ZDND and Secretary, Department of Social Services (Social security second review)

[2025] ARTA 30

ZDND and Secretary, Department of Social Services (Social security second review) [2025] ARTA 30 (22 January 2025)

Applicant:ZDND

Respondent:  Secretary, Department of Social Services

Other Parties:  GWFS

Tribunal Number:                2023/4160

Tribunal:General Member S. Fenwick

Place:Melbourne

Date: 22 January 2025

Decision:The Tribunal sets aside the decision under review and substitutes it with a decision that between 7 January 2022 and 15 April 2022 the percentage of care is 100% in favour of ZDND and 0% in favour of GWFS.

.............................[SGD]...........................................

General Member S. Fenwick

Names used in all published decisions are pseudonyms. Any references appearing in square brackets indicate that information has been removed from this decision and replaced with generic information so as not to identify involved individuals as required by subsections 161(1B)-161(1C) of the A New Tax System (Family Assistance) (Administration) Act 1999.

Catchwords

SOCIAL SECURITY – Family Tax Benefit – percentage of care – whether interim care determination available – consideration of actual care – decision set aside and substituted

Legislation

A New Tax System (Family Assistance) Act 1999 (Cth)
Administrative Appeals Tribunal Act 1975 (Cth)
Child Support (Assessment) Act 1989 (Cth)

Social Services Legislation Amendment (Child Support and Family Assistance Technical Amendment) Act 2024 (Cth)

Cases

Child Support Registrar v CMU23 [2024] FCA 109

Statement of Reasons

BACKGROUND

1. ZDND has applied to the Tribunal for review of a decision of the Social Services & Child Support Division (AAT1) of the Tribunal (as it was prior to the commencement of the ART), dated 26 May 2023. This decision affirmed prior decisions of delegates of the Respondent which had determined percentage of care in respect of the child of the parties as 100% in favour of GWFS as of 10 February 2022.

2. The circumstances are not in dispute. Prior to 10 February 2022, the parties each had care percentages for the purposes of Family Tax Benefit of 50%. The significance of this date arises from family law proceedings in which it was ordered that ZDND be returned to the care of GWFS on that day, after GWFS had been granted 100% care. The proceedings arose due to the fact that as of 7 January 2022, and ostensibly in breach of the 50/50 care arrangement prevailing, ZDND had 100% care of the child. Ultimately, the child was restored to the care of GWFS, consistent with the family law orders, from 15 April 2022 and thereafter GWFS retained 100% care.

3. As will be seen below, the relative simplicity of the circumstances stands in contrast to the relative density of the legal issues. This is because of the inherent complexity of the legislation, and due to the need to account for the implications of the ‘Oliver’ decision (Child Support Registrar v CMU23 [2024] FCA 109 (CMU23)). This decision concerned interim care decisions in child support matters, but due to the relevance of child support determinations for matters under the A New Tax System (Family Assistance) Act 1999 (Cth) (FA Act), was followed by legislative amendments to the FA Act. While some consideration must be given to this history, this matter ultimately will be resolved with reference to the actual care provided.

4. ZDND lodged material including written submissions on facts and evidence. The Respondent lodged documents under s 37 of the Administrative Appeals Tribunal Act 1975 (Cth), and a Statement of Facts, Issues and Contentions (RSFIC) dated 11 June 2024. Following a request from the Tribunal, a Supplementary SFIC (Supplementary RSFIC) dated 8 October 2024 was lodged which assisted in clarifying the legal issues and also provided a decision tree. ZDND and GWFS appeared at the hearing, but no substantive evidence was required.

   LEGISLATION

5. Eligibility for family tax benefit is governed by Division 1 of Part 3 of the FA Act. Subdivision D of Division 1 addresses the issue of percentages of care, including when a child is not in the care of an adult (s 35A) and when they are (s 35B). Concordance between percentage of care decisions in the child support and family tax benefit fields arises by operation of s 35T of the FA Act.

6. It is of relevance particularly to the previous decisions in this matter that under s 35C of the FA Act, in summary, a percentage of care decision can reflect the ratio that should have been in place (but was not) where the party with the reduced care took steps to ensure the care arrangement was complied with.

