Wade v Secretary, Department of Family and Community Services

[2004] FCA 1660

FEDERAL COURT OF AUSTRALIA

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

SOCIAL WELFARE – apportionment of shared care of children – eligibility for the Family Tax Benefit – calculation of the Family Tax Benefit – means by which the calculation of shared care should be made – whether hours should not be used in calculating care for the purposes of the Family Tax Benefit – use of Family Assistance Guide in determining how the percentage of Family Tax Benefit for a child is to be determined - pattern of care

Statutes

A New Tax System (Family Assistance) Act 1999 (Cth) ss 21, 22, 58, 59(1), Part 3, 22(7), 25, 25(2), 25(3), 58(1), 58(3), 59

Administrative Appeals Tribunal Act 1975 (Cth) s 44(1)

Cases

Re Harrison and Secretary, Department of Family and Community Services (2002) 68 ALD 543 Refd to

Re Nowicz and Secretary, Department of Family and Community Services (2001) 65 ALD 314 Refd to

PAUL WADE v SECRETARY, DEPARTMENT OF FAMILY & COMMUNITY SERVICES and LINLEY BARAN
Q76 OF 2004

KIEFEL J
20 DECEMBER 2004
BRISBANE

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY	Q76 OF 2004

BETWEEN:

PAUL WADE
APPLICANT

AND:

SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES
FIRST RESPONDENT

LINLEY BARAN
SECOND RESPONDENT

JUDGE:

KIEFEL J

DATE OF ORDER:

20 DECEMBER 2004

WHERE MADE:

BRISBANE

THE COURT ORDERS THAT:

1.        The application be dismissed.

2.        The applicant pay the first respondent’s costs including any reserved costs.

Note:   Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY	Q76 OF 2004

BETWEEN:

PAUL WADE
APPLICANT

AND:

SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES
FIRST RESPONDENT

LINLEY BARAN
SECOND RESPONDENT

JUDGE:	KIEFEL J
DATE:	20 DECEMBER 2004
PLACE:	BRISBANE

REASONS FOR JUDGMENT

1. The applicant is the father of two children and the second respondent is their mother.  On 1 May 1998 the Family Court made an order as to the joint responsibility for and residence of the children, reflecting an agreement reached between the applicant and the second respondent.

2. On 17 December 2002 the second respondent completed a form entitled ‘Details of your child’s care arrangements’.  In it she said that since 1999 the children had resided with her every Thursday night and on every second weekend Friday and Saturday night and usually half the holidays.  She said that in the year 2002 the children would reside with her from 23 December 2002 to 12 January 2003.  She said that she did not know what percentage of care she would have during the assessment period. 

3. On 20 December 2002 the applicant completed a similar form. In relation to the question as to what percentage of care he would have during the assessment period he said ‘90%’.  Further, in relation to the enquiry how long each of the children would be with the second respondent the following appears:

   ‘1.       From 3 pm Friday - 6 pm Sunday every second week;  and

   2.        3 pm Thursday - 9 am Friday every week;  and

   3.        Half of school holidays’

4. A calculation follows:

‘3 nights per f/n	60
½ school hols	42
102	28%’

1. The applicant denies that it is his note.  It may not be.  It would appear to refer to the second respondent’s provision of care.  The applicant notes elsewhere in this document that his proportion of care should be taken at 90 per cent and the second respondent at 10 per cent.

2. At the hearing of this matter the applicant would not accept that that was his note, but it appears to be consistent with his other writings, and with what was said before the Tribunals. 

3. In the same document in a ‘note’ he stated:

   ‘The percentage of “care” should reflect the 100%  financial responsibility for school/housing/medical/and other recurrent & fixed costs which I bear as a consequence of the mother making no child support payments or determined contribution to them.  …’

4. The applicant was receiving 100 per cent of the Family Tax Benefit (‘FTB’) for both children at the time the document was completed.

