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

XYYX and Secretary, Department of Social Services (Social services second review) [2017] AATA 731 (25 May 2017)
Division:GENERAL DIVISION
File Number: 2015/3738
Re:XYYX
APPLICANT

AndSecretary, Department of Social Services
RESPONDENT

AndXCPP
DVGD
OTHER PARTIES

DECISION
Tribunal:Regina Perton, Member

Date: 25 May 2017
Place:Melbourne

The Tribunal sets aside the decision under review and substitutes a decision that the two FTB children were cared for by XYXX for 63 per cent and XCPP 37 per cent during the periods under review.
The Tribunal remits the application to the respondent for calculation of entitlements and/or debts, if any, payable by the parties.
[sgd]........................................................................
Regina Perton, Member
SOCIAL SECURITY – family tax benefits – shared care – percentages of care during specified periods - dispute on actual dates for some of the period – change of percentage of care.
Legislation
A New Tax System (Family Assistance) Act 1999 sections 21, 22, 27, 28, 35J, 59
REASONS FOR DECISION
Regina Perton, Member
25 May 2017

When a couple who have dependent children separate and then share their children’s upbringing, the family tax benefit (FTB) payable to either parent is based on the percentage of time that each parent cares for the children. Other factors come into play as well for individual parents, such as their income and that of a new partner. The FTB payment may be paid into the account of the biological parent’s partner rather than to him/her where the children are cared for by that parent and his or her partner.
The percentage of time is often based on court orders relating to future care arrangements. If Centrelink, which administers FTB for the Department of Social Services (the Department) is advised that the care arrangements differ from court orders, or if there is no court order but some other form of agreement, Centrelink may adjust the rate of payment based on the information provided by one or both parents.
XYYX and XCPP are the biological parents of two daughters who qualified as FTB children under the age of 16 years at that time. The parents separated in January 2009 and were divorced in late 2010. Initially by oral agreement and later by a court order, the parents agreed to arrangements whereby the father cared for the girls every second weekend, one night in the alternate week and half the school holidays. The nature of the father’s employment was such that he found he could not commit to looking after the girls for half the holidays so there were some changes to the percentage of care over the years. He spent time with them for a few days during some holidays taking them on camping trips.
DVGD was the father’s partner and cared for the girls when they were with their father during the period under review. Centrelink records indicate that DVGD was a member of a couple with the children’s father from late December 2009 to 17 July 2014. The father and DVGD arranged that the FTB would be paid to her rather than to him. Such an arrangement is within the legislation and Centrelink guidelines.
On 18 May 2012 DVGD lodged an FTB claim in which she stated that she had 40% care of the children. Centrelink paid FTB on that basis after notifying XYYX on 25 May 2012 of an application by another party (no name given) and advising her she could supply evidence of a different percentage if she wished by 8 June 2012. XYYX stated that she did not receive that letter.
On 11 March 2015 XYYX wrote to Centrelink stating that:
Since my separation in January 2009 I have provided for all my daughters financial needs including education, medical, social and otherwise.
I have maintained 65% care responsibility since the 20^th April 2009 when [XCPP] no longer wished to have the girls for half of the school holiday periods. He has continued to have the girls stay with him every second weekend and there have been no changes at all to these arrangements.
Centrelink changed the existing care percentage for FTB to 65% for XYYX and 35% for DVGD. FTB debts were raised against DVGD on the basis that the girls were with their father and her for 35% of the time rather than 40%.
DVGD sought review by an authorised review officer of Centrelink (ARO) in relation to the debt and the percentage of care. On 10 April 2015 an ARO affirmed the decision under review.
DVGD lodged an application to the Social Security Appeals Tribunal (SSAT). On 12 June 2015 the SSAT set aside the decision under review and substituted a decision that there were no grounds to revoke the care percentages of 40% care to DVGD and XCPP and 60% to XYYX as from 30 November 2010.
On 27 July 2015 XYYX lodged an application with this Tribunal maintaining that she had cared for the girls for 65% of the time.
RELEVANT LEGISLATION AND GUIDELINES
Section 21 of A New Tax System (Family Assistance) Act 1999 (the Act) sets out when an individual is eligible for FTB on the basis of having an FTB child.
Section 22 of the Act sets out the situations where an adult can be considered to be caring for an FTB child:
(1) An individual is an FTB child of another individual (the adult) in any of the cases set out in this section.
Individual aged under 16
(2) An individual is an FTB child of the adult if:
(a) the individual is aged under 16; and
(b) the individual is in the adult’s care; and
(c) the individual is an Australian resident, is a special category visa holder residing in Australia or is living with the adult; and
(d) the circumstances surrounding legal responsibility for the care of the individual are those mentioned in paragraph (5)(a), (b) or (c).
…
Legal responsibility for the individual
(5) The circumstances surrounding legal responsibility for the care of the individual are:
(a) the adult is legally responsible (whether alone or jointly with someone else) for the day‑to‑day care, welfare and development of the individual; or
(b) under a family law order, registered parenting plan or parenting plan in force in relation to the individual, the adult is someone with whom the individual is supposed to live or spend time; or
…
Percentage of care at least 35%
(7) If an individual’s percentage of care for a child during a care period is at least 35%, the child is taken to be an FTB child of that individual for the purposes of this section on each day in that period, whether or not the child was in that individual’s care on that day.
Note: If an individual’s percentage of care for a child during a care period is less than 35%, the child is taken not to be an FTB child (see section 25).
Sections 27 and 28 of the Act allow for shared parental responsibility where one member of a couple has a child from a previous relationship for which the new couple share care. This allowed DVGD to claim FTB rather than XCPP.
Section 59 of the Act provides further detail about shared care:
59 Shared care percentages where individual is FTB child of more than one person who are not members of the same couple
(1) An individual has a shared care percentage under this section for an FTB child of the individual if:
(a) the Secretary has determined the individual’s percentage of care for the child during a care period; and
