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

[2023] AATA 1816

ZFDQ and Secretary, Department of Social Services (Social services second review) [2023] AATA 1816 (27 June 2023)

Division:GENERAL DIVISION

File Number:          2022/9253

Re:ZFDQ  

APPLICANT

AndSecretary, Department of Social Services

RESPONDENT

AndQJBZ

OTHER PARTY

DECISION

Tribunal:Dr L Bygrave, Member

Date:27 June 2023

Place:Melbourne

The decision under review is set aside and, in substitution, the Tribunal decides that QJBZ was not entitled to receive family tax benefit for the period between 16 August 2020 and 3 February 2021.

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

Dr L Bygrave, Member

CATCHWORDS

SOCIAL SECURITY – family tax benefit (FTB) – where there is an existing care arrangement – where there is a departure from the existing care arrangement – whether the party with the reduced care took reasonable steps to ensure compliance with existing care arrangement for FTB entitlement purposes – decision under review set aside and substituted

LEGISLATION

A New Tax System (Family Assistance) Act 1999 (Cth)

SECONDARY MATERIALS

Guides to Social Policy Law: Family Assistance Guide, Department of Social Services, version 1.245 released on 8 May 2023.

REASONS FOR DECISION

Dr L Bygrave, Member

27 June 2023

BACKGROUND

1. The Applicant (ZFDQ) and the Other Party (QJBZ) are the separated parents of ‘S’ and ‘D’ who are currently aged 16 years and 13 years.

2. A Final Order in the Federal Circuit Court of Australia dated 18 March 2020 (final parenting orders) set out the parental responsibility and care to be provided by ZFDQ and QJBZ in relation to ‘S’ and ‘D’.[1] This corresponded to a care arrangement of QJBZ having 68% care of ‘S’ and ‘D’, and ZFDQ having 32% care of ‘S’ and ‘D’.[2]

   [1] Exhibit T-T3.

   [2] Exhibit T-T25, 229-230.

3. On 5 November 2020, ZFDQ lodged a claim with Services Australia for family tax benefit on the basis that she had ‘100% care’ of ‘S’ and ‘D’ from 16 August 2020.[3] ‘S’ and ‘D’ were then aged 13 years and 11 years. Services Australia subsequently wrote to ZFDQ on 5 November 2020 requesting she provide evidence to support she has ‘S’ and ‘D’ in her care.[4]

   [3] Exhibit T-T6, 38-42.

   [4] Exhibit T-T20, 129-130.

4. Services Australia also wrote to QJBZ on 5 November 2020 stating ZFDQ had advised that QJBZ had ‘0% care’ of ‘S’ and ‘D’ from 16 August 2020 and requesting QJBZ to provide evidence to support he has ‘S’ and ‘D’ in his care.[5]

   [5] Exhibit T-T19, 108-109.

5. On 13 January 2021, Services Australia sent letters to:

   ·ZFDQ to advise her care arrangement had been assessed on the evidence and a decision made that she had 100% care of ‘S’ and ‘D’ from 16 August 2020, and to set out her payment of family tax benefit from that date.[6]

   ·QJBZ to advise his care arrangement had been assessed and a decision made that he had 0% care of ‘S’ and ‘D’ from 16 August 2020, and he could not be paid family tax benefit because ‘S’ and ‘D’ were no longer in his care and he did not have any ‘qualifying dependent children’.[7]  

   [6] Exhibit T-T20, 131-135.

   [7] Exhibit T-T19, 110-113.

6. On 3 February 2021, an Interim Order was made in the Federal Circuit Court of Australia (interim parenting orders) that ordered ZFDQ to return ‘S’ and ‘D’ to QJBZ on 4 February 2021. This interim parenting order also stated that the ‘final parenting orders remain in full force and effect’ and ‘a family report is to be prepared and given to the Court by 21 October 2021.’[8]

   [8] Exhibit T-T8.

7. QJBZ subsequently sought an internal review of the decision made by Services Australia on 13 January 2021 to cancel his family tax benefit from 16 August 2020.

8. On 15 July 2022, an Authorised Review Officer at Services Australia affirmed the decision made on 13 January 2021 to cancel the payment of family tax benefit to QJBZ from 16 August 2020 and determined that an ‘interim period does not apply’ for the period between 16 August 2020 and 3 February 2021.[9]

   [9] Exhibit T-T17, 94-97, 100.

