Thomas and Secretary, Department of Family and Community Services

[2004] AATA 221

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2004] AATA 221

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No N2002/1350

GENERAL ADMINISTRATIVE  DIVISION		)
Re		ROSLYN THOMAS

Applicant

And SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES

Respondent

DECISION

Tribunal Mr S. Webb, Member

Date3 March 2004

PlaceSydney

Decision The decision under review is affirmed.

[sgd] Mr S. Webb, Member

CATCHWORDS

SOCIAL SECURITY - family tax benefit - rate of payment - reasonable action to obtain maintenance - claim required to contain information - information not provided - decision affirmed

A New Tax System (Family Assistance) Act 1999 s. 58, Schedule 1

A New Tax System (Family Assistance) (Administration) Act 1999 ss. 3, 5, 7, 20

Acts Interpretation Act 1901 s. 29

Child Support (Assessment) Act 1989 s 4

Drake v Minister for Immigration and Ethnic Affairs (1979) 2 ALD 60

Re Temmen and Secretary, Department of Social Security (1992) 28 ALD 137

REASONS FOR DECISION

3 March 2004 Mr S. Webb, Member        

1.      This dispute concerns the rate of Family Tax Benefit (“FTB”) paid to Roslyn Thomas in respect of her son Dean prior to 18 October 2001.   Ms Thomas is not satisfied with the Social Security Appeals Tribunal decision to affirm the primary decision, which was made on the basis that the correct rate of FTB was paid from 14 June 2000 to 18 October 2001.

issue

2.      The issue for determination by the Tribunal is whether Ms Thomas is entitled to be paid more than the base rate of FTB for Dean prior to 18 October 2001.

legal principles

3.      Ms Thomas’ claim is under the A New Tax System (Family Assistance) Act 1999 (“the Family Assistance Act”) and the A New Tax System (Family Assistance) (Administration) Act 1999 (“the Administration Act”).

4.      The rate of FTB that is payable to a parent who is entitled to claim or apply for maintenance in respect of a child is to be calculated in accordance with the rate calculator at Schedule 1 of the Family Assistance Act (s.58).  Under that calculator, FTB is payable at the base rate in respect of a child unless the claiming parent takes action that the Secretary considers to be reasonable to obtain maintenance (Clause 10, Schedule 1, Family Assistance Act).  The term ‘maintenance’ is defined to include ‘child support’, which is defined to mean ‘financial support under the Child Support (Assessment) Act 1989’ (“the Child Support Act”) (s.3, Family Assistance Act). However, the Family Assistance Act does not qualify, describe or exemplify actions that may be considered reasonable to obtain maintenance.

5. Under the Child Support Act, financial support may be determined by the Registrar on application by an eligible person for administrative assessment of child support (Part 4) or for acceptance of a written consent agreement between the parents of the child or children in issue (Part 6). However, the definition of ‘maintenance’ under the Family Assistance Act is not limited to financial support under the Child Support Act.

6.      The Social Security Family Assistance Guide (“the Guide”) sets out policy guidelines concerning ‘taking reasonable maintenance action’ under the Family Assistance Act (3.1.5.30, the Guide) (T22).  Under the Guide a person in Ms Thomas’ circumstances is considered to have taken reasonable maintenance action if they have they undertaken, or have in progress, the following actions:

“- completing an assessment form, AND

·     having payments collected by the [Child Support Agency], OR

·     privately collecting 100% of the assessment, OR

·     lodging a Child Support Agreement”

7.      The Guide sets out guidelines concerning ‘when maintenance action is not applicable’ under the Family Assistance Act (3.1.5.60, the Guide) (Ex A1, Attachment 2), specifically in cases where:

“the child:

·     is not from a previous relationship,

·     is 16 years or more and less than 18 years of age,

·     is a Stage 1 child and the customer was granted family allowance before 1 June 1988,

The customer:

·     had an informal maintenance agreement in place prior to the CSS,

·     is blind and receives an Age, DSP or disability wage supplement.”

