Smith and Anor; Secretary Department of Family and Community Services and Indigenous Affairs and

[2007] AATA 1117

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2007] AATA 1117

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No Q200600468

GENERAL ADMINISTATIVE DIVISION		)
Re		SECRETARY DEPARTMENT OF FAMILY AND COMMUNITY SERVICES AND INDIGENOUS AFFAIRS

Applicant

And  KAYLEEN SMITH

Respondent

And JOSEPH CARUSO

Third Party

DECISION

Tribunal  Ms M J Carstairs, Senior Member

Date 9 March 2007

Place Brisbane

Decision The Tribunal affirms the decision under review.

.................[Sgd].............................

Senior Member         

CATCHWORDS

SOCIAL SECURITY – Family Tax Benefit – pattern of care – use of bus records to evidence care arrangements – Tribunal satisfied that pattern of care established and applicant entitled to FTB – no need to consider special circumstances and waiver of debt – consideration of correct and preferable decision – decision under review affirmed.

A New Tax System (Family Assistance) Act 1999 s 22; 25; 59

Family Assistance Guide

Drake v Minister for Immigration and Ethnic Affairs (1979) 46 FLR 409

Secretary Department of Social Security v Payne (1999) 54 ALD 357

McDonald v Director General of Social Security (1984) 6 ALD 6

Re Nowicz and Secretary Department of Family and Community Services (2001) 33 AAR 337

Wade v Secretary Department of Family and Community Services [2004] FCA 1660

REASONS FOR DECISION

9 March 2007    Ms M J Carstairs, Senior Member

1.      The Secretary to the Department of Family, Community Services and Indigenous Affairs seeks review of a decision made by the Social Security Appeals Tribunal concerning the proportions of family tax benefit (FTB) payable to Kayleen Smith and Joseph Caruso, as based on the respective care given by them to their daughter Alycia, born in 1992, in the period July 2003 to mid-January 2006 (the relevant period).  The Social Security Appeals Tribunal decided that during the relevant period, Ms Smith exercised 14% of Alycia’s care.

2.      Where FTB is claimed by more than one person, care of a young person and who is giving it, forms the basis upon which FTB is worked out.  A minimum requirement for any payment of FTB is 10% of care.  Otherwise the other care-giver will be eligible for 100% of the FTB. 

3.      Ms Smith has three children.  She has shared care of each of her children with the children’s fathers and/or other relatives of the children.  Ms Smith says that prior to 2005 she was unaware that she might have an entitlement to claim any FTB in these circumstances.

4.      It is only the care arrangements for Alycia which are the subject of this review- not the arrangements for Ms Smith’s other children.  For Alycia, a major part of the early years of care, certainly from 1998, were provided by the paternal grandmother, Mrs Anna Caruso.  Mr Caruso, until last year, lived at his parents’ house.

BACKGROUND

5.      Until Ms Smith made her claim in 2005 Mr Caruso was being paid 100% of the FTB.  When Ms Smith claimed, it was on the basis, as she put it in her claim, that she had about 14% of the care for Alycia from July 2003.  She in fact believes that this was always the amount of her involvement, but the legislation - A New Tax System (Family Assistance) Act 1999 (the Act) - only allows a limited backdating of claims such as this, made after the event. 

6.      Mr Caruso had been invited by Centrelink to respond to Ms Smith’s new claim about shared care. He did not do so within the prescribed 14 days, and therefore Centrelink decided the case without his input.  Ms Smith’s claim was granted and, accordingly, was backdated to 2003.  Apparently, Mr Caruso’s FTB for Alycia was cancelled entirely – it being a requirement of the Act that people in receipt of benefits respond to correspondence requiring a reply.  It seems that once Mr Caruso realised that his payments had been cancelled he asked Centrelink to re-open the matter. 

7.      Centrelink carried out an internal review of the decision and decided that they had been wrong and that Ms Smith had less than a 10% share of the care of Alycia.  This meant that she had a NIL entitlement.  The next stage of review, at the Social Security Appeals Tribunal, concluded the reverse, and reinstated the original Centrelink decision that Ms Smith exercised 14% of the care of Alycia. 

