FEDERAL COURT OF AUSTRALIA

Kristoffersen v Secretary, Department of Social Services [2019] FCA 1658

ORDERS

THE COURT ORDERS THAT:

1.    Subject to Order 2, the decision of the Administrative Appeals Tribunal (the “Tribunal”) of 15 March 2018 dismissing the application for review filed on 10 October 2017 is affirmed.

2.    The decision of the Tribunal is set aside, in part, pursuant to s 44(4) of the Administrative Appeals Tribunal Act 1975 (Cth) solely on the question of whether the amounts identified at paragraph [138] of the reasons published today, not paid to the applicant as part of the Family Tax Benefit Part A Supplement, for the reasons identified at paragraph [139], or otherwise, were properly withheld as a matter of offset as suggested.

3.    The application to the extent described in Order 2 is remitted to the Tribunal to be considered and decided according to law.

4.    The respondent pay the applicant’s costs of and incidental to the appeal.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

GREENWOOD J:

Background and context

1    This proceeding concerns an appeal by Mr Kristoffersen pursuant to s 44 of the Administrative Appeals Tribunal Act 1975 (Cth) (the “AAT Act”) from a decision of the Administrative Appeals Tribunal (the “AAT” or the “Tribunal”) of 15 March 2018. In that decision, the AAT dismissed Mr Kristoffersen’s application filed on 10 October 2017 by which he sought a second-tier review of a decision of the Social Services and Child Support Division (the “SSCSD”) of the AAT. The SSCSD decision is sometimes called the “AAT 1 decision” in the papers relevant to this proceeding. An application for review of a decision of the AAT within its Social Services and Child Support Division lies to the General Division of the Tribunal. The statutory basis for that right of review before the Tribunal is to be found in s 179 of the Social Security (Administration) Act 1999 (Cth). Division 3 of Part 4A of that Act addresses the topic of the “AAT second review”. Section 179(1) provides that an application may be made to the AAT for second review of a decision of the AAT on first review (made within the SSCSD of the Tribunal). For the purposes of the second review, the decision of the AAT, on first review, is taken to be, if the AAT on first review affirms a decision, that decision as affirmed: s 179(2). The AAT on first review (by the SSCS Division) affirmed a decision of the Authorised Review Officer (the “ARO”). The first decision of the AAT is taken to be that decision of the ARO as affirmed: s 179(2)(a).

2    The Tribunal dismissed Mr Kristoffersen’s application for review of 10 October 2017 on the ground that it was satisfied, for the purposes of s 42B(1)(b) of the AAT Act, that the application “has no reasonable prospect of success”. Section 42B, in its present form, was introduced into the AAT Act by Item 116 of Schedule 1 to the Tribunals Amalgamation Act 2015 (Cth). The amendment to s 42B commenced on 1 July 2015. Section 42B(1) since 1 July 2015 has been in these terms:

42B    Power of Tribunal if a proceeding is frivolous, vexatious etc.

(1)    The Tribunal may dismiss an application for the review of a decision, at any stage of the proceeding, if the Tribunal is satisfied that the application:

(a)    is frivolous, vexatious, misconceived or lacking in substance; or

     (b)    has no reasonable prospect of success; or

     (c)    is otherwise an abuse of the process of the Tribunal.

3    In the Explanatory Memorandum to the Tribunal’s Amalgamation Bill 2014, at paras 551 and 552, the considerations leading to the proposed amendment were put this way:

551.    New subsection 42B(1) would provide that the Tribunal may dismiss an application for review of a decision at any stage of a proceeding, if the Tribunal is satisfied that the decision is:

•    frivolous, vexatious, misconceived or lacking in substance

•    has no reasonable prospect of success, or

•    is otherwise an abuse of process of the Tribunal.

552.    This amendment would modernise the language of existing paragraph 42B(1)(a) and clarify the policy surrounding the grounds for dismissal. The proposed new grounds are similar to dismissal powers available to other bodies. For example, Rule 26.01 of the Federal Court Rules 2011 allow for summary judgment on matters which have no reasonable prospect of success, or are an abuse of process. Similarly, section 47 of the Queensland Civil and Administrative Tribunal Act 2009 provides for dismissal of applications where the application is frivolous, vexatious, misconceived, lacking in substance or otherwise an abuse of process. These powers would provide the Tribunal with greater power to dismiss unmeritorious matters early where appropriate.

4    Mr Kristoffersen has been (and remains) in receipt of a disability support pension (“DSP”) and a family tax benefit (“FTB”) at all times material to this proceeding. Mr Kristoffersen is married to Ms Nhung Do Hong who at all material times has been in receipt of a carer payment (“CP”) in respect of her care of Mr Kristoffersen. Mr Kristoffersen says that he suffered a “debilitating work accident” which left him with “numerous permanent disablements and the need for a full time carer”. Mr Kristoffersen and Ms Hong are the parents of Thai Lee, who was born on 17 February 2007.

5    Mr Kristoffersen has been involved in Tribunal proceedings with respect to the present respondent on a number of occasions. These proceedings have involved, variously, the rate of payment of the FTB to Mr Kristoffersen, the payment of the School Kids Bonus (“SKB”) and the appointment of an Aboriginal Liaison Officer.

6    In this proceeding, Mr Kristoffersen contends that the AAT engaged in errors of law in concluding that his challenge to the decision of the SSCSD (the AAT 1 decision) has no reasonable prospect of success with the result that the exercise of the discretionary power in s 42B(1)(b) to dismiss the application for review miscarried. He says he was denied an exercise by the AAT of its statutory obligation to conduct a review of the decision of the SSCSD. It should be noted that in carrying out its functions, the Tribunal must pursue the objective of providing a mechanism that:

(a)    is accessible; and

(b)    is fair, just, economical, informal and quick; and

(c)    is proportionate to the importance and complexity of the matter; and

(d)    promotes public trust and confidence in the decision-making of the Tribunal.

7    Section 25(4A) of the AAT Act provides that the Tribunal may determine the scope of the review of a decision by limiting the questions of fact, the evidence and the issues it considers. Mr Kristoffersen draws attention to s 43 of the AAT Act. As to that section, it should be noted that for the purpose of reviewing a decision, the AAT may exercise all the powers and discretions conferred by any relevant enactment on the person who made the decision. Section 43(1) provides that for the purpose of reviewing a decision, the Tribunal “shall” make a decision either: (a)  affirming the decision under review; or (b)  varying the decision under review; or (c)  setting aside the decision under review and either (i)  making a decision in substitution for the decision so set aside or (ii)  remitting the matter for reconsideration. The Tribunal’s obligation to make a decision reflecting one of those possibilities is an obligation arising for the purposes of conducting a review. It may be, however, that the Tribunal is satisfied that an application for review is properly characterised as one falling within s 42B(1)(a), (b) or (c) in which event the Tribunal may exercise a discretionary power to dismiss the application. There is nothing inconsistent in the operation of s 43(1) and s 42B(1) of the AAT Act as Mr Kristoffersen seems to inferentially suggest.

8    In order to appreciate the true scope of Mr Kristoffersen’s challenge to the decision of the SSCSD and the basis upon which the Tribunal concluded that it was satisfied that that application, so framed, had no reasonable prospect of success, it is necessary to examine aspects of the decision of the ARO, the decision of the SSCSD, the challenge made to that decision by Mr Kristoffersen and the Tribunal’s reasons in support of its decision to dismiss the application on 15 March 2018.

The relevant events and decisions

9    On 15 May 2012, the Department of Social Services (the “Department”) decided to reduce Mr Kristoffersen’s FTB Part B rate to $31.92 per fortnight.

