Strang and Secretary, Department of Social Services (Social services second review)

[2017] AATA 3039

Strang and Secretary, Department of Social Services (Social services second review) [2017] AATA 3039 (21 December 2017)

Division:GENERAL DIVISION

File Number(s):      2017/3351

Re:Michelle Strang

APPLICANT

AndSecretary, Department of Social Services

RESPONDENT

AndDamian Rowlands

OTHER PARTY

DECISION

Tribunal:A G Melick AO SC, Deputy President

Date:21 December 2017

Date of written reasons:        26 February 2018

Place:Hobart

For the reasons given orally at the conclusion of the hearing in this matter, the decision under review is set aside and substituted with the care percentages set out at paragraph 27 of these reasons.

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

A G Melick AO SC, Deputy President

SOCIAL SECURITY – family tax benefit – FTB – whether applicant or other party had care of child – percentage of care decision – finding of fact in relation to plausible care of child – decision under review set aside

LEGISLATION

A New Tax System (Family Assistance) Act 1999 (Cth)

A New Tax System (Family Assistance) (Administration) Act 1999 (Cth)

CASES

Polec v Staker & Another [2011] FMCAfam 959; (2011) 253 FLR 339

WRITTEN REASONS FOR ORAL DECISION

A G Melick AO SC, Deputy President

26 February 2018

BACKGROUND

1. This application is for review of a decision dated 18 May 2017 regarding family tax benefit (FTB) percentages of care. Mr Rowlands and Ms Strang are the parents of four children, three of whom (E, A and L) were FTB children during the period in question.

2. Mr Rowlands and Ms Strang separated on 19 February 2016 but remained living under the same roof until 9 November that year. Ms Strang applied to the Department of Human Services (the Department) for FTB on 1 March 2016, declaring she had 50% care of each the children. On 2 April 2016 the Department granted Ms Strang FTB on the basis that she had 50% shared care from 19 February 2016. The balance of care, 50%, was determined to be provided by Mr Rowlands.

3. On 26 May 2016 Ms Strang requested an internal review of that decision. She informed the authorised review officer (ARO) that she had only agreed to 50% care because she was unaware she could claim more when separated but living under one roof. On 7 September 2016 the ARO varied the original decision and decided that Ms Strang had 100% care of E and 80% of the care of the other two children, A and L, from 19 February 2016.

4. On 24 November 2016 Mr Rowlands applied to the Social Services & Child Support Division of the Administrative Appeals Tribunal (SSCSD) to appeal the ARO decision. On 18 May 2017 the SSCSD set aside the decision under review and, in substitution, determined that Ms Strang and Mr Rowlands each had 50% care of their three children from 19 February 2016.

5. This application was heard on 21 December 2017. Both Ms Strang and Mr Rowlands attended the hearing in person and gave evidence. The T documents were received in evidence and Ms Strang tendered a bundle of diary extracts and financial records. I note that the parties’ evidence at the hearing was generally consistent with the material contained in the T documents and included in the previous decisions.

   RELEVANT LEGISLATIVE PROVISIONS

6. The relevant law is A New Tax System (Family Assistance) Act 1999 (the Act) and A New Tax System (Family Assistance) (Administration) Act 1999 (the Administration Act).

7. The Act contains provisions that deal with the payment of FTB where the care of a child is shared by people who are not members of a couple. The amount of care is determined over a care period, usually 12 months. In this matter I am determining care between 16 February 2016 and 9 November 2016 (the period during which Ms Strang and Mr Rowlands were separated but living under the same roof).

8. Where a child is in the care of more than one person, a shared care percentage of FTB is calculated in accordance with s 59 of the Act:

   Shared care percentages where individual is FTB child of more than one person who are not members of the same couple

   (1)  An individual has a shared care percentage under this section for an FTB child of the individual if:

   (a)  the Secretary has determined the individual's percentage of care for the child during a care period; and                 

   (b)  that percentage is at least 35% and not more than 65%.

   …

   (2) The individual's shared care percentage for the FTB child is the relevant percentage specified in column 2 of the table.

9. Prior to this, a determination must be made about a person’s percentage of care under Part 3, Subdivision D of the Act. Generally, the determination of person’s percentage of care will be based upon the actual level of care in accordance with ss 35A or 35B of the Act. Section 35B applies here and provides:

   Determination of percentage of care--child is in the adult's care

   Initial determination

   (1)  If:

   (a)  the Secretary is satisfied that there has been, or will be, a pattern of care for a child over a period (the care period) such that, for the whole, or for parts (including different parts), of the care period, the child was or will be, under subsection 22(2), (3) or (4), an FTB child of more than one individual; and

   (b)  one of those individuals (the adult), or the partner of the adult, makes or has made a claim under Part 3 of the A New Tax System (Family Assistance) (Administration) Act 1999 for payment of family tax benefit in respect of the child for some or all of the days in the care period; and

   (c)  the adult is not a partner of at least one of the other individuals referred to in paragraph (a);

   the Secretary must determine the adult's percentage of care for the child during the care period.

