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

Williams and Secretary, Department of Social Services (Social services second review) [2017] AATA 414 (4 April 2017)
Division:GENERAL DIVISION
File Number(s): 2016/6120
Re: Ms Jessica Williams
APPLICANT

AndSecretary, Department of Social Services
RESPONDENT

DECISION
Tribunal:Anna Burke, Member
Date:4 April 2017
Place:Melbourne

The Tribunal affirms the decision under review.
[sgd]........................................................................
Anna Burke, Member
SOCIAL SECURITY – pensions benefits and allowances – family tax benefit – cancellation of benefit based on partner’s income being in excess of the payment threshold – review of entitlement to family tax benefit – applicant in multiple relationship– member of a couple – decision affirmed.
Legislation
A New Tax System (Family Assistance) Act 1991
A New Tax System (Family Assistance) (Administration) Act 1999
Cases
Re Quist-La Gloria and Secretary, Department of Social Security (1998) 52 ALD 410
Secondary Materials
Family Assistance Guide (Guides to Social Policy Law)
REASONS FOR DECISION
4 April 2017
Introduction

Ms Williams is seeking a second tier review of the cancellation of her Family Tax Benefit (FTB) payment. Centrelink cancelled Ms Williams’ FTB on 10 March 2016 as her and her partner’s income was assessed as being in excess of the threshold for payment of FTB. Centrelink is the service delivery agency for the Department of Social Services.
Ms Williams does not dispute Mr Moore is her partner or that their combined income is in excess of the FTB threshold. However, she believes that her circumstances are unique and should be taken into account to calculate her income on a case-by-case basis. She and Mr Moore are in a multiple relationship. That is, Mr Moore has two partners, including Ms Williams. Mr Moore is the primary partner in the multiple relationship. Ms Williams, Mr Moore and Mr Moore’s other partner all live in the one residence, with the children of Mr Moore and Ms Williams and the children of Mr Moore and the other partner.
Ms Williams represented herself at the hearing and was accompanied by her partner Mr Moore. Ms Belinda Lewis appeared for the respondent.
Ms Williams and Mr Moore are the parents of child A, who was born in 2014. On 8 July 2014 Ms Williams first enquired about FTB and paid parental leave payment for the impending birth of her child.
On 1 December 2014 Ms Williams was assessed as being partnered with Mr Damien Moore and that Ms Williams and Mr Moore were each to be treated as a member of a multiple relationship.
On 4 April 2015 Ms Williams FTB was cancelled on the basis that Ms Moore’s and Mr Williams’ combined income was deemed to be in excess of the threshold to quality for FTB. At the time, Ms Williams advised Centrelink that her annual salary was $60,000 and Mr Moore’s was $92,000.
On 11 December 2015 Ms Williams lodged an online application for FTB as her combined income had decreased. Ms Williams reported her annual income to be $9,000 and Mr Moore’s to be $90,000.
On 22 February 2016 Centrelink granted her FTB and paid her arrears. On 9 January 2016 Mr Moore’s salary was updated to $92,896. On 8 March 2016 Ms Williams’ updated her estimate of annual income to $35,000 as she had received a redundancy payment.
On 10 March 2016 Centrelink advised Ms Williams that her FTB had been cancelled as her combined income of $127,896 was in excess of the threshold for FTB eligibility. On 24 May 2016 Ms Williams requested an internal review of the decision, as she believed her situation should be assessed on a case-by-case basis. On 30 May 2016 an Authorised Review Officer (ARO) affirmed the original decision.
On 15 July 2016 Ms Williams applied to the Social Security and Child Support Division of the Administrative Appeals Tribunal (AAT) (Tier 1) for a review of the ARO’s decision. On 19 October 2016 the Tier 1 hearing affirmed the original decision made on 10 March 2016. On 9 November 2016 Ms Williams applied to the General and Other Divisions of the AAT for a review of the Tier 1 decision.
Issues
I need to consider the following relevant issues:
a) whether the decision to cancel Ms Williams’ FTB is correct;
b) whether Ms Williams’ is a member of a couple, as per section 1.1.M.50 of the Family Assistance Guide with respect to her claim against cancellation; and

c) whether Mr Moore’s income should be assessed in calculating Ms Williams’ entitlement to FTB.