9. QJBZ subsequently applied for review to the Social Services and Child Support Division (AAT1) of the Tribunal and, on 19 October 2022, the AAT1 decided:

   For the period 16 August 2020 to 3 February 2021 an interim care percentage applies such that [QJBZ] had 68% care of the children and [ZFDQ] had 32% care.[10]

   [10] Exhibit T-T2, 14.

10. On 31 October 2022, ZFDQ lodged an application for review of the AAT1 decision with the General Division of the Tribunal.

11. The matter was heard by the Tribunal in Melbourne on 31 May 2023. ZFDQ and QJBZ attended the hearing and provided oral evidence by teleconference, and the Respondent attended the hearing by videoconference.

    RELEVANT LEGISLATION

12. The legislation relevant to this matter is A New Tax System (Family Assistance) Act 1999 (Cth) (the Act). Relevant government policy is also set out in the Family Assistance Guide (the Guide) released on 8 May 2023.

13. Section 21 of the Act sets out when ‘an individual is eligible for family tax benefit in normal circumstances’: subsection 21(1) requires the individual to have ‘at least one FTB [family tax benefit] child’ in their care. Relevantly, in circumstances when ‘an individual is an FTB child of another individual’ and is aged under 16 years, subsection 22(5) of the Act sets out the following circumstances about legal responsibility for the child:

    (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

    (c)     the individual is not in the care of anyone with the legal responsibility for the day-to-day care, welfare and development of the individual.

14. Subsection 22(7) of the Act provides:

    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).

15. Section 25 of the Act further sets out the effect of an individual’s percentage of care for a child being less than 35% and states:

    If an individual’s percentage of care for a child during a care period is less than 35%, the child is taken, despite section 22, not to be an FTB child of that individual for any part of the period.

16. Although ‘care period’ is not defined in the Act, the Guide sets out that the term is used to assess shared care for the purposes of family tax benefit and:

    The care period for working out the percentage of care provided by an adult:

    -    begins on the day on which the care of a child starts to be shared between 2 or more adults, or the day on which the pattern of care … changes, and

    -    ends when there is a subsequent change in care.[11]

    [11] Family Assistance Guide, version 1.245 released on 8 May 2023, 1.1.C.100.

17. Provisions for the ‘shared care’ of an FTB child of more than one person who are not members of the same couple are outlined in the Act: section 59 provides that an individual has a shared care percentage for an FTB child if their percentage of care for the child during a care period is ‘at least 35% and not more than 65%’. In order to apply section 59, there must be a determination of the individual’s percentage of care under the Act. Section 35B of the Act relevantly requires that the percentage of care with respect to an FTB child must correspond with the ‘actual care of the child’ an individual had during the care period.

18. Section 35C of the Act sets out the ‘percentage of care if action is taken to ensure that a care arrangement in relation to a child is complied with’ and subsection 35C(1) relevantly states:

    (1)  This section applies in relation to an individual (the adult) if:

    (a)  a care arrangement applies in relation to a child; and

    (b)  the Secretary is satisfied that the actual care of the child that the adult has had, or will have, during a care period does not comply with the extent of care of the child that the adult should have had, or is to have, under the care arrangement during the care period (which may be nil); and

    (c)  an individual who has reduced care of the child is taking reasonable action to ensure that the care arrangement is complied with.

    Note: This section does not apply in certain circumstances, see section 35F.

    [emphasis added]

19. Consistent with section 35C of the Act, the Guide states:

    Where the care of a child is shared and the actual care corresponds with that in a care arrangement, each individual’s percentage of care can be determined based on the care arrangement. If the actual care is different from the percentage of care determined on the basis of the care arrangement then, in normal circumstances, actual care must be used to determine each individual’s percentage of care. However, if an individual’s FTB child is prevented from being in their care in accordance with a care arrangement without their consent and they take reasonable steps to have the care arrangement complied with then there may be an interim period where care is determined by the care arrangement rather than actual care.[12]

    [emphasis added]

    [12] Family Assistance Guide, version 1.245 released on 8 May 2023, 2.1.1.70.

20. The Guide outlines policy in relation to disputed care arrangements, which for the purposes of family tax benefit is:

    a dispute in relation to the care of a child [that] exists where a care arrangement for the child is in place and there is a departure from the terms of the arrangement by one of the parties and the other party disputes the care change. A care arrangement for a child is a written agreement between the parents, or between a parent and a carer relating to the care of the child, or a parenting plan or a court order for the child...