8.      It is from this outcome at the Social Security Appeals Tribunal that the Secretary now appeals, on the grounds that the Social Security Appeals Tribunal “erred” in their decision – although the source of error was not identified.  

THE ISSUES

9.      The issues before me ultimately relate to ascertaining what pattern of care was in place for Alycia during the relevant period.  If I find myself in agreement with the Social Security Appeals Tribunal – their decision being the one here under review by force of s142(2) of the Act – then no other matters arise for consideration and their decision will be affirmed.

10.     However if the Social Security Appeals Tribunal made an incorrect decision about Ms Smith’s care of Alycia, then as a result Ms Smith would be required to pay back the FTB received by her for the relevant period.  That would raise the question of whether any or all of such a debt should be waived on the grounds of special circumstances.  I note at this point that there was some discussion about another ground of waiver – on the basis of error by Centrelink (s97 of the Act) – but any debt here does not arise solely from a Centrelink administrative error, which renders this alternative ground of waiver unavailable.

THE LEGISLATION

11.     To qualify for FTB a person must have the legal responsibility for the child and be caring for the child.  When disagreements arise, working out percentages of care by one party or another can be fraught with difficulty.  Those difficulties are well demonstrated in this case. 

12.     I firstly observe in relation to the applicable legislative provisions, that when conducting any review of a decision I must reach the correct or preferable decision by examining the evidence and taking into account the statutory requirement in issue.[1]  There is no formal onus on an applicant before this Tribunal, but there is a practical onus.  The effect of McDonald v Director General of Social Security (1984) 6 ALD 6 is that the state of satisfaction a decision-maker must reach is affected by the nature of the decision under review. Here the decision under review is that of the Social Security Appeals Tribunal.

[1]         Drake v Minister for Immigration and Ethnic Affairs (1979) 46 FLR 409; Secretary

Department of Social Security v Payne (1999) 54 ALD 357

13.     The nub of the applicant’s case, as I see it, is that Centrelink made an incorrect decision in the first place to grant this benefit.  In this practical sense the applicant must satisfy me that the decision made by the Social Security Appeals Tribunal, reinstating the first Centrelink decision, is not the correct decision.  An appreciation of this practical requirement is particularly important where, as is the case here, the other parties are unrepresented. 

14. The starting point is s22(7) and s25(1) of the Act. These sections provide that if the Secretary is satisfied that there has been, or will be, a pattern of care for a child over a period where a child is a FTB child of more than one individual, the child is taken to be the FTB child of that individual – except if the care exercised amounts to less than 10%.

15.     The Secretary, by virtue of s59 of the Act, is required to work out percentages. In dealing with these matters the Secretary has formulated a Family Assistance Guide.  The Tribunal normally has regard to that Guide and I have taken it into account where relevant.

16.     Paragraph 2.1.1.45 of the Guide is headed “Shared Care & Establishing a Pattern of Care”. It commences,

“If the care percentage or care arrangements are not agreed on between the carers, it is necessary to establish a pattern of care … to make a shared care determination for FTB. A pattern of care is established by using either the number of nights in care … or hours of care for each FTB child. The percentage of care for each FTB child is then calculated and applied to the standard rate … of FTB …”

17.     It is clear from the legislation that the Act does not set a time frame over which a pattern of care is to be established.  Paragraph 2.1.1.45 of the Guide speaks of making a shared care determination by reference to the actual care arrangements as agreed to by the parties or, where there is no agreement, by reference to available evidence.  The Guide suggests as a primary reference point a nights in care assessment, that is, a person having the overnight care of a child is regarded as having had care of that child for that day.  But it recognises that there will be occasions where such an approach will not accurately reflect the caring arrangements for the child and suggests, in such cases, an actual hours in care approach. 

THE EVIDENCE ABOUT ALYCIA’S CARE

18.     With her claim Ms Smith supplied a copy of agreed Family Court orders in respect of Alycia.  The first of these dates from February 1995.  Alycia was then 2 years of age.  The orders provided that the grandparents would have access every second weekend and, by agreement reached with Ms Smith, access at Easter and Christmas Day.  The arrangement was altered in 1998 upon application by the paternal grandmother, Mrs Caruso.  Thereafter, the order provided that Ms Smith, Mr Caruso, and the grandparents, Mr Leonard Caruso and Mrs Anna Caruso, would have joint residency of Alycia, and provided, amongst other things, that Alycia would live with the paternal grandparents from Sunday to Thursday evenings, but also they would have continue to have contact as per the alternate weekend arrangements of the previous order. 