10    On 5 June 2012, an ARO decided to affirm that decision. In reaching that decision, the ARO considered Schedule 1 to the A New Tax System (Family Assistance) Act 1999 (Cth) (the “FA Act”) with respect to the methodology for calculating the FTB Part A rate and Schedule 1, Part 4, Division 1, Cl 29 of the FA Act as to how to calculate the FTB Part B rate. The statutory scheme is examined later in these reasons: see [94] and following.

11    The ARO made the following “findings of fact”:

Findings of Fact

After careful consideration of the evidence, I have made these key findings:

•    You are a member of a couple. You receive Disability Support Pension and your partner receives Carer Payment.

•    Your daughter Thai Lee is your FTB child. Thai Lee turned 5 on 17 February 2012.

•    You are receiving Family Tax Benefit in the 2011/12 financial year based on a combined income estimate of $27,503 and the lower income of $13,452.

•    Your rate of FTB Part A is not affected by your income because you receive an income support payment.

•    Your rate of FTB Part B is affected by the income of the lower earner.

•    From 1 July 2011 your FTB rate was $238.98 per fortnight, made up of $164.64 for FTB Part A and $74.34 for FTB Part B.

•    From 7 February 2012 your FTB rate is $196.56 per fortnight, made up of $164.34 for FTB Part A and $31.92 per fortnight for FTB Part B.

12    In the ARO’s reasons for decision, the ARO said that the FTB Part A rate is determined by reference to the adjusted taxable income unless the person or their partner is receiving a pension or benefit. If the person or their partner is receiving a pension or benefit, FTB Part A is paid at the maximum rate, unless the person or their partner also receives child support or maintenance for a child.

13    The ARO then went on to say that the FTB Part B rate is determined on the basis of an assessment of the adjusted taxable income of the lower earner in a couple, “even if that income is from a pension or benefit”.

14    The ARO then noted that the FTB Part B rate is also affected by the age of a couple’s youngest child. The maximum rate, accordingly is:

(a)    $140.00 per fortnight for a child under 5 years old;

(b)    $97.58 per fortnight for a child 5 to 15 years old.

15    The ARO noted that for eligible two parent families with a child aged between 5 and 15 years old, the lower earner can have income of $4,891 per year and “still get” the maximum rate of FTB Part B and may, to some extent, still receive the Part B rate if they have an income less than $19,382.

16    The ARO referred to Mr Kristoffersen receiving $74.34 per fortnight for the FTB Part B and the reduction to $31.92 per fortnight after his child turned 5 years of age on 17 February 2012.

17    The ARO understood Mr Kristoffersen’s contention to be that his and his wife’s income should be “disregarded” for the FTB Part B because he has not earned enough income to pay tax.

18    The ARO said that a person’s income, as defined, is to be included in the estimate for the purposes of Part B of the FTB. Accordingly, the ARO found that the rate of FTB Part B is correct.

19    It seems that Mr Kristoffersen did not seek review of the ARO’s decision.

20    On 9 July 2014, a further decision was made by Centrelink with respect to the FTB Part B to reduce the rate to $30.52 per fortnight with effect from 24 July 2014.

21    On 7 January 2015, an ARO affirmed Centrelink’s decision. The ARO made these findings of fact:

After careful consideration of the evidence, I have made these key findings:

•    You receive Family Tax Benefit for your child, Thai Lee, whose date of birth is 17 February 2007.

•    You are a member of a couple. Your partner is Nhung Do Hong.

•    Both you and Nhung receive income support payments. You receive Disability Support Pension and Nhung received Carer Payment.

•    From 1 July 2014 you are being paid the maximum rate of Family Tax Benefit Part A.

•    From 1 July 2014 you are being paid Family Tax Benefit Part B based on estimates of your income of $15,714 for yourself and $15,046 for your partner. The maximum rate of Family Tax Benefit Part B is $105.00 per fortnight and you are paid a reduced rate of $30.52 based on the income of $15,046, being the income earned by the lower income earner.

•    The rate of Family Tax Benefit Part B paid to you has been worked out correctly.

22    The ARO went on to explain how the FTB Part A rate is calculated and explained that the “Family Assistance Act” states that adjusted taxable income is the “sum of these amounts”, meaning the following income:

•    Taxable income,

•    Adjusted fringe benefits;

•    Target foreign income,

•    Total net investment loss;

•    Tax free pensions or benefit;

•    Reportable superannuation contributions;

•    Less the amount of the individual’s deductible child maintenance expenditure.

23    The ARO then observed that “neither you nor your partner earn taxable income, however the tax free pension that you each receive is included in your adjusted taxable income”. The ARO noted that in the 2014/5 financial year, the FTB Part B is paid at the maximum rate if the lower income earner’s adjusted taxable income is less than $5,329. FTB Part B ceased to be payable if the lower income earner’s income is $21,043 or more.

24    The ARO explained that based on estimates of income provided by Mr Kristoffersen, his wife’s income is $15,046 which is the lower income. The ARO noted that because this figure is between $5,329 and $21,043 it is “correct that you are paid a reduced rate for [FTB] Part B”.

25    The ARO then said this:

At the end of the financial year a process known as reconciliation occurs. At this time supplements are assessed which are in addition to the fortnightly instalments already paid. The Family Tax Benefit Part A Supplement is $726.35 and the Family Tax Benefit Part B supplement is $354.05. These supplements cannot be paid before reconciliation occurs. At reconciliation actual adjusted taxable incomes are used to work out your annual entitlements. If these differ from the estimates used during the year a variation to your payments will be made.

26    The ARO concluded that the FTB Part B paid to Mr Kristoffersen had been assessed correctly and “in accordance with the legislation”.

27    On 2 February 2015, Mr Kristoffersen applied to the Social Security Appeals Tribunal (the “SSAT”) for review of the ARO’s decision of 7 January 2015.

28    The SSAT gave its decision on 9 April 2015. The SSAT considered Mr Kristoffersen’s central contention that his wife’s tax free CP should not be taken into account in the calculation of his FTB Part B.

29    The SSAT explained that s 58 of the FA Act provides the rate of the FTB is calculated in accordance with Schedule 1 to the FA Act. Clause 29 of Schedule 1 provides that a person’s maximum rate of FTB Part B is reduced by taking into account the person’s adjusted taxable income.

30    Subclause 3(2) of Schedule 3 to the FA Act provides that where a person is a member of a couple the relevant adjusted taxable income is the income of the person who earned the lower amount.

31    The SSAT referred to subclause 2(1) of Schedule 3 to the FA Act which defines “adjusted taxable income” as:

2(1)    For the purposes of this Act and subject to subclause (2), an individual’s adjusted taxable income for a particular income year is the sum of the following amounts (income components):

   (a)    the individual’s taxable income for that year;

   (b)    the individual’s adjusted fringe benefits total for that year;

   (c)    the individual’s target foreign income for that year;

(d)    the individual’s total net investment loss (within the meaning of the Income Tax Assessment Act 1997) for that year;

(e)    the individual’s tax free pension or benefit for that year;

(f)    the individual’s reportable superannuation contributions (within the meaning of the Income Tax Assessment Act 1997) for that year; less the amount of the individual’s deductible child maintenance expenditure for that year.

32    Accordingly, the SSAT concluded that Centrelink is required “pursuant to subclause 2(1)(e) to take both Mr [Kristoffersen] and his partner’s tax free pensions into account in calculating the rate of [FTB] part B payable to him. Centrelink’s decision is therefore correct”.