7. What are known as interim decisions arise under ss 35F and 35FA of the FA Act. Relevantly, s 35F provides for the circumstances in which s 35C does not have effect. The nature and operation of these provisions have been affected by CMU23, and subsequent legislative amendments made through the Social Services Legislation Amendment (Child Support and Family Assistance Technical Amendment) Act 2024 (Cth) (the Amending Act). Importantly, the Amending Act sets out how a decision should be made on or after 29 March 2024 (Supplementary RSFIC [9]).

8. Also relevant is Subdivision E of Division 1 which provides for the revocation and suspension of care decisions. Section 35P of the FA Act provides for circumstances where the Secretary, or a decision-maker, must revoke a determination where there is a change to care. That is, where the Secretary is informed or becomes aware that the actual care does not conform with an individual’s existing percentage of care, a new determination must be made. Critically, under the Amending Act, s 35F(1)(c) of the FA Act was repealed, and reference to that provision in s 35P(2) was removed (RSFIC [21]).

9. CMU23 was decided on 1 February 2024, that is nearly nine months after the AAT1 decision. The decision found that the corresponding provision in the Child Support (Assessment) Act 1989 (Cth) to s 35F(1)(c) of the FA Act (as it was) operated such that when a percentage of care decision has been revoked, an interim care determination cannot be made (RSFIC [29]).

10. The result is that, in circumstances where a change of care occurs before the Amending Act takes effect, being 29 March 2024 (Supplementary RSFIC [15]), and where a decision is made under s 35P to make a new care determination, the original unamended legislative provisions must be applied, and applied consistently with CMU23 (Supplementary RSFIC [19]; (RSFIC [25], [32]). It follows further that a decision must be made as to the percentage of care under s 35B.

11. Critically, the operation of s 35C (the provision which has been relied upon to date in previous decision making) is precluded if a determination is made under s 35P of the FA Act (Supplementary RSFIC [20]; RSFIC [25]).

    ISSUES

12. Aided by the decision tree submitted in this matter (Supplementary RSFIC, Annexure A), and consistent with the pattern for decision-making as outlined generally in the FC Act, I must be satisfied about the following matters:

    (a)whether a change in care occurred on or after 7 January 2022;

    (b)whether there was a change of care under either s 35A or s 35B of the FA Act;

    (c)whether a court order was in place with a different care level than the actual care taking place;

    (d)did the change take place before 29 March 2024.

13. In circumstances where I am positively satisfied about these matters, I must revoke the existing percentage of care decision and determine a new percentage of care based on the actual care.

    CONSIDERATION

14. ZDND seeks, in essence, for a decision to be made in their favour based on the fact that they had actual care (100%) of their child between 7 January 2022 and 15 April 2022.

15. Consistent with its various written submissions, the Respondent contended at the hearing that, in essence, the upshot of CMU23 was that the Tribunal may have regard to actual care regardless of the circumstances or conditions under which it came about. It was also explained, in simple terms, that the gap in the legislation identified in CMU23 was rectified by the Amending Act.

16. For completeness I note that relevant facts and circumstances are set out in the RSFIC [2]-[13], and also Supplementary RSFIC [25], and I have already summarised the salient facts above.

17. I am satisfied on the basis of the evidence and the submissions of the matters identified in paragraph [12] of these reasons: a change of care occurred on 7 January 2022; this was a change of care under s 35B of the FA Act; there was a court order in place at the time establishing a different percentage to that actually taking place; this change of care clearly occurred before the legislative amendments took effect (29 March 2024); and, accordingly, I am precluded from making a care percentage determination under s 35C.

18. It follows that I must revoke the original care determination and determine instead that between 7 January 2022 and 15 April 2022 the percentage of care, based on actual care, is 100% in favour of ZDND and 0% in favour of GWFS.

    DECISION

19. For the reasons given above the Tribunal sets aside the decision of the Social Services & Child Support Division dated 26 May 2023 and substitutes it with a decision that the existing percentage of care determination is revoked and that between 7 January 2022 and 15 April 2022 the percentage of care is 100% in favour of ZDND and 0% in favour of GWFS.

20.     I certify that the preceding 19 (nine-teen) paragraphs are a true copy of the written reasons for the decision herein of General Member S. Fenwick

...............................[SGD].................................

Associate

Dated: 22 January 2025

Date of hearing:

30 October 2024

Applicant:

Solicitors for the Respondent:

Self-represented

Services Australia

Other Party:

Self-represented