19.     In a statutory declaration dated 23 September 2005, Ms Smith declared that she had her daughters, Alycia and Stephanie, and son Trevor, every second weekend, during the week, and half the holidays (which I understand was a reference to the school holidays).[2]  Another letter was provided by Ms Smith’s mother stating that her daughter had the girls and her son Trevor, every second weekend and half the school holidays.[3]  Ms Smith’s mother, however, was not called to give evidence.

[2]        Document T36

[3]        Document T41

20.     Ms Smith, Mr Caruso, Mrs Anna Caruso, Ms Stephanie Smith and Ms Smith’s ex-husband Mr Smith gave oral evidence, the last three by telephone, which presented some difficulties when identifying documents.  There was little that was new in the oral evidence presented, and the evidence that I heard assisted me little with my task.  I was no better informed by the oral evidence than by the documented materials before me.  I was not satisfied that the oral evidence was objectively given -  untainted by an allegiance to the party (Mr Caruso or Ms Smith) on whose behalf it was given.  To some extent the documentary materials (supporting letters, statements and recorded notes of conversations with Centrelink officers in the course of their enquiries) also pointed in different directions depending on the “camp” from which each originated. 

21.     Mr Caruso and Ms Smith were less ready to focus on the relevant period, than on their current clashes over Alycia and their animosity towards each other.  Alycia, it seems, left the care of her grandparents in 2006 and moved to live with Ms Smith, who then had 100% of the care.  In June 2006 the Social Security Appeals Tribunal recorded Ms Smith as saying Alycia had run away.  It seems Alycia came back to her mother, and resumed in Ms Smith’s care until about Christmas 2006.  Mr Caruso told me that at about that time, Alycia telephoned asking to live with him – he by then had his own residence.

22.     As to the relevant period I did not form the impression that Mr Caruso had any close knowledge of the day-to-day happenings involving Alycia.  These seemed to have been more the responsibility of Mrs Caruso.  I gained little assistance from Mr Caruso’s evidence.

23.     The evidence of his mother, Mrs Caruso, has been crucial in deciding the FTB claim within Centrelink.  She had been contacted by Centrelink officers by telephone in the course of the review.  It seems, according to the notes of the review officer, that Ms Caruso had said that Alycia stayed with Ms Smith sometimes two or occasionally three times a month and was allowed to go to her every second weekend from Friday to Sunday, but that Alycia often preferred to go to a friend’s place instead.[4]

[4]        Document T63

24.     Mrs Caruso had made a statutory declaration for this hearing, as did Mr Caruso.  It was evident that the statements were prepared together as many paragraphs of the two statements were identical, word for word.  Mrs Caruso told me that she and her son did not write their statements together, but this was plainly not correct.  One example will suffice.  It was paragraph 13 of Mr Caruso’s statement and, identically, paragraph 14 of Mrs Caruso’s statement:

I have looked at the records from Brisbane bus lines (T-documents, pages 111 to 120).  I don’t agree with the records insofar as it implies that Alycia visited Ms Smith almost every second weekend, because from memory Alycia did not take that many bus trips to Blackbutt/Kingaroy.  Even if the bus line records are in relation to travel by Ms Smith, Stephanie and /or Alycia, the records may have been tickets purchased for travel by Stephanie or by Ms Smith herself (in the second half of 2003 after she and Mr Smith separated).

25.     Both statements, which I note were witnessed by the applicant’s solicitor Mr Lo, contained quite unhelpful, adverse comments relating to Ms Smith’s parenting skills with both her daughters, and to matters concerning the state of Ms Smith’s mental health. 

