Eggleton and Secretary, Department of Family and Community Services [2000] AATA 98 (14 February 2000)

Last Updated: 13 March 2000

DECISION AND REASONS FOR DECISION [2000] AATA 98

ADMINISTRATIVE APPEALS TRIBUNAL )

) No N99/701

GENERAL ADMINISTRATIVE DIVISION )

Re JOHN CECIL EGGLETON

Applicant

And SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES

Respondent

DECISION

Tribunal Ms S M Bullock, Member

Date 14 February 2000

Place Sydney

Decision The decision under review is affirmed.

(Sgd) S M Bullock

..............................................

MEMBER

CATCHWORDS

Social Security - Family Allowance - Member of a Couple - Maintenance - Income of each Member included as Income of Other Member - Whether Special Reason for Treating as not Members of a Couple

Social Security Act 1991 ss 10, 21, 24, 861, 1069-A1, 1069-H3, 1069-52, 1069-J8, 1069-J9

The Child Support (Assessment) Act 1989

Re Kuipers and Secretary, Department of Social Security (1998) 52 ALD 663

Secretary, Department of Social Security v Le-Huray (1996) 23 AAR 297

Re Secretary, Department of Social Security and Porter (1997) 48 ALD 343

Re Department of Social Security and Tsimpidaros (AAT 10292, 5 July 1995)

Re Beadle and Director-General of Social Security (1984) 6 ALD 1

Beadle v Director-General of Social Security (1985) 7 ALD 670

Klein v Domus Pty Ltd (1963) 109 CLR 467

REASONS FOR DECISION

Ms S M Bullock, Member

1. This is an application for review made by Mr John Cecil Eggleton ("the Applicant") against a decision of the Social Security Appeals Tribunal ("the SSAT") made on 22 April 1999, that Mr Eggleton's Family Allowance between 8 October 1998 and 19 November 1998 should be reduced because of the receipt of child support payments by his partner (T2). The SSAT's decision affirmed a decision of an Authorised Review Officer of the Department of Family and Community Services ("ARO") made on 4 February 1999, that the maintenance income received by Mr Eggleton's partner, Ms B Bannerman, for her children, should be included in the calculation of Family Allowance payment to him for his then 15 year old daughter, Cassie (T22). The ARO's decision affirmed the original decision of the delegate of the Department of Family and Community Services which was made on 30 October 1998 (T8).

2. Mr Eggleton attended the hearing and provided oral evidence. He represented himself with the assistance of Ms B Bannerman, his partner, who also provided oral evidence to the Tribunal. The Respondent, the Secretary, Department of Family and Community Services ("the Department"), was represented by Mr A Cox, Departmental Advocate. The Tribunal took into evidence documents lodged pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 ("T Documents T1-T24) and the following exhibits:

Exhibit Number Description Date

A1 Letter to Mr Eggleton from Mr B Gerogiannis, Solicitor, Legal Aid Commission of New South Wales 29 June 1999

A2 Letter to Mr Cox, Administrative Law Section, Centrelink, from Ms M Sripathy, Solicitor, Welfare Rights Centre, Sydney 22 September 1999

A3 Letter to Mr Eggleton from Ms M Sripathy, Solicitor, Welfare Rights Centre, Sydney 30 September 1999

A4 Letter to Mr Eggleton from Mr J Charles, Manager Investigations, Commonwealth Ombudsman 17 February 1999

R1 Respondent's Statement of Facts and Contentions 30 September 1999

Issues

3. The issue to be determined in this matter is whether or not maintenance income (child support) received by Mr Eggleton's partner, Ms Bannerman, during the period 8 October 1998 to 19 November 1998, should have the effect of reducing the amount of Family Allowance paid to Mr Eggleton in respect of his daughter, Cassie.

Legislation

4. A determination in this matter requires consideration of certain provisions of the Social Security Act 1991 (" the Act").

5. Subsection 10(1) of the Act defines "Maintenance Income" and provides:

"10(1) In this Act, unless the contrary intention appears:

capitalised maintenance income, in relation to a person, means maintenance income of the person:

(a) that is neither a periodic amount nor a benefit provided on a periodic basis; and

(b) the amount or value of which exceeds $1,500

..."

