Wilson and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs and Anor

[2011] AATA 736

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2011] AATA 736

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No 2011/1618

GENERAL ADMINISTRATIVE DIVISION		)
Re		Liana Wilson

Applicant

And Secretary, Department of Families, Housing, Community Services and Indigenous Affairs

Respondent

And

Anthony Payne

Other Party

DECISION

Tribunal Senior Member A K Britton

Date20 October 2011  

PlaceSydney

Decision The decision under review is set aside and in substitution it is decided that Ms Wilson is entitled to 100 per cent of family tax benefit for the period 1 July 2009 to 7 May 2010.

.......................[sgd].......................

Senior Member A K Britton

CATCHWORDS

SOCIAL SECURITY – Family Tax Benefit – eligibility of separated members of a couple for period prior to separation – FTB received by one spouse prior to couple entering into property settlement –– decision under review set aside.

A New Tax System (Family Assistance) Act 1999 (Cth) – ss 22, 26, 29

Drake v Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634

Visa Cancellation Applicant and Minister for Immigration and Citizenship [2011] AATA 690

REASONS FOR DECISION

Senior Member A K Britton           

1.      Ms Liana Wilson challenges the decision made by the Social Security Appeals Tribunal (SSAT) that her former spouse, Mr Anthony Payne, is entitled to 50 per cent of the family tax benefit (FTB) paid to her for the tax year 2009/2010. In making that decision, the SSAT set aside an earlier decision made by a Centrelink Authorised Review Officer that Ms Wilson should receive all of the FTB payable for that period.

2. Ms Wilson and Mr Payne have two children. In addition, Ms Wilson has a child from a previous relationship. Prior to their separation in May 2010, each child was deemed to be an “FTB child” of Ms Wilson and Mr Payne within the meaning of s 22 of A New Tax System (Family Assistance) Act 1999 (the Family Assistance Act).

3.      Prior to separating, FTB was paid to Ms Wilson by way of an annual lump sum payment. From 8 May 2010, when the couple separated, Ms Wilson elected to receive FTB by way of fortnightly instalments.

4.      The issue to be determined is how the FTB paid to Ms Wilson for the 2009/2010 financial year to 8 May 2010, should be apportioned.  Ms Wilson contends that she is entitled to the entire amount and the original decision should be reinstated. Mr Payne and the respondent Secretary contend that the benefit should be split equally between himself and Ms Wilson and that the decision made by the SSAT should be upheld.

Statutory framework

5. Under the Family Assistance Act, where two individuals are members of a couple, each of whom would otherwise be eligible for FTB, only one member is eligible for FTB. In deciding which member of the couple is eligible for FTB, s 26 of the Family Assistance Act instructs the decision-maker to have regard to:

(a)  whether one member of the couple is the primary carer for the child or children; and

(b) whether the members have made a written agreement nominating one of them as the member who can make a claim under Part 3 of the A New Tax System (Family Assistance) (Administration) Act 1999 for payment of family tax benefit in respect of the child or children.

6. Where, as in this case, a couple have separated and FTB is claimed for a period when they were still members of a couple, the one-member eligibility rule does not apply and the percentage of FTB payable to each former member of the couple is a matter for determination by the decision-maker. Section 29 provides:

Eligibility for family tax benefit of separated members of a couple for period before separation

If the Secretary is satisfied that:

(a)  2 individuals are not members of the same couple ( person A and person B ); and

(b)  during a period in the past when person A and person B were members of the same couple, they had an FTB child or children; and

(c)  but for subsection 26(1), person A and person B would both be eligible for family tax benefit for the FTB child or children for that period;

the Secretary may:

(d)  determine that person A and person B are both eligible for family tax benefit for the child or children for that period; and

(e)  determine person A's and person B's percentage of the family tax benefit for the child or children for that period.

7. The Family Assistance Act does not prescribe how the decision-maker should approach the task of deciding how the benefit should be paid under s 29. The Family Assistance Guide provides some guidance and states at 2.1.1.25:

Sharing FTB between a separated couple for a period prior to separation — past period claim

If the Secretary is satisfied that 2 individuals:

·are no longer members of a couple, and

·have an eligible FTB child for a past period, and

·would both have been eligible for FTB but for subsection 26(1) (only one member of a couple eligible for FTB), then

the Secretary may determine that both applicants are eligible for that period and determine the percentage of care applicable for each applicant/recipient for that period.

