Editors --- "Family assistance payments: date of effect and method payment" [2008] SocSecRpr 23; (2008) 10(2) Social Security Reporter, Article 5

• KERFORD AND SECRETARY TO THE DEEWR
• Background
• Submissions – CCB%
• Analysis
• Legislation
• Analysis
• Formal decision

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Family assistance payments: date of effect and method payment

KERFORD AND SECRETARY TO THE DEEWR

(2008/446)

Decided: 28th May 2008 by S.A. Forgie

Background

Kerford applied for review of three decisions made by the SSAT.

The first related to payment of child care benefit (CCB). Kerford had asked Centrelink to reduce his CCB% from 100% to 0% from 25 December2006 as he was removing his children from care for two weeks holiday. Centrelink reduced the CCB%from18 December 2006.

The second and third decisions related to the method of payment of family tax benefit (FTB) and maternity immunisation allowance (MIA).Kerford had closed his nominated bank account and asked that payments be made by cheque. The SSAT had concluded that it did not have jurisdiction in relation to the decision regarding FTB. In relation to MIA, Centrelink and the SSAT decided to affirm the decision not to pay MIA by cheque.

Submissions – CCB%

The submission put by the Department was that Centrelink’s CCB computer systems would not accept Christmas Day as the date of effect of a decision, noting that childcare centres are not open on that day.

Centrelink had applied section 65Aof the A New Tax System (Family Assistance) Administration Act 1999 (FAA Act) which allows Centrelink to vary a determination. This section states as follows:

If:

(a) determinations of conditional eligibility under section 50Fand of CCB% under section 50J are made in respect of a claimant who is an individual; and

(b) after the determinations are made, an event occurs; and

(c) the determination of conditional eligibility has, at some time after the occurrence, the effect that the claimant is conditionally eligible; and

(d) when the Secretary becomes aware of the occurrence, the Secretary considers that, if he or she were making the determination of CCB% immediately after the occurrence, the CCB% would be different to the CCB% previously determined;

the Secretary must, subject to subsection (4), vary the determination of CCB% with effect from the date of the occurrence.

Subsection (4) states that the variation can take place from a later date in certain circumstances.

The Department argued that this subsection provides a discretion, which by applying policy and Centrelink’s systems allowed the decision to be made.

Analysis

The Tribunal agreed with the Department that the power to vary the determination rested with s.65A.

The Tribunal recognised that for reasons of administrative efficiency and expediency, it was appropriate to develop policy about this. However, the Tribunal noted that the legislation was clear that the determination was to take effect ‘from the date of the occurrence’ of the event. The event in this case, was Kerford going on holidays and temporarily removing his children from care. The date of the event was 25 December 2006.

The Tribunal noted that there was nothing in the legislation indicating that the date of effect of the decision could not be a public holiday.

The Tribunal referred to Brennan J in the decision of Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634 which had been used by the Department to justify the application of policy. The AAT stated:

...it is clear that he was concerned only with policy that guided the exercise of a discretion, that has been given by Parliament, to make a decision. His Honour’s words cannot be read as suggesting that policy can override or modify legislation enacted by Parliament. (Reasons, para. 35)

The Tribunal concluded that there was no legislation overriding s.65A, noting that s.36(2) of the Acts Interpretation Act 1901allows for the reckoning of time to include a public holiday.

The Tribunal concluded that Kerford’s CCB% was to be reduced to 0% from 25 December 2006.

Submissions – method of FTB and MIA payment

The Department submitted that the Tribunal did not have jurisdiction to review the decision, because it had no further power than the SSAT and that a decision made under s.7(2) of the was not reviewable.

In the alternative, the Department submitted that if the Tribunal found that it did have jurisdiction, then it should affirm Centrelink’s decision as ss.7(2), 26A and 27 of the FAA Act all anticipated payments of FTB to be made by direct credit. It further argued that this was consistent with policy and that policy should be applied as per the decision of Drake (No 2).

Legislation

Section 7(2) states:

To be effective:

(a) a claim must:

(i) be made in a form and manner; and

(ii) contain any information; and

(iii) be accompanied by any documents:

required by the Secretary; and

(aa) in the case of a claim for family tax benefit by instalment –the bank account requirement set out in section 7A must be satisfied in relation to the claim; ...