6. Section 861 of the Act deals with the manner in which a person's Family Allowance is to be worked out in accordance with the Rate Calculator contained in section 1069 of the Act, and as relevant provides:

"861 How to work out a person's family allowance rate

The rate of family allowance payable to a person or to an approved care organisation for an FA child is worked out using the Family Allowance Rate Calculator at the end of section 1069. "

7. Module A at subsection 1069-A1 sets out the overall rate calculation process which is as follows:

"1069-A1 The rate of family allowance of a person (other than an approved care organisation) who has an FA child or FA children is a fortnightly rate calculated as follows:

Method Statement

Step 1 Add the amounts worked out under the following Modules:

(a) MODULE B (standard family allowance rate);

(b) MODULE C (large family supplement);

(c) MODULE D (multiple birth allowance);

(d) MODULE F (guardian allowance).

Note: Module G may apply if 2 people who are not members of the same couple share the daily care and legal responsibility for a child.

Step 1A Work out the amount (if any) for rent assistance (using MODULE E) and add the amount to the total from Step 1. The result is the person's gross family allowance rate.

Step 2. Apply the family allowance income rest in Submodule 3 of MODULE H to the person's gross family allowance rate to work out any reduction for income. Take any reduction away from the person's gross family allowance rate: the result is the person's income tested family allowance rate.

Step 3. Take away from the person's income tested family allowance rate the person's minimum family allowance rate: the result is the person's adjusted income tested family allowance rate.

Step 4. Apply the maintenance income test in MODULE J to the person's adjusted income tested family allowance rate to work out any reduction for maintenance income. Take any reduction away from the person's adjusted income tested family allowance rate: the result is the person's maintenance tested family allowance rate.

Step 5. Unless Step 6 applies, the person's family allowance rate is:

(a) if there is no reduction for income or for maintenance income - the person's gross family allowance rate; or

(b) if there is a reduction for income but no reduction for maintenance income - the person's income tested family allowance rate; or

(c) if there is a reduction for maintenance income - the sum of:

(i) the person's maintenance tested family allowance rate; and

(ii) the person's minimum family allowance rate.

Step 6. If there is any reduction for income under Step 2 or any reduction for maintenance income under Step 4, but the person's family allowance income worked out under Step 2 in Submodule 3 of MODULE H is less than the person's income ceiling worked out under Step 3 of Submodule 3 of MODULE H , then the person's family allowance rate is the greater of the following amounts:

(a) the rate obtained under Step 5;

(b) the minimum family allowance rate."

8. Subsection 1069-H3 provides that where a person is a member of a couple, the person's income for a tax year includes income for that year from a person's partner. Subsection 1069-H3 states:

"For the purposes of this Module, if a person is a member of a couple, the person's income for a tax year includes the income for that year of the person's partner"

9. Subsection 1069-J2 of the Act provides that the annual rate of maintenance income of a person who is a member of a couple is the sum of the respective annual rates of each of the members of the couple. Subsection 1069-J2 states:

"The annual rate of the maintenance income of a person who is a member of a couple is the sum of the rates that, apart from this Point, would be the respective annual rates of each of the members of the couple."

10. Subsection 1069-J9 of the Act states that subsection 1069-J2 is to be disregarded when using Table J at 1069-J8. Table J applies a different "maintenance income free area" in accordance with whether members of a couple are both receiving maintenance income or only one of the members of a couple is in receipt of such income. The provisions of Table J and subsection 1069-J9 should be read in conjunction with subsection 1069-J2. Subsection 1069-J9 provides an exception in Table J to the general rule provided in subsection 1069-J2. That exception applies only to the calculation of the "maintenance income free area".

11. Part 1.3 of the Act deals with the "determinations having interpretive effect". Specifically section 24 of the Act considers when persons may be treated as not being a member of a couple and as relevant subsection 24(2) states:

"24(2) Where:

(a) a person has a relationship with a person of the opposite sex (the "partner"); and

(b) the person is not legally married to the partner; and

(c) the relationship between the person and the partner is a marriage-like relationship; and

(d) the Secretary is satisfied that the person should, for a special reason in the particular case, not be treated as a member of a couple;..."

Background

12. The following information is provided by way of background. The information contained herein is not in dispute.

* Mr Eggleton was born on 15 November 1952.

* Mr Eggleton had been married for approximately 21 years and sadly was widowed on 21 October 1995 following Mrs Eggleton's suffering a fatal heart attack (T3). Mr Eggleton has five children; David, aged 27 years; Joanne, aged 26 years; Christopher, aged 25 years; Nicholas, 18 years and Cassie, who will turn 16 on 15 December 1999.

* On 30 October 1995, Mr Eggleton lodged a claim for Family Payment [Family Allowance] (T3).

* Mr Eggleton is in receipt of a Disability Support Pension.

* On or about 26 August 1998, Mr Eggleton commenced a relationship with Ms Belinda Bannerman (T5). Ms Bannerman has two children from a previous relationship, Kaila McFawn, aged seven years and Michael McFawn, aged five years.