evidence

8. Ms Thomas gave oral evidence and represented herself at the hearing in this matter. Mr J. Larcombe represented the Secretary, Department of Family and Community Services (“the Secretary”). The Tribunal had before it documents prepared pursuant to s.37 of the Administrative Appeals Tribunal Act 1975 and materials that were tendered in final submissions.

factual context

9.      The following factual findings are drawn from the evidence and are not in dispute.

10.     Ms Thomas is the mother of two children, Scott and Dean, in respect of whom she receives FTB.  She has been in receipt of a Sole Parent Pension and Parenting Payment Single, and Dean has been in her care, during all relevant periods.  Dean was born on 29 April 1998.

11. Ms Thomas did not lodge an application for the administrative assessment of maintenance by the Child Support Act in relation to Dean following his birth, nor did she apply for acceptance under that Act of a maintenance agreement between herself and Mr Steven Evans, Dean’s father. She did, however, lodge an FTB claim form in respect of Dean on 28 May 1998, in which she stated that she did not receive maintenance payments in respect of her children and did not have a maintenance agreement with Dean’s father (Ex R1, Attachment 1, pp14-15). On that form Ms Thomas stated that she did not have a Child Support assessment and omitted to answer questions concerning notification of the Child Support Unit.

12.     Ms Thomas received the maximum rate of FTB Parts A and B in respect of Dean until 14 June 2000.  From that date until 18 October 2001 she was paid the base rate of FTB for Dean.  Ms Thomas attempted to lodge an incomplete Child Support Assessment form on 31 July 2001 (T8, f22) that was not accepted.  She lodged a properly completed Child Support Assessment Form on 18 October 2001 (T12, f26).

13.     The rate of Dean’s FTB was increased on and after 18 October 2001 when it was accepted that she had undertaken reasonable maintenance action.

summary findings

14.     Ms Thomas did not apply for an administrative assessment of the level of child support that was payable in relation to Dean following his birth and did not lodge a completed Application for Child Support Assessment form until 18 October 2001. 

15. Ms Thomas entered into an informal maintenance arrangement with Mr Evans on or about June 1998. This arrangement did not comprise a written agreement that was signed by both parties. No application was made for acceptance of the informal maintenance arrangement as a consent agreement for the purposes of the Child Support Act.

16. Ms Thomas received maintenance payments from Mr Evans averaging $50 per fortnight. However the level of maintenance that was payable in the circumstances had not been assessed under the Child Support Act or in accordance with any other impartial measure or standard.

decision

17.     Ms Thomas did not fully undertake reasonable action to obtain maintenance, for the purposes of the Family Assistance Act, until the level of maintenance payable in relation to Dean had been properly assessed.

18.     The decision under review is affirmed.

reasons for the decision

19.     In making this decision I have carefully considered all of the evidence, the submissions of the parties, relevant caselaw and legislation.

20.     I accept Ms Thomas as a witness of truth.

administrative error

21.     This case has an unfortunate history involving Commonwealth error.  At birth, Dean was incorrectly coded for FTB purposes and FTB was paid at the maximum rate until 14 June 2000.  Ms Thomas informed Centrelink in her claim form for FTB in respect of Dean that she was not receiving maintenance payments and did not have a maintenance agreement with his father, Mr Evans.  She also informed Centrelink that she did not have a Child Support Assessment in relation to Dean (Ex R1, Attachment 1, p14).   On the information provided by Ms Thomas it would be reasonable to conclude that no action to obtain maintenance in relation to Dean had been taken at that time.  It would follow that only the base rate of FTB would therefore have been payable in accordance with the rate calculator at Schedule 1 of the Family Assistance Act.  Instead Ms Thomas was paid FTB at the maximum rate.

22.     The error was discovered on or about 19 May 2000 during a review.  The Secretary submitted that a letter was sent to Ms Thomas concerning the error and enclosing a Child Support Assessment form on 19 May 2000.  However, the Secretary was not able to produce a copy of the letter or to satisfy me that the alleged letter was sent.  Ms Thomas claimed and I accept that she did not receive such a letter on or about 19 May 2000. 