33    On 24 April 2015, Mr Kristoffersen applied to the AAT for review of the SSAT’s decision. Mr Kristoffersen complained that: “the decisions are wrong and illegal decisions, based in vindictiveness & racism. The information enclosed was not taken into account at all. The information provided to the SSAT was missing crucial documents as discussed at the hearing”.

34    This seems to be a reference to a document in the nature of submissions dated 30 March 2015 with a “T Document” reference of T13. The document appears to relate to both Centrelink’s asserted refusal to allocate an Indigenous Liaison Officer to Mr Kristoffersen and the FTB matters. I will only address the latter matters.

35    Mr Kristoffersen sets out the background to his application. He explains that on 14 December 2003, he suffered a “debilitating work accident” which left him with “numerous permanent disablements and the need for a full time carer”.

36    Mr Kristoffersen explains that because of this, he applied on 14 January 2004, for a DSP and asked to speak to an “indigenous social worker”. He says that in 2004 he was assessed by doctors, orthopaedic specialists and Centrelink medical professionals. Mr Kristoffersen says as a result of these assessments, he was judged to have a “disability rating of 30+” and required full time care.

37    Mr Kristoffersen said that his DSP payments have “fluctuated constantly” and makes various allegations about the conduct of Centrelink. He then sets out the changes in his FTB payments from 17 February 2007 to 24 July 2014. The gravamen of his concerns were that Centrelink has improperly dealt with him and has erroneously reduced his payments pursuant to the FTB scheme because it has taken into account his tax free payments.

38    Mr Kristoffersen also filed a Statement of Facts and Contentions (“SFC”) on 1 September 2015. In his SFC, Mr Kristoffersen states the “issue to be decided” is:

Can an exempt non-taxable income support payment (carer payment) be classed as earned income and then as earned income be subtracted or added to a non-existent earned taxable income to create an “adjusted taxable income” (ATI), and then as ATI be declared as earned taxable income and be used to reduce income support payments?

39    Mr Kristoffersen then clarified the issue as whether:

… a non-taxable Centrelink payment [can] be classed as earned income and then as earned income be adjusted using the adjustment components detailed on page 14 schedule 3 [FA], using itself as the sole adjustment amount in the required sum and then be classed as Taxable Income Adjusted”.

40    A further key issue in controversy between Mr Kristoffersen in proceeding 2015/1979 was whether the AAT was entitled to consider the reduction in FTB payments since they were initially paid in 2007 or whether the AAT had its jurisdiction limited to the correct rate of FTB payable with effect from 24 July 2014 (being the date of the decision reviewed).

41    Mr Kristoffersen stated that from 12 February 2007 to 11 October 2007 he was paid the FTB Part A and Part B at the full rate. He observed that the “original reductions” commenced on 11 October 2007 for the DSP, FTB Part A and FTB Part B. Mr Kristoffersen explained that he made a request for review on 11 October 2007 and contacted the Department on a number of dates in 2007 and 2008.

42    At [21] of his SFC, Mr Kristoffersen says:

21.    Mr Bishop claims (at 8 to 15) [someone] in 2015 entered on the [department’s] system that Mr K was paid some “Top up” payments to compensate the recorded reduced payments. There appears to be no other evidence to support that these alleged “top up” payments ever occurred.

43    Mr Kristoffersen goes on to contend that Parts A and B of the FTB, the SKB and the energy supplement have not been fully paid based on the Department’s view that Mr Kristoffersen is a member of a two income household.

44    In the Secretary’s Statement of Facts and Contentions (the “Secretary’s SFC”), the Secretary recited the relevant provisions of the FA Act and contended that:

25.    The Applicant’s estimated adjusted taxable income for the financial year ending 30 June 2015 is $15,714 being payments of disability support pension (T17: p83). Ms Hong estimated adjusted taxable income for the same year is $15,046 being payments of carer pension (T17: p83). It is therefore Ms Hong’s income that is used for the purposes of the FTB part B rate calculation (T10: p 83).

26.    The relevant estimated adjusted taxable income exceeds the income threshold of $5,329 and therefore the rate of FTB part B is reduced from the maximum payment of $105 per fortnight (T4: p36-37).

27.    The Secretary contends that the Applicant’s rate of FTB part B is correct, being an amount of $30.52 per fortnight. At the end of the financial year, as has occurred in each previous year, the estimated adjusted taxable income will be reconciled against the Applicant’s actual adjusted taxable income once known and any difference paid or recovered from the Applicant.

45    On 27 October 2015, the AAT affirmed the decision under review. The AAT recited the relevant provisions which dictate the methodology for calculating the rates of the FTB. The AAT stated that Mr Kristoffersen’s entitlement to the FTB Part A is not in issue. The AAT also correctly articulated Mr Kristoffersen’s contention that “reductions to FTB are related solely to earned income”, which the AAT speculated was based on the Departmental Guide. The AAT found that Mr Kristoffersen’s wife was paid in excess of $5,329 for her CP and this was correctly taken into account by the Department in determining the taxable income of Mr Kristoffersen and his wife for the purposes of deciding the correct rate of FTB Part B the FA Act.

46    Subsequent to that decision, Mr Kristoffersen requested a review of all entitlements paid since 11 October 2007.

47    On 28 February 2017, an ARO decided that the “decision” (although more accurately described as a series of decisions) to not pay the FTB Parts A and B (and supplements) and the SKB at the maximum rate is correct. In respect of this decision, the ARO made the following findings of fact:

After careful consideration of the evidence, I have made these key findings:

•    You have been paid the correct rate of FTB [P]art A and Part B since 11 October 2007 up to 28 February 2017.

•    Your FTB payments for the current financial year (2016/2017) are based on your income estimates and are currently correct until your actual income or any change in circumstances are assessed.

•    You have been paid the correct rate of FTB Part A and Part B Supplements since 11 October 2007 up to 30 June 2016.

•    You have been paid to the correct rate of Schoolkids Bonus since 11 October 2007 up to 30 June 2016.

48    The ARO went on to say:

The rate for FTB instalment customers is worked out using the customer’s estimate of ATI for the financial year and estimated maintenance income. If either members of a couple are on an income support payment they receive FTB Part A free of the income test (with the exception of the maintenance income test). Only single income support customers receive FTB Part B free of the income test. FTB Part B is based on the lower secondary income earner (either member of the couple).

At the end of the financial year a process known as reconciliation occurs in which the payments a person received during the financial year are compared to a person’s actual entitlement. A person’s income estimates are compared with the income assessed by the Australian Taxation Office, or in your case the department’s assessment of your non-taxable income. If the income estimates were too low, the person may incur a debt. If they were high, the person may receive arrears.

As FTB is assessed on financial years I have broken down your FTB payments into financial years and as you have asked your payments to be reviewed from 11 October 2007. I have reviewed your FTB entitlements for each financial year separately.

49    The ARO then considered each financial year from 2007/2008 to 2016/2017.

50    As to the 2007/2008 financial year, the ARO said that the maximum rate for the FTB Part A was $145.46 and the maximum rate for the FTB Part B for a child under 5 years was $125.02. The maximum rate of FTB Part B Supplement was $324.85.

51    As to FTB Part A, the ARO explained that for the period 24 October 2007 to 15 January 2008, Mr Kristoffersen was paid $138.68 which was a reduction from the maximum rate. The ARO determined that the reason for this was that the concept of Mandatory Continuous Adjustment (“MCA”) applied. This is a process whereby a claimant has their entitlement reduced because it is expected that they will receive more than their entitlements. The ARO said that “this possible” overpayment was due to Mr Kristoffersen’s wife’s CP claim, that was rejected. Therefore it was found that there was no overpayment by way of MCA and Mr Kristoffersen was paid the maximum rate for FTB Part A.