* Ms Bannerman receives payments for her children from her former husband through the Child Support Agency.

* By letter of 1 October 1998, Centrelink advised Mr Eggleton that the rate of Family Allowance for Cassie had changed. It reduced to $23.50 commencing on 8 October 1998 (T6). Previously, Mr Eggleton had received approximately $125.40 per fortnight in Family Allowance.

* Ms Bannerman was advised on 19 October 1998, by the Child Support Agency, that her child support for 21 October 1998 was $735.45. This payment was made up of an amount of arrears of child support of $95.87 and the usual payment of $639.58.

* Mr Eggleton made a "Statement" to Centrelink on 9 November 1998 disagreeing with Centrelink's decision to reduce his Family Allowance for Cassie. Mr Eggleton wrote:

"I am appealing against the decision that you are taking into account that I am receiving maintenance for my daughter Cassie (15-12-83) who is not in any way related to the children receiving maintenance, Kaila & Michael. I object to being "double dipped", in my payments because by you doing this you are causing a whole load of problems for the family we are trying to establish. This is also unfair and we wish this to be stopped, we receive maintenance for Kaila & Michael not Cassie... ." (T10)

* Ms Bannerman was paid Family Allowance for Cassie Eggleton, in addition to her own children, Kaila and Michael from 9 November 1998 at the rate of $209.50 per fortnight (T11).

* By letter of 21 January 1999, a Departmental delegate advised Mr Eggleton that the decision to reduce his Family Allowance for Cassie was correct (T15).

* Mr Eggleton appealed to an ARO on 21 January 1999 stating:

"...What I disagree with is 1) I should be able to claim and be granted full Family Payments for Cassie as I am in receipt of a Disability Support payment. 2) That at no time should Belinda's receipt of maintenance should double dip me. My daughter Cassie's mother is deceased and to get letters stating that I am in receipt of maintenance is very distressing. I want to make make [sic] my point that I should claim for Cassie and Belinda claim for Kaila and Michael. If Belinda receives maintenance for her two children then it should only affect her Family Payments, not mine. The original decision maker has explained that I can claim Family Payment for Cassie but I have been told that I am not able to be paid for Cassie. I have also had the maintenance free area explained to me and that Belinda's Family Payment is taken over the three children. I still do not agree with this decision. I receive letters stating that I am not entitled to Family Payments because I receive maintenance. Belinda also receives letters stating that her receipt of maintenance is affecting her Family Payments." (T17)

* On 27 January 1999, the Department was advised by Mr Eggleton that he and Ms Bannerman had separated on 24 January 1999 (T19).

* By letter of 5 February 1999, an ARO informed Mr Eggleton that the calculation of the Family Allowance for Cassie, including the maintenance income received by Ms Bannerman for her children, was correct (T22).

* On 2 March 1999, Mr Eggleton appealed to the SSAT concerning the rules that had been applied to the calculation of Family Allowance for Cassie which required that one partner's receipt of maintenance income affects the payment of Family Allowance for the other partner (T23).

* The SSAT affirmed the ARO's decision on 22 April 1999.

* On 13 May 1999, Mr Eggleton appealed to the Tribunal stating that he believed the "Special Maintenance Income Rule 1069-2" is:

´"...unfair and unjust with respect to the partner who does not receive maintenance as he is a widower. We are only one of many in this type of situation" (T1, p2)

* In a statement of 11 February 1999, accompanying Mr Eggleton's application for review to the Tribunal, he wrote:

"...However when we went to complete the paperwork we were told that because Maintenance is being collected for Kaila and Michael McFawn that Maintenance was also being collected for Cassie Eggleton which being a widower is an impossible task. This I believe is also beyond the powers of Centrelink.

So instead of having Family Payments assessed on my partners children being Approx. $8,441.92 per year. It is being assessed on $16,883.84 which is incorrect, as Maintenance is only collected for Kaila and Michael McFawn not Cassie Eggleton.

As a result of this decision the amount we are being assessed on is incorrect. The amount used for the assessment is wrong.

When maintenance is received by a parent that payment should only affect the children of that relatioship [sic], not for other children in the relationship.

I should be entitled to full Family Payment for Cassie and that my partners Family Payment should be the only thing AFFECTED by the amount of maintenance collected for Kaila and Michael McFawn.