   Determination after revocation

   (2)  If:

   (a)  the Secretary revokes, under Subdivision E of this Division, a determination of an individual's (the adult) percentage of care for a child that was made under section 35A or this section; and

   (b)  the Secretary is satisfied that there has been, or will be, a pattern of care for the child over a period (the care period) such that, for the whole, or for parts (including different parts), of the care period, the child was or will be, under subsection 22(2), (3) or (4), an FTB child of the adult and at least one other individual; and

   (c)  the adult is not a partner of at least one of those other individuals;

   the Secretary must determine the adult's percentage of care for the child during the care period.

   Percentage of care

   (3)  The percentage determined under subsection (1) or (2) must be a percentage that corresponds with the actual care of the child that the Secretary is satisfied that the adult has had, or will have, during the care period

   (4)  Despite subsection (3), if section 35C, 35D or 35G applies in relation to the adult, the Secretary must determine the adult's percentage of care under subsection (1) or (2) in accordance with that section.

   (emphasis in original)

   CONSIDERATIONS

10. I must determine to what extent Ms Strang and Mr Rowlands had care of each of their children during the care period of 19 February 2016 until 9 November 2016. What care was provided to each of the three FTB children is a question of fact. ‘Care’ is not defined in the Act.

    The meaning of ‘care’

11. I note the useful considerations set out in Polec v Staker & Another [2011] FMCAfam 959; (2011) 253 FLR 339 (Polec) and rely upon comments made by Federal Magistrate Hughes for guidance, specifically those regarding determinations of ‘care’ of a child at paragraphs 53 to 56. At paragraph 56 of Polec, the court stated that it was necessary to consider:

    (a)To what extent does the person meet the needs of the child by providing the child with accommodation, clothing, food, child care, education, health care, emotional support, supervision, transport and extracurricular activities?

    (b)To what extent does the person make arrangements for others to meet the needs of the child?

    (c)To what extent does the person pay for the costs of meeting the needs of the child?

    (d)To what extent does the person otherwise provide financial support for the child?

    (e)To what extent does the child provide for his or her own needs or have those needs met from another source?

    (f)To what extent is the child financially independent or financially supported from another source?

    Contentions

12. It is not disputed by either parent that they decided to remain living under the same roof when they separated. Mr Rowlands gave evidence, and to a certain extent agreed with Ms Strang, that they agreed to remain on amicable terms and try to get on as usual.

13. Mr Rowlands said that they told the children of their separation on the day it occurred but told them things would continue as normal. Ms Strang said she thought this had been a fairly short, informal conversation. Both parties agreed they would attempt to continue as normal.

14. The agreement appears to have been that they would care for the two younger children on a 50:50 basis. The two older children would be able to decide how they spent time with their parents. Things apparently continued on this basis for about a month until a disagreement between Mr Rowlands and E occurred after he attempted to moderate, what he described as, concerning behaviour.

15. When they separated, Ms Strang and Mr Rowlands agreed that bills would be split evenly, although there was some dispute about this in that Mr Rowlands stated he had done an extensive amount of work on the kitchen. Mr Rowlands gave evidence that he paid for materials worth $17,000 to upgrade the kitchen and did the physical labour. He also stated that he paid for kitchen appliances, approximately $4,500, on the basis that Ms Strang pay for the children’s school fees. Ms Strang stated there had been no such agreement.

16. Ms Strang said she thought she had received $9,500 in FTB towards the end of 2015, the year prior to the separation. The respondent‘s records showed this figure was approximately $8,500 by the end of October 2015.

17. Mr Rowlands and Ms Strang had separate bank accounts but split responsibilities regarding expenses: Ms Strang usually paid for food and Mr Rowlands paid for Telstra and other utilities. However, Ms Strang gave evidence at the hearing that she thought she paid for at least 50%, if not more, of those bills.

18. Mr Rowlands gave evidence that the reason Ms Strang took the children to most activities, including medical appointments and sporting activities was because he had a two seat utility vehicle and she had full use of the family car.

19. Mr Rowlands works as a builder and during the morning his work usually involves building inspections. The rest of the time he does costings and other matters at home. It is common ground that E does not want anything to do with her father but I note that he was present in the house and so was, in effect, available to care for her. This was the case when Ms Strang would work at night. Ms Strang often worked night shift from 10pm to 7am. She gave evidence that she cooked the children’s breakfasts, made their lunches and usually made their dinner. She said she also preparing meals in advance in case she was going to be on an afternoon shift and not at home.