5. On 10 January 2003 the first respondent determined that from 1 July 2002 the shared care would be apportioned 28 per cent to the second respondent and 72 per cent to the applicant.  On 16 January 2003 the second respondent applied to waive the benefit but she was dissuaded from that course by the applicant. By letter received by the first respondent on 14 February 2003 the applicant sought review of the way in which the FTB was calculated. 

6. The applicant sought a determination that when he had 100 per cent of the care of the children (as in the school holidays) he would be paid 100 per cent of the payments and the same should apply for the non-primary care-giver;  and that when he had the predominant percentage of care the non-primary care-giver’s percentage of care should be assessed at less than 10 per cent, which would result in him receiving 100 per cent of the payment. 

7. An authorised review officer conducted a review and determined on 20 March 2003 that the shared care be apportioned 35 per cent to the second respondent and 65 per cent to the applicant. This had the effect that the second respondent could no longer waive the benefit, had she wished to.  The applicant sought review of that decision by the Social Security Appeals Tribunal (‘the SSAT’). 

8. The SSAT noted that the authorised review officer had varied the percentage of care to 65 per cent by having regard to the Family Court order which set out the shared care arrangement between the parties.  It identified the issue for its determination as being whether there had been a correct calculation of the applicant’s percentage of shared care.  The SSAT recorded that the applicant told it:

   ‘That the agreed care arrangements between he and Ms Baran between 1 July 2002 and 30 June 2003 were as follows:

   (i)One night a week Ms Baran had the children from after school until next morning.

   (ii)Ms Baran also had alternate week-end access from 3 p.m. Friday until 6 p.m. Sunday.

   (iii)Ms Baran had care of the children for half the school holidays.’ 

9. The second respondent agreed with this.  The applicant told the Tribunal that he did not wish the assessment of shared care to be done on the basis of hours.  He considered that if the children were with the second respondent from 3.00 pm one day to 9.00 am the next that that is not a day’s care, it is nil.  Whether the children go to their mother for half an hour or four hours that does not mean that they are out of his care.

10. The SSAT referred to ss 21, 22, 58 and 59(1) of the A New Tax System (Family Assistance) Act 1999 (Cth) (‘the Act’). It considered that the Act was silent as to the means by which the calculation of shared care should be made. One approach, suggested by the Family Assistance Guide (‘the Guide’) pars 2.1.1.45 and 2.1.1.50, was to calculate the number of nights spent in each parent’s care.  It noted that that may be appropriate in many circumstances but may not reflect accurately the responsibility of parents on a daily or hourly basis.  The Tribunal considered that it might be unfair to the applicant to calculate the percentage of care on the basis of nights spent in care since, on most weeks, his children spent the vast majority of the day with him and only one evening a week with their mother (plus alternate weekends).  In its view a fairer calculation was to calculate the actual hours spent in care.  It calculated that the second respondent had 31 per cent of the shared care of the children and the applicant had 69 per cent.

11. The Tribunal said that it had carefully considered the applicant’s arguments that the percentage of care should be based strictly on the days in which the children were in the respective care of their parents and that minor periods of time spent apart from him should not be counted as the children being in the care of his ex-partner.  It was not persuaded by his arguments.  It was of the view that the family assistance scheme is designed to provide an allocation of family payments which more accurately reflects the reality of care provided by parents.  The applicant’s  interpretation of the legislation would not, in its view, promote the intention of the legislature and would seem to be at variance with the approach taken in cases such as Re Harrison and Secretary, Department of Family and Community Services (2002) 68 ALD 543 and Re Nowicz and Secretary, Department of Family and Community Servcies (2001) 65 ALD 314.

12. On 8 March 2004 the Administrative Appeals Tribunal (‘the AAT’) affirmed the SSAT’s decision.  The AAT accepted that there may be very short periods of time during which a child is in the care of a parent which might perhaps be disregarded for the purpose of the calculation.  However it regarded a period from 3.00 pm one day to 9.00 am the following day as quite significant and considered that it should form part of the calculation.  In its view the SSAT assessment more accurately reflected the reality of the level of care provided by the parents for the period under review than would be the case if only full days were taken into account.