I believe that what we have here is a case of "Double Dipping" and that to me is unfair and incorrect for all those that are also in this situation, as well as myself." (T1, p 3)

Evidence of Mr Eggleton

13. Mr Eggleton informed the Tribunal that he and Ms Bannerman had commenced a relationship in about January 1998 and commenced living together in Mr Eggleton's family home at Oakhurst in August 1998. Mr Eggleton's daughter, Cassie, was living with him and continues to reside with her father. Ms Bannerman's children also moved with her into Mr Eggleton's house in August 1998. Kaila and Michael McFawn continued to live with Ms Bannerman. Mr Eggleton further informed the Tribunal that Ms Bannerman receives child support or maintenance income for her children from her former husband, Mr McFawn.

14. The Department was informed of the change in Mr Eggleton's circumstances within the time frame required of him. Mr Eggleton was at the time receiving a Family Allowance for Cassie of $123.50 per fortnight. Mr Eggleton stated that he is in receipt himself of a Disability Support Pension of $208.00 per fortnight. Mr Eggleton explained that he has the condition, Non-Hodgkin's Lymphoma. Mr Eggleton is required to be medically monitored on a weekly basis and has in the past received treatment of chemotherapy and radiotherapy. Mr Eggleton informed the Tribunal that there is a new drug for his condition which may assist him and he is also looking at the possibility of a marrow transplant.

15. Mr Eggleton has attempted to work on Saturdays, driving a truck, but has ceased this for a short time. He was earning approximately $240.00 per week.

16. Mr Eggleton is in the process of paying off his home at Oakhurst. There is approximately $70,000.00 remaining of the home loan which was originally $115,000. Mr Eggleton makes mortgage repayments of $390.00 per fortnight to the National Australia Bank. Mr Eggleton stated that Ms Bannerman had also previously worked on a part time basis for Anglicare receiving about $60.00 per week. This work ceased however, when Ms Bannerman commenced living at Oakhurst.

17. In relation to the maintenance received by Ms Bannerman from her former husband for their two children, Mr Eggleton stated that the amount of maintenance during the period they lived together from August 1998 to 26 January 1999 was irregular. Ms Bannerman could receive $500.00 or $600.00 per month. Mr Eggleton could not understand how the Department arrived at its calculation of the maintenance received by Ms Bannerman from Mr McFawn as being $8,000 per year.

18. Mr Eggleton explained to the Tribunal that his blended family's finances were managed by pooling all the resources. Money came into the house from Ms Bannerman and himself and was used jointly - everyone contributed. Mr Eggleton told the Tribunal that the maintenance for Kaila and Michael McFawn went into this pooled income as part of the household's finances. Mr Eggleton stated that he and Ms Bannerman eventually opened a joint bank account, but initially his payments were deposited into the National Australia Bank, while Ms Bannerman's payments went into a Westpac Bank account.

19. Mr Eggleton told the Tribunal that he could not countenance the fact that money paid for the maintenance of Ms Bannerman's children by her ex-husband should cause the Family Allowance for Cassie to be reduced. Once it became clear to Mr Eggleton that the Family Allowance would continue to be reduced, he decided, on advice from Centrelink staff, to "sign Cassie over" to Ms Bannerman in the sense that Ms Bannerman, on paper, became responsible for looking after Cassie. Mr Eggleton mused that it was ironic that when his daughter was under his care, the Family Allowance reduced, but when Cassie was notionally on paper under the care of Ms Bannerman, a non-biological carer, then the Family Allowance increased.

20. Mr Eggleton emphasised that his appeal to the Tribunal was made on a point of principle. He stated that he had been able to survive financially although this had been an extremely difficult time. His application for review to the Tribunal was not because of "the money" but because he considered that morally the decisions of the Department and the SSAT were wrong. Mr Eggleton stated that in fact staff at Centrelink offices agreed with him and had told him that morally the Department's decision was not correct but that legally it was. Mr Eggleton had written to Members of Parliament in relation to his concerns but had not been successful following such representations. In addition, Mr Eggleton had written to the Commonwealth Ombudsman and again, Mr Eggleton was unsuccessful in obtaining any reversal of the Department's decision. The Commonwealth Ombudsman noted that in fact the decision of the Department did not indicate any administrative error (Exhibit A4).

21. While Mr Eggleton acknowledged that he had been able to survive financially following the reduction of the Family Allowance, he stated that there was a great strain placed on Ms Bannerman's and his relationship because of the financial difficulties. Mr Eggleton and Ms Bannerman separated in January 1999 following an argument which had to do with "personal issues" but also the stresses of the family's financial situation impacted on their decision to separate at that time. Mr Eggleton also wanted to emphasise that he and Ms Bannerman were attempting to bring together two families into one and the pressure associated with the finances as a result of the reduction in Family Allowance hindered considerably the achievement of this result.

