Editors --- "Baby bonus: adoptive children, when entrusted into care for the process of adoption" [2012] SocSecRpr 36; (2012) 14(4) Social Security Reporter, Article 8

• SECRETARY TO THE DFHCSIA v ABBOTT
• Background
• The legislation
• The issue
• Discussion
• Formal decision

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Baby bonus: adoptive children, when entrusted into care for the process of adoption

SECRETARY TO THE DFHCSIA v ABBOTT

(Full Federal Court of Australia )

Decided: 29th November 2012 by Bromberg JJ.

Background

Abbott and her husband adopted two children with the orders of the Supreme Court of NSW being made in October 2010. Barnardos Australia, an authorised party, had placed the children in long term foster care with the Abbotts in January 2007. In February 2010 Barnardos made a decision to allow the Abbotts to adopt the children. In August 2010 Abbott applied for baby bonus in respect of the children. The claim was refused by Centrelink but allowed by the SSAT. The AAT affirmed the decision of the SSAT. The Secretary’s appeal to the Federal Court was dismissed and the matter was brought to the Full Court.

The legislation

Under s.36(5) of A New Tax System (Family Assistance) Act 1999 (the Act), with effect from 1 January 2009, an adoptive parent was entitled to payment of ‘baby bonus’ if:

(a) as part of the process for the adoption of the child by the individual, the child is entrusted to the care of the individual by an authorised party; and

(b) the child is aged under 16 at the time the child is entrusted to the care of the individual.

The issue

The central issue was whether the children could be said to have been entrusted at all to the care of Abbott as part of the adoption process, or whether they were entrusted to her care at an earlier stage for some other reason, thereafter remaining in the care of the respondent, but without the necessary connection to the adoption process even though that process had commenced.

The Secretary accepted the AAT’s finding of fact that the adoption process started on 23 February 2010. Thus, if the children were entrusted into Mrs Abbott’s care ‘as part of the process of adoption’, then that occurred after 1 January 2009. However, the Secretary agitated in effect that the physical placement of the children in 2007 for long term foster care was when the children were ‘entrusted to the care’ of Mrs Abbott.

Discussion

The Full Court accepted the reasoning of both the AAT and the primary judge that the children were first placed into the care of Mrs Abbott by Barnardos as part of a long term foster care arrangement. However, from 23 February 2010, the children were entrusted into Mrs Abbott’s care as part of the process of their adoption.

The Full Court said that the Secretary’s construction that an individual’s eligibility for baby bonus only arose when the child was ‘first physically’ entrusted was wrong on two grounds. First it sought to qualify the word ‘entrusted’ in a way the Parliament had not sought to do. Secondly, it denied the true scope of the section which recognised that from 23 February 2010 Barnardos entrusted the children to Mrs Abbott as part of the process of adoption under s.35(5)(a) of the Act.

Formal decision

The appeal was dismissed with costs.