Secretary, Department of Social Services and Mark McGee
[2014] AATA 53
•4 February 2014
[2014] AATA 53
Division GENERAL ADMINISTRATIVE DIVISION File Number(s)
2013/4323; 2013/4326; 2013/4327
Re
Secretary, Department of Social Services
APPLICANT
And
Mark McGee
RESPONDENT
DECISION
Tribunal Deputy President RP Handley
Date 4 February 2014 Place Sydney The decision under review is set aside and a decision substituted that Mr McGee was neither eligible for the Baby Bonus in respect of his daughter, nor was he eligible for the Family Tax Benefit prior to 19 October 2012.
................[sgd]........................................................
Deputy President RP Handley
Catchwords
SOCIAL SECURITY – Family assistance – Family Tax Benefit – Baby Bonus – FTB child – meaning of living with – Child born in Cambodia – Applicant a citizen and resident of Australia – Child not living with the Applicant prior to the child’s arrival in Australia – Child not a FTB child of the Applicant during the 26 week period – Decision under review set aside
Legislation
A New Tax System (Family Assistance) Act 1999 (Cth) ss 3(1), 21, 22, 36(2)
Social Security Act 1991 (Cth) s 7(2)
Cases
Australian Education Union v Department of Education and Children’s Services [2012] HCA 3
Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634
Sheehan and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2011] AATA 611
Shu Sun and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2006] AATA 487
Secondary Materials
Department of Social Services, Family Assistance Guide
REASONS FOR DECISION
Deputy President RP Handley
The Secretary of the Department of Social Services (the Secretary) has applied to the Tribunal for the review of a decision of the Social Security Appeals Tribunal (SSAT) to set aside a decision of an authorised review officer (ARO) and delegate of the Secretary to refuse Mr McGee’s claim for the Baby Bonus and for the Family Tax Benefit (FTB) prior to 19 October 2012.
BACKGROUND
Mr McGee, who is aged 59, is an Australian citizen and resident. He first met his future wife, Mrs McGee, in December 2008 while visiting Cambodia. In July 2011, Mr McGee and Mrs McGee became engaged to marry and travelled to Australia. During her stay, Mrs McGee became pregnant. She returned to Cambodia on the expiry of her visa on 19 October 2011.
In January 2012, Mr McGee travelled to Phnom Penh where he rented an apartment for the duration of his two week stay. In March 2012, Mr McGee arranged to lease a fully furnished three bedroom unit in Phnom Penh for Mrs McGee and members of her supporting family to live in. The lease was signed by Mrs McGee. In early April 2012, Mrs McGee gave birth to Mr McGee’s daughter in Phnom Penh. Mr McGee left Australia on 18 April 2012 to be with his partner and daughter and stayed with them in the Phnom Penh apartment. Mr McGee had booked a flight for 18 April 2012 because this was about the time Mrs McGee was expected to give birth.
On 26 April 2012, Mr McGee applied for Australian citizenship for his daughter. On 27 April 2012, he returned to Australia to fulfil work commitments in Nowra. His daughter was granted Australian citizenship on 5 June 2012. On 16 October 2012, Mr McGee travelled to Cambodia, returning to Australia with Mrs McGee and their daughter on 19 October 2012.
On 28 November 2012, Mr McGee lodged claims with Centrelink for the Baby Bonus and FTB in respect of his daughter. Mr McGee and Mrs McGee were married in Australia on 3 February 2013. On 17 January 2013, Centrelink rejected his claim for the Baby Bonus and for FTB for the 2011/2012 financial year on the ground that his daughter was not his FTB child within 26 weeks of her birth. However, Centrelink granted him FTB from 19 October 2012, the date that Mrs McGee and his daughter arrived in Australia. On 4 April 2013, Mr McGee claimed a lump sum payment of FTB for the 2011/2012 financial year. This claim was rejected on the same basis.
Mr McGee applied for a review of these decisions. On 9 April 2013, an ARO upheld the decisions but, on 18 July 2013, the SSAT set aside that decision and remitted the matter to the Secretary with directions that Mr McGee’s claims for the Baby Bonus and FTB were to be reassessed on the basis that his daughter was his FTB child within 26 weeks of her birth.