THE LEGISLATIVE FRAMEWORK

The entitlement to FTB is contained in the A New Family Tax System (Family Assistance) Act 1999 (the Act), A New Tax System (Family Assistance) (Administration) Act 1999 and the Social Security Act 1991 (SSAct).
The power to cancel Ms Williams’ FTB is provided by section 80(1) of the Social Security (Administration) Act 1999 (the Administration Act). Section 80 provides that if the Secretary is satisfied that a social security payment is being paid to a person who is not qualified for the payment the Secretary is to determine that the payment is to be cancelled or suspended.
Section 58 of the Act provides that an individual’s annual rate of FTB is to be calculated in accordance with the rate calculator in Schedule 1.
In calculating an individual’s rate for FTB, an individual’s adjustable tax income must be determined and applied according to the relevant rate calculator.
Schedule 3 of the Act states:
3   Adjusted taxable income of members of couple
(1)        For the purposes of this Act (other than Part 4 of Schedule 1), if an individual is a member of a couple, the individual’s adjusted taxable income for an income year includes the adjusted taxable income for that year of the individual’s partner.
(2)        For the purposes of Part 4 of Schedule 1, if an individual is a member of a couple, the individual’s adjusted taxable income for an income year is:
a)   for the purposes of Subdivision AA of Division 1 of Part 4 of Schedule 1:
i.the individual’s adjusted taxable income for that year; or
ii.the adjusted taxable income for that year of the individual’s partner if it is more than the individual’s adjusted taxable income for that year; and
b)   for the purposes of the other provisions of Part 4 of Schedule 1:
i.the individual’s adjusted taxable income for that year; or
ii.the adjusted taxable income for that year of the individual’s partner if it is less than the individual’s adjusted taxable income for that year.
The Family Assistance Guide (the Guide) defines a member of a couple and multiple relationships at 1.1M.50:
1.1.M.50 Member of a couple
Definition
The term 'member of a couple' has the same meaning under the FAAct as under the SSAct.
An individual is a member of a couple with another individual under the SSAct if they are:
·          legally married or in a registered relationship and not living apart on a permanent or indefinite basis, or
·          in a de facto relationship and are over the age of consent and not in a prohibited relationship.
Note: Prior to 1 July 2009 same sex couples were not recognised for FA purposes.
In determining if an individual is a member of a couple, consideration must be given to the following 5 factors:
·          the financial aspects of the relationship,
·          the nature of the household,
·          the social aspects of the relationship,
·          any sexual relationship between the individuals, and
·          the nature of the individual's commitment to each other.
Multiple relationships
Multiple relationships are where an individual has more than one partner at the same time. For example, the relationships could comprise of a claimant/recipient with any combination of male or female partners.
Under the member of a couple provisions of the SSAct, it is possible for an individual to be in more than one de facto relationship at the same time. A separate member of a couple assessment is undertaken for each relationship.
The process for determining FA claims which involve multiple relationships is different to the process for social security claims. FA claims should be determined on a case-by-case basis, taking into account the individual circumstances of the family.
Parties’ contentions
Ms Williams argues that the Guide should apply to her multiple relationship with Mr Moore and Mr Moore’s other partner and that her multiple relationship status with Mr Moore should be assessed on a case-by-case basis. She also contends that Mr Moore’s income should be attributed on a percentage basis between her and Mr Moore’s other partner.
The respondent contends that there is no discretion under the Act to split Mr Moore’s income between Ms Williams and his other partner. This is based on the fact that that clause 3 of Schedule 3 of the Act requires a partner’s income to be included in calculating a rate.
THE TRIBUNAL’S CONSIDERATION AND FINDINGS
Evidence before the tribunal
The evidence before the Tribunal included two sets of documents provided pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 (the T-documents) and the supplementary T-documents provided by the respondent. Ms Williams gave oral evidence at the hearing. In addition, Mr Moore provided information and a statutory declaration in respect of the ATO’s assessment of his combined income with his partner’s income. The respondent responded to this matter.
Is Ms Williams a member of a couple?
There is no dispute between the parties that Ms Williams is part of a couple, as defined in section 1.1.M.50 of the Guide. Indeed, at no stage has Ms Williams sought to deny her relationship with Mr Moore or his relationship with their daughter.
On numerous occasions, Ms Williams notified the Department of Human Services of her partner’s income in respect of her application for FTB. On 1 December 2014 the Department determined Ms Williams and Mr Moore satisfied the definition of a couple and determined that the Applicant’s status was to be treated as a member of a multiple relationship. Mr Moore was already on the Department’s system as the partner of another woman and as such the Department had to manually enter Ms Williams’ details and requests as the system does not allow one partner to be identified against two individuals.
Can Ms Williams’ situation be considered on a case-by-case basis?
The respondent contended in submissions and at the hearing that Ms Williams cannot seek redress under section of 24(2) of the SSAct, which states:
(2) Where:
a)    a person has a relationship with another person, whether of the same sex or a different sex (the partner); and
b)    the person is not legally married to the partner; and
c)    the relationship between the person and the partner is a de facto relationship; and
d)    the Secretary is satisfied that the person should, for a special reason in the particular case, not be treated as a member of a couple;
the Secretary may determine, in writing, that the person is not to be treated as a member of a couple for the purposes of this Act.
Ms Williams could not seek redress under section 24(2) as Ms Williams could not be granted special reasons not to be treated as a couple.
Moreover, the respondent contended that Ms Williams is able to pool resources with Mr Moore and his other partner and benefits from these arrangements. In addition to this, no extenuating circumstance exists, such as a person’s partner being in gaol or suffering serious illness that would allow the Secretary to treat her as not part of a couple.