(b) that percentage is at least 35% and not more than 65%.
Note: Paragraph 27(2)(b) deals with the percentage of care in a blended family case.
…
There are numerous sections and Departmental guidelines setting out how to determine the percentages of care. Subsection 35J(2) of the Act provided guidance to the Tribunal in this matter where the dispute over particular periods is in the past rather than in the future:
35J Working out actual care, and extent of care, of a child
(1) The actual care of a child that an individual has had, or will have, during a care period may be worked out based on the number of nights that the Secretary is satisfied that the child was, or will be, in the care of the individual during the care period.
(2) The extent of care of a child that an individual should have had, or is to have, under a care arrangement during a care period may be worked out based on the number of nights that the child should have been, or is to be, in the care of the individual during the care period under the care arrangement.
(3) For the purposes of this section, a child cannot be in the care of more than one individual at the same time.
…
PERCENTAGE OF CARE DURING RELEVANT PERIODS
As indicated earlier, DVGD ceased to be eligible for FTB on account of XCPP’s children after she and XCPP separated in July 2014. After it had determined that DVGD was caring for the children for 35% of the time rather than 40% during part of the period she was partnered with XCPP, Centrelink adjusted the entitlements to reflect those percentages. In late January 2015, Centrelink raised debts of $420.90 for the 2011/12 financial year and $1035.35 for the 2012/13 financial year based on the five percent difference in care. The SSAT decision resulted in those debts being wiped.
XYYX has maintained that the correct percentage of care was 65% to her and 35% to DVGD.
In terms of evidence, the Tribunal initially had a photocopy of the front single page of DVGD’s work diaries for the years 2011, 2012 and 2013. The black and white copies had crosses which purported to be dates when the girls stayed with her. Many of the crosses on particular dates coincided with weekends that the girls stayed but there were other markings too. DVGD said that she no longer had the original diaries that the photocopies had been taken from. That evidence was also before the SSAT.
XYYX provided a copy of the divorce application filed in October 2010 which indicated that the children would have contact visits with their father for 35% of the time.
At the first hearing of this matter on 8 March 2016, the maternal grandmother attended along with the FTB daughters. The maternal grandmother indicated that she kept a daily diary describing the events of the day. The diary, amongst other things, contained descriptions of family activities including those in which the two girls were involved. The diary was difficult to decipher so the Tribunal asked the applicant to transcribe the information and provide it to the other parties and the Tribunal.
XYYX provided a document signed by her former husband indicating that the girls stayed with him for 35% of the time. However, he denied being aware of what he had signed stating that the percentage was not correct. DVGD later submitted that as she was the recipient of the FTB, it was not XCPP’s signature that was required but hers.
DVGD was given the opportunity to comment on the grandmother’s diary entries and she stated that on some dates, the girls went to events involving their mother’s family but then slept overnight at their father’s home after the event described. There were similar recollections by XYYX in relation to the children’s father’s family function.
There were additional documents prepared by both DVGD and XYYX which gradually whittled down to a few disputed dates with concessions on the part of XYYX due to the unavailability of evidence. XYYX’s partner had died just prior to the period in question. Both XYYX and DVGD had some work commitments that may have led to adjustments that were not necessarily recorded.
After the exchange of numerous documents and concessions to the other parties, the Tribunal at the most recent hearing ended up with only a few days in dispute in the relevant periods, namely the financial years 2011-12 and 2012-13.
It was agreed between the parties that the girls stayed with their father and his partner every fortnight throughout the year, whether it was school holidays or the school year. Thus the girls spent four nights, Thursday, Friday, Saturday, Sunday in one week and Thursday night in the alternate week. It was also agreed that the girls had spent five nights in the financial year 2011-12 camping with their father’s family.
There was no agreement between the parents as to whether on their father’s birthday in September of both years, the girls stayed with him overnight or went back to their mother’s home after going out to dinner with him. They agreed the dinner took place. The father was adamant that the girls stayed overnight. On the balance of possibilities, the Tribunal prefers the father’s memory of those two nights. The Tribunal notes that the addition of one extra night each financial year makes no real change to the percentages of care for FTB purposes.
There was some disagreement about dates outside those financial years but the Tribunal does not need to make findings on those as the FTB percentages and debts are only about those two years. They may well be relevant for child support payments. FTB is calculated on a financial year basis whereas child support appears to be calculated on calendar years.
The Tribunal calculated the percentages of care for the relevant periods based on what appears to have been the care of the girls taking into account that the parties relied on memories and some documentation that was five years and more in the past. The Tribunal finds that the care in both financial years in question, with each year calculated individually, was 37 per cent by their father and DVGD and 63 per cent by XYYX.
There may well be further calculations of debts and/or underpayments as a result of the Tribunal’s findings. The Tribunal hopes that these will be minimal and/or waived on the basis of special circumstances and/or practical considerations.
DECISION
The Tribunal sets aside the decision under review and substitutes a decision that the two FTB children were cared for by the mother for 63 per cent and the father 37 per cent during the periods under review.
The Tribunal remits the application to the respondent for calculation of entitlements and/or debts, if any, payable by the parties.

31. I certify that the preceding 30 (thirty) paragraphs are a true copy of the reasons for the decision herein of Ms Regina Perton, Member

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

Dated 25 May 2017

Date of hearing 8 March 2016 & 9 February 2017

Applicant

Other parties

In person

In person

Advocate for the Respondent Mr Tim de Uray

[2017] AATA 731

25 May 2017

Key Legal Topics

Areas of Law

Administrative Law

Statutory Interpretation

Legal Concepts

Appeal

Judicial Review

Remedies

Procedural Fairness