Savanovic and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs and Anor [2009] AATA 979 (21 December 2009)

Last Updated: 21 December 2009

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2009] AATA 979

ADMINISTRATIVE APPEALS TRIBUNAL )

) No 2009/2313

GENERAL ADMINISTRATIVE DIVISION		)
	Re		SLAVKO SAVANOVIC

Applicant

And

SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS

Respondent

And

ZIVANA SAVANOVIC

Third Party

DECISION

Tribunal

Mr Egon Fice, Member

Date 21 December 2009

Place Melbourne

Decision

The Tribunal sets aside that part of the SSAT decision which calculated Mr Savanovic’s shared care of his children at 32 per cent and determines that his shared care of his children from 1 July 2008 is 30 per cent. The Tribunal affirms that part of the SSAT decision which states that from 1 July 2008 Mr Savanovic’s rate of FTB for his children is nil.

(sgd) Egon Fice
Member

SOCIAL SECURITY – family tax benefit – percentage of shared care – family court order considered – part of reviewable decision set aside.

A New Tax System (Family Assistance) Act 1999 s 22

A New Tax System (Family Assistance) (Administration) Act 1999 ss 71, 95, 97, 101

REASONS FOR DECISION

21 December 2009

Mr Egon Fice, Member

1. Mr Slavko Savanovic and his former wife Mrs Zivana Savanovic were receiving family tax benefit (FTB) for their two children. On 2 August 2007 the Family Court of Australia made an order regarding the shared care of their two children. That order formed the basis for Centrelink’s calculation of the percentage of the period during which the children would be in Mr Savanovic’s care. Centrelink administers FTB on behalf of the Secretary to the Department of Families, Housing, Community Services and Indigenous Affairs (the Secretary).
2. On 31 October 2008 an Authorised Review Officer (ARO) with Centrelink determined that, pursuant to the Family Court Order, from 1 July 2008 Mr Savanovic cared for their children 30 per cent of the time and that his wife cared for their children 70 per cent of the time. From 1 July 2008 to 23 September 2008, Mr Savanovic received FTB on the basis that he cared for his children 35 per cent of the time and Centrelink paid him $664.70.
3. Upon reconsideration of the decision, the ARO determined that because Mr Savanovic did not have the care of his children for more than 35 per cent of the time, he was not entitled to any FTB payment during that period. For that reason, the ARO determined that Mr Savanovic had been overpaid $664.70. The ARO found that the sum of $664.70 was a debt owed to the Commonwealth and that the debt could not be waived. Centrelink asked Mr Savanovic to repay the debt.
4. The Social Security Appeals Tribunal (SSAT) found that Mr Savanovic had care of his children for 32 per cent of the time, which was below the 35 per cent threshold required to be met for eligibility for payment of FTB. Therefore, Mr Savanovic was not entitled to any FTB payment from 1 July 2008. Mr Savanovic now seeks review of the SSAT decision.
5. The issues I need to determine are:
   • (a) the percentage of Mr Savanovic’s shared care of his children from 1 July 2008; and
   • (b) whether Mr Savanovic must repay the FTB sum received after 1 July 2008 as a debt due to the Commonwealth.