23.     Ms Thomas submitted that she did not receive a second letter from Centrelink dated 14 June 2000 concerning the rate of FTB that was payable in relation to Dean.  However, a copy of the letter was before the Tribunal (T5) and I am satisfied that the letter was sent.  It follows that Ms Thomas is deemed to have received that letter (s.29, Acts Interpretation Act 1901).  The letter stated “[I]f you take reasonable action to get child support for [Dean] you may be able to receive more Family Allowance” (T5, f17).  Nonetheless, I accept that Ms Thomas either did not receive the letter, or did not read it, and remained ignorant of the fact that she was considered not to have taken reasonable maintenance action and was being paid the base rate of FTB in relation to Dean until July 2001.  She did not lodge a properly completed Child Support Assessment form until 18 October 2001 and was paid a higher rate of FTB thereafter.

24.     Ms Thomas submitted that she did not know and was not informed at the time of the birth of her son, Dean, or until July 2001 thereafter, that the rate of FTB Part A payable in relation to Dean was dependent upon her taking reasonable maintenance action.  She asserted that she did not know and was not informed at any time that her informal arrangement with Dean’s father for the periodic payment of maintenance amounts was not ‘reasonable maintenance action’.  In Ms Thomas’ submission she did not know that ‘taking reasonable maintenance action’ meant making application to the Child Support Registrar for formal assessment of the level of child support that was payable in relation to Dean in the circumstances.

25.     I accept Ms Thomas’ submissions concerning her ignorance, but note that ignorance does not negative the objective of the ‘reasonable action’ requirement in relation to obtaining maintenance.

action to obtain maintenance

26.     I am satisfied on the evidence that Ms Thomas did take action to obtain maintenance.  The question is whether her action was reasonable.

27.     Ms Thomas asserts that she and Mr Evans made an informal arrangement for the payment of maintenance averaging $50 per fortnight from June 1998 (Ex A1, Attachment 1).  I accept that Ms Thomas did in fact make such an arrangement.  Ms Thomas contends that she included the maintenance income thus paid in the three monthly sole parent pension review forms lodged with Centrelink thereafter.  No such review forms are in evidence.  In her submission Centrelink failed to act on the information provided, in consequence of which her FTB records were not updated. 

28.     I do not accept this submission.  There is no evidence before me that Ms Thomas informed Centrelink of the maintenance action she had taken in June 1998 or that she sought to update the information she provided on the FTB claim form she lodged in respect of Dean on 28 May 1998.  Even if I accept Ms Thomas’ assertion that she included her maintenance income on quarterly pension review forms, it is clear that such information is not sufficient for FTB purposes or to update the information she previously provided on her FTB claim form in relation to Dean.

29.     The existence of administrative error on the part of Centrelink and an informal maintenance arrangement between Ms Thomas and Mr Evans do not compel a conclusion that the action Ms Thomas took to obtain maintenance was reasonable.

reasonable action

30.     In the Secretary’s submission, action to obtain maintenance will only be reasonable if a properly completed application for child support assessment is lodged.  That is consistent with the departmental policy guidelines (3.1.5.30) set out in the Guide (T22).  I note in passing that the Tribunal is not bound by such policy guidelines; Drake v Minister for Immigration and Ethnic Affairs (1979) 2 ALD 60. I accept however that it is appropriate to have regard to the policy guidelines in so far as they may reflect the construction and meaning of the legislation in question.

31.     The Family Assistance Act operates, in relevant part, to ensure that the taxpayer does not unreasonably subsidise parents who fail to take reasonable action to obtain maintenance in respect of their children.  However, consideration of whether reasonable action has been undertaken is not only concerned with the reasonableness of the amount of the maintenance paid (Re Temmen and Secretary, Department of Social Security (1992) 28 ALD 137). It is also concerned with the reasonableness of the action taken to obtain the maintenance. The fact that Ms Thomas received maintenance income in respect of Dean by informal arrangement with his father does not necessarily mean that her action to obtain that maintenance was reasonable, nor does it compel a conclusion that the amount of the maintenance was reasonable.