    The dispute may relate to a departure from shared care arrangements between 2 or more individuals, or to a departure from arrangements for the sole care of a child, where care changes from one individual to another in contravention of the arrangement.[13]

    [emphasis added]

    [13] Family Assistance Guide, version 1.245 released on 8 May 2023, 2.1.1.70.

21. The Act does not define ‘reasonable action to ensure compliance with a care arrangement’; however, the Guide provides the following policy guidance:

    The person with reduced care must continue to take reasonable action to ensure compliance with the care arrangement in order for FTB to continue to be based on the care arrangement for the interim period. Reasonable action could include:

    -    negotiating with the other party in a genuine attempt to ensure compliance with a written agreement, or

    -    making and/or attending an appointment at a Family Relationships Centre (FRC) or similar dispute resolution service with the aim of ensuring the care arrangement is adhered to, or

    -    obtaining or seeking legal advice regarding the making of a court order, or

    -    filing an application to a Court to have an order made or enforced, or

    -    attending a hearing at Court to seek an order to be made or enforced, or

    -    notifying the police that the child has been taken without consent.

    Individuals who receive either a past period or instalment payment must provide evidence that reasonable action has been taken to ensure compliance with the care arrangement. Acceptable evidence includes:

    -    a written account of the steps an individual has taken to negotiate with the other parent, verified by Centrelink with the other parent and/or an independent third party, such as a legal representative, or

    -    documentation from an FRC or dispute resolution service setting out the details of an upcoming appointment and the action sought, or

    -    documentation of police or court action.

    Where possible, a copy of the documentation should be attached to the individual's request. Otherwise Centrelink must sight the evidence and document the details with the individual’s request.

    The individual making the claim to continue to receive their FTB entitlement during the interim period must take reasonable action to ensure compliance with the existing care arrangement. Where an individual simply complains about the loss of care to Centrelink, this does not meet the requirement of taking reasonable action.[14]

    [emphasis added]

    [14] Family Assistance Guide, version 1.245 released on 8 May 2023, 2.1.1.70.

    CONSIDERATION

22. The issues for determination by the Tribunal are whether:

    (a)there was a care arrangement prior to 16 August 2020 and if so, what were the terms of this care arrangement;

    (b)there was a departure from this care arrangement;

    (c)the individual who has reduced care was taking reasonable action to ensure the care arrangement was complied with.

    Issue 1: was there a care arrangement prior to 16 August 2020 and if so, what were the terms of this care arrangement?

23. ZFDQ and QJBZ agree that the final parenting orders made on 18 March 2020, being a family court order, was the care arrangement in place for the period from 18 March 2020 to 16 August 2020. I am satisfied the terms of this care arrangement corresponded to QJBZ having 68% care of ‘S’ and ‘D’, and ZFDQ having 32% care ‘S’ and ‘D’.  

    Issue 2: was there a departure from this care arrangement?

24. An undated ‘summary of facts’ lodged by ZFDQ included the following chronology of events:

    ·final parenting orders were made on 18 March 2020;

    ·‘S’ and ‘D’ ‘commenced living with [ZFDQ] from the July 2020 school holidays’;

    ·ZFDQ’s solicitors wrote to QJBZ on 8 October 2020 ‘proposing a variation to the [final] parenting orders’ and QJBZ ‘did not respond’;

    ·ZFDQ’s solicitors wrote to QJBZ again on 29 October 2020 and enclosed ‘proposed orders by consent’;

    ·on 9 December 2020, ZFDQ ‘filed for a variation of the [final] parenting orders’;

    ·QJBZ filed a response on 29 January 2021, and ‘the children were still living with [ZFDQ]’; and

    ·interim parenting orders were made on 3 February 2021 and ‘the children returned to live with [QJBZ] on 4 February 2021, but continued to spend additional time with [ZFDQ]’.[15]

    [15] Exhibit ST-ST9.

25. ZFDQ lodged supporting documents with the Tribunal including:

    ·A letter from ZFDQ’s lawyers to QJBZ dated 8 October 2020 which stated:

    oZFDQ had instructed her lawyers that ‘S’ and ‘D’ have been spending time with ZFDQ ‘during the recent school holidays and … have indicated that they wish to remain in her care’;

    oZFDQ’s lawyers hold instructions to assist ZFDQ to ‘file an application for a variation of the parenting orders based on the substantial and significant change in circumstances since the final parenting orders were made’.[16]

    [16] Exhibit ST-ST8, 13-14.