PERCENTAGE OF SHARED CARE

6. The Secretary is required under A New Tax System (Family Assistance) Act 1999 (the Family Assistance Act) to determine the percentage of the period that a child is in an adult’s care where there is shared care (s 22(6A)). The Family Assistance Act also provides that a child cannot be in the care of more than one adult on any particular day (s 22(6C)), and the Secretary must determine which of the adults has the care of the child on any given day, having regard to the living arrangements of the child (s 22(6D)).
7. The Family Assistance Act does not give any guidance to the Secretary about how to determine who has care of a child on any given day having regard to the living arrangements. Therefore, the Secretary has adopted a policy which he applies equally to all persons entitled to FTB. The Secretary determines that a child is in the care of the person with whom it remains overnight. While this policy may appear to be somewhat arbitrary, it does assist Centrelink in determining, as a percentage, the care that each adult may have of a child. In any event, that policy is applied uniformly to all recipients of the FTB and therefore it cannot be said to be unfair. As the Family Assistance Act is silent on how this calculation is to be made, it is clear that the policy adopted by the Secretary does not offend against the Family Assistance Act. It is a lawful policy and I should apply it.
8. Under the Family Court Order, the children are required to spend the following times with Mr Savanovic:
   • (a) Each alternate week-end from 5.00pm Friday to Monday at the start of school, commencing 3 August 2007;
   • (b) For one half of each of the school term vacations and the long summer vacation on dates to be agreed between the parties and in default of agreement, the first half;
   • (c) For two hours on the husband’s birthday, where it falls on a school day or four hours if a week-end;
   • (d) From 10.00am on Father’s Day until the start of school the next day. In the event that the husband’s contact falls on Mother’s Day week-end, such time spent is suspended from 10.00am on Mother’s Day;
   • (e) From 3.00pm on 25 December 2007 until 3.00pm on 26 December 2007 and each alternate year thereafter and from 3.00pm on 24 December 2008 until 3.00pm 25 December 2008 and each alternate year thereafter;
   • (f) From 3.00pm on 6 January 2008 until 3.00pm 7 January 2008, and each alternate year thereafter, and from 3.00pm on 7 January 2009 until 3.00pm on 8 January 2009 and each alternate year thereafter;
   • (g) From 5.00pm the day prior to St. Nicholas Day until 8.00pm on St. Nicholas Day (19 December);
   • (h) On each of the children’s birthdays as agreed between the parties;
   • (i) By telephone or SMS Wednesday of each week; and
   • (j) At such further and other times as may be agreed between the applicant husband and respondent wife.
9. The SSAT, applying the above orders to the period between 1 July 2008 and 30 June 2009, calculated that the children spent 118 nights with Mr Savanovic. This amounts to 32.33 per cent of the care of the children. The SSAT did not set out the basis for its calculation, other than to say it had complied with the Family Court Order of 2 August 2007.
10. As he did before the SSAT, Mr Savanovic maintained that the correct calculation was as assessed by the Child Support Agency, being 35.7 per cent of the care of his children. That was based on a calculation that Mr Savanovic had the care of his children for 128 nights. However, one needs to look more carefully at the way in which the Child Support Agency arrived at this figure.
11. According to the Child Support Agency, the current care levels on its records indicated the children spent between 110 and 145 nights with Mr Savanovic. It therefore estimated that the average number of nights per year was 128. This figure is not based on actual nights spent with Mr Savanovic but, as is stated in its own documents, it is an estimated number of nights spent with Mr Savanovic. A careful reading of the Family Court Order makes it clear that the number of nights in any one year may vary by agreement between the parties. Therefore, the figure of 128 has been decided upon by the Child Support Agency for the purpose of determining the level of child support that should be paid by one parent to the other.
12. It must be borne in mind that for the purposes of the FTB, Centrelink is required to make its own calculation based on the number of nights it believes Mr Savanovic’s children will spend with him. It should come as no surprise that the calculation by Centrelink is likely to be at variance with that of the Child Support Agency, depending upon whether it has made an estimate of any additional nights that the children might spend with Mr Savanovic.
13. Centrelink calculated Mr Savanovic’s percentage of care on two alternative bases. The first is what Centrelink described as its abstract calculation, where Mr Savanovic has the children for:
    • (a) half of the school holidays (20 September 2008 – 5 October 2008, 20 December 2007 – 1 February 2008, 4 April 2008 – 19 April 2008, and 27 June 2008 – 12 July 2008) being 80 nights in total and therefore 40 nights in Mr Savanovic’s care;
    • (b) three nights every second weekend for the remaining period (365-80) which results in 285 nights or 20 fortnight periods with three days in every fortnight period giving a total of a further 60 nights; and
    • (c) St. Nicholas Day, Father’s Day and 23 December 2008, resulting in three nights.

The total, by this calculation, results in Mr Savanovic having 103 nights or 28 per cent of the total care.

14. The second method used by Centrelink is based on a more specific calculation of the actual nights in care from 1 July 2008 to 30 June 2009. Centrelink did this by marking on a calendar the actual days involved during that period which meets the three mandatory periods under the Court Order. Adding those nights of care results in 111 nights. If an additional night is added for Christmas then Mr Savanovic would have his children for a total of 112 nights, or 30 per cent of the time.
15. There was no evidence from Mr Savanovic that he had the children, by prior arrangement, for any nights in addition to those which were used by Centrelink in its calculations. Furthermore, no days have been allowed for the children’s birthdays because, as I understand it, the children do not spend the night of their birthday with Mr Savanovic. Therefore, in the absence of any other evidence from Mr Savanovic, I find that Mr Savanovic had the care of his children between 1 July 2008 and 30 June 2009 for a total of 112 nights, or 30 per cent of the time.
16. The fact that the Child Support Agency estimated that Mr Savanovic had the care of his children for 128 days is beside the point. First, it is only an estimate and not the actual number of nights the children spent with Mr Savanovic. Secondly, Centrelink is required to make its own calculation for FTB purposes. It would be irresponsible of Centrelink to simply rely on an estimate made by another agency.