52    As to FTB Part B, the ARO said that Mr Kristoffersen was not paid the maximum rate. This was due, apparently, to Mr Kristoffersen’s wife’s income being $9,000. Due to “the income estimate” (presumably of Mr Kristoffersen’s wife’s income), the maximum rate was not paid. The ARO found that Mr Kristoffersen was wrongly paid the full amount of Part B from 1 July 2007 to 25 September 2007, but the MCA process rectified this.

53    As to the Part A supplement for 2007/2008, the ARO said Mr Kristoffersen was paid $16.74. The reason that Mr Kristoffersen was not paid the maximum amount of $667.95 is because he was apparently overpaid the Part B payment and an adjustment was made. For the Part B supplement, Mr Kristoffersen was paid $325.74.

54    As to the 2008/2009 financial year, the maximum rate for FTB Part A was $151.34 and the maximum rate of FTB Part B for a child under 5 was $128.80. The maximum rate for the Part A supplement was $686.20 and for the Part B supplement it was $335.80.

55    For the Part A rate, the ARO found that Mr Kristoffersen was paid the maximum entitlement for the entire financial year. For FTB Part B, the ARO found that Mr Kristoffersen was not paid the maximum rate. This was due to Mr Kristoffersen’s wife’s estimated income of $9,342 from 1 July 2008, $19,334 from 1 October 2008, $12,000 from 12 November 2008, $10,474 from 12 December 2008 and $14,947 from 13 March 2009. The ARO said that for the financial year, the “lower income limit” is $4,526 before the Part B rate is affected.

56    Mr Kristoffersen’s Part A supplement was $175.68. The ARO explained that the reason he was not paid the maximum amount for the Part A supplement was because he was overpaid FTB Part B for the 2008/2009 financial year and adjustment was made accordingly. The ARO confirmed that the Department had assessed Mr Kristoffersen’s wife’s adjusted taxable income as $14,937.

57    Mr Kristoffersen was paid the maximum rate for the FTB Part B.

58    As to the 2009/2010 financial year, the maximum rate for Part A was $156.94 and the maximum for Part B for a child under 5 years was $133.56. The maximum rate for the Part A supplement was $711.75 and for the Part B supplement it was $346.75.

59    For the FTB Part A, the ARO found that Mr Kristoffersen was paid the maximum entitlement for the entire financial year.

60    As to the FTB Part B, the ARO found that Mr Kristoffersen had not been paid the maximum rate. This was due to his wife’s income being estimated at $12,282 from 1 July 2009. For the financial year, the lower income limit is $4,672 before it affects the Part B rate. For the Part A supplement, Mr Kristoffersen was paid $649.70 (the full amount was not paid because he was overpaid FTB Part B for the 2009/2010 financial year and an adjustment made offsetting the amount overpaid by way of reconciliation).

61    Mr Kristoffersen was paid the full amount of the Part B supplement for the 2009/2010 financial year.

62    As to the 2010/2011 financial year, the ARO noted that the maximum rate of FTB Part A was $160.30 and the maximum rate of FTB Part B for a child under 5 years was $136.36. The maximum rate for the Part A supplement was $726.35 and for the Part B supplement it was $354.05. The ARO found that Mr Kristoffersen was paid the maximum entitlement for the entire financial year with respect to FTB Part A, but for Part B he was not. This was because his wife’s income estimate was $12,897 from 1 July 2010 being in excess of the lower income limit of $4,745. Mr Kristoffersen was also not paid the full amount of the Part A supplement because he was overpaid FTB Part B for the 2009/2010 financial year and an adjustment was accordingly made after reconciliation. Mr Kristoffersen was found to have been made the maximum rate of the Part B supplement.

63    As to the 2011/2012 financial year, Part A was paid at the maximum rate for the entire financial year and Part B was not paid at the maximum rate. Again, this was because Mr Kristoffersen’s wife had an estimated income of $13,452 from 1 July 2011. Mr Kristoffersen was not paid the full amount of the Part A supplement because he was overpaid FTB Part B for the 2011/2012 financial year and an adjustment was accordingly made, after reconciliation.

64    Mr Kristoffersen was paid $355.02 as Part B supplement. There is no indication of whether this is the full amount.

65    For the 2012/2013 financial year, Mr Kristoffersen was paid the maximum amount of Part A for the entire financial year. As to Part B, Mr Kristoffersen was paid the full amount, less 20 cents in the dollar of each dollar of income earned over $5,037. This was based off an estimate of Mr Kristoffersen’s wife’s income from 1 July 2012 being $13, 964.

66    The Part A supplement for 2012/2013 was not the maximum amount as Mr Kristoffersen was overpaid FTB Part B for the 2012/2013 financial year, and an adjustment was again made, after reconciliation. The Part B supplement was paid at the maximum rate.

67    Without traversing each financial year in detail, I note that the ARO found that for the 2013/2014, 2014/2015, 2015/2016 and 2016/2017 financial years, Mr Kristoffersen was paid FTB Part A at the maximum rate; Part B was not paid at the maximum rate because Mr Kristoffersen’s wife’s estimated income was in excess of the requisite threshold; the Part A supplement was not paid in full as Mr Kristoffersen’s Part B rate was overpaid in each year and the Part B supplement was paid in full.

68    The ARO also considered briefly the SKB paid to Mr Kristoffersen. The ARO confirmed that the correct rates had been paid.

69    On 11 September 2017, the Social Services and Child Support Division of the Tribunal (before amalgamation) affirmed the ARO’s decision of 28 February 2017. In so doing, the AAT considered Mr Kristoffersen’s claim that he had not been correctly paid by Centrelink.

70    The AAT identified at [16] that Mr Kristoffersen says that he has been paid the DSP since 14 February 2004 and that his wife is in receipt of the CP. The AAT went on to say at [17] that Mr Kristoffersen says his tax free payments (and those of his wife) should not be assessed for the purposes of assessing the correct FTB rates.

71    The AAT then considered the relevant legislative provisions and said at [22] that “the effect” of clause 38L of Schedule 1 of the FA Act is that where an individual or their partner is receiving one of the prescribed payments, the individual’s income excess is nil and they are entitled to the maximum FTB Part A rate.

72    However, the AAT concluded at [24] that Mr Kristoffersen was wrong to contend that an individual’s adjusted taxable income is not relevant to the calculation of Part B of the FTB. The AAT was satisfied that the Centrelink payments impugned by him, were correctly paid by Centrelink: see [28].

73    On 10 October 2017, Mr Kristoffersen lodged an Application for Second Review with the AAT which sought a review of the Social Services and Child Support Division decision.

74    On 15 March 2018, Senior Member Tavoularis dismissed Mr Kristoffersen’s application for review of the SSCSD decision in reliance upon s 42B(1)(b) of the AAT Act.

The Senior Member’s decision

75    Before the AAT on second review, Mr Kristoffersen explained that he was seeking review of five separate decisions. These were set out in Senior Member Tavoularis’ reasons at [6]:

1)    The decision to reduce Family Tax Benefit (FTB) part A and not pay at the full or maximum rate since 11/10/07

2)    The decision to not pay the FTB part A annual bonuses at the maximum rate since 11/10/07

3)    The decision to not pay the school kids bonuses at the full or maximum rate since 11/10/07

4)    The decision to reduce FTB part B and not pay at the maximum or full rate since 11/10/07

5)    The decision to not pay the FTB part B annual bonuses at the maximum rate since 11/10/07

76    The AAT considered the Department’s first contention that the five decisions referred to at para [75] of these reasons was not amenable to review by the Tribunal because the AAT could not consider whether the payments were actually made to Mr Kristoffersen. Instead, the AAT considered that this was a proceeding “about qualification for certain payment(s)” (eligibility) “and, if so qualified, the rate at which that payment(s) is/are to be received”: see [7] and [8] of the decision.