Ms Williams is not seeking to be regarded as single with respect to her relationship status with Centrelink for her determination of FTB and has not requested that her situation be viewed by the Secretary as a special reason. Rather, Ms Williams contents that her unique relationship as recognised by the Department as a multiple relationship be considered on a case by case basis, as prescribed in the Guide, to determine her combined income with her partner.
At the hearing Ms Williams and Mr Moore described their living arrangement. They reside in a five bedroom house with their daughter and Mr Moore’s other partner and the other partner’s two children. They each contribute to the rent and household finances. Their living arrangement allows the members of the multiple relationship to pool resources. However, Ms Williams stated that in this circumstance, the arrangement works to their disadvantage as Mr Moore’s income, being the central income of the relationship, is shared between two couples and three children. Moreover, the members of the multiple relationship are required to rent a larger home to accommodate their family situation.
Ms Williams contends that in her situation the central partner’s income is being counted twice, one for each partner and should be calculated differently to recognize their unique living arrangement. Consequently, the family is disadvantaged, as Mr Moore’s income is counted twice and not treated as a percentage for each family unit as she contends that it should be. She argues that the household should be regarded as being composed of two couples and not one.
Ms Williams does not dispute that her combined income takes her over the threshold for FTB. However, she maintains that Mr Moore’s income as the central earner should be assessed against each partner and not attributed twice by the Department to two partners.
At the hearing and in a subsequent statutory declaration to the Tribunal, Ms Williams advised that the ATO had provided advice that Mr Moore should only indicate his partner with the highest income on his tax return but both of his partners would nominate him as their partner on their tax returns.
The respondent argued that taxation advice has no relevance in respect of the Act or of the SSAct, the relevant legislation in respect of the matter before the Tribunal. Furthermore, data matching is undertaken by the department against ATO records to assess an individual’s income and in respect of Mr Moore, his salary would be linked to both Ms Williams and his other partner.
The respondent contends that there is no discretion to exclude Mr Moore’s adjusted income in determining the Applicant’s entitlement to FTB. The respondent further contends that there is no discretion pursuant to clause 3 of Schedule 3 of the Act to split Mr Moore’s income between his nominated partners.
Ms Williams contends this does not reflect the advice provided in the Guide which clearly states that:
A separate member of a couple assessment is undertaken for each relationship. The process for determining FA claims which involve multiple relationships is different to the process for social security claims. FA claims should be determined on a case-by-case basis, taking into account the individual circumstances of the family.
Consideration
The Tribunal considered that Ms Williams and Mr Moore presented as a credible couple who were attempting to comply with the law in respect of their unique relationship. They had not attempted to deny they were a couple, their income, or the nature of the relationship with their child.
The Tribunal found that while their situation was unusual, it did not exclude Ms Williams from the operations of the Act which provides, for the purposes of FTB calculation, that if an individual is a member of a couple then the combined income is to be used in the calculation of the benefit.
The Tribunal found that Ms Williams situation does not give rise to the Secretary determining her not to be treated as a member of a couple. Additionally, the Tribunal found that the Act does not provide discretion to the Secretary to split or apportion a central member’s income between partners.
However, the Tribunal did find that the Guide is unclear, and therefore misleading, giving rise to Ms Williams’ reasonable expectation that her circumstances would be assessed on a case-by-case basis. The Guide gave weight to Ms Williams’ contention that her situation should be assessed as one income shared between three people and not two couples benefiting wholly and equally from Mr Moore’s one income.
In Re Quist-La Gloria and Secretary, Department of Social Security (1998) 52 ALD 410, the Tribunal considered whether a man could simultaneously have a marriage-like relationship with more than one woman. Senior Member Allen held that this proposition was entirely consistent with the SSAct. This was despite finding that the applicant was engaged in a commune type arrangement with her partner, which did not expand to satisfying the definition of a marriage-like relationship. There appears to be little other reference to multiple relationships on which to base this determination.
Placing the decision in Re Quist-La Gloria to one side, the Tribunal was not aided by any explanation or guidance from the respondent with regards to Centrelink’s dealings with multiple relationships, except insofar as to state that they had come across them in the past. Therefore, the Tribunal notes that there was not a substantial amount of precedent to consider with reference to multiple relationships and the application of FTB in these circumstances.
CONCLUSION
Having carefully considered all the evidence before the Tribunal, I find that Ms Williams is living with Mr Moore as a couple and that his income must be taken into account in assessing her eligibility for FTB. I further find that at the time of determination this combined income exceeded the income threshold and as such Ms Williams was not entitled to FTB.
DECISION
The Tribunal affirms the decision under review,

42. I certify that the preceding 41 (forty-one) paragraphs are a true copy of the reasons for the decision herein of Anna Burke, Member

[sgd]..........................................................
Associate
Dated 4 April 2017

Date of hearing 9 March 2017

Applicant In person

Advocate for the Respondent Ms Belinda Lewis

[2017] AATA 414

4 April 2017

Key Legal Topics

Areas of Law

Administrative Law

Statutory Interpretation

Legal Concepts

Judicial Review

Procedural Fairness

Statutory Construction

Standing

Date of hearing	9 March 2017
Applicant	In person
Advocate for the Respondent	Ms Belinda Lewis