s) of hearing Matter heard on the papers
3
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