32. Having carefully considered the submissions of the parties, the relevant caselaw and the relevant legislation I am satisfied that what is required involves three steps. Firstly, action is required to identify the person or persons with a maintenance liability in respect of the child or children in question. Secondly, it is necessary to assess the appropriate level of maintenance that is or would be payable in the particular circumstances. The adoption of impartial standards in such assessment is clearly desirable. The Child Support Act provides such a mechanism by way of application for administrative assessment of child support by the Child Support Registrar. It is only by application of such a standard that any certainty can be achieved concerning the level of maintenance that is appropriate in the circumstances of both parents.

33. Thirdly, action is required to arrange for the payment of maintenance at the appropriate level. The Child Support Act provides statutory mechanisms for the collection of maintenance in certain circumstances. There is no requirement under the Family Assistance Act that maintenance must be collected under the Child Support Act.

34. While it may be desirable to assess the level of maintenance that is payable in respect of a child in accordance with legislatively fixed standards (see s.4, Child Support Act) there is no requirement under the Family Assistance Act that maintenance must be assessed in that way. Such a mandatory requirement could have been specified had that been the intention of the Parliament on enacting the Family Assistance Act. Instead the Secretary is required to form an opinion whether the action taken by a claimant to obtain maintenance is reasonable in the particular circumstances. Clearly there is great diversity in the circumstances of FTB claimants that may arise for consideration under the Family Assistance Act and flexibility may be required to respond to the specific circumstances of a particular case in order to ensure a fair and just outcome. It does not follow that any action taken by a claimant to obtain maintenance in respect of a child is reasonable for the purpose of claiming FTB.

35.     Turning to the action Ms Thomas took to obtain maintenance, I accept that she arranged for Dean’s father to pay maintenance.  It is not in dispute that she and Mr Evans are the natural parents of Dean and that Dean resided in the care of Ms Thomas at all relevant times.  Nor is it in dispute that Mr Evans has a maintenance liability in respect of Dean.

36.     There is no evidence before me that Ms Thomas sought an impartial assessment of Mr Evans’ maintenance liability.  Nor is there evidence that an objective standard was applied when assessing the amount of maintenance that is or would otherwise be payable by Mr Evans.  It follows on the evidence that it is not possible to determine whether or not the amount of maintenance paid by Mr Evans, averaging $50 per fortnight, was a reasonable amount of maintenance in the circumstances.

37.     There is no evidence before me concerning the mechanism by which Mr Evans pays maintenance to Ms Thomas.  Nor is there evidence to corroborate the regularity of such payments, even though I note Ms Thomas’ explanation that payments are made fortnightly.

38.     On these facts, and in the absence of an impartial assessment of the appropriate level of maintenance that is payable by Mr Evans in the circumstances, I am compelled to conclude that Ms Thomas’ action to obtain maintenance, while well motivated, was not sufficient to be reasonable for the purpose of calculating the rate of FTB under the Family Assistance Act.

maintenance agreement

39.     I do not accept that the informal agreement between Ms Thomas and Mr Evans constitutes a maintenance agreement under the Family Assistance Act.  The informal agreement was not in writing.  There are an infinite variety of possible terms that may be agreed informally by separate parents concerning child maintenance arrangements and payments.  That any such agreement should be properly documented and signed by both of the parents before it can be accepted is not only a matter of law, it is a matter of common sense.  There was no such written agreement in Ms Thomas’ case during the period under claim.