26.     In her oral evidence Mrs Caruso acknowledged that she was not sure what percentage of the time Alycia spent with Ms Smith, but she strongly denied that Alycia went to her mother for half of school holidays.  However she said that the Family Court Order had been complied with up until the last 12 months.  As to the period when Ms Smith returned to Brisbane, Mrs Caruso said that Alycia’s visits to Ms Smith were sporadic, but sometimes were tied in with Ms Smith needing Alycia’s help with the baby, Trevor.  She acknowledged that Alycia would stay overnight and visited during the day.  Of this period, Stephanie Smith, whose evidence in other respects was not particularly helpful or detailed, said that she and Alycia were still visiting their mother on a fortnightly basis at weekends.  She also alluded to Alycia being called upon to help her mother with the baby Trevor. 

27.     The other witness whose evidence gave me some concern was that of Mr Trevor Smith, Ms Smith’s ex-husband. He did not demonstrate that he had a good recollection of times and dates.  As an example, he gave evidence that he was married to Ms Smith from 1998 to 2004, they having separated in about 2002, but he was reminded that they had married in 2000, separated in about 2003 and divorced in 2005.  He was able to confirm that they had moved from the Brisbane area to Blackbutt for about a year and then to Kingaroy for about 6 months.  This was of assistance in that it confirmed that these were places that Ms Smith had lived, and put in doubt the completeness of the Centrelink addresses for Ms Smith,[5] which did not record her as living at Kingaroy. 

[5]        Exhibit A5

28.     In the past Mr Smith had supported Ms Smith’s claim for FTB based on her shared care of Alycia.  From the documentary materials, there was a letter dated 15 September 2005 sent with Ms Smith’s claim, Mr Smith seemingly being the author.  It stated as follows:

I was married to Kayleen Janelle Smith (Allan).  From the year 1998 to 2.2.03 Kayleen had Stephanie Smith (Allan) and Alycia (Allan) every fortnight on the weekends and school holidays breaks and then from 2003 to now I know of her having the children the same.[6]

[6]        Document T29

29.     Mr Smith, giving his evidence by telephone, did not have a copy of this document.  Mr Smith told me that he would not have written the document, but that his sister, Ms L Catley, would have:

If I did put that – if I did that, it would have been my sister who read it to me and then I would have signed it[7]

[7]        Transcript of hearing 11 January 2007 p49.

30.     Document T29 contained two segments of writing, which appeared to be in the one handwriting.  The above quoted text was followed by:

I Louelle Catley, Kayleen Smith sister-in-law, know she had Stephanie and Alycia every second weekend and school holidays as what my Brother said as above.

31.     Two signatures appear under each statement and appear to be different.  This tended to support Mr Smith’s evidence that his sister wrote and read the statement to him and he signed it.  This evidence, given on the first day of hearing, rendered surprising the suggestion made to Ms Smith on the second day of the hearing by Mr Lo, that Ms Smith wrote T29 – implying it was her fabrication.  Mr Lo made this accusation on his own observation of similarities between the handwriting on T29 and Ms Smith’s handwriting on another document, a similarity that was far from observable to me.  I accept without hesitation Ms Smith’s evidence that the document at T29 was not her document.  That evidence is supported by the misspelling of Ms Smith’s former surname of “Allen,” as “Allan”. This suggests it is unlikely that Ms Smith was the author. 

32.     Mr Smith now says, contrary to the contents of document at T29 that Alycia ‘might’ have come to Blackbutt about five or six times during the year when he and Ms Smith lived there and to Kingaroy once only.  However Mr Smith’s evidence is discredited.  It seemed to me to be coloured by his ongoing custody issues with Ms Smith over their son Trevor Smith.  Quite apart from that, he had kept no records and had a singularly poor recall of dates.

33.     There was other evidence about the pattern of care, some of which was not evidence called for this hearing, but had been before the Social Security Appeals Tribunal.  This included evidence given by Mr P Pane, who had been a family friend of Ms Smith’s mother in the past.  The Social Security Appeals Tribunal recorded him as saying that he said that he had resumed contact with Ms Smith just before Christmas in 2004, when Ms Smith was then living at Nundah.  Mr Pane told the Social Security Appeals Tribunal that at that time, Stephanie and Alycia were coming to visit Ms Smith every second weekend and he had seen the girls at those times or, if he was telephoning, could hear them in the background.  He told the Social Security Appeals Tribunal also that he lent Ms Smith money regularly as she needed it for the fortnightly visits.  He told the Social Security Appeals Tribunal that at one time, for a few weeks, he was driving Alycia to school each day.  Mr Pane was not called to give evidence at this hearing.