    ·A letter from ZFDQ’s lawyers to QJBZ dated 29 October 2020 that stated ZFDQ had instructed:

    othe children remain in the care of ZFDQ in accordance with their wishes;

    oDHHS (Department of Health and Human Services) is aware of the circumstances and has no objection to the children living with their mother (ZFDQ), but expects the parties to enter into a further agreement to reflect the change in circumstances; and

    ofunding for mediation through Victoria Legal Aid has been applied for but it is unlikely that a mediation date will be available until February 2021.

    This correspondence enclosed draft proposed orders by consent.[17]

    [17] Exhibit ST-ST7.

    ·A letter from ZFDQ’s lawyers to ZFDQ dated 15 November 2022 that set out the following chronology of relevant events:

    o3 September 2020: ZFDQ approached her lawyers to assist her to negotiate a change to the final parenting orders made on 18 March 2020.

    o2 October 2020: ZFDQ provided a copy of a text from ‘S’ advising she was living with ZFDQ and not QJBZ.

    o8 October 2020: ZFDQ’s lawyers wrote to QJBZ proposing a variation to the final parenting orders and QJBZ did not respond.

    o29 October 2020: ZFDQ’s lawyers again wrote to QJBZ and enclosed proposed orders by consent and advised ZFDQ would be seeking court orders for a variation if QJBZ did not respond.

    oearly November 2020: ZFDQ’s lawyers spoke with the Department of Fairness, Family and Housing (DFFH), who advised the circumstances of ZFDQ ‘had changed significantly’ and they were satisfied the children were safe in the care of ZFDQ and living with her ‘reflected their wishes’.

    o9 December 2020: ZFDQ filed her initiating application.

    o29 January 2021: QJBZ filed his response.

    o1 February 2021: first hearing held.

    o3 February 2021: interim court orders made.

    o4 February 2021: ‘S’ and ‘D’ returned to live with QJBZ but spent additional time with ZFDQ.[18]

    ·A letter from a counsellor with CRAMLI Psychological and Behavioural Services dated 21 November 2022 that stated she conducted ten counselling sessions with ‘S’ between 12 November 2020 and 16 August 2021, and the sessions between 12 November 2020 and 26 April 2021 were conducted at her mother’s (ZFDQ’s) home in Dandenong.[19]

    ·A letter by a Senior Child Protection Practitioner – Community Based at DFFH dated 21 November 2022 that confirmed ‘S’ and ‘D’ were in the ‘full time care’ of ZFDQ ‘between the dates of 16/08/2020-03/02/2021’.[20]

    [18] Exhibit ST-ST6, 9-10.

    [19] Exhibit ST-ST5.

    [20] Exhibit ST-ST4, 6.

26. At the hearing, ZFDQ said that ‘S’ and ‘D’ stayed with her during the July 2020 school holidays, and refused to leave with QJBZ when he came to collect them on 16 August 2020. She said that she was providing care for the children, including transporting them to school by uber and, after her lawyers wrote to QJBZ in October 2020 and received no response, she decided to make a claim for family tax benefit in November 2020.

27. QJBZ did not dispute that ‘S’ and ‘D’ were not in his care between 16 August 2020 and 3 February 2021. However, QJBZ told the Tribunal that ZFDQ withheld the children from him, and the final parenting orders made on 18 March 2020 were not complied with by ZFDQ. QJBZ said he went to his lawyer in August 2020 to seek ‘recovery orders’ and was told that, due to the covid-19 pandemic, the process to go to Court would be slow. QJBZ advised the Tribunal that he has no documents or correspondence from his lawyers to support this oral evidence.

28. I am satisfied the evidence shows the initiating application to vary the final court orders was filed by ZFDQ on 9 December 2020 and QJBZ filed his response on 29 January 2021, more than seven weeks later. Interim parenting orders were subsequently made on 3 February 2021 that ordered ‘S’ and ‘D’ to return to the care of QJBZ. ZFDQ and QJBZ agree that ‘S’ and ‘D’ returned to live with QJBZ on 4 February 2021.

29. Based on the evidence, I am satisfied that there was a departure from the care arrangement set out in the final parenting orders on 16 August 2020. I am further satisfied that ‘S’ and ‘D’ were 100% in the care of ZFDQ between 16 August 2020 and 3 February 2021.

30. For completeness, I note that QJBZ lodged a copy of a Final Order dated 17 November 2021 that was filed in the Federal Circuit and Family Court of Australia. I place no weight on this Final Order as it was made more than nine months after the period relevant to this matter.