Evidence of Ms Bannerman

22. Ms Bannerman stated that she was born on 17 December 1964. She commenced living with Mr Eggleton on about 26 August 1998. Ms Bannerman has two children, Kaila and Michael, both from a previous relationship and for a period her children also lived in Mr Eggleton's home with Mr Eggleton's daughter Cassie. Prior to this, Ms Bannerman lived in rental accommodation paying $170.00 per week. Ms Bannerman explained that she received variable amounts of maintenance from her ex-husband, estimating that maintenance received by her could be between $400.00 and $500.00 per month. Ms Bannerman also received Family Allowance of approximately $208.00 per fortnight.

23. When Ms Bannerman moved into Mr Eggleton's Oakhurst property, her Family Allowance reduced to $174.00 per fortnight. The Family Allowance subsequently rose again from 19 November 1998 to $285.00 per fortnight when Ms Bannerman notified the Department that she had the care of Cassie, or as Ms Bannerman stated "Cassie was signed over" to her.

24. Prior to moving into Mr Eggleton's home, Ms Bannerman had been working part-time with Anglicare, but it became too difficult in terms of travelling to continue this employment.

25. Initially, Mr Eggleton and Ms Bannerman had separate bank accounts, Mr Eggleton using the National Australia Bank and Ms Bannerman using the Westpac Bank. Despite separate banking arrangements, Ms Bannerman explained to the Tribunal that all the money was pooled to cover the household expenses. Ms Bannerman could not estimate for the Tribunal how much she contributed to the household, stating that it "all went in together". This pooling of financial resources also included Ms Bannerman contributing to the mortgage repayments on Mr Eggleton's house.

26. Ms Bannerman and Mr Eggleton's relationship was under great stress and because of "personal issues" the couple separated on or about 25 January 1999, Ms Bannerman told the Tribunal. Ms Bannerman further stated that it was harder living together given the number of stresses including their finances, than it was to live apart. Ms Bannerman stated that the blended family still managed financially, because they had to. It was however, very hard trying to make one family out of the two families. Ms Bannerman stated that she had no other assets apart from a car.

27. Ms Bannerman stated that apart from the financial issues and personal issues between her and Mr Eggleton, the only other significant problem was the health of her son Michael, who suffered from asthma.

28. While Ms Bannerman agreed that her Family Allowance should be affected by the maintenance payments for her two children, Mr Eggleton's Family Allowance for Cassie should not have been affected. It was not right, Ms Bannerman stated, that her ex-husband's financial support of her two children should be extended to supporting three children. Ms Bannerman noted that Mr Eggleton had written to the Commonwealth Ombudsman who was unable to assist (Exhibit A4) because the ARO's and SSAT's decisions did not appear to reveal any administrative error and the Ombudsman's officer referred Mr Eggleton to his local Federal Member and the Minister for Social Security.

29. Ms Bannerman was concerned not only for the issue of maintenance income affecting the Family Allowance for Cassie, but also questioned the calculations of the annualised figure of maintenance income of $8,000.00.

Submissions

30. Mr Eggleton and Ms Bannerman provided joint submissions to the Tribunal with no objection from the Department.

31. Mr Eggleton asked the Tribunal to consider that his application for review concerned a "moral issue". Mr Eggleton stated that he understood that Centrelink must apply the legislation in its calculation of Family Allowance for Cassie, but that it was not fair that income provided by Ms Bannerman's ex-husband for his children should also be used to calculate Family Allowance for Cassie Eggleton. It seemed ludicrous, Mr Eggleton submitted, that Ms Bannerman should receive more Family Allowance if Cassie, his daughter, was regarded as being under the care of Ms Bannerman. That the Government was paying Ms Bannerman more Family Allowance than they were prepared to pay Cassie's biological father, seemed completely at odds with the issue of the welfare of people. It was encouraging the splitting up of families, Mr Eggleton submitted.

32. Ms Bannerman referred the Tribunal to Re Kuipers and Secretary, Department of Social Security (1998) 52 ALD 663 in which there was a discussion by the Tribunal of the application of section 24 of the Act, which contains a discretion, for special reasons, to allow members of a couple to be considered as not being members of a couple. Ms Bannerman submitted that the circumstances experienced by Mr Eggleton and herself during the period under review, were similar to those in Re Kuipers (supra).

33. Mr Eggleton submitted that there was an issue of the Department "double dipping", in that both partners of the relationship were being affected by the Department's treatment of maintenance income received for Kaila and Michael McFawn as well as Cassie. Cassie suffers, as a result of the Department's actions, and Ms Bannerman's children don't, Ms Bannerman submitted.

