Editors --- "Pension bonus scheme: treatment of overseas wor" [2005] SocSecRpr 24; (2005) 7 Social Security Reporter, Article 24

• FEENEY and SECRETARY TO THE DFaCS and FITZSIMMONS
• Background
• The law
• Formal decision

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Family tax benefit: establishing pattern of car

FEENEY and SECRETARY TO THE DFaCS and FITZSIMMONS

(5/818)

Decided: 25th August 2005 by S. Webb

Background

Feeney and Fitzsimmons were married and had two children, Luke and Samantha (the children). They divorced in about 2001. On 4 September 2002 the Family Court made an order stipulating that the children were to live with Fitzsimmons and have contact with Feeney on alternate weekends, half of all school holidays and on certain other stipulated dates.

From 4 September 2002 to 4April 2003, Fitzsimmons was paid family tax benefit (FTB) on the basis of 100 %care of the children. On 11 March 2003Feeney lodged a claim for FTB in relation to Luke, stating that Luke had been in his care since 6 March 2003. On 18March 2003 Centrelink cancelled Fitzsimmons’ FTB payments in respect of Luke.

On 14 April 2003 Feeney lodged a claim for FTB in relation to both children for the period 4 September 2002 to5 March 2003 on the basis of the shared care arrangements ordered by the Family Court, and 100% FTB in relation to Luke from 6 March 2003. On the same day, Centrelink decided to apportion FTB in respect of the children from 4 September 2002, on the basis of the Court order, as 22% to Feeney and 78% to Fitzsimmons. A consequence of this decision was that FTB overpayments were raised against Fitzsimmons of $757.14 in relation to Samantha and $244.59 in relation to Luke.

Fitzsimmons sought a review by the SSAT. Feeney was not present at the hearing and was not asked to give evidence. The SSAT decided to set aside Centrelink’s decision and ordered that Fitzsimmons was eligible to be paid 100%of FTB in relation to the children in respect of the period 4 September 2002 to4 April 2003. Consequently, the FTB debts were found not to exist.

On 19 May 2003 Feeney applied to the AAT for review.

The law

The qualifications for FTB are contained in s.22 of A New Tax System (Family Assistance)Administration Act 1999 (the Act) which provides:

22(2) The individual is an FTB child of the adult if:

(a) the individual is aged under 18; and

(b) the adult is legally responsible (whether alone or jointly with someone else) for the day-to-day care, welfare and development of the individual; and

(c) the individual is in the adult’s care; and

(d) the individual is an Australian resident, is a special category visa holder residing in Australia or is living with the adult.

22(7) If:

(a) the Secretary is satisfied there has been, or will be, a pattern of care for an individual (the child)over a period such that, for the whole, or for parts (including different parts), of the period, the child was, or will be, an FTB child of more than one other individual under subsection (2), (3), (4), (5) or (6); and

(b) one of those other individuals makes, or has made, 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 for some or all of the days in that period; and

(c) subsection25(1), (1A) or (1B) does not require that the child be taken not to be an FTB child of that individual for any part of that period;

the child is to be 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.

The evidence

Feeney and Fitzsimmons gave very different accounts of the actual amount of time they each cared for the children during the relevant period. The Tribunal noted that there were many inconsistencies in the evidence before it, and no evidence from an independent person to corroborate the claims of either Feeney or Fitzsimmons.

Consideration

The AAT pointed out that the Act does not explain how a person’s FTB percentage is to be worked out. However, the AAT followed the Federal Court’s decision in Wade v Secretary to the DFaCS [2004] FCA 1660 (this SSRedition), quoting Keifel J:

It is however clear from the Act that its object is to provide a benefit to the person having the care of the child. To be consistent with this object the percentage of care to be assigned to each person should reflect the actual care provided by them... The ‘pattern of care’ referred to in the guidelines has two aspects, it seems to me. In the first place it reflects the care arrangements agreed between the parties or involves a finding which has regard to the actual care arrangements for the child. It is said that “as much as possible” the pattern of care should be the pattern agreed. The pattern of care is also used as the basis for the calculation of percentage... (Reasons, paras. 30,31)

The AAT pointed out that in this case, Feeney and Fitzsimmons were in conflict over the actual day to day-care of the children and their respective FTB percentage amounts. The AAT was satisfied that the terms of the Family Court order were not strictly adhered to, but that those variations did not disturb the pattern of care established by the Court order. The variations could therefore not extinguish Feeney’s claim to FTB, although they could go to the amount of FTB payable to him. The AAT applied the reasoning in Re Nowicz and Secretary to the DFaCS (4(10) SSR 122) in this regard.

The AAT found that on the balance of probabilities, the children were in the care of Feeney for at least10% of the time during the relevant periods. When the AAT proceeded to look at the applicable percentage amounts, however, it found that the evidence before it did not make it possible to determine the actual care Fitzsimmons and Feeney provided to the children in terms of days and hours with any certainty. That being so, and in the absence of compelling evidence to the contrary, the AAT found it appropriate to apportion the FTB percentages on the basis of the terms in the Family Court order.

Formal decision

The AAT decided to set aside the decision of the SSAT and substituted a decision that Feeney was eligible for 22% of FTB and Fitzsimmons was eligible for 78% of FTB in relation to the children during the relevant periods from 4 September 2002.

[D.A.]