20. There was no evidence provided that suggested Ms Strang did not pay Mr Rowlands rent at the time when the house belonged to them in equal shares, 50% each.

21. Ms Strang kept a detailed daily diary that she tendered as an exhibit at the hearing. There was some dispute between the parties about what was or wasn’t recorded in the diary. I accept that Ms Strang could not have been aware of what Mr Rowlands was doing when she was not in the house, which was a significant proportion of the time. Mr Rowlands had a room downstairs but stated that noise from the timber floors upstairs meant he was aware of what was occurring. He stated that this meant that when the children were upstairs, he was, in effect, caring for them.

    FINDINGS

22. I make the following findings of fact:

    (a)That at the relevant time, the parents were living separated in the same house; 

    (b)That at the relevant time, Ms Strang was working between 190 and 210 hours per month. I base this finding on her diary and the notes it contained, noting that Ms Strang initially gave evidence that she worked a 158 hour month. Her work consisted of shifts at varying times of the day but was generally made up of about 10 night shifts, four afternoon shifts and six day shifts per month;

    (c)That Mr Rowlands was usually at home when Ms Strang was away on night shift, as well as often being at home at other times;

    (d)That Ms Strang took the children to the majority of their sporting activities but I accept that this was due in part to the car arrangements. I note that Mr Rowlands took the children to activities at least one weekend a month;

    (e)That Ms Strang took A, who has Type 1 Diabetes, to approximately six medical appointments during the care period;

    (f)That Ms Strang always attended parent teacher nights at the children’s schools. However I accept Mr Rowlands’ evidence that he asked for reports from her about these and then discussed them with his children. He said he kept up to date with their school activities through their reports;

    (g)That Mr Rowlands spent a significant amount of time and money on the kitchen and kitchen appliances in the year prior to the separation. I find he is entitled to credit for this because the property is now in the possession of Ms Strang; and

    (h)That the 2015 FTB payments of approximately $8,500 should be taken into account as some would have been spent on the FTB children during the care period. The diary entries show that expenses totalling approximately $6,500 related to the children but $1,500 of this was ‘cash out’ and so I cannot make any findings as to how that was spent. I also note that that money was spent in relation to the entire family, not just the three children to which the FTB allowances applied. 

23. I find that Ms Strang and Mr Rowlands’ financial contributions were, generally, fairly even but, on the basis of her diary entries, I find that Ms Strang contributed slightly more. However, as I have noted above, I consider that some consideration should be had to the FTB payments received in 2015 and the money spent by Mr Rowlands on the kitchen.

24. Apart from E, I do not find that there is any significant difference between emotional support given by the two parents for each of the children. There was no evidence to suggest that there was any friction between Mr Rowlands and A or L. He maintained regular contact with them through living in the house and their monthly outings.

25. It is difficult to be precise about the amount of care given by each parent. I do not accept that Ms Strang had 100% care of E because she was in the house and so was under Mr Rowlands’ care for a considerable part of the relevant period. In view of the estrangement between the Mr Rowlands and E, I consider the appropriate care percentage for E is 80% to Ms Strang and 20% to Mr Rowlands.

26. In relation to the other two children, I find that a care percentage of 60% to Ms Strang and 40% to Mr Rowlands existed in the relevant period. This finding reflects the amount of time Ms Strang spends with the children and the support she gives them in relation to school and sporting activities. However, applying an extended definition of care, I also take into account the significant amount of time that Mr Rowlands was in the house during the care period and that he was available to care for the children. 

    DECISION

27. For the reasons and considerations outlined above, I make the following determinations in relation to Ms Strang and Mr Rowlands’ percentages of care in respect of the three FTB children:

    (a)E: 80% care to Ms Strang, 20% care to Mr Rowlands;

    (b)A: 60% care to Ms Strang, 40% care to Mr Rowlands; and

    (c)L: 60% care to Ms Strang, 40% care to Mr Rowlands.

28. The decision dated 18 May 2017 is set aside and substituted with the percentages I have set out in the preceding paragraph.

I certify that the preceding 28 (twenty -eight) paragraphs are a true copy of the reasons for the decision herein of A G Melick AO SC, Deputy President

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

Associate

Dated: 26 February 2018

Date(s) of hearing:	21 December 2017
Applicant:	In person
Counsel for the Respondent:	Mr Brian Sparkes, FOI and Litigation Branch, Department of Human Services
Other Party:	In person