IS MR SAVANOVIC ENTITLED TO A FAMILY TAX BENEFIT PAYMENT

17. On 1 July 2008 the Family Assistance Act changed. A new subsection (7) was added to s 22 of the Family Assistance Act which provided:

(7) If, under subsection (6A), the Secretary determines that a child was, or will be, in the care of an individual for at least 35% of a period, the child is taken to be an FTB child of that individual for the purposes of this section on each day in that period, whether or not the child was in that individual’s care on that day.
Note: If the Secretary determines that a child was, or will be, in the care of an individual for less than 35% of a period, the child is taken not to be an FTB child (see section 25).

The effect of this amendment is that where an individual has the care of a child for less than 35 per cent of a period, that person is not entitled to an FTB payment.

18. Because Mr Savanovic received FTB payments totalling $664.70 between 1 July 2008 and 23 September 2008, I find that Mr Savanovic received a social security payment to which he was not entitled.

DEBT OWED TO THE COMMONWEALTH

19. Section 71 of A New Tax System (Family Assistance) (Administration) Act 1999 (the Administration Act) provides:

No entitlement to amount
(1) If:
(a) an amount has been paid to a person by way of family tax benefit, baby bonus or maternity immunisation allowance (the assistance) in respect of a period or event; and
(b) the person was not entitled to the assistance in respect of that period or event;
the amount so paid is a debt due to the Commonwealth by the person.

20. Quite clearly, Mr Savanovic owes a debt to the Commonwealth in the amount of $664.70. There are provisions in the Administration Act which permit the Secretary to write off or to waive a debt in particular circumstances. For example, the Secretary may write off a debt if it is irrecoverable at law or it is unlikely that the debt will be repaid (s 95 of the Administration Act). However, Mr Savanovic did not claim that the Secretary should write off the debt nor did he produce any evidence to me that any of the circumstances set out in s 95 were met. I cannot therefore exercise the Secretary’s power to waive the debt.
21. Under s 97(1) of the Administration Act the Secretary must waive the right to recover the proportion of a debt that is attributable solely to administrative error made by the Commonwealth, if the debtor received the payment in good faith and would suffer severe financial hardship if it were not waived. There was no evidence before me that the Commonwealth made any error. The calculation of the percentage of care attributable to Mr Savanovic was a calculation that he gave to Centrelink. Centrelink simply paid Mr Savanovic on the basis of his calculation.
22. There is also provision in s 101 of the Administration Act, where the Secretary may waive the right to recover all or part of a debt if there are special circumstances, other than financial hardship alone, that make it desirable to waive the debt. Although I asked Mr Savanovic whether there were any special circumstances in his case, which might give rise to a waiver under s 101, he declined to offer any evidence to support such a waiver.

CONCLUSION

23. Having examined the calculations of the percentage of care which Mr Savanovic has of his two children, I have found that Mr Savanovic did not have 35 per cent or more of the care of his children between 1 July 2008 and 23 September 2008. Therefore, during that period of time, he was not entitled to any FTB payments. That he was paid FTB resulted in a debt owed to the Commonwealth; a debt which should not be waived or written off. Although the SSAT determined that Mr Savanovic’s shared care of his children was 32 per cent, I cannot agree. I do however agree with the SSAT that, from 1 July 2008, Mr Savanovic’s rate of FTB for his children was nil.
24. Accordingly, I set aside that part of the SSAT decision which calculated Mr Savanovic’s shared care of his children at 32 per cent and instead determine that his shared care of his children from 1 July 2008 is 30 per cent. I affirm that part of the SSAT decision which states that, from 1 July 2008, Mr Savanovic’s rate of FTB for his children is nil.

I certify that the twenty four [24] preceding paragraphs are a true copy of the reasons for the decision herein of

Mr Egon Fice, Member

(sgd): Leah Berardi

Clerk

Date of Hearing 10 November 2009

Date of Decision 21 December 2009

Advocate for the Applicant Self Represented

Advocate for the Respondent Ms Ailsa Bramley, Centrelink Legal Services

Advocate for Third Party Self Represented