The recipients can agree on the percentage of care they each had for their FTB child, providing the total care percentage does not exceed 100 per cent. If they do not agree on a percentage of care, an assessment of their actual care arrangements for the period must be made. In this case the care arrangements for the period being claimed for must be declared, and the determination of the percentage of FTB to be paid for each person will be the same as for any other shared care case.

In determining the percentage of FTB to which each individual is entitled, the decision will be based on issues of fairness and appropriateness, taking into account equity considerations and the sharing and pooling within a family unit that can result in a 50:50 split of FTB.

Property settlement

8.      In January 2011, the parties entered into a property settlement. For current purposes, suffice to say that the settlement terms provided that the title in the family home, the only significant asset held by the couple, passed to Mr Payne. He received a 40 per cent interest in the value of the unencumbered interest in the property; Ms Wilson received a 60 per cent interest. In addition, each party retained all personal property in their possession or control. At the time of settlement, the parties no longer held a joint bank account. 

9.      In September 2010, Mr Payne lodged a claim for FTB for the disputed period. The claim was rejected on the day it was lodged.  In November 2010, Centrelink made a payment of $8,781 to Ms Wilson for FTB for the disputed period.

10.     Settlement discussions between the parties relating to property and parenting commenced in July 2010. A mediation conference was held in September 2010. A deed of settlement in relation to property was signed by Ms Wilson on 14 January 2011.  Three days later, Mr Payne lodged an application for review of the decision made by the ARO on 22 December 2010 to not disturb the original decision. It was the original decision that gave Ms Wilson all of the disputed FTB payment. He signed the deed of property settlement two days later.

11.     The terms of settlement make no mention of FTB. Neither party claim it was raised in settlement discussions.  In these proceedings, Ms Wilson stated that at the time she signed the deed, it had been her understanding she would be entitled to keep the FTB payment.  Mr Payne claimed that he understood that the matter was separate to those discussions and would be the subject of further review.

How should the FTB for the disputed period be paid?

12.     The decision about who should receive FTB for the disputed period is a difficult one. The issue only arises because the parties elected to receive FTB payments by way of an annual payment made to Ms Wilson. It can be inferred that in making that election, the parties assumed that, as occurred, they would remain together and continue to pool income and be jointly responsible for family expenditure. As Mr Payne points out, had they elected to receive FTB by way of fortnightly instalments, the money would have been available to the family, including himself, throughout the disputed period.  On the other hand, given the timing of the payment to Ms Wilson, to now split that payment arguably disturbs the property settlement reached by the parties. 

13.     The “interests of justice” in this case are finely balanced. Since separation, both parties have been in straitened financial circumstances. The disputed amount is just under $9,000, and of some significance to each of them.  Nonetheless, I have decided that the timing of the financial settlement tips the balance of factors in favour of Ms Wilson. In reaching that decision, I have taken into account that Mr Payne took steps to have the decision made by Centrelink reversed before settlement was reached. In addition I make no adverse finding about either party for failing to raise the issue of FTB in the context of the property discussions. 

14.     In reaching my decision, I have also had regard to the policy of the Department that FTB generally should be divided equally between the parties where it is received after separation and relates to a period where a couple was together. That policy should be applied unless cogent reasons exist not to do so: Drake v Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634, 644-5. Nonetheless the Tribunal may depart from the policy in a particular case if the interests of justice dictate. The Tribunal’s role is at all times to make the correct and preferable decision even when that decision does not accord with government policy: Visa Cancellation Applicant and Minister for Immigration and Citizenship [2011] AATA 690 at [69]. In deciding that the circumstances of this case warrant a departure from policy I have taken into account that the policy does not address the situation raised by the facts of this case, where FTB was received by a member of the former couple prior to a financial settlement being reached.

15.     The decision under review is set aside and in substitution it is decided that Ms Wilson is entitled to 100 per cent of family tax benefit for the period 1 July 2009 to 7 May 2010.

I certify that the 15 preceding paragraphs are a true copy of the reasons for the decision herein of Senior Member A K Britton.

Signed:.......................[sgd].........................

Associate to Senior Member A K Britton

Date of Hearing:  29 September 2011
Date of Decision:  20 October 2011
Applicant self-represented

Solicitor for the Respondent:     Ms B Salaji, Centrelink Program Litigation and Review Branch

Other Party self-represented