40.     In Ms Thomas’ submission the existence of an informal agreement between her and Mr Evans should exempt her from taking maintenance action in accordance with the policy guidelines (see 3.1.5.60, the Guide).  I do not agree.  Policy guideline 3.1.5.60, in relevant part, relates to a person who was party to “an informal maintenance agreement in place prior to the CSS”, that is an informal agreement that was in place prior to 1 June 1988.  It is clear on the facts that this policy guideline does apply in this case.

conclusion

41.     From a public policy perspective, it is necessary to balance the interests of the child in question and the interests of the parents, including their capacity to provide child maintenance, and the interests of the taxpayer.  The desirability of assessing the terms of any arrangement between parents for the payment of maintenance in respect of a child in accordance with fixed and impartial legislative fixed standards is most apparent.  These are matters within the ambit of the legislative scheme for family assistance and child support.

42.     It is for this reason that I do not accept Ms Thomas’ claim that the action she took to obtain maintenance was reasonable in the circumstances. The essential point is not that Ms Thomas arranged with Mr Evans for the payment of an amount of maintenance but that the level of maintenance payable in the circumstances had not properly been assessed.  Ms Thomas did not take action to properly assess the amount of maintenance that was or would be payable by Mr Evans in the particular circumstances.  In consequence, neither Ms Thomas, nor the Secretary, nor the Tribunal can be satisfied that the amount of maintenance actually paid by Mr Evans was greater than or equal to or less than the amount that would be payable in the particular circumstances had his maintenance liability been properly assessed.  Ms Thomas’ action and her informal arrangement with Mr Evans cannot, therefore, be said to be reasonable action to obtain maintenance under the Family Assistance Act.

43.     It follows the decision under review must be affirmed.

44.     It is a matter of concern that Ms Thomas did not understand the implications of not applying for an assessment of child support in respect of Dean.  She was entitled to expect that Centrelink would inform her of such implications.  I acknowledge Ms Thomas’ consternation and frustration in this matter.  It is beholden upon Centrelink and the Secretary to ensure that FTB claimants are properly informed of their rights and obligations, and the administrative options that arise therefrom. 

45.      Ms Thomas should have been properly informed following Dean’s birth of her options with regard to obtaining maintenance payments from Mr Evans and the implications in relation to the rate of FTB payments.  That she was not may, in part at least, relate to the administrative error that I have referred to above.  However, that error was in her favour and the Secretary has indicated that no debt will be raised for recovery as the overpayment was solely caused by Centrelink’s administrative error and the ensuing payments were received in good faith.  There is nothing before me to disturb such a conclusion.

I certify that the preceding 45 paragraphs are a true copy of the reasons for the decision herein of  Mr S Webb, Member

Signed: Guy Moloney           .......................................................................................
  Associate

Date/s of Hearing  4 November 2003    
Date of Decision       3 March 2003          
Solicitor for the Applicant               self-represented      

Solicitor for the Respondent                    Mr James Larcombe
A NEW TAX SYSTEM (FAMILY ASSISTANCE) ACT 1999

Section 3 - Definitions

(1) In this Act, unless the contrary intention appears:

…
child support means financial support under the Child Support
(Assessment) Act 1989 and includes financial support:
(a) by way of lump sum payment; or
(b) by way of transfer or settlement of property.
…
maintenance includes child support.
maintenance agreement means a written agreement (whether made within or outside Australia) that provides for the maintenance of a person (whether or not it also makes provision in relation to other matters), and includes such an agreement that varies an earlier maintenance agreement.

maintenance income, in relation to an individual, means:
(a) child maintenance—that is, the amount of a payment or the value of a benefit that is received by the individual for the maintenance of an FTB child of the individual and is received from:
(i) a parent of the child; or
(ii) the partner or former partner of a parent of the child;
…

Schedule 1—Family tax benefit rate calculator

…

10.      Effect of maintenance rights

The FTB child rate for an FTB child of an individual is the base FTB child rate (see clause 8) if:
(a) the individual or the individual's partner is entitled to claim or apply for maintenance for the child; and
(b) the Secretary considers that it is reasonable for the individual or partner to take action to obtain maintenance; and
(c) the individual or partner does not take action that the Secretary considers reasonable to obtain maintenance.
…