Editors --- "Blended family: partner choice not to contribute to expenses of FTB children; discretion not to treat person as a member of a couple" [2012] SocSecRpr 12; (2012) 14(2) Social Security Reporter, Article 3

• BURKETT and SECRETARY TO THE DFHCSIA
• The issue
• Submissions
• Discussion
• Formal decision

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Blended family: partner choice not to contribute to expenses of FTB children; discretion not to treat person as a member of a couple

BURKETT and SECRETARY TO THE DFHCSIA

(2012/131)

Decided: 28th December 2012 by S. Webb

The issue

The issue for determination before the Tribunal was whether there was a special reason not to treat Burkett as a member of a couple for the purposes of the A New Tax System (Family Assistance) Act 1991 (the Family Assistance Act).

Submissions

Burkett argued that she should not be treated as a member of a couple for the purposes of the Family Assistance Act for the following reasons:

- Her de facto spouse Lavender’s income was taken into account when deciding her entitlement to family tax benefit (FTB) with disentitling effect, but she and her children did not obtain any financial support or benefit from the relationship with him – they conducted their parental responsibilities and their finances separately;

- Her de facto had no legal obligation to support her or her children financially, and he chose not to do so – Burkett was unable to compel or persuade him to a different decision;

- Burkett did not obtain any economy of scale from her relationship with her de facto spouse and she, alone in the relationship, bore the cost of raising her children with only minimal financial contributions from their biological father;

- Burkett was struggling to meet necessary expenses for herself and her children without additional financial support from the biological father of her children or from her de facto spouse, or in the form of FTB so long as Lavender’s income was taken into account;

- Financially she would be better off ending her de facto relationship, but this would mean sacrificing the emotional and other benefits she and her children obtained from the relationship – she should not be forced to end the relationship in order to obtain FTB payments;

- Following a work injury to her ankle in 2010, her ability to earn additional income in secondary employment to support her children had reduced;

- Without any financial support from her de facto (or additional payments from the children’s father) she had significant difficulty paying for necessary medical, surgical, dental, osteopathic, physiotherapy and psychological treatments for herself and her children – she was concerned about the potentially adverse health effects on her children if FTB was not granted and she was unable to pay for the treatment her children required; and

- Without support from her de facto and without FTB payments her children were experiencing disadvantage and they were being denied opportunities to the detriment of their best interests – her de facto spouse’s recalcitrant decision should not be held above the best interests of her children when applying the law.

Discussion

The Tribunal considered each of Burkett’s submissions in turn but was not satisfied on the evidence that the arguments advanced justified the exercise of the discretion conferred by section 24 of the Social Security Act 1991 (the Act). The Tribunal did not consider the arrangements she had entered into with her de facto spouse to keep their finances and assets separate, apart from strict rules of agreement governing any shared expenditure, were unusual or out of the ordinary when considered within the context of a blended family. Whilst the Tribunal considered that Lavender had been the driving force behind the arrangements, it ultimately found that the agreement was predicated on personal preferences and the choices of both parties, entered into without any apparent coercion prior to their decision to move in together. Further the Tribunal found that this was reflected in Burkett’s willingness to give effect to the arrangement in the choices she made day to day. The Tribunal was not persuaded on the evidence that Burkett was unable to change the arrangement, finding from the evidence of Burkett and that of her de facto that incremental changes had been made by agreement over time.

The Tribunal did not accept Burkett’s submission that she did not obtain any economies of scale arising from the pooling of income, assets or other resources in respect of the children, on the basis that their financial arrangements were not entirely separate. Instead the Tribunal found, on the evidence, that the children benefited from the pooling of resources which existed in the joint household regarding other shared arrangements. The Tribunal also did not accept that Burkett’s financial position set her case apart from the usual run of cases, noting that during the relevant period she was able to make ends meet although she had to forgo some items. Whilst the Tribunal accepted that Burkett had experienced some difficulty meeting the costs of medical and other treatments she and her children had required, the Tribunal found that the evidence did not establish Burkett was unable to pay for the necessary treatment or that any necessary treatment had been foregone as a result.

Finally, the Tribunal noted some difficulty with Burkett’s submission concerning the best interests of her children as it suggested that the circumstances of her relationship with her de facto stood contrary to the best interests of her children remarking that,

....the manner in which she conducts her relationship and the terms she settled upon with Mr Lavender, are matters of her own choosing. If the choices she has made (and continues to make) truly bear against the best interests of her children, then it is for her to decide how to best manage her circumstances, including whether those choices should stand or be reconsidered.

(Reasons, para. 58)

Formal decision

The decision under review was affirmed. [G.B.]