Secretary, Department of Families, Housing, Community Services and Indigenous Affairs and Evtushenko

[2011] AATA 596

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2011] AATA 596

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No 2011/0840

GENERAL ADMINISTRATIVE DIVISION		)
Re		Secretary, Department of Families, Housing, Community Services and Indigenous Affairs

Applicant

And Lana Evtushenko

Respondent

DECISION

Tribunal Senior Member A K Britton

Date26 August 2011

PlaceSydney

Decision The decision of the Social Security Appeals Tribunal is set aside. Ms Evtushenko is ineligible to receive the baby bonus in respect of her son.

....................[sgd]..........................

Senior Member A K Britton

CATCHWORDS

SOCIAL SECURITY – family assistance – baby bonus – eligibility – FTB child – absence from Australia – proper construction of A New Tax System (Family Assistance) Act 1999 s 24(4) and (5) – language of provision clear and unambiguous – applicant ineligible as taken to have been absent from Australia for more than three years – decision under review set aside

A New Tax System (Family Assistance) Act 1999 (Cth) – ss 3(1), 21(1), 21(2)(c), 22, 24, 24(1), 24(4), 24(5), 36(2)(b)(i)

Acts Interpretation Act 1901 (Cth) – s 15AB

Project Blue Sky v Australian Broadcasting Authority (1997) 194 CLR 355; [1998] HCA 28

Re Rahim v Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2010] AATA 946

REASONS FOR DECISION

Senior Member A K Britton

1.The Secretary of the Department of Families, Housing, Community Services and Indigenous Affairs seeks review of a decision made by the Social Security Appeals Tribunal (SSAT) that Ms Lana Evtushenko was eligible to receive the “baby bonus” in respect of her son who was born in October 2009. In making that decision, the SSAT reversed an earlier decision made by a Centrelink Authorised Review officer that Ms Evtushenko was ineligible to receive the “baby bonus” in respect of her son.

2.The “baby bonus” is a form of “family assistance” payable to persons who meet the criteria set out in the A New Tax System (Family Assistance) Act 1999 (Cth) (the Act): s 3(1). To be eligible for the baby bonus a person must, among other things, be eligible for family tax benefit (FTB), another form of family assistance, within 26 weeks of the birth of the subject child: s 36(2)(b)(i). The key issue to be decided in this matter is whether Ms Evtushenko was eligible for family tax benefit in the 26-week period following the birth of her son, i.e. October 2009 to April 2010. If the answer to this question is yes, she will be eligible to receive the baby bonus, otherwise she will not.

Background

3.The facts in this matter are largely agreed. Ms Evtushenko, an Australian citizen, lived in Australia from birth until August 2000, when she left to travel and work overseas. In the intervening period, before returning to live permanently in Australia in October 2010, Ms Evtushenko visited Australia on six occasions for short visits. 

4.In October 2009, Ms Evtushenko gave birth to a son in the UK. 

5.In 2009, Ms Evtushenko and her partner decided to return to live in Australia on a permanent basis and in April 2009 purchased a house in Sydney.  A combination of factors — difficulties in finding suitable employment in Australia and their son’s ill health — delayed the couple’s return until October 2010.

6.In October 2010, Ms Evtushenko lodged a claim with Centrelink for the baby bonus. That claim was made within time.

Eligibility criteria for FTB  

7.S 22 of the Act defines an FTB child as follows:

When an individual is an FTB child of another individual

(1)  An individual is an FTB child of another individual (the adult) in any of the cases set out in this section.

Individual aged under 16

(2)  An individual is an FTB child of the adult if:

(a)  the individual is aged under 16; and

(b)  the individual is in the adult's care; and

(c)  the individual is an Australian resident, is a special category visa holder residing in Australia or is living with the adult; and

(d)  the circumstances surrounding legal responsibility for the care of the individual are those mentioned in paragraph (5)(a), (b) or (c).

8.There is no argument that Ms Evtushenko’s son satisfies the above criteria and is “an FTB child”. It is also agreed that since her son’s birth, Ms Evtushenko satisfied the eligibility criteria for FTB set out in s 21(1), namely having at least one FTB child; being an Australian resident; and having a tax rate greater than nil, calculated by  applying the formula set out in s 21(2)(c) of the Act.

9.Section 24 of the Act is headed “Effect of certain absences of FTB child etc. from Australia”.  Section 24(1) deals with the absence of an FTB child from Australia and provides: 

Absence from Australia of FTB or regular care child

(1)  If:

(a)  any of the following applies:

…

(ii)  a child born outside Australia is an FTB child at birth;

… and

(b)  the child continues to be absent from Australia for more than 3 years;

during that absence from Australia, the child is neither an FTB child, … at any time after the period of 3 years beginning on the first day of the child's absence from Australia.

10.Because Ms Evtushenko’s son has been absent from Australia for less than three years s 24(1) has no application.  Accordingly by the operation of s 22 of the Act, at all times since his birth he has been an “FTB child of Ms Evtushenko”.

Does s 24(4) operate to make Ms Evtushenko ineligible for FTB?

11.The issue in dispute is whether, as the Secretary asserts, s 24(4) operates to make Ms Evtushenko ineligible for FTB in the 26 weeks after the birth of her son while she and her partner were living in the UK.  Sections 24(4) and 24(5) are relevant and provide:

(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).

