Telford and Secretary, Department of Families and Community Services and Indigenous Affairs
[2007] AATA 1818
•1 October 2007
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2007] AATA 1818
ADMINISTRATIVE APPEALS TRIBUNAL )
) No 2007/0792
GENERAL ADMINISTRATIVE DIVISION ) Re KATRINA TELFORD Applicant
And
SECRETARY, DEPARTMENT OF FAMILIES AND COMMUNITY SERVICES AND INDIGENOUS AFFAIRS
Respondent
DECISION
Tribunal Mr P McDermott, RFD, Senior Member Date1 October 2007
PlaceBrisbane
Decision The Tribunal affirms the decision under review .
.................[Sgd]............................
SENIOR MEMBER
CATCHWORDS
SOCIAL SECURITY – family tax benefit – maintenance income test – whether the transfer of property to the applicant is correctly treated as capitalised maintenance income – decision affirmed
A New Tax System (Family Assistance) Act 1999 s 3; Schedule 1, cl. 24
Pemberton and Repatriation Commission (1990) 21 ALD 418
REASONS FOR DECISION
1 October 2007 Mr P McDermott RFD Senior Member Introduction
1. In 2000 a property at Cow Bay, in the state of Queensland, was transferred to Ms Katrina Telford in lieu of child maintenance of her son. I have to decide whether the transfer of this property has been correctly treated as capitalised maintenance income under the A New Tax System (Family Assistance) Act 1999 (“the Act”).
HISTORY OF THE MATTER
2. On 31 October 2000 Ms Telford advised Centrelink that Mr Daniel Firkins had transferred to her a property at Cow Bay, which was valued at $72,000 in lieu of child maintenance. At this time the contact officer at Centrelink advised Ms Telford that the transfer of the property would have to be treated as capitalised maintenance income [T7, fol 36]. Centrelink have treated the property transfer as being capitalised maintenance income received for the period commencing 31 October 2000 and ending on 12 July 2017. This treatment has the consequence of reducing Ms Telford’s family tax benefit.
3. On 22 June 2006 Ms Telford sought a review of the decision of Centrelink to treat the transfer of the property as capitalised maintenance. On 16 November 2006 the authorised review officer confirmed that there was no basis in the legislation for exempting capitalised maintenance income. On 24 January 2007 the Social Security Appeals Tribunal affirmed the decision of the authorised review officer.
Ms Telford has made an application to this Tribunal to review the decision of the Social Security Appeals Tribunal.
FINDINGS OF TRIBUNAL
4. The rate of a person’s family tax benefit is determined by applying the rate calculator in Schedule 1 of the Act. The rate calculator incorporates a maintenance income test.
5. The term “maintenance income” is defined, in paragraph (a) of the definition of “maintenance income” in s 3, to include “child maintenance” which is “the amount of a payment or the value of a benefit that is received by the individual for the maintenance of a FTB child of the individual and is received from a parent of the child or the partner or former partner of the parent of the child.
6. I have already mentioned that Ms Telford herself advised Centrelink that she received the property from her son’s father in lieu of maintenance. I am therefore satisfied that the value of the benefit that was received her by the transfer of the property is “child maintenance” for the purposes of the Act.
7. The term “capitalised maintenance income” is defined in s 3(1) of the Act to mean maintenance income of the individual that is neither a periodic payment nor a benefit that is provided on a periodic basis; and the amount or value of which exceeds $1,500. I also observe that the transfer of the property does not come within these exclusions and is therefore “capitalised maintenance income” for the purposes of the Act.
8. I consider that Centrelink have been reasonable in valuing the property at the value of $72,000 that was indicated by Ms Telford and not at the value of $80,000 upon which duty on the transfer was paid. After the hearing Ms Telford sought to attribute a much lower value to the property. She did not put forward any evidence in support of that lower valuation which was less than the unimproved value of the property. I was not prepared to consider such a contention which was unsupported by evidence.
9. One concern of Ms Telford is that the acquisition costs of acquiring the property have not been deducted from the value of the property. Ms Telford informed the Social Security Appeals Tribunal that she received a property worth $72,000 but that it cost her $5,000 to acquire the property. There are no receipts which verify this expense apart from a duty receipt for $975 which is based on the value of the property being $80,000. However, in referring to the “value of the benefit that is received by the individual”, in paragraph (a) of the definition of “maintenance income” in s 3, I have taken the view that the Parliament was referring to the actual value of property that is received by the individual, cf Pemberton and Repatriation Commission (1990) 21 ALD 418.
10. During the hearing consideration was given to the issue whether the property could be regarded as an unrealisable asset. On the current state of the evidence before me I am unable to make a finding that the property is an unrealisable asset. There was, for instance, no evidence before me from a real estate agent to support any such finding. Even if there were such evidence I have reservations whether there is scope within the scheme of the Act for treating the property as an unrealisable asset. I consider that the Act in referring to the “value of the benefit that is received by the individual”, in paragraph (a) of the definition of “maintenance income” in s 3, requires any benefit to be valued at the time of that is received and not at any subsequent time.
11. Any contrary conclusion would have adverse administrative consequences that I am sure would not have been intended by Parliament. It would also be prejudicial to a claimant in the position of Ms Telford who subsequently sells the property for a consideration in excess of the “value of the benefit’.
12. I appreciate that Ms Telford is currently facing difficulties and that she has put forward the submission that one alternative may be for the Secretary to lodge a caveat over the property. However, I am not satisfied that this is a workable solution. I also consider that the Secretary would not have an “interest” in the property, within the meaning of s 122 of the Land Titles Act 1994, which would support a caveat.
13. I should mention that I have considered the length of the capitalisation period that has been used for the purposes of cl 24 of Schedule 1 of the Act. Under cl 24(5) “the capitalisation period is such period as the Secretary considers appropriate in the circumstances of the case”. The capitalisation period concludes on the day before Ms Telford’s son 18th birthday. I consider that it was appropriate to allot a capitalisation period which coincides with the period that her son is a minor.
14. Having regard to the difficulties which are being faced by Ms Telford who resides in a remote community, it would be desirable if Centrelink could offer some support facilities to Ms Telford.
15. Ms Telford was given additional time to make submissions as she stated that she did not have all of the relevant material before her.
DECISION
16. I affirm the decision under review.
I certify that the 16 preceding paragraphs are a true copy of the reasons for the decision herein of Senior Member P McDermott.
Signed: .....................................................................................
AssociateDate/s of Hearing 11 July 2007
Date of Decision 1 October 2007
Submissions received by 24 August 2007
Applicant Mr Steger unrepresented
Respondent Mr C Keim, departmental advocate
0
0
0