77    The AAT then went on to consider whether Mr Kristoffersen’s application should be dismissed pursuant to s 42B(1)(b) of the AAT Act. In so doing, the Senior Member canvassed the relevant legislative provisions from [12]-[17]. Those paragraphs are reproduced below:

The calculation of the FTB

12.    The contention(s) now ventilated by the Applicant in the present substantive application is/are of the same nature and type and have, at their core, the same particularly to those appearing in his application in 2012, when he first alleged that there was an error with his FTB payments.

13.    The specific issue(s) he now seeks to re-ventilate has/have been squarely addressed in the decision of the SSCSD dated 11 September 2017. The learned Member has both accurately and succinctly summarised the methodology of calculation of the rate of FTB pursuant to Schedule 1 of A New Tax System (Family Assistance) Act 1999 (Cth) (“the Act”) at [18]-[23] of that decision.

14.    The FTB is comprised of two parts: Part A and Part B. Each part (together with its associated supplements) is reconciled at the end of each financial year. As mentioned earlier, the essence of the Applicant’s case is that he is entitled to the maximum rate of payment for the FTB because his income from the DSP and his wife’s income from the CP should not be taken into account in the relevant calculation. This contention is plainly incorrect and is not otherwise sustainable.

15.    This comment is tempered by the helpful concession made by the Respondent: the Applicant’s abovementioned contention is correct in respect of the FTB Part A component. This concession squarely accords with the findings of both the Authorised Review Officer (“ARO”) and the learned Member who decided the matter at the SSCSD level. As the former correctly pointed out in his decision:

The rate for FTB instalment customers is worked out using the customer’s estimate of ATI [i.e. adjusted taxable income] for the financial year and estimated maintenance income. If either members of a couple are on an income support payment they will receive FTB Part A free of the income test (with the exception of the maintenance income test). Only single income support customers receive FTB Part B free of the income test. FTB Part B is based on the lower secondary income earner (either member of the couple).

(my underlining)

16.    Looking to the provisions of the Act, specifically clauses 38L and 38M of Schedule 1, the Applicant’s entitlement for the FTB Part A was, in my view, correctly calculated at the maximum rate for all but a short period in 2007 for the following reasons identified by the ARO, with whom the learned Tribunal Member at the SSCSD subsequently concurred:

I first looked at the amount of FTB Part A, you were paid this financial year. For the period 24 October 2007 to 15 January 2008 you were paid $138.65, which was reduced from the maximum rate. The reason for this was mandatory continuous adjustment. This occurs where it is determined that the individual/or claimant has been paid more than they are likely to be entitled, mandatory continuous adjustment (MCA) will apply. This is calculated automatically upon a change to the customer’s circumstances, income estimate or maintenance income. This possible overpayment was due to your partner’s carer’s claim that was rejected. It was found that there was no overpayment and this was returned to you during reconciliation. Therefore I can confirm you were paid the correct rate of FTB Part A for this period.

17.    As noted by the Respondent, the Applicant’s contention about FTB Part B, as put to the SSCSD and now propounded in the substantive application, is not correct and can never be correct. It is surely unarguable that clause 29 of Schedule 1 of the Act establishes the rate of FTB Part B a person received is to be reduced by taking into account that person’s adjustable taxable income. This reality brings one to the nub of the Respondent’s contention in this dismissal application.

(i)    Clause 3(2)(b) of Schedule 3 of the Act stipulates that where a person is a member of a couple, the relevant adjusted taxable income is the income of the person who earned the lower amount;

(ii)    Clause 2(1) of Schedule 3 of the Act defines adjusted taxable income and includes an individual’s tax-free pension or benefit for that year. This includes the FTB.

[original emphasis, footnotes omitted]

78    The Senior Member explained that the ARO had set out the operative effect of the legislation as it applied specifically to Mr Kristoffersen’s circumstances: see [18].

79    The AAT concluded, having regard to the analysis in its reasons, that “there can be no question the Applicant’s entitlement to the FTB since 11 October 2007 has been correctly calculated”.

80    I do not understand that the SKB is agitated before this Court, but the AAT said this at [21]:

21.    I am of the view that the decision of the ARO regarding the Applicant’s entitlement to this bonus is entirely correct and unarguable. The ARO told the Applicant:

SKB payments did not begin until 1 January 2013 and finished 31 December 2016. You were eligible for this payment as you were receiving FTB part A and your ATI [i.e. adjusted taxable income] was under $100,000 (from 1 January 2015). Eligibility for SKB was based on the income information already provided to the department. Eligibility was determined on each of the bonus test days of 1 January and 30 June each year. The SKB payments were a set rate depending on whether the child was at primary or secondary school and the year. As [your child] was at primary school for this period, [the SKB] was paid at the primary school rate. The primary school rate for 2013/2014 was $205, for 2015 was $211 and for 2016 was, $215 … you have received your correct entitlement for [your child].

[original emphasis, footnotes omitted]

81    As to the FTB supplements, the AAT found:

The calculation of the FTB supplements

22.    The Applicant further contends that there are errors in the calculations of his FTB Part A and FTB Part B supplements. The payments of these supplements were reduced from the maximum rate owing to the income assessments of the Applicant’s wife. Having regard to the totality of the evidence before me, I am satisfied that these reductions were properly made; there is no evidence before me supporting my contention of the Applicant that the Respondent’s calculations were incorrect.

82    The AAT then reached the following conclusions:

23.    The currently configured and propounded substantive application reveals three things:

(a)    The principle expressed in Clause 3(2) of Schedule 3 of the Act is beyond argument;

(b)    The principle expressed in Clause 2(1) of Schedule 3, defining adjusted taxable income to include an individual’s tax-free pension or benefit for that year, is beyond argument; and

(c)    The resulting calculations and findings of both the ARO and the SSCSD are incapable of rational challenge.

24.    If the Applicant is incapable of comprehending the above three items, or is otherwise dismissive of their operative reality, then the substantive application is clearly misconceived and ought be dismissed pursuant to s 42B(1)(a) of the AAT Act.

25.    More substantially, even in the absence of such a demonstrated misconception, the substantive application has no reasonable prospect of success [s 42B(1)(b)]. The Applicant’s contentions go nowhere in terms of convincing the Tribunal that he would have any measure of success in varying the decision under review. Nothing he contends raises any doubt in respect of the calculation of his entitlement to FTB and SKB.

26.    The substantive application is both misconceived and hopeless. No legitimate purpose could be achieved by allowing it to continue. It can serve no purpose for the Applicant and should no longer consume this Tribunal’s time and resources.

[footnotes omitted]

83    Notwithstanding the reference to the s 42B(1)(a) ground, the Senior Member dismissed the application in reliance on s 42B(1)(b).

The application

84    Mr Kristoffersen contends for 11 purported questions of law in his Amended Supplementary Notice of Appeal (the “ASNOA”). They are these:

Questions of law

1.    The AAT representative erred in law by identifying the normal application of section 3A of the AAT Act then incorrectly applying it. He was not open to applying the correct legislation related to the decisions under review. This resulted in the question of law “What is the income assessment Legislation?”

