Editors --- "Family tax bene?t: whether 'care' provided to FTB child" [2010] SocSecRpr 50; (2010) 12(4) Social Security Reporter, Article 5

• FULLER and SECRETARY TO THE DFHCSIA and ORS
• Background
• The law
• Discussion
• Formal decision

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Family tax benefit: whether ‘care’ provided to FTB child

FULLER and SECRETARY TO THE DFHCSIA and ORS

(2010/822)

Decided: 25th October 2010 by M. Denovan

Background

Fuller received family tax benefit (FTB) in respect of her daughter A. On 24 October 2007, A ceased to live in the same house with her mother but Fuller continued to receive FTB on the basis that she had 100% care of A until 23 March 2009.

Centrelink cancelled Fuller’s FTB in respect of A from 1 March 2008 and raised FTB debts of $4108.24 for the period 1 March 2008 to 27 October 2008 and $464.29 for the period 19 January 2009 to 16 February 2009. On appeal to the Social Security Appeals Tribunal, the decision was varied so that Fuller’s FTB was cancelled from 24 October 2007 and thus extended the debt period and quantum.

For about a month from 24 October 2007 to 27 November 2007, A stayed with Fuller’s brother and girlfriend who lived close by. Although the relationship and arrangement was initially congenial, A had a falling out with Fuller’s brother’s girlfriend and so left and moved in with the Ashenden family for approximately a year until 21 November 2008. The Ashendens were the other respondents in this matter. A moved back in with Fuller, from 21 November 2008 to 19 January 2009, after which point A moved in with Ms Kassulke.

The law

Eligibility for FTB for a child at any given point in time is dependent on whether the child is an FTB child, and the meaning ascribed to ‘FTB child’ is provided in s.22 of the A New Tax System (Family Assistance) Act (the FA Act). Amongst other things, the section provides that ‘an individual is in the adult’s care’ to be considered a FTB child.

However, the definition of ‘care’ is not provided for in the legislation. Guidance as to what constitutes ‘care’ is found in the Family Assistance Guide, for example, at 1.1.C.90 of the Guide, it refers to ‘care’ as being ‘physical care’, and includes mental, moral and emotional support, including love, comfort and discipline. It also gives examples of day-to-day care as including bearing the costs of the child’s daily care, looking after the child’s daily needs etc.

The Tribunal referred to Drake and Minister of Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634 and Secretary to the DCFS v Holmes (2000) 98 FCR 461 and considered it appropriate that regard be paid to relevant Departmental policy.

Discussion

One of the main questions for the Tribunal was whether Fuller provided the type of care that would qualify her for FTB during part or all of the period from 24 October 2007 to 21 November 2008, and from 19 January 2009 to 23 March 2009.

The Tribunal in reaching its determination had regard to a number of factors including the intention of the parties at the time of the change of care; the purpose of the arrangements; who bore the costs for the day-to-day upkeep of the child; food, transport to and from school etc; and, who paid for other long-term costs associated with the child such as school fees, clothing, health and dental care etc.

The Tribunal firstly considered the arrangement in place when A resided with Fuller’s brother. Fuller claimed that the arrangement was intended only to be temporary and that she paid her brother the balance of FTB after paying A’s school fees. Given the close proximity of the residences and in the absence of evidence to the contrary, the Tribunal accepted Fuller’s evidence that she maintained involvement and care of A to a sufficient degree to entitle her to FTB during that time.

The Tribunal secondly considered the arrangement in place when A resided with the Ashendens. A knew the Ashendens through one of her friends and it was initially intended to be a temporary arrangement for about three months but attempts to reconcile A with her mother broke down on or about 1 March 2008 when family mediation failed.

It was accepted that Fuller and the Ashendens had originally agreed that Fuller would continue to collect FTB for A, and pay the Ashendens the balance after paying A’s school fees. Mrs Ashenden gave evidence at the hearing and confirmed this oral agreement but said that she received no money from Mrs Fuller after March 2008. The Tribunal considered that although the law does not provide for private FTB agreements of this nature, it accepted that the arrangement was evidence that Fuller continued to be involved with A’s daily care at least until 1 March 2008.

The Tribunal noted that the Departmental guidelines provide that payment of FTB during short term absences in all but the most extenuating circumstances should not exceed 4 weeks. The Tribunal considered Fuller’s medical conditions including bipolar disorder, drug dependence and serious blood disorder as well as the medical conditions of her two younger sons in her care, both of whom have been diagnosed with behavioural disorders and concluded that this was a case of extenuating circumstances.

Fuller moved to Queensland with her two sons and left A in Adelaide with the Ashendens in May 2008. On 21 November 2008, A moved in with her mother and later with Ms Kassulke on 19 January 2009. The Tribunal considered that A’s enrolment in a school close to the Kassulke residence was indicative of an intention for the arrangement to be permanent and determined that Fuller was not involved in A’s daily care to entitle her to FTB after 19 January 2009.

The Tribunal concluded that Fuller was entitled to FTB until 1 March 2008 and then from 21 November 2008 to 19 January 2009. The Tribunal next considered whether the debts ought to be waived pursuant to s.101 of the FA Act. In considering the issue of ‘knowingly’, the Tribunal determined that Fuller should have turned her mind to informing Centrelink when she moved to Queensland. On the issue of special circumstances, the Tribunal accepted that Fuller’s circumstances collectively were special, and the mental and emotional demands placed on her by her medical conditions and her children were much greater than the average family had to deal with.

Formal decision

The Tribunal set aside the decision of the SSAT which cancelled Fuller’s FTB in respect of her daughter from 24 October 2007 and substituted its decision that FTB was cancelled from 1 March 2008 and the period of FTB debt was from 1 March 2008 to 27 October 2008. It affirmed the decision of the SSAT to raise and recover an FTB debt for the period 19 January 2009 to 16 February 2009. The Tribunal also pursuant to s.101 of the FA Act waived the FTB debt for the period 1 March 2008 to 1 May 2008.

[C.W.]