34. Ms Bannerman further submitted that if Centrelink had taken notice of the cases such as Kuipers (supra) and Secretary, Department of Social Security v Le-Huray (1996) 23 AAR 297, it would save itself some money and many people much heartache. Ms Bannerman noted that Mr Eggleton and herself were trying to establish a family in difficult circumstances, yet the Department seemed to be encouraging families to live apart by its treatment of maintenance income and the effect of this in reducing income available to families.

35. Both Ms Bannerman and Mr Eggleton posed a question for the Tribunal. "Was it fair and just that Mr McFawn be expected to pay maintenance not only for his biological children, but for someone else's child who happened, because of circumstances, to be involved because of his ex-wife's relationship with another man?" Further, "Was it the Department's intention that maintenance coming into Mr Eggleton's and Ms Bannerman's family unit be only used for Kaila and Michael and that the adults should then say to Cassie that they could not buy her things or spend money on her because the money was meant only for Kaila and Michael?" This seemed to be the approach which the Department would wish to encourage and it was neither practical, fair, nor just, Mr Eggleton submitted.

36. Mr Cox for the Department submitted that Mr Eggleton was a "member of a couple" within the definition of that term contained in subsection 4(2) of the act.

37. Under section 861 of the Act, detailing how Family Allowance is to be calculated using the Family Allowance Rate Calculator, subsection 1069-H3, Mr Cox submitted, provides that where a person is a member of a couple, the person's income for a tax year includes the income for that year of the person's partner. Although this provision is relevant to illustrate a consistent general principle in the Family Allowance Rate Calculator, Mr Cox submitted that the SSAT incorrectly considered "maintenance income" as being encompassed by the definition of income to be found in subsection 8(1) of the Act. Mr Cox submitted that maintenance income is excluded from the definition at subsection 8(8)(j) of the Act. Rather, maintenance income is defined at section 10 of the Act. Despite this error by the SSAT, Mr Cox submitted that the decision reached by the SSAT by applying subsection 1069-J2 was correct.

38. Mr Cox submitted that the correct approach in the calculation of Family Allowance is detailed in Module A of the Act which at subsection 1069-A1, sets out the overall rate calculation process. Step Four of subsection 1069-A1 deals with the maintenance income test of Module J of Section 1069. Mr Cox contended that subsection 1069-A1 applies to all recipients of Family Allowance regardless of whether they actually received maintenance income themselves. Accordingly, Mr Cox submitted that the test applies to all persons receiving Family Allowance, including Mr Eggleton.

39. Mr Cox contended that it was incorrect to assert that the maintenance income test applied only to a person receiving maintenance. It is the test that applies in the rate calculation process to all person's receiving Family Allowance. Mr Cox submitted that subsection 1069-J2 was correctly interpreted in Re Kuipers (supra) and referred the Tribunal to the comments by Senior Member Dwyer, in which she described section 1069-J2 as being:

"...particularly directed at maintenance income received by a person who is a member of a couple. It specifically provides that the annual rate of maintenance income of a couple is the sum of the annual rates of each member of the couple..."

40. The application of section 24 of the Act cannot be quarantined to a particular part of the Act, Mr Cox submitted. Subsection 1069-J2 of the Act applies in a specific and deliberate way to construe maintenance income received by a couple. Mr Cox submitted that the Tribunal in Re Kuipers (supra) was correct when it concluded that subsection 24(1) of the Act should not be used to defeat the specific intention and purpose of section 1069-J2 of the Act. Mr Eggleton and Ms Bannerman were members of a couple and this was not disputed, Mr Cox contended. Mr Cox referred the Tribunal to the evidence of both Mr Eggleton and Ms Bannerman that they pooled their financial resources to cover all household expenditure including mortgage repayments. The issue of the couple being able to pool their financial resources is a major detriment to the application of section 24 of the Act and its discretionary provisions, Mr Cox submitted. There was nothing preventing Mr Eggleton and his partner using their resources in such a manner and in such circumstances. Further, Mr Cox submitted that the use of the discretion contained in section 24 would not be appropriate given the circumstances characterising Mr Eggleton and Ms Bannerman's relationship.

41. Mr Cox concluded that the overall Family Allowance Rate Calculator includes the maintenance income test. This test applies to all persons receiving Family Allowance, Mr Cox submitted. Subsection 1069-J2 of the Act operates to ensure that maintenance income received by a person is included in the rate of Family Allowance paid to their partner. Accordingly, Mr Cox submitted that subsection 1069-J2 of the Act had been correctly applied in the calculation of the rate of Family Allowance paid to Mr Eggleton. In such circumstances Mr Cox submitted that the Tribunal should affirm the decision of the SSAT.