34.     A major focus of evidence – oral and documentary – concerned bus trips involving Stephanie and Alycia travelling to Blackbutt and Kingaroy during the years that Ms Smith was living there.  It was Ms Smiths’s evidence that she would send the tickets for her daughters to Brisbane by express post so that they could travel to visit over the weekends. Centrelink checked with an organisation called Bush Connection, which confirmed that the organisation assisted Ms Smith with bus fares for her children as well as school books.[8]

[8]         Document T39

35.     The records from Brisbane Bus Lines covered the period May 2002 to August 2004.  These records take their significance in that they shed some light on the pattern of care.  However in that regard, it was notable that the Secretary called no evidence from the bus company identifying the records so that I could form a view on their accuracy or completeness.  Unfortunately only surnames were recorded by the bus line.  The passenger’s sex is not identified, nor whether the passenger was an adult or a child – although some inferences could be drawn from the cost of the particular ticket.  Since the evidence was that Alycia could have travelled using either the surname Smith or the surname Allen, and sometimes was travelling with her sister Stephanie and sometimes not, only the most general conclusions could be drawn.  I was assisted by the helpful analysis of the records by the Social Security Appeals Tribunal and by Mr Lo.[9] 

[9]        Exhibit A3.

36.     The Social Security Appeals Tribunal noted that the bus records supported Ms Smith’s evidence about the travel by Alycia to Blackbutt and Kingaroy and observed that this travel was sometimes one way only (lending support to evidence that Mr Smith would, on occasions, drive the girls one way).  The travel did not only take place on weekends, lending support to Ms Smith’s evidence that she had her daughters for some part of the school holidays. However there was no evidence to support Ms Smith having the girls for half of all school holidays – bearing in mind the length of the end of year school holidays.  The Social Security Appeals Tribunal noted that between April and November 1993 there were seven occasions of travel on a Friday with a return trip on Sunday.  Ms Smith also referred to another occasion when she had Alycia during what might have been school time, because, according to Ms Smith, Mrs Caruso had to be away for some reason.

37.     What was noteworthy from the bus records was the regularity and pattern of the travel.  Blackbutt and Kingaroy are some 2 1/2 and 3 1/2 hours (respectively) hours by bus from Brisbane.  It must have been difficult to make the travel arrangements at a distance and ensuring that the tickets were available ahead of time, but Ms Smith obviously persisted despite the difficulties. 

38.     The submissions on behalf of the applicant were that Ms Smith could not have had Alycia for fortnightly weekend access visits because she was moving around in her accommodation and because of what was referred to as “her mental condition”.  There was no medical evidence presented to me about the nature of Ms Smith’s medical condition, which is remarkable since she is in receipt of a Centrelink disability support pension. This suggests some medical records must be available and this material would take on importance if I needed to consider such issues as special circumstances. 

39.     However there was no reliable evidence that Ms Smith’s mental state interfered with her ability to have contact with her daughters or her son on any extended basis.  Ms Smith told me, and I accept, that any visits she made to hospital occurred during the week and she avoided weekends so that she would be available to see her children.  As I understood her evidence, one reason for her attendance at hospital was to stabilise her compliance with prescription medications. 

40.     The only suggestion of extended hospitalisation came from Mr Smith, who said that between 2002 and 2003 Ms Smith was hospitalised “four or five times” for about a month at a time.  I have already made the observation that I regard Mr Smith as an unreliable witness, but even if his evidence were true on this point, this is well before the period that I need to consider.  If there was any evidence of extended hospitalisations, no doubt the applicant would have produced that evidence.  Ms Smith confirmed under cross-examination that she had never been hospitalised for a month.  There was one five or six day admission to Prince Charles Hospital in Brisbane in 2005.[10] 