12.Ms Evtushenko visited Australia on six occasions prior to returning to live permanently in Australia in October 2010. The Secretary asserts that because each visit was for less than 13 weeks, by the operation of s 24(5) Ms Evtushenko was taken not to have returned to Australia for the purpose of s 24(4). Accordingly, by the combined operation of ss 24(4) and (5), Ms Evtushenko is taken to have been absent from Australia since August 2000. 

13.Ms Evtushenko contends that the meaning given to s 24(4) by the SSAT should be adopted. The SSAT decided that the three-year disqualifying period imposed by s 24(4) only commences when a person who is absent from Australia becomes eligible for FTB by having an FTB child.  The SSAT reasoned:

As a general rule the Tribunal would follow policy unless it had “cogent reason not to do so”. In this case, the Tribunal concluded that there was cogent reason to not follow the Guide’s policy at 2.1.2.30. The purpose of section 24(1) of the Act is to enable family tax benefit to be payable in respect of a child for three years whilst the parent and the child are overseas. Section 24(4) states that the maximum period an individual can be eligible for family tax benefit is three years from the first date of their absence from Australia. Evidently there is a tension between these two subsections. However, eligibility must exist before absence can exclude one from eligibility. Ms Evtushenko commenced her absence from Australia having no eligibility for family tax benefit; one cannot be eligible for the benefit without a family tax benefit child. The birth of [Ms Evtushenko’s son] on 28 October 2009 created this eligibility.

The Tribunal has determined that the calculation of the three year period under section 24(4) must start on the date that Ms Evtushenko became eligible for family tax benefit, this being 28 October 2009. This approach is supported by the Administrative Appeals Tribunal (AAT) in the case of Rahim and SDFHCSIA [2010] AATA 946 where it was concluded that any time absent overseas prior to becoming eligible for family tax benefit should not be considered when applying section 24 of the Act (at paras 102-106).

14.I agree with the SSAT that it is not necessary, or indeed appropriate, to resort to the Guide to Social Security Law to determine the proper construction of s 24(4). It is not one of the extrinsic materials defined in s 15AB of the Acts Interpretation Act 1901 (Cth) as a document to which reference may be had in construing an ambiguous provision. It is a policy document produced by the Executive, not the Parliament. The task of determining the proper meaning of a statutory provision falls to the Tribunal. As the High Court emphasised in Project Blue Sky v Australian Broadcasting Authority (1997) 194 CLR 355 the proper approach to statutory interpretation is contextual rather than strictly literal. McHugh, Gummow, Kirby and Hayne JJ said in their joint judgment (at 381-2, 384):

The primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all the provisions of the statute. The meaning of the provision must be determined "by reference to the language of the instrument viewed as a whole". In Commissioner for Railways (NSW) v Agalianos, Dixon CJ pointed out that "the context, the general purpose and policy of a provision and its consistency and fairness are surer guides to its meaning than the logic with which it is constructed". Thus, the process of construction must always begin by examining the context of the provision that is being construed.

A legislative instrument must be construed on the prima facie basis that its provisions are intended to give effect to harmonious goals. Where conflict appears to arise from the language of particular provisions, the conflict must be alleviated, so far as possible, by adjusting the meaning of the competing provisions to achieve that result which will best give effect to the purpose and language of those provisions while maintaining the unity of all the statutory provisions. Reconciling conflicting provisions will often require the court "to determine which is the leading provision and which the subordinate provision, and which must give way to the other". Only by determining the hierarchy of the provisions will it be possible in many cases to give each provision the meaning which best gives effect to its purpose and language while maintaining the unity of the statutory scheme.

15.I am unable, however, to agree with the proposition that the purpose of s 24(1) is to “enable FTB to be payable in respect of a child for three years whilst the parent and child are overseas”.  The provision simply states that an FTB child born overseas will remain an FTB child for a period of up to three years. Having an FTB child is but one of a number of criteria an adult claimant must satisfy to be eligible for FTB.

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 s 24(4) should be construed as meaning that “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.

17.Nor do I agree that the decision of Re Rahim v Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2010] AATA 946, supports the conclusion reached by the SSAT about the operation of s 24(4). In any event, the decision is not binding on me and, more significantly, the Member’s reasons in that case do not provide any assistance in construing s 24(4).

18.By the combined operation ss 24(4) and (5), Ms Evtushenko has been absent from Australia since August 2000.  It follows that throughout the 26-week period following the birth of her son, Ms Evtushenko had been absent from Australia for more than three years and therefore, by the operation of s 24(4), is ineligible for FTB.  It follows that she was also ineligible for the baby bonus.

19.In reaching this decision I have accepted and taken into account that throughout the 26 weeks following the birth of her son, Ms Evtushenko and her partner were prevented from realising their plan to return to Australia because of their son’s life threatening condition which made travel impossible.  While I have considerable sympathy for Ms Evtushenko’s position, the Act does not confer a discretionary power that would allow me not to apply s 24(4) in this case.

20.For these reasons, I have decided that the correct and preferable decision is that Ms Evtushenko was ineligible to receive the baby bonus in respect of her son and to set aside the decision made by the SSAT.

I certify that the 20 preceding paragraphs are a true copy of the reasons for the decision herein of Senior Member A K Britton

Signed:         ...................................[sgd].....................................
  Associate to Senior Member A K Britton

Date/s of Hearing:  10 August 2011
Date of Decision:  26 August 2011

Solicitor for the Applicant:         S. Mantaring, Centrelink Program Litigation and Review Branch

Respondent self-represented