(b) ...

(c) ...

Section 7A(2) states:

The requirement is that the claimant provide:

(a) details of a bank account maintained by the person alone or jointly or in common with someone else into which instalments of family tax benefit are to be paid; or

(b) a statement that the claimant will nominate, and provide details of, such a bank account within 28 days after the claim is made.

Section 26A allows the Departmental Secretary to require a person who is claiming payment to give details of a bank account within 28days. Two conditions are required. Firstly, there must be a decision that FTB is to be paid by instalment. Second, the claimant must not have already nominated a bank account.

Section 27A applies if these details are not provided within the required 28 days. Section 27A(3)states, that in these circumstances:

... the Secretary may vary the determination so that it has effect that the claimant is not entitled to be paid family tax benefit for any day, on which the determination was or will be in force, after the end of the instalment period before the variation takes place.

This result can be precluded if the Secretary applies the powers set out in s.27A(2):

The Secretary may determine that the consequence in subsection (3) does not apply if the Secretary considers that it is appropriate to exempt the claimant from the consequence.

Analysis

As to the issue of jurisdiction, the Tribunal considered a number of cases and found that the principles in the case of Ward v Nicholls (1988) 16 ALD 353; 84 ALR 471 applied. The Tribunal referred to the decision of Walker v Secretary, Department of Social Security (1997) 75 FCR 493; 147 ALR 263noting that while this case contained statements by one of the three judges which was contrary to Ward, the statement was obiter dicta and that the principles set out in case of Ward and Crompton v Repatriation Commission [1993] FCA 468; (1993) 30 ALD 45 applied in this case.

The Tribunal concluded that the issue of whether or not it had jurisdiction required the Tribunal to consider whether the SSAT had jurisdiction (as the Tribunal’s jurisdiction is dependent on this). This consideration, however, was based on its own analysis, rather than the conclusion by the SSAT that it did not have jurisdiction.

The Tribunal did not agree with the SSAT and Centrelink that the decision under review was a decision to not pay by cheque ie that the legislative source for making the decision was s.7(2). The Tribunal instead found that:

The DFHCSIA Secretary’s power to require details of a bank account arises if the claimant has not nominated a bank account into which instalments of FTB are to be paid. That is the power given by s 26A but the reference to a determination must, in this case, be a reference to a determination under s 16 as to entitlement to be paid FTB for each day on which the determination is in force. If the conversation between Mr Kerferd and the Centrelink officer on 25 October 2006 can be taken as a requirement under s 26A, then regard must then be had to s 27A when Mr Kerferd did not provide the required details. That would raise the issue of whether Mr Kerferd should be exempted from the consequences that are provided for in s27A(3) by an exercise of the discretion under s 27A(2). An exemption could take the form of a decision that he be paid by cheque. Equally, a decision that he not be paid by cheque could be characterised as necessarily incorporating a decision that the DFHCSIA Secretary’s discretion under s.27A(2) not be exercised.

(Reasons, para. 71)

As a consequence of this conclusion, there was nothing in the FAA Act that precluded review by the SSAT and consequently the Tribunal.

After concluding that it had jurisdiction, the Tribunal considered the substantive matter. It found that s.27A(2) could not be read in isolation from other legislation and noted that the intention of the FAA Act was that payments were to be made to the intended recipient and were not lost.

The Tribunal noted that Kerford’s wish for payment to be made by way of cheque was not to ensure that the payments reached him or that he had more immediate access. The Tribunal therefore concluded that these circumstances were not appropriate for an exemption to be applied from the consequences set out in s.27A(3).

The Tribunal applied the same analysis and reached the same conclusion in relation to MIA payments, albeit under a different section (s.47(5)).

Formal decision

The AAT set aside the decisions of the SSAT in relation to CCB and FTB and substituted two decisions:

· that Kerford’s CCB% was 0% for 25December 2006 until 2 January 2007;

· that it declined to make a determination under s.27A(2) that the consequence in s.27A(3) does not apply.

The Tribunal affirmed the decision in relation to MIA payments.