13. The applicant appeals from that decision. His appeal is limited to the questions of law, pursuant to s 44(1) of the Administrative Appeals Tribunal Act 1975 (Cth) .

14. The applicant’s grounds of appeal, shorn of irrelevancies, may be summarised as follows:

    1.His principal contention is that hours should not be used in calculating care for the purposes of the FTB.  He submits this follows from a consideration of the relevant legislation and guidelines.

    2.He points to a factual error in the calculation of FTB where weekends are taken into account.

    3.He says that the second respondent’s application for waiver was not considered by either the SSAT or the AAT.

    4.He says that the second respondent’s claim was for payment of FTB for an extended holiday period and that she was not seeking a percentage of regular fortnightly instalments.

    5.The calculation first undertaken by the authorised review officer, to determine a pattern of care, only arises if the carers do not agree on the care percentage.  Both carers agreed that they should each have 100 per cent FTB during extended holidays and that he should receive 100 per cent on a fortnightly basis.

15. The ground listed at 2 does not involve a question of law.  The agreement referred to in 5 is not in evidence. There is no suggestion of there being an agreement concerning the percentage of care to be applied until the matter reached the AAT.  Even then it is the applicant’s assertion, there being no statement from the second respondent to this effect.  In any event I do not consider that the various decision-makers were bound to apply the agreement for which the applicant contends.  Whilst the Guide suggests agreements between the parties as to the percentage of care each contributed will be given effect to, where possible, the applicant’s approach was to apply different percentages at different times.  On one view it does not appear to be the approach contemplated by the Guide.  There may be administrative consequences to the applicant’s approach.

16. The second respondent’s waiver referred to in the ground listed at 3 was withdrawn by her.  After the SSAT decision her assessed level of contribution did not make waiver an option, although there is nothing to suggest it was again contemplated.  It cannot be said to have been an issue before the AAT and does not assume any relevance on the appeal.

17. With respect to the ground listed at 4, the applicant sought to put a document before the Court which was not before the AAT, although he says it was before the SSAT.  The document is the second respondent’s application for FTB dated 23 December 2002. In it she said that the children entered her care on 23 December 2002 and that they would be living with her for three weeks.   She answered ‘no’ to the question whether the claim was for fortnightly benefits.  I take the applicant to contend that these references suggest she was applying only for benefits for the holiday period at 100 per cent.  This does not provide strong support for the existence of a wider agreement concerning the percentage of care to be attributed to the parties, one which is to apply in the future. 

18. The other aspect of the applicant’s argument in this regard appears to be that the second respondent did not apply for FTB based upon a shared care arrangement and there should not have been a change made from the existing arrangements. However the applicant and the second respondent provided details of a shared care arrangement in a form which is used for and which is relevant to assessments of FTB. It is used with respect to applications for FTB and when persons are already receiving such benefits. In the latter circumstances there does not seem to me to be anything in the Act which would prevent a review officer from reassessing benefits payable from time to time and when further information is received.

19. Part 3 of the Act relates to the eligibility of an individual for FTB. Section 21 of the Act provides that an individual is eligible if they have at least one FTB child and satisfy certain other criteria. To be an FTB child the child must be in the adult’s care, amongst other things. Section 22(7) of the Act provides that if the Secretary is satisfied that there will be a pattern of care for the child over a period, where the child will be an FTB child of more than one other individual, and one of those other individuals makes a claim for payment of FTB with respect to the child for some or all of the days in that period the child is to be taken to be an FTB child of that individual for the purposes of the section ‘on each day in that period, whether or not the child was in that individual’s care on that day’.

20. Section 25 of the Act deals with the effect of an FTB child being in an individual’s care for less than 30 per cent of the period. Depending upon the percentage of the period in question the child may not be an FTB child for any of the period. At certain other percentages the person may waive the benefit. Section 25(2) provides that, for the purposes of the section, a child cannot be in the care of more than one of the other individuals on a particular day, and sub-section (3) requires the Secretary to determine which of the individuals has the care of a child on a given day having regard to the living arrangements of the child.

