Editors --- "FTB child: calculation of proportion of 'shared care'" [2006] SocSecRpr 16; (2006) 8(2) Social Security Reporter, Article 5

• WARNE and SECRETARY TO THE DFaCSIA
• Background
• Legislation
• Caselaw
• Findings
• Formal decision

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FTB child: calculation of proportion of 'shared care'

WARNE and SECRETARY TO THE DFaCSIA

Decided: 24th February 2006 by P.E. Hack

Background

Warne and her former partner shared the care of their two children from May 2003 to November 2004, and were therefore each entitled to receive a proportion of Family Tax Benefit (FTB). A decision was made that Warne provided 58% of the care for the children and her FTB percentage was determined on that basis. On appeal to the AAT, Warne’s former husband was joined as a party to the proceedings.

Legislation

Section 22(7) of the A New Tax System (Family Assistance) Act 1999(the Act), directs the decision maker to consider, where the care provision is shared, what is, or will be, the ‘pattern of care’ in respect of an FTB child of an individual so as to determine whether ‘on each day in the period, whether or not the child was in that individual’s care on that day’.

Section 59 of the Act gives the Secretary a discretion to allocate the percentage that will determine the claimant’s proportion of FTB.

The AAT noted that the Department’s Guide to the Act, at para. 2.1.1.45, headed ‘Shared Care and establishing a Pattern of Care’, provides, ‘A pattern of care is established by using either the number of nights in care... or hours of care for each FTB child’.

Caselaw

Two cases Nowicz and Secretary DFaCS, [2001] AATA 628, and Feeney and Secretary, DFaCS and Anor [2005] AATA 818 have determined that a pattern of care should not be departed from for minor variations.

In Nowicz, the AAT, discussing variations from the pattern of care that a Tribunal may take account of, expressed a view that,

Once established, it is appropriate that variation only occur where there is to be a significant departure in an established pattern of care.... the legislation is clearly not concerned with patterns of expenditure on the children, and is based purely on the time spent in each of the carer’s care.

In Feeney, however, the Tribunal stated that,

As a matter of policy, FTB is intended to assist with the essential costs of caring for children. It is appropriate, therefore, to consider the proportionality of FTB payments on the basis of financial as well as temporal factors...

Findings

Setting aside the decision under review, the AAT made an adjustment in favour of the applicant based on hours rather than days. It also found a greater proportion of the at-school time was attributable to Warne, on the basis that dealing with the school was her responsibility. The AAT then went further.

Noting the ‘misgivings ‘in Nowicz, the AAT decided on the facts of the case to follow the decision in Feeney. The Tribunal found a significant difference in the costs associated with providing the shared care by the parties. Warne spent on average $238 per month on medical and schooling needs while her former husband paid an average of $55 per month in child support, together with some schooling outlays. The AAT had no difficulty making a five percent adjustment in favour of Warne.

Cautioning against any detailed comparison of expenditure between carers in an area already loaded with potential for disputes, the AAT said,

But where, as I find here, there is a significant difference between the amounts expended by one party compared with the amounts expended by the other, an adjustment, again on a broad brush basis, seems to me to be plainly warranted.

(Reasons, para.27)

Formal decision

The Tribunal set aside the decision under review and remitted the matter to the Department with directions to adjust the FTB payments such that the FTB for the period from 2 May 2003 to 23 November 2004be determined on the basis that Warne had care of the children for 74% of the time and her former husband for 26% of the time.

[J.S.]