On 28 August 2013, the Secretary applied to the Tribunal for a review of the SSAT’s decision.
THE RELEVANT LAW & ISSUES
The issues for the Tribunal to decide are, first, whether Mr McGee was eligible to receive the Baby Bonus in respect of his daughter and, second, whether he was eligible to receive FTB for the period prior to his daughter’s arrival in Australia on 19 October 2012.
Eligibility for the Baby Bonus and FTB is governed by the A New Tax System (Family Assistance) Act 1999 (Cth) (the Family Assistance Act). Eligibility for the Baby Bonus is linked to an individual’s eligibility for the Family Tax Benefit (FTB). At the relevant time, s 36(2)(aa) required that the child in respect of whom eligibility for the Baby Bonus was sought was “an FTB child of the individual”, and s 36(2)(b)(i) required that the individual (in this instance Mr McGee) was “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”.
The relevant 26 week period is from the time of Mr McGee’s daughter’s birth until early October 2012. This links to the second issue for the determination by the Tribunal - whether Mr McGee was eligible for the FTB for the period prior to his daughter’s arrival in Australia on 19 October 2012.
An individual’s eligibility for FTB is determined in accordance with s 21 of the Family Assistance Act. Relevantly, s 21(1)(b)(i) states that for the individual to be eligible for FTB the individual must be “an Australian resident”. An ‘Australian resident’ was at that time defined in s 3(1) of the Family Assistance Act as having the same meaning as in the Social Security Act 1991. Section 7(2) of the Social Security Act defines an ‘Australian resident’ as follows:
(2) An Australian resident is a person who:
(a) resides in Australia; and
(b) is one of the following:
(i) an Australian citizen;
(ii) the holder of a permanent visa;
(iii) a special category visa holder who is a protected SCV holder.
There is no dispute that Mr McGee resided in Australia at the relevant time and was an Australian citizen. However, for Mr McGee to be eligible for the Baby Bonus and FTB in respect of his daughter she was required to be an ‘FTB child’ as defined in the Family Assistance Act. An ‘FTB child’ is defined relevantly as follows:
22 (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).
The Secretary submits that the Mr McGee’s daughter did not satisfy the requirement in s 22(2)(c). Mr McGee does not contend that his daughter was an Australian resident. The issue for the Tribunal, therefore, is whether Mr McGee’s daughter was ‘living with’ him during the relevant period.
The term ‘living with’ is not defined in the Act. However, the term is referred to in the Family Assistance Guide (the FA Guide) which, like the Social Security Guide, is intended to assist departmental decision-makers understand the law and its application. In Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634, the Tribunal stated that decision-makers should apply Government policy unless that policy is unlawful, or produces an unjust result in the circumstances of the particular case.
The FA Guide provides some guidance as to the application of the ‘living with’ requirement at 2.1.2.10 and also at 2.1.2.30, relevantly as follows:
2.1.2.10. …
General residence requirements
In deciding whether a child is 'living with' the individual for the purposes of the residence requirements, the ordinary meaning of 'living' should be used, that is, residing, dwelling or occupying a place as a domicile. The period of time that the child has been staying with the individual may also be considered. A short period of staying with the child or visiting the child while the child is still residing overseas is not likely to constitute living with the individual.
…
2.1.2.30. …
Child born overseas
A person can claim FTB and/or baby bonus for a child who is born overseas while they are outside Australia, subject to other eligibility criteria. The claim must however be lodged within the allowable claim period. The residence requirements for FTB and baby bonus are satisfied as long as at least one parent is an Australian resident who is temporarily absent from Australia.
If a person returns to Australia without the child, they may still be eligible for a payment if the child was living with them at any time after the birth. They may also be entitled to FTB and/or baby bonus if the child is an Australian resident or SCV holder residing in Australia as long as the child is still in their care.
Example 1: Sarah and Kate are a couple who leave Australia temporarily for 18 months. Four months after departure, Sarah has a baby and lodges a claim for FTB and baby bonus after the birth. As Sarah and the baby are only temporarily absent from Australia, they may be eligible for FTB and baby bonus.