2.    The AAT erred in law by not abiding the section 43 of the AAT Act legislation. The tribunal was obligated to stand in the shoes of the decision maker under section 43 of the Administrative Appeals Act. If the AAT had done so it would have come to a completely different finding. This poses the question of law “What is normal practice in assessing a claim for FTB?”

3.    The tribunal erred in law by not correctly detailing the full text of the sections of legislation it used in applying a section 42B(1)(b) dismissal without hearing. If it had it would have been open to the true meaning of the legislation in the sections quoted such as “schedule 3 of the Act” as quoted on page 10 of the decision and “Common Provisions”. These facts define an error of law, as the statute legislation was not correctly constructed. It was tampered with, thus delivering a misconstrued and incorrect finding.

4.    The tribunal erred in law by calling a welfare payment an income. This is an error of fact. But this placing the horse before the cart approach created the error in law in applying the methodology used in section 3A of the AAT Act to adjust taxable income. This based on the integer that a welfare payment is an income and the resultant finding that “Mr Kristoffersen’s wife’s income should be considered in the calculation process”. The question of law here is “What is income?”

5.    The tribunal exercised the discretion vested in it without taking into account considerations that it was legislatively bound to take into account such as the full text of section 38L or the legislative submissions submitted by the applicant. This is an error of fact. The error of law occurred by not being open or impartial as required under section 2A of the AAT Act 1975. The question of law is “What is the Tribunal’s Objectives”?

6.    The tribunal erred in law by considering a methodology schedule used to adjust earned taxable income as applicable, instead of the legislation related to the decisions under review. This essential preliminary error of fact across the face of the decision resulted in applying irrelevant considerations and not being open to and ignoring the relevant considerations. The wrong test was used and it was not open to applying the correct test. Unreasonable under the tribunal’s legislated statute requirement “to be impartial”, this is an error of law [and] resulted in an unreasonable dismissal.

7.    The AAT erred in law by pinning its decision to the absence of evidence presented by the respondent’s representative. The error occurred by not being reasonably open to this fact, even after being alerted and directed to the true legislation. Clearly there is a preliminary question as to whether the legislative evidence quoted by the applicant reasonably admits a different conclusion thus provoking a reasonable prospect of success.

8.    Failure to take into account the meaning and context of section 3A is a question of law. The distinction of the ultimate fact that a Carer Pension is not an income or earned income, as is legislatively required and the facts he adduced, that Carer Payment and Disability Support pension are earned incomes, raises the question of law “What constitutes earned income?” is a question of law.

9.    Mr Bishop submitted false testimony and even though the applicant directed the AAT to this fact and it was investigated, the decision to dismiss was grounded on the respondent’s false testimony and sham submissions. This is an error of fact. The error of law occurred when he was not open to evaluating true evidenced legislation and facts. He neglected his obligations under section 62A. The decision was then flawed because there was a refusal to adjudicate even after being asked. This led to a decision to dismiss. The question of law is “What is false testimony?”

10.    The use of the taxable income adjustment methodology, section 3A of the AAT Act, as [sic] claim that a sole income adjustment component is the whole item is wrong. This is a basic and obvious error across the face of the decision which poses the question of law “What is a component?”

11.    The AAT has been enthusiastic to settle this case by not hearing it. By doing so has displayed the hallmarks of “True instinctive prejudice” as in House v The King (1936) 55 CLR 499. It lent itself to the old sin of disposing of a case by using non-appealable or unrelated findings of fact, with no onus of proof and without considering or relating its decision to the current legislative provisions that factually relate to this case. This is an error of law.

85    Mr Kristoffersen seeks the following orders:

Orders sought

1.    That the decision dated 15th of March 2018 File Number 2017/6091 be set aside under section 44(5) of the AAT Act.

2.    In considering that the respondent is no longer contesting decision 1), 2) and 3) as correct decisions, as stated by its representative, Mr Bishop, at the directions hearing 18th June 2018, the respondent (Centrelink and its representatives “the Secretary, Department of Social Services”) be ordered to pay all withheld payments in regards to these three decisions at the maximum rates, incurring a penalty of 13% interest. From date of review request 24th Oct 2007 and noting that “School Kids Bonus” has been renamed as “Return to School Bonus”.

3.    That under section 44(4) of the Administrative Appeals Tribunal Act the tribunal be directed to review the two remaining welfare payment reductions at an Administrative Appeals Tribunal tier two hearing with instructional directions based under section 44(7)(b)(vi) and (vii) of the AAT Act 1975. Being:-

  3(i)    Direction 1) A welfare payment is not an income.

3(ii)    Direction 2) To adjust one’s Taxable income one must first have a taxable income to adjust.

3(iii)    Direction 3) A component is only a part of an item. Standing alone it is not the item.

3(iv)    Direction 4) The trigger for the enactment of section 3A of A New Tax System (Family Assistance) Act 1975, is “the sole income earner or lower income earner, if a couple, must first have a taxable income to adjust”.

4.    That the tribunal be directed to act impartially and only consider evidence backed by tangible physical evidence disregarding all falsehoods and hearsay.

4(i)    The tribunal be ordered to forward Mr Bishop’s testimony to the federal police for full investigation leading to possible charges under sections 62A, 62B and 63 of the AAT Act 1975.

5.    That the tribunal be required to consider relevant legislation in full context.

86    The grounds relied upon by Mr Kristoffersen are:

Grounds relied on

1.    Clearly the tribunal failed to take into account the true related legislation. The income assessment legislation as stated from A New Tax System (Family Assistance) Act 1999 and the formative common provisions of schedule 1, 2C – Income test 38L and 38M Income test, sections. They decided to adhere to the application of a methodology used to adjust taxable income Schedule 3(2)(a) and (e) and ignored Part 4 – Part B rate in Division 1 – Overall rate calculation process 28B(1) and 28B(2). They put the cart before the horse and called a stand-alone welfare payment income then assessed it as taxable income adjusted, ignoring the formative and common provisions stated within the legislation.

2.    The decision to not abide the AAT section 43 legislation can be misconstrued as an error of fact. The error of law occurred by not being open to stand in the decision-maker’s shoes and commit to what is normal practice in the assessment of FTB. In normal circumstances a Centrelink service officer details the customer’s information into a computer and the computer takes into account all the effective integers the result is the amount to be paid. Welfare payments are not income in the computer program and the end result presents all available welfare payments as if the person has just applied. The AAT ignored normal practice.

3.    An error of law is recognised when the full text of the referred legislation is shortened to remove the critical components used in assessing its importance and meaning. The result is a flawed decision or decision unrelated and is an error of law.

4.    The tribunal erred in judgment in calling a Disability Support Pension income and then deciding it an earned income and then stretching this definition to become earned taxable income. It made the same error of judgment about carer’s pension. Both disability support pension and carer’s pension are welfare payments. This is an error of fact. The error of law occurred in not recognising the normal definition of income and then not applying it. In the legislation these welfare payments are never called income, earned income, taxable income or taxable income adjusted. Part 2 section 3 definitions detail the meaning of secondary earner of a couple and (a)(ii) details an adjusted taxable income for the year as based on The member of couple who returns to paid work first during the year. Mr K or his wife have not returned to paid work and do not receive an income. Neither is a secondary earner of a couple.

5.    The tribunal has an obligation inferred upon it under AAT section 1 part 12A tribunal’s objective, to provide a mechanism of review that is fair, just and proportionate to the importance and complexity of the matter and promote public trust and confidence in decision-making. In not being open to considering the true related legislation such as section 38L in full text or the complexity of how the legislation effects the ultimate decision to reduce one’s welfare payments and then dismissing a matter without hearing infers the opposite has occurred.