[10]        Evidence given to the Social Security Appeals Tribunal – Document T2

41.     It seemed to me after hearing all the evidence, having noted some of the deficiencies in that evidence, that there was a pattern of care that nevertheless could be deciphered in this case.  That pattern reflected certain aspects of the Family Court order that had been in place since Mrs Caruso went to the Court in 1998 to have the original order amended to provide that Alycia live with them.  By force of that order the grandparents were the primary care-givers and Ms Smith does not dispute that, but equally, all parties were recognising the continued involvement of Ms Smith in Alycia’s upbringing.  Clearly, once Ms Smith moved away from Brisbane to Blackbutt, this meant that the contact would be more difficult to arrange, but we have the evidence from the bus records that despite the difficulties Ms Smith was ensuring that she maintained contact with Alycia.  

42.     It is not necessary to reiterate the deficiencies in the evidence in this case. Even with the best will in the world it is difficult for people to remember accurately things that took place some time ago.  Here no one has kept any personal records of what took place and there was little indication that anyone was approaching the question with good will or impartially.  But it was evident to me that Ms Smith, whilst distracted in giving her evidence by the animosity between herself and Mr Caruso (and against Mr Smith), was a sincere parent who was trying to carry out her role as a mother as best she could, taking into account the state of her health.  I regarded her evidence as truthfully given and an honest attempt to recall what took place.  I accept that she was committed to ensuring that her contact with both daughters was regular, and wherever possible, for the benefit of her daughters’ relationship as sisters, that the girls would come together. 

43.     I consider that the bus records give some indication of the regular pattern of contact – albeit that they do not provide the complete picture of contact arrangements.  They are valuable in showing that even when Ms Smith was living at a distance she was ensuring that contact continued under what must have been difficult circumstances.  From the bus records, it would not be safe to conclude that Ms Smith had Alycia as much as half of all school holidays, but periods of 4 to 6 days at a time were evident. 

44.     I have no reason to believe that when Ms Smith returned to Brisbane, where it would be much easier to maintain contact with her daughters, that contact would suddenly reduce in frequency.  There was sufficient evidence from others, including Ms Smith’s mother and Mr Pane, that the contact continued and that some of the care included parts of school holidays, fortnightly weekend visits; and other times not necessarily scheduled but having more of an impromptu arrangement, for instance if Ms Smith needed some help with Trevor. 

45.     As stated above the provisions for FTB are concerned with the pattern of care over a period and not with day to day variations in the care: Re Nowicz and Secretary Department of Family and Community Services (2001) 33 AAR 337. The decision-maker must determine the pattern of care based on the available evidence where parties disagree: Wade v Secretary Department of Family and Community Services [2004] FCA 1660.

46.     The Social Security Appeals Tribunal concluded that the level contributed to Alycia’s care by Ms Smith was 14%.  They reached this conclusion based on essentially the same evidence that I had before me.  I concluded that they were correct, doing the best that is possible on the state of the evidence relating as it did to two years retrospective entitlement to FTB where there were few objective records, and varying, imperfect, recollections of those exercising the care.  An assessment of 14% gives commonsense appraisal of the pattern of care over a period of time, and takes account of those fortnights when Alycia seems to have stayed one night – a Saturday/Sunday pattern – rather than two nights – the Friday/Sunday pattern.  When account is taken that there were other times where extra days reflected school holiday periods (but not, as I have noted above, half of the school holidays) it is clear in my view that whatever the variations in detail, Ms Smith was ensuring that contact with Alycia was maintained roughly in accordance with the terms of the Family Court Order.

47.     I am satisfied that the decision under review, that is the decision of the Social Security Appeals Tribunal, was the correct or preferable decision.  On the evidence I have not been satisfied that Ms Smith had less than 14% care and, accordingly, I am not satisfied that Ms Smith was disentitled to FTB. 

DECISION

48.     The Tribunal affirms the decision under review.

I certify that the 48 preceding paragraphs are a true copy of the reasons for the decision herein of Ms M J Carstairs, Senior Member

Signed ……………………………………          
  M. Brazier, Associate

Dates of Hearing  11 January 2007 and 15 February 2007
Date of Decision  9 March 2007
The Applicant was self represented
The Third party was self represented
For the Respondent                   Mr Johnson Lo, Clayton Utz Lawyers