Note: Sarah need not wait until her return to Australia to lodge the claim as the baby bonus claim must be lodged within 52 weeks of the child's birth.
Example 2: Jeffrey leaves Australia temporarily to travel overseas. While overseas he meets and marries a non-Australian resident who subsequently has his child. As the birth parent is not residentially qualified for payment, Jeffrey may lodge a claim for FTB and baby bonus within the applicable time limits.
…
EVIDENCE
Mr McGee and Mrs McGee provided Statutory Declarations dated 23 December 2013 and Mr McGee gave evidence at the hearing. Mr McGee said he is self-employed and runs a small mechanical repair business within the grounds of the Naval base at HMAS Albatross just outside Nowra. He provides a service to Navy personnel, which he has been doing for about 20 years. He does not have a formal lease of his premises but more of an informal licence. Mr McGee said that for about the past 10 years he has also had casual employment with Wilson’s Security. He works for the company as a security guard at Woolworths Nowra three nights a week. Mr McGee said that without his repair business and his casual employment, he would have no income and would be unable to meet his many financial commitments.
Mr McGee stated that he met Mrs McGee in December 2008 while visiting Cambodia. They maintained contact after he returned to Australia and Mr McGee visited Cambodia again in December 2009 spending further time with Mrs McGee. During this time, they decided that they wanted to be together permanently. In January 2011, they obtained Mrs McGee’s parents’ “blessing” for their marriage but, in March 2011, the Cambodian Government passed a new law prohibiting any foreign man aged over 50 from marrying a Cambodian woman. After discussion with Mrs McGee’s family, it was agreed that Mr McGee and Mrs McGee would become engaged in Cambodia but marry in Australia. They held an engagement party in Cambodia on 17 July 2011 following which they flew to Australia on 19 July 2011.
Mrs McGee became pregnant while in Australia but after the Department of Immigration and Citizenship refused to extend Mrs McGee’s three month visa, she returned to Cambodia on 19 October 2011.
Mr McGee said he travelled to Cambodia in January 2012 and rented an apartment in Phnom Penh for the duration of his stay. Part of his goal in renting the particular apartment was to check out the area near where Mrs McGee was to have their baby, to identify secure accommodation where she and his child could live after the birth. On 19 January 2012, Mrs McGee applied for a prospective spouse visa. In March 2012, Mr McGee arranged and paid for the lease of a similar apartment in the same apartment block for Mrs McGee to live in. However, because Mr McGee was in Australia at the time, Mrs McGee signed the lease. Mr McGee said it was a joint decision to lease the apartment. His wife could have stayed at her cousin’s unit but Mr McGee wanted her to be safe.
Mrs McGee gave birth to their daughter in early April 2012 and on 18 April 2012 Mr McGee flew to Phnom Penh to join her in the leased apartment. Mr McGee said while he was there:
… I was involved in all day-to-day activities associated with caring for [their daughter] . We attended medical appointments and went shopping. I helped to bathe [their daughter] and played with her. [Mrs McGee] and I slept in the same bed and we lived together as a family.
On 26 April 2012, Mr McGee applied for Australian citizenship for their daughter and on 27 April 2012 he returned to Australia. Mr McGee said he had to return to Australia in late April because he would otherwise have lost his business and casual employment, for which he is expected to provide a service. While he was staying in the apartment with Mrs McGee, he said that her parents were also staying there. Her aunty, who had previously been staying there, returned to her own apartment elsewhere.
Mr McGee said that while he was in Australia and Mrs McGee was in Cambodia she would consult him on all decisions about their daughter, for example about attending medical appointments. He paid all the costs associated with supporting Mrs McGee and their daughter and provided Mrs McGee with a card linked to his bank account for her living expenses. They maintained daily contact by telephone, email or Skype. After about three months in the apartment, Mrs McGee moved to another apartment nearby.
In July 2012, Mr McGee paid for his niece, who had attended the engagement party in Cambodia, to travel to Phnom Penh during her university holiday to spend time with Mrs McGee and their daughter. In this way he felt, although he could not be with Mrs McGee, he was there in spirit. His niece helped Mrs McGee with her visa application and accompanied her when she attended the Australian Embassy in Phnom Penh.