6.    The tribunal in using the wrong methodology and ignoring the correct methodology has demonstrated an eagerness to dismiss without considering the merits of the legislative instruments Mr K clearly described. In normal practice a normal person would consider this action as unreasonable.

7.    The tribunal has discretionary powers in accepting evidence. It allows written and verbal evidence to be classed as factual. The error of law occurred when the tribunal was directed to examine the false testimony presented by Mr Bishop and it did examine the false testimony but still decided that deliberate false and misleading testimony was acceptable as factual evidence. This is a blight across the face of the tribunal process and in ignoring its obligations under sections 62A and 63 has committed an error of law.

8.    The legislation detailed in the decision is not the correct legislation that applies to the decisions under review. If the correct legislation was applied the tribunal would have come to the conclusion that the primary decision under review was and remains “Was Mr Kristoffersen entitled to be paid FTB at the maximum rate for the entire time he has contested the decisions to reduce his FTB entitlements” [and] concluded that at all material times Mr K and his wife have not earned an income and as such are not subject to the taxable income adjustment method detailed in section 3A. In applying the legislation in Schedule 3 Adjusted taxable income of members of a couple, section (1) directs you to Part 4 of schedule 1. This section deals with Overall rate calculation process and states (2) However subclause (1) doesn’t apply while the individual or the individual’s partner is receiving a social security pension, a social security benefit, a service pension or income support supplement. Clearly adjusted taxable income stipulations do not apply to persons who do not earn an income or as stated in the legislation earn a taxable income.

9.    The decision was ill conceived and based on false testimony. If the tribunal had considered the constant false statements and written untrue submissions from the respondent’s representative were just that, it may have considered the applicant’s argument and directions to true facts and hard prima facia evidence. This would have given a completely different outcome. Mr Bishop’s brief was “To win at all costs no matter what the consequences” and misleading the tribunal with false testimony became his method. A cricketer who sandpapers a ball is banned for his actions. A lawyer who gives false testimony should be held in the highest of contempt.

10.    The AAT misinterpreted the definition of what a component is in the constitution of a whole item. This basic error appears to be the grounding argument that a solitary component, a welfare payment, is the whole item, taxable income adjusted. In simple terms the definition of a component or in this case a taxable income adjustment component, is not the item. The same as Monday is not a week and a wheel is not a motor car. This preliminary basic error of fact ignored creates the error of law in this case.

11.    The respondent and the AAT both have quoted that a single parent family is automatically assessed as to receive FTB–A and annual supplements FTB–B and annual supplements at the maximum rates. This is because the income test in the common provisions Division 2C – income test applies, as it does to all FTB recipients and applies to not only individuals of single parent families but to individuals of two parent families. It recognised this as the appropriate legislation then applied section 3A [posing] the question “Should Mr K’s wife’s income be included in the calculation of FTB?” It has never been under dispute whether a person’s adjusted taxable income [affects] one’s FTB payments and it has never been under dispute whether a non-taxable pension can or cannot be used in the section 3A calculation process. Section 3A of the A New Tax System (Family Assistance Act) 1975 is not a terminology seeking to define taxable income. It is the methodology used to adjust one’s taxable income.

[original emphasis]

A question of law

87    The proper approach to applications under s 44 of the AAT Act was addressed in Haritos v Federal Commissioner of Taxation (2015) 233 FCR 315 (“Haritos”). The Full Court said in Haritos at [62] that the following matters must be kept in mind:

1)    The subject matter of the Court's jurisdiction under s 44 of the AAT Act is confined to a question or questions of law. The ambit of the appeal is confined to a question or questions of law.

2)    The statement of the question of law with sufficient precision is a matter of great importance to the efficient and effective hearing and determination of appeals from the Tribunal.

3)    The Court has jurisdiction to decide whether or not an appeal from the Tribunal is on a question of law. It also has power to grant a party leave to amend a notice of appeal from the Tribunal under s 44.

4)    Any requirements of drafting precision concerning the form of the question of law do not go to the existence of the jurisdiction conferred on the Court by s 44(3) to hear and determine appeals instituted in the Court in accordance with s 44(1), but to the exercise of that jurisdiction.

5)    In certain circumstances it may be preferable, as a matter of practice and procedure, to determine whether or not the appeal is on a question of law as part of the hearing of the appeal.

6)    Whether or not the appeal is on a question of law is to be approached as a matter of substance rather than form.

7)    A question of law within s 44 is not confined to jurisdictional error but extends to a non-jurisdictional question of law.

8)    The expression “may appeal to the Federal Court of Australia, on a question of law, from any decision of the Tribunal” in s 44 should not be read as if the words “pure” or “only” qualified “question of law”. Not all so-called “mixed questions of fact and law” stand outside an appeal on a question of law.

9)    In certain circumstances, a new question of law may be raised on appeal to a Full Court. The exercise of the Court's discretion will be affected not only by Coulton v Holcombe [1986[ HCA 33; (1986) 162 CLR 1 considerations, but also by considerations specific to the limited nature of the appeal from the Tribunal on a question of law, for example the consideration referred to by Gummow J in Federal Commissioner of Taxation v Raptis [1989] FCA 381; (1989) 20 ATR 1262 that there is difficulty in finding an "error of law" in the failure in the Tribunal to make a finding first urged in this Court.

10)    Earlier decisions of this Court to the extent to which they hold contrary to these conclusions, especially to conclusions (3), (4), (6) and (8), should not be followed to that extent and are overruled. Those cases include Birdseye; Australian Securities and Investments Commission v Saxby Bridge Financial Planning Pty Ltd; Comcare v Etheridge; HBF Health Funds and Hussain v Minister for Foreign Affairs.

88    Decisions of this Court since Haritos have had to grapple with the question of whether this Court’s jurisdiction has been properly invoked in circumstances where a notice of appeal is uninformative or unhelpful in properly identifying a “question of law” for determination: see Berry v Commissioner of Taxation (2015) 149 ALD 270, Davies J at [30]; and Crown Estates (Sales) Pty Ltd v Commissioner of Taxation (2016) 152 ALD 408, Logan J at [12]-[16] and [21]-[23].

89    In that context, and for the purposes of the present proceeding, the proposition at point 6 of Haritos needs to be kept firmly in mind with the result that the question becomes one of whether, having regard to the inelegant language of the questions and the text of the grounds (notwithstanding whatever limitations may be apparent in those grounds), has Mr Kristoffersen (as a self-represented party) identified, as a matter of substance rather than form, questions of law to be determined forming the subject matter of the appeal: TNT Skypak (Aust) Pty Ltd v Federal Commissioner of Taxation (1988) 19 FCR 149 at [11], per Gummow J.

90    The Secretary construes questions 1, 3, 4, 5, 6, 7, 8, 9, 10 and 11, together with grounds 1, 3-6 and 8-11 as asserting that the AAT either failed to apply the correct legislative test or misinterpreted the relevant legislation, or both.

91    The Secretary says that question 6 asserts unreasonableness. The Secretary contends that questions 1, 5, 6, 7, 9 and 11 and grounds of appeal 2 and 5 contend that the AAT was affected by actual bias.

92    The Secretary also asserts that question 9 and grounds 7 and 9 variously contend for misconduct on behalf of the Secretary’s representatives.