Findings

42. The Tribunal must reach a determination in this matter taking into account the oral and documentary evidence and by applying the law and case law.

43. The Tribunal found Mr Eggleton and Ms Bannerman provided consistent and unembellished evidence and considers them to be witnesses of truth.

44. The first issue for the Tribunal to consider is whether or not the maintenance income received by Ms Bannerman for her children, Kaila and Michael, should have the effect of reducing the Family Allowance paid to Mr Eggleton for his daughter Cassie, during the period 8 October 1998 to 19 November 1998.

45. There is no dispute that Ms Bannerman was receiving maintenance income for Kaila and Michael McFawn from her ex-husband Mr McFawn. There is also no dispute that for the purposes of section 4 of the Act, Mr Eggleton and Ms Bannerman were members of a couple.

46. Subsection 1069-H3 of the Act provides, that for the purpose of the Module, if a person is a member of a couple, the person's income for a tax year includes the income for that year of the person's partner. Subsection 1069-A1 states that Family Allowance for a person is calculated by applying the maintenance income test in Module J. Maintenance income is significantly defined at section 10 and has a separate income test. Subsection 1069-J2 states that the annual rate of maintenance income for a person who is a member of a couple, is the sum of the rates of each of the members of the couple. Subsection 1069-J8 distinguishes between situations where both members of the couple are receiving maintenance and where one member of the couple is receiving maintenance. The Tribunal considers that subsection 1069-J2 requires that the annual rate of maintenance, in this case received by Ms Bannerman, is to be added to Mr Eggleton's annual rate of maintenance which in this case is zero. In this specific case, the resulting figure is being used to work out the affect of the maintenance income of Ms Bannerman (given Mr Eggleton's maintenance income is zero) and the affect this has on Mr Eggleton's Family Allowance for Cassie.

47. The Tribunal, referring to subsection 1069-J9 of the Act which refers to Table J, confirms in the Tribunal's view, the intention of the legislation to cover situations distinguishing between when one member of the couple may receive maintenance income or both members of a couple receive maintenance income.

48. The Tribunal considers that the purpose of the legislation is clear in that it intends, for the purpose of the calculation of the Family Allowance, to cover situations where one or both partners receive maintenance income and this income should be taken into account for the purpose of calculating the correct rate of Family Allowance. The Tribunal notes from Re Kuipers (supra), that the Minister for Social Security, the Hon. Jocelyn Newman, replying to the local Federal Member who had made representations on behalf of Mr and Mrs Kuipers, wrote:

"The Family Payment income and maintenance income tests are designed to ensure that payment is based on the assessment of need of the family and therefore takes account of income sources in the family unit which can be used to support family members. The rate of Family Payment is based on the family's taxable income, any foreign income, the value of net rental property loses and the value of certain employer provided benefits. Where a family is also receiving maintenance, the maintenance income test is then also applied. The rationale for this is that where available, private income should be used to support a family rather than to looking at one's fellow tax payers for support.

It is expected that all income is used to benefit the whole family unit. Maintenance is not taxable income but is part of the overall income that the family receives. In the case of Mr Kuipers and Ms Ford, they receive maintenance as part of their total income. If maintenance income was ignored when calculating the rate of Family Payment, it could be argued that families that receive maintenance income are advantaged over families that receive no maintenance income.

..."

49. Thus, the Tribunal finds that under the Act, the maintenance income provided to Ms Bannerman's children by Mr McFawn must be used in the calculation of Family Allowance for Cassie Eggleton. The Tribunal, while feeling obliged to make this finding, considers that this situation reflects a tension between the provisions of the Act and the Child Support (Assessment) Act 1989 ("the Child Support Act"). The Tribunal understands that the intention of the Child Support Act is that it operates to ensure that in this specific case, Mr McFawn's payment of maintenance is for the financial support only of his children Kaila and Michael. The Act however, by taking into account the maintenance income for Kaila and Michael in assessing the Family Allowance payment for Cassie Eggleton was regarding the maintenance income as available and to be used for the financial support of all the children in the Eggleton/Bannerman household. The Tribunal considers the consequences of the relevant provisions of the Act indicate a conflict between the intentions of both pieces of legislation. The Tribunal notes that a similar view was expressed by the Tribunal in Re Kuipers (supra) and that that Tribunal made unsuccessful attempts to obtain some clarification and discussion of the issues from the Family Court of Australia, the Child Support Agency and the father in that case, Mr Ford.