Mr McGee said that on 16 October 2012, he travelled to Cambodia and returned to Australia with Mrs McGee and their daughter on 19 October 2012. He and Mrs McGee were married in Australia on 3 February 2013. He said Mrs McGee was granted a visa enabling her to return to Australia in about June 2012 (A Centrelink letter dated 9 April 2013 refers to Mrs McGee being granted a Prospective Marriage, Subclass 300 Visa on 24 May 2013). He had been told by Centrelink that he had 52 weeks from the time of his daughter’s birth with which to lodge a claim for the Baby Bonus and Family Tax Benefit. The documents provided to the Tribunal include a copy of a page from the Department’s website that states “the baby bonus claim must be lodged within 52 weeks of the child’s birth”. Mr McGee said that as a result of this advice, he was not aware of the need for any haste in Mrs McGee coming to Australia with their daughter or his lodging a claim. He was anxious to ensure she was mentally ready to come to Australia. Her welfare was very important to him and, initially, she needed the support of her family.
Mr McGee said a further factor in delaying their coming to Australia was the need for their daughter to complete a world standard immunisation program before travelling. Her last injection for this program was on 4 October 2012. Mr McGee said that had he known of the 26 week period for eligibility for the Baby Bonus, he might have been able to bring the immunisation program forward a little to enable them to be in Australia before the expiry of the 26 weeks. As it was, their arrival in Australia was only 12 weeks after the end of the 26 week period.
Mr McGee said that once his relationship with Mrs McGee became serious, it was always their intention to live in Australia. While he was with Mrs McGee and their daughter in the apartment in Phnom Penh in April 2012, he regarded that as his home.
Mr McGee said prior to approaching the Illawarra Legal Centre to help with his appeal to the Tribunal, he had no legal assistance. He has no experience in such matters and is a motor mechanic by trade. He found the Centrelink documentation confusing and Centrelink staff gave him different advice. At the time, he did not know how best to proceed.
SUBMISSIONS
Applicant
Dr Thompson, for the Secretary, submitted that the ‘living with’ requirement in s 22(2)(c) of the Family Assistance Act is closely connected with the notion of ‘residence’ as defined in s 7(2) of the Social Security Act. However, it is likely Parliament deliberately used the words ‘living with’ because they have no legal colour. He contended that although Mr McGee spent 9 days (18 April to 27 April 2012) in Phnom Penh with Mrs McGee and their daughter, this should not be considered to be ‘living with’ them. It was not Mr McGee’s (imputed) intention to treat the apartment where he was staying in Phnom Penh as his home - his habitual place of abode. He referred to the Tribunal decision in Sheehan and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2011] AATA 611 (Sheehan) a case, he contended, with materially similar facts. In that case, the child (who was granted Australian citizenship) and her mother lived in the Philippines where the applicant travelled on a visitor visa. While the applicant provided financial support, the Tribunal said (at [22]) that the temporary arrangements made by the applicant to visit his son (spending 33 days there) were not what was contemplated by the ‘living with’ requirement in s 22(2)(c) of the Family Assistance Act. (See also Shu Sun and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2006] AATA 487.)
Dr Thompson submitted that Mr McGee’s short visit to Cambodia in April 2012 does not satisfy the ‘living with’ requirement in s 22(2)(c). It was only a temporary arrangement. The ‘living with’ requirement was not satisfied until the family reunited in Australia in October 2012.
Doctor Thompson referred to various dictionary definitions of the term ‘living’. The Concise Oxford Dictionary’s fourth meaning for ‘live’ is “to dwell or reside”. The Free Dictionary (thefreedictionary.com) (fourth) meaning of ‘live’ is also “to reside; dwell”, and ‘live with’ is to “dwell with”. The Merriam-Webster fourth meaning of ‘live’ is “to occupy a home; dwell”, and the stated synonyms are “abide, dwell, reside”. The World English Dictionary fourth meaning of ‘live’ is “to reside or dwell”. Dr Thompson submitted that the use of the word ‘dwell’ in these stated definitions indicates that ‘living with’ involves physical proximity to the person lived with.