    Issue 3: did the individual who has reduced care take reasonable action to ensure the care arrangement was complied with?

31. As I am satisfied QJBZ was the individual who had reduced care in the period between 16 August 2020 and 3 February 2021, I now consider whether QJBZ took reasonable action to ensure the care arrangement – namely, the terms of the final parenting orders made on 18 March 2020 – was complied with.

1. In a letter to Services Australia dated 24 July 2021, QJBZ wrote that ZFDQ withheld his children from him from ‘25 August 2020’ and he made ‘numerous calls to police to retrieve [his] children’, ‘numerous phone calls to Centrelink’ regarding his children and sought legal advice about the situation.[21] He provided no documentation to support these circumstances, such as records of his phone calls to police or police reports, records of his phone calls to Centrelink, or supporting documents that show he has sought legal advice.

   [21] Exhibit T-T9, 66.

2. At the hearing, QJBZ was asked about the actions he took to ensure the final parenting orders were complied with after his children did not return to his home on 16 August 2020.  QJBZ said he ‘went to his lawyer’ in August 2020 and was told that the process to go to Court to recover his children would be slow due to the covid-19 pandemic. QJBZ said his lawyer initiated the application in December 2020; however, this is not supported by the documentary evidence before the Tribunal that states ZFDQ filed the initiating application on 9 December 2020 and QJBZ filed a response on 29 January 2021.

3. QJBZ told the Tribunal on 31 May 2023 that he did not contact the police in the period from 16 August 2020 to 3 February 2021 to advise that his children were not in his care, although he called the police on 3 February 2021 after the interim parenting orders were made. He also said that he did not engage with an alternative dispute service to ensure the care arrangement was adhered to between 16 August 2020 and 3 February 2021. In response to questions about whether he received the letters sent to him from ZFDQ’s lawyers dated 8 October 2020 and 29 October 2020, QJBZ did not answer the question and stated it was a ‘difficult time’ and he was ‘hurting’.

4. Records show QJBZ advised Services Australia on 17 November 2020 that he was ‘seeking legal assistance to lodge recovery orders for both children but this was protracted due to COVID restrictions’.[22] I note there are no records that show QJBZ told Services Australia that ‘S’ and ‘D’ were not in his care from 20 August 2020; indeed, the records show the first contact between QJBZ and Services Australia that ‘S’ and ‘D’ were not in his care was 5 November 2020, the same date that ZFDQ lodged her claim for family tax benefit.[23]

   [22] Exhibit T-T21, 158.

   [23] Exhibit T-T21, 156-157.

5. QJBZ has filed no other documentation, such as correspondence from his lawyer, to support his oral evidence that he commenced legal proceedings to ensure the care arrangement in the final parenting orders were complied with after 20 August 2020. Further, it is unclear why – if QJBZ had spoken with his lawyer – he would not respond to letters sent to him from ZFDQ’s lawyers on 8 October 2020 and 29 October 2020 that sought to engage with him about the final parenting order. I also consider the oral evidence that QJBZ spoke with his lawyer in August 2020 is not consistent with the documentary evidence that it was ZFDQ who filed the initiating application on 9 December 2020.  

6. Based on the evidence, I am not satisfied that QJBZ, as the individual who had reduced care, took reasonable action to ensure the care arrangement was complied with in the period between 16 August 2020 to 3 February 2021.

7. I therefore find that an interim period does not apply for the period between 16 August 2020 and 3 February 2021 because QJBZ, as the individual with reduced care, did not take reasonable action to ensure the care arrangement was complied with. For this reason, QJBZ was not entitled to receive family tax benefit from 16 August 2020 and the decision made by Services Australia on 13 January 2021 to cancel the payment of family tax benefit to QJBZ from 16 August 2020 was correct.

   DECISION

8. The decision under review is set aside and, in substitution, the Tribunal decides that QJBZ was not entitled to receive family tax benefit for the period between 16 August 2020 and 3 February 2021.

I certify that the preceding 39 (thirty-nine) paragraphs are a true copy of the reasons for the decision herein of Dr L Bygrave, Member

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

Associate

Dated: 27 June 2023

Date(s) of hearing:	31 May 2023
Date final submissions received:	6 June 2023
Applicant:	Self-Represented
Advocate for the Respondent:	Ms Nadia Markov
Solicitors for the Respondent:	Services Australia - Litigation Branch
Other Party:	Self-Represented