21. The rate of family assistance is provided for in Part 4 of the Act. It is expressed as an annual rate, from which a daily rate may be calculated: s 58(1) and (3). Pursuant to s 59 the Secretary may determine the percentage that is to be person A’s percentage of FTB for the child where an FTB child is a child of person A and another individual, not their partner. It would seem that the percentage must relate to the annual and daily rates.

22. The Guide is not referred to in the Act. In par 2.1.1.45 of the Guide, ‘Shared Care & Establishing a Pattern of Care’, it is said in summary that:

    ‘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 …’

    Where carers do not agree on the actual pattern of care it must be determined on the basis of available evidence. The Guide goes on to say that:

    ‘Generally a pattern of care is based upon the number of nights in an assessment period where an individual has the overnight care of an FTB child.  A person with the overnight care of a child is regarded as having had care of the child for that day.’

    But it is explained that:

    ‘There may be some occasions where only counting the nights in care does not accurately reflect the caring arrangements for the child.  In such cases, at the request of a carer, the actual number of hours of care may be calculated for each carer in determining the pattern of care and then converted into days in care.’

23. Under par 2.1.1.50, ‘Shared Care & Calculating Percentage of Care’, it is said in summary that:

    ‘This topic explains how to calculate the percentage of care when 2 or more individuals … share the care of an FTB child and they have not provided the FAO of an agreed percentage of care.  The percentage of care is calculated taking into account the pattern of care … over the assessment period … .’

24. And under ‘Step 2 – Work out the percentage of care’:

    ‘Having established the pattern of care during the assessment period, the number of nights in care … is divided by the number of days in the assessment period and multiplied by 100 to arrive at a percentage.’

25. The SSAT and the AAT were correct in finding that the Act does not explain how the percentage, that is to be the person’s percentage of FTB for the child, is to be determined for the purposes of s 59(1) of the Act. The Guidelines provide for the steps which may be undertaken to achieve that result. Guidelines may fulfil this function, so long as what is suggested in them is not inconsistent with the purpose and intended operation of the Act.

26. There is nothing in the Act which requires the percentage to be determined by reference to whole days that a person has the care of the child. The references in ss 22 and 25 of the Act to days of care is for the purposes of these provisions. It does not follow that the reference to days of care can be imported into what is necessary to calculate the actual percentage of care. It is however clear from the Act that its object is to provide a benefit to the person having the care of the child. To be consistent with this object the percentage of care to be assigned to each person should reflect the actual care provided by them. This is the way in which the SSAT and AAT approached the matter. In my view they were correct.

27. The ‘pattern of care’ referred to in the guidelines has two aspects, it seems to me.  In the first place it reflects the care arrangements agreed between the parties or involves a finding which has regard to the actual care arrangements for the child.  It is said that ‘as much as possible’ the pattern of care should be the pattern agreed.  That was the course taken here.  The pattern of care is also used as the basis for the calculation of percentage in par 2.1.1.50.  Although they are expressed as the respective party’s ‘days of care´ under par 2.1.1.45, which are to be divided by the number of days in the period in question, the Guidelines permit more than one method of assessing those days. Relevantly one is to calculate the number of hours of care and aggregate them.

28. The applicant submits that that course was not open in the present case because there was no ‘request’ by a carer for such an approach, as the guidelines contemplated. I do not think that the reference to a request is to be taken to prevent a decision-maker from assessing the care on an hourly basis. They are guidelines after all, not regulations. To do so would be consistent with the purpose of the Act. I add that I do not consider that the reference to ‘nights in care’ in Step 2, par 2.1.1.50 adds to or detracts from the approach which I have taken.

29. The appeal is without merit.  It will be dismissed, with the applicant to pay the costs of the first respondent.

I certify that the preceding thirty-three (33) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Kiefel.

Associate:

Dated:            20 December 2004

The Applicant:	Appeared in Person
Counsel for the First Respondent:	Mr M Swan
Solicitor for the First Respondent:	Australian Government Solicitor
Counsel for the Second Respondent:	The Second Respondent did not appear
Date of Hearing:	22 October 2004
Date of Judgment:	20 December 2004