50. Having found that the Tribunal must include the maintenance income received for Kaila and Michael McFawn in the calculation of the Family Allowance for Cassie Eggleton, the Tribunal turns to consider the actual calculation itself. The Tribunal at the time of hearing raised the issue of the calculation of the Family Allowance for Cassie because there was concern there may have been a miscalculation. By further written submission received by the Tribunal on 11 October 1999, the Tribunal was informed that indeed there had been an error made in the calculation in the Family Allowance not to the detriment of Mr Eggleton and Cassie, but to the Department itself. In this regard, the Department had made an error which benefited Mr Eggleton in that he was paid an amount of Family Allowance greater than his entitlement. However, this error having been discovered, the Department has waived the recovery of the additional amount of Family Allowance paid to Mr Eggleton, by utilising the provisions of section 1237A of the Act. No further submissions have been received by the Tribunal from Mr Eggleton in relation to this particular issue and accordingly, the Tribunal finds that the calculation of Family Allowance should not be disturbed and that there has been no element of "double dipping" or miscalculation of the allowance to the detriment of Mr Eggleton.

51. The Tribunal next turned to consider the issue of whether or not the discretion contained in subsection 24(2) of the Act should be utilised. In considering section 24 of the Act, the Tribunal has received some guidance from a number of Federal Court and Tribunal decisions. In Klein v Domus Pty Ltd (1963) 109 CLR 467, Dixon CJ noted:

"...We have invariably said that wherever the legislature has given a discretion of that kind you must look at the scope and purpose of the provision and at what is its real object. If it appears that the dominating, actuating reason for the decision is outside the scope of the purpose of the enactment, that vitiates the supposed exercise of the discretion. But within that very general statement of the purpose of the enactment, the real object of the legislature in such cases is to leave scope for the judicial or other officer who is investigating the facts and considering the general purpose of the enactment to give effect to his view of the justice of the case. "

52. In Secretary, Department of Social Security v Le-Huray (supra), Jenkinson J concluded:

"...Further, in considering the meaning of the phrase "special reason", in regard to what Toohey J said in Re Beadle and Director-General of Social Security (1984) 1 AAR 362 - that, to be "special" circumstances, must have a particular quality of unusualness - should be tempered by an even more careful regard to what the Full Court of this court said on the appeal in those matters - that Bowen CJ, Fisher and Lockhart JJ, would place less emphasis than did Toohey J on what is only one of the several meaning of the word "special" which a dictionary affords: Beadle v Director-General of Social Security (1985) 7 ALD 670."

53. The Tribunal does not feel free to use the discretion contained in subsection 24(2) of the Act to defeat the purpose of section 1069-J of the Act which includes the maintenance income received for the McFawn children in the calculation of the Family Allowance payment for Cassie Eggleton, even though the Act clearly indicates that maintenance paid for one purpose under the Child Support Act is to be spent for a wider purpose under the Act.

54. While the Tribunal notes the seeming clash between the provisions of the Act and the Child Support Assessment Act in respect of maintenance income, which in the Tribunal's view is unsatisfactory, noting the treatment of "special" in Beadle v Director-General of Social Security (1985) (supra) and Re Beadle and Director-General of Social Security (1984) (supra), the Tribunal does not consider that in the legislative sense that there is anything special about the circumstances surrounding Mr Eggleton's case. The Tribunal understands that Mr Eggleton and Ms Bannerman consider it unfair and unjust that maintenance income received for Kaila and Michael should be included in the calculation for Cassie and that they consider that this is a special reason why the discretion contained in section 24 should be applied. The Tribunal does not consider however, that whatever the validity of their views might be, it cannot take away from the clear purpose and intention of the Act in relation to the receipt of child maintenance income, to allow for the overturning of this purpose and intention by the enactment of the discretion contained in section 24 of the Act.

55. The better course, in the Tribunal's view, would be to have the legislation reviewed in order that the tension and seeming discrepancy between the provisions of the Act and the Child Support Act be removed. To this end, as the Tribunal did in re Kuipers (supra), I propose to ask the District Registrar to send a copy of these reasons to the Chief Justice of the Family Court of Australia and to the Registrar at Child Support as I believe there is a need for further reflection of the problems raised by this and other similar matters which have come before the Tribunal.

56. In all the circumstances and for the reasons set out above, the Tribunal reluctantly affirms the decision under review.

I certify that the 56 preceding paragraphs are a true copy of the reasons for the decision herein of:

Ms S M Bullock, Member

Signed: .....................................................................................

Associate

Date/s of Hearing 28 September 1999

Date of Decision 14 February 2000

Representative for the Applicant Self Representation by

Mr Eggleton and Ms Bannerman

Representative for the Respondent Mr A Cox, Departmental Advocate