Dr Thompson said that it was always Mr McGee’s intention to live in Australia with Mrs McGee and their child. The new law passed by the Cambodian Government in March 2011 forbade his marrying Mrs McGee in Cambodia. In the circumstances, the apartment in Phnom Penh was only ever a temporary arrangement while Mr and Mrs McGee were engaged and for the time before and after the birth of their child.
Respondent
Mr Turton, for Mr McGee, noted the relevant parts of paragraphs 2.1.2.10 and 2.1.2.30 of the FA Guide (see above). The latter paragraph indicates that a person whose child is born overseas and who returns to Australia without the child may still be eligible for FTB and/or Baby Bonus if the child was “living with them at any time after the birth”. The former paragraph indicates that even a short period of time spent with the child overseas could be considered sufficient to meet the ‘living with’ requirement. The paragraphs indicate that the facts of each case must be carefully considered.
Mr Turton noted that the Family Assistance Act is beneficial legislation. He submitted that the term ‘living with’ is not the same as ‘residing’ and requires a different legal test. If it had been the legislature’s intention that the two terms were interchangeable then just the term ‘residing’ would have been used. He submitted the term ‘living with’ concerns whether the applicant and child are living together – it is about the connection or relationship between the applicant and the child – as opposed to where the applicant or the child habitually reside, which represents their connection with a place. It is not uncommon for couples to be separated for reasons of employment. In the present case, it was Mr McGee’s obligation to provide an ongoing service to personnel at HMAS Albatross that required him to be physically absent from his daughter for such an extended period of time.
Mr Turton submitted that the facts of Sheehan were materially different. There was no intention that the applicant’s child should live in Australia. In Mr McGee’s case, it was always his intention for him, Mrs McGee and their daughter to be together. However, they were subject to the age barrier imposed by Cambodian law and the migration process in which they had to engage for Mrs McGee to obtain a visa to live in Australia. While the rented apartment in Phnom Penh was not a permanent home, Mr McGee was nevertheless ‘living with’ Mrs McGee and their child during his time there in April 2012.
Mr Turton also noted that the child was conceived in Australia, but Mrs McGee was unable to remain in Australia under the terms of her visa and was unable to apply for a residence visa while in Australia. She and Mr McGee decided that she should therefore return to Cambodia for the birth of their child and that Mr McGee would provide financial support. Mr Turton noted that Mr and Mrs McGee’s intention was always that their daughter should live in Australia with Mr McGee.
Mr Turton said the Baby Bonus was intended to pay the costs associated with the birth of a child. Mr McGee has been responsible for the costs associated with his daughter’s birth. He paid for the rental accommodation in Cambodia and her living expenses. He noted Mr McGee’s evidence that he was confused by the eligibility and process requirements for the Baby Bonus and FTB and he was not aware of the 26 week time constraint in respect of eligibility.
Discussion
The issues and relevant legislation are set out above. To be eligible for the Baby Bonus and FTB prior to 19 October 2012 Mr McGee was required to be ‘living with’ his daughter during the relevant period of 26 weeks following her birth, between early April 2012 and early October 2012. This turns on the meaning of the term ‘living with’ in s 22(2)(c) of the Family Assistance Act. As the parties recognise, the term is not defined in the legislation unlike the word ‘resides’, the meaning of which is explained in section 7(3) of the Social Security Act 1991. Where words are not defined or explained in legislation the approach to be adopted in interpreting those words is to look at ‘the ordinary and grammatical meaning of the words of the provision having regard to their context and legislative purpose’; Australian Education Union v Department of Education and Children’s Services [2012] HCA 3, at [26]. Dr Thompson referred to dictionary definitions of the words ‘live’ and ‘living’ which commonly include the synonyms ‘abide’ or ‘dwell’, as well as, in this context confusingly, ‘reside’. The addition of the preposition ‘with’, however, adds another dimension to the meaning, requiring that the FTB child lives with the adult individual.
