West and Commissioner of Taxation

[2003] AATA 368

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2003] AATA 368

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No QS2002/28

SITTING AS THE SMALL TAXATION CLAIMS TRIBUNAL		)
Re		ARNOLD VAN WEST

Applicant

And COMMISSIONER OF TAXATION

Respondent

DECISION

Tribunal Mr B J McCabe, Member

Date24 April 2003

PlaceBrisbane

Decision The Tribunal affirms the objection decision under review. 

(Sgd) B J McCabe
  Member

CATCHWORDS

TAXATION – Small Taxation Claims Tribunal – income tax – Medicare levy surcharge - whether applicant exempted from paying the Medicare levy surcharge – whether the applicant is entitled to claim his former wife as a dependent – meaning of “dependent”

Income Tax Assessment Act 1936

Medicare Levy Act 1986

REASONS FOR DECISION

24 April 2003 Mr B J McCabe, Member  

Introduction

1. The applicant, Mr Van West, objected to the Commissioner’s assessment with respect to the year ended 30 June 2000. The Commissioner says Mr Van West must pay the Medicare levy surcharge. Mr Van West disagrees. He says he has a dependent – his former wife to whom he pays spousal maintenance. A person with a dependent is not required to pay the surcharge imposed pursuant to s 8B of the Medicare Levy Act 1986 and s 251S of the Income Tax Assessment Act 1936 (ITAA36).

The Material Before the Tribunal

2. The Tribunal was provided with the documents required under s 37 of the Administrative Appeals Tribunal Act 1975. It also had the benefit of written submissions filed on behalf of the Commissioner and Mr Van West. The parties consented to the matter being dealt with on the papers, so there was no need for a hearing.

The Facts

3.      The facts of the case are not in dispute. Mr Van West was divorced on 24 February 1998. The Family Court ordered that he pay spousal maintenance to his ex-wife in the amount of $150 per week. The applicant apparently complied with the order and made the payments. The children of the marriage were grown and no longer dependent. The applicant did not live with his children or his ex-wife.

4.      Mr Van West was not married during the year of income in question and he was not in receipt of any welfare benefits. He was not covered by an insurance policy providing private health cover.

5.      The applicant’s taxable income in the year ending 30 June 2000 was $51,715.

The Legislation

6. Section 8B of the Medicare Levy Act 1986 imposes a levy payable in certain circumstances by higher income earners. The levy is collected through the tax system pursuant to s 251S of ITAA36 and the related provisions in Part VIIB of that Act.

7. Section 8B(1) says:

“This section applies to a person during a period if during the whole of the period:

(a) the person is not a married person; and

(b) the person does not have any dependants; and

(c) the person is not covered by an insurance policy that provides private patient hospital cover; and

(d) the person is not a prescribed person.”

8. The dispute in this case is whether Mr Van West has any dependents within the meaning of s 8B(1)(b). He does not satisfy any of the other grounds for exemption.

9.      The expression “dependent” is not defined in the Medicare Levy Act, but s 3 of the Act says that words and phrases used in the Act are taken to have the same meaning as the same words used in Part VIIB of ITAA36. “Dependent” is defined in s 251R(3) of ITAA36. The section says a person is taken to be the spouse of another person if:

“(a) the first-mentioned person was a resident of Australia;

(b) the first-mentioned person was:

(i) the spouse of the other person;

(ii) a child of the other person less than 16 years of age; or

(iii) a child of the other person not less than 16 years of age but less than 25 years of age and receiving full-time education at a school, college or university; and

(c)    the other person contributed to the maintenance of the first-mentioned person.”

10.     There are several exceptions to the definition provided for elsewhere in s 251R, but they are not relevant here.

11.     The term “spouse” is defined in section 6(1) of the ITAA36. Section 6(1) provides:

“In this Act, unless the contrary intention appears: …

spouse, in relation to a person, includes another person who, although not legally married to the person, lives with the person on a bona fide domestic basis as the husband or wife of the person.”

12.     Mr Van West is a resident of Australia, but he does not have a spouse following his divorce; he does not reside with his former wife on a bona fide domestic basis; nor does he have a child under 16 or a child under 25 receiving a full-time education whom he supports. The fact he pays his former spouse maintenance is irrelevant.

13. The applicant obviously has a good deal of unresolved anger about his divorce and the Family Court. He points out on several occasions in his material that he did not initiate the divorce. He says the Family Court has made his ex-wife dependent on him, so he should be able to claim the benefits that flow from having a dependent. He is wrong. The legislation sets out the circumstances in which a person may be relieved the obligation to pay the Medicare levy. Section 8B of the Medicare Levy Act applies to Mr Van West.  He must therefore pay the levy.

14.     The objection decision under review is affirmed.

I certify that the 14 preceding paragraphs are a true copy of the reasons for the decision herein of Mr B J McCabe, Member

Signed:         Sarah Oliver
  Associate

The matter was heard on the papers
Date of Decision  24 April 2003

The Applicant represented himself
Solicitor for the Respondent     Mr Aftanas, ATO Legal Practice