The relevant meaning of the words ‘abide’ and ‘dwell’ has a temporal element suggesting a degree of permanence to the arrangement. In my view, this is apposite in the context of the Family Assistance Act and claims thereunder. The time during which the arrangement has been operational may be relatively short, if the arrangement has only recently commenced. Provided the intention behind the arrangement is ongoing, and, therefore, has a degree of permanence, then the temporal element would likely be satisfied.
This appears to accord to the relevant provisions in the Family Assistance Guide. The general residence requirement stated in paragraph 2.1.2.10 requires consideration to be given to the period of time that the child has stayed with the individual adult and, while stating that a short period of time is not likely to constitute living with the individual, it does not preclude this. Paragraph 2.1.2.30, which expressly addresses the situation where a child is born overseas, states that the fact of the adult returning to Australia without the child does not make the adult ineligible for payment if the child was living with the adult at any time after the birth. These paragraphs indicate that careful consideration needs to be given to the facts of each case.
In my view, the meaning of the words ‘living with’ in s 22(2)(c) indicates that the living arrangement must have had a degree of permanence or, at least, been ongoing at the relevant time.
In Sheehan, the Tribunal found the 33 days spent by the applicant with his child and the mother of his child in the Philippines was a temporary arrangement of a kind that was not contemplated by s 22(2)(c) of the Family Assistance Act. In that case, the applicant had no entitlement to reside in the Philippines and could only visit the country under a tourist visa. He was unable to marry the mother of his son and might, for that reason, have been unable to obtain a permanent visa. While I agree with Mr Turton that some of the material facts are different to those of the present case, the arrangement itself, the adult spending time with his son in another country where that arrangement did not reflect the usual dwelling arrangement, is not dissimilar.
I accept that Mr McGee was prevented, during the relevant 26 week period, from habitually dwelling with his child by financial constraints, and therefore the need for him to work in Australia, by the constraint of him only being entitled to a tourist visa in Cambodia, by restrictive Cambodian marriage laws, and by Mrs McGee still being in the process of obtaining the necessary visa to enable her to reside in Australia. Nevertheless the arrangement which involved his staying with Mrs McGee and their child in a leased apartment in Phnom Penh was of a temporary nature, intended for the period from not long before the child’s birth until the child and mother were united with Mr McGee in Australia. I recognise that Mr McGee covered all Mrs McGee’s and their child’s expenses during this period, including, having made the necessary arrangements for the leasing of the apartment. I also accept his evidence that he provided emotional support for Mrs McGee and that any decision-making was made jointly with her. That, however, does not change my view of how the words ‘living with’ should be applied in this case.
I am sympathetic to Mr McGee’s position but find that his daughter is not a FTB child because she was not, during the relevant period (the 26 weeks) living with her father, notwithstanding that they spent 9 or 10 days together in April 2012.
I am, however, concerned about the information provided to Mr McGee about his eligibility for the Baby Bonus and FTB and the advice he received from Centrelink staff. His evidence suggests to me that he is rightly persistent in pursuing his entitlements and took steps to find out how he would be eligible. If he was misled by incorrect information or wrong advice such that this could be said to be defective administration, this is a matter he may be able to pursue elsewhere, for example, by making a claim under the Compensation for Detriment Caused by Defective Administration Scheme. I note from the Tribunal documents that the ARO initially thought Mr McGee was qualified for the Baby Bonus and FTB from either birth of his child or the 18 April 2012 but referred the matter to a Centrelink Specialist Adviser (New Parents Program Section) for confirmation. The Specialist Adviser stated that the Baby Bonus and FTB were not payable because the child was not ‘living with’ Mr McGee within 26 weeks of the child’s birth.
DECISION
45. The decision under review is set aside and a decision substituted that Mr McGee was neither eligible for the Baby Bonus in respect of his daughter, nor was he eligible for the Family Tax Benefit prior to 19 October 2012.
I certify that the preceding 45 (forty -five) paragraphs are a true copy of the reasons for the decision herein of Deputy President RP Handley ..................[sgd]......................................................
Associate
Dated 4 February 2014
Date(s) of hearing 28 January 2014 Date final submissions received 28 January 2014 Solicitors for the Applicant I Turton, Illawarra Legal Centre Solicitors for the Respondent Dr S Thompson, Sparke Helmore Lawyers
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