93    Having regard to Mr Kristoffersen’s ASNOA; the contended questions of law, the grounds relied upon by Mr Kristoffersen; and the AAT’s reasons, I am satisfied that the following question of law arises: did the AAT either fail to apply the correct legislative test or misinterpret or misconstrue the applicable statutory provisions (or both) in reaching a decision on 15 March 2018 that Mr Kristoffersen’s application of 10 October 2017 seeking review of the SSCSD decision (the so-called “AAT 1” decision) be dismissed on the ground that the application of 10 October 2017 “has no reasonable prospect of success”?

The legislative scheme of the FA Act

94    Section 21 of the FA Act addresses the topic of when an individual is “eligible for family tax benefit in normal circumstances”. It is common ground that Mr Kristoffersen is an eligible recipient of a family tax benefit under the FA Act. Section 58(1) of the FA Act provides that subject to ss 60 to 61B, an individual’s “annual rate” of family tax benefit “is to be calculated in accordance with the Rate Calculator in Schedule 1”. Part 1 of Schedule 1 addresses the topic of the “overall rate calculation process”. Clause 1 of Schedule 1 recognises that an individual’s annual rate of family tax benefit is made up of a Part A rate and a Part B rate to be added together to “work out” an individual’s annual rate of benefit.

95    Clause 1(1) of Schedule 1 provides that an individual’s Part A rate is to be calculated under Part 2 of the Schedule (by reference to clauses 3 to 24S), or Part 3 (clauses 25 to 28) or Part 3A (clause 28A), having regard to the relevant circumstances which engage those Parts. An individual’s Part B rate is to be calculated under Part 4 of the Schedule (by reference to clauses 28B to 33).

The Part A rate

96    Clause 1(2) of the Schedule provides that to work out the individual’s Part A rate, Part 2 of the Schedule is to be used (clauses 3 to 24S) if the individual has at least one FTB child and, relevantly, the individual, or the individual’s partner, is receiving a social security pension, a social security benefit, a service pension or an income support payment: see clause 1(2)(a)(ii). By reason of clause 1(2)(a)(ii) and its application to Mr Kristoffersen’s circumstances, his Part A annual rate fell to be determined under Part 2 of the Schedule by reference to clauses 3 to 24S of the Schedule. Clauses 3 to 24S of Part 2 are concerned with a method of calculation described as “Method 1”. Clause 3, as part of Method 1, sets out a “Method statement” which comprises four steps.

97    Step 1 involves adding together a rate called the “individual’s standard rate” (determined under clauses 7 to 11 of Part 2) and a particular allowance or supplement or rent assistance amount (if any of those elements apply having regard to the circumstances of the particular individual). That sum so determined for the relevant individual is described as the “individual’s maximum rate”).

98    Step 2 has two elements to it.

99    First it requires the “income test” in Division 2C of Part 5 of Schedule 1 (clauses 38L and 38N) to be applied to “work out any reduction for adjusted taxable income”.

100    Second, it requires any reduction so calculated to be taken “away from the individual’s maximum rate” (determined under Step 1). The result thus arising is described as the “individuals’ income tested rate”.

101    Clause 38L (within Division 2C of Part 5) provides that if an individual, or an individual’s partner, is receiving a social security pension, a social security benefit, a service pension or income support supplement (being the circumstances relevant to Mr Kristoffersen), the individual’s “income excess is nil” and thus the individual’s “income tested rate” for the purposes of Step 2 is “the same as the individual’s maximum rate” (as determined under Step 1).

102    Thus, Mr Kristoffersen was entitled to the maximum Part A rate as determined according to the elements of Step 1.

103    It is common ground that Steps 3 and 4 have no application which would alter the position that Mr Kristoffersen was entitled to the maximum Part A rate determined according to the Method statement.

104    For the sake of completeness, clause 3 (and the Method statement set out in clause 3), is set out below:

3    Method of calculating Part A rate

Subject to the operations of clauses 5, 6A, 38J and 38K, if the individual’s Part A rate is to be calculated using this Part, it is calculated as follows:

Method statement

Step 1.    Add the following amounts:

(a)    the individual’s standard rate under Division 2 of this Part (clauses 7 to 11);

(ba)    the individual’s newborn supplement (if any) under Division 1A of Part 5 (clauses 35A and 35B);

(c)    the individual’s multiple birth allowance (if any) under Division 2 of Part 5 (clauses 36 to 38);

(ca)    the individual’s FTB Part A supplement under Division 2A of Part 5 (clause 38A);

(cb)    the individual’s energy supplement (Part A) under Subdivision A of Division 2AA of Part 5 (clause 38AA);

(d)    the individual’s rent assistance (if any) under Subdivision A of Division 2B of Part 5 (clauses 38B to 38H).

The result is the individual’s maximum rate.

Note:    Paragraph (cb) does not apply to certain individuals: see clause 6A.

Step 2.    Apply the income test in Division 2C of Part 5 (clauses 38L to 38N) to work out any reduction for adjusted taxable income. Take any reduction away from the individual’s maximum rate: the result is the individual’s income tested rate.

Step 3.    Apply the maintenance income test in Division 5 of this Part (clauses 20 to 24) to work out any reduction for maintenance income. Take any reduction away from the individual’s income tested rate: the result is the individual’s income and maintenance tested rate.

  Step 4.    The individual’s Part A rate is:

(a)    the individual’s income and maintenance tested rate if it is equal to or greater than the individual’s base rate (see clause 4); or

(b)    the individual’s base rate (see clause 4) if it is more than the individual’s income and maintenance tested rate.

105    The Department accepts that Mr Kristoffersen’s Part A rate entitlement is the maximum rate: see para 29 of the Department’s submissions.

The Part B rate

106    As earlier mentioned, clause 1(1)(b) provides that an individual’s Part B rate is to be calculated under Part 4 (clauses 28B to 33) of the Schedule.

107    Division 1 of Part 4 addresses the topic of the “overall rate calculation process” for the Part B rate and subdivision A of Division 1 (Part 4) addresses the topic of the general method of calculating the Part B rate. Section 29 falls within subdivision A of Division 1 of Part 4 and clause 29(2) provides that if the individual is a member of a couple (as Mr Kristoffersen is) the individual’s Part B rate is to be “worked out” using the Method statement set out at s 29(2). That Method statement involves three steps.

108    Step 1 requires the amounts referable to the three items recited at clauses 29(1)(a), (b) and (c) to be added together. They are the individual’s standard rate under Division 2 (clauses 30 and 31); the individual’s FTB Part B supplement under Division 2A (clause 31A); and, the individual’s energy supplement (Part B) under Division 2B (clause 31B). The result so worked out is “the individual’s maximum rate”.

109    Step 2 requires the “individual’s reduction for adjusted taxable income” to be “worked out” using Division 3 (clauses 32 and 33) of Part 4.

110    Once the extent of that reduction is worked out using clauses 32 and 33 (if there be any reduction), Step 3 involves reducing the maximum rate under Step 1 by the amount of the reduction determined under Step 2.

111    For the sake of completeness, s 29(2) and the Method statement is set out below:

29    General method of calculating Part B rate

…

(2)    The individual’s Part B rate is worked out using the following method statement if the individual is a member of a couple:

Method statement

  Step 1.    Add the following amounts:

(a)    the individual’s standard rate under Division 2 (clauses 30 and 31);

(b)    the individual’s FTB Part B supplement under Division 2A (clause 31A);

(c)    the individual’s energy supplement (Part B) under Division 2B (clause 31B).

     The result is the individual’s maximum rate.

       Note:    Paragraph (c) does not apply to certain individuals: see clause 29AA.

Step 2.    Work out the individual’s reduction for adjusted taxable income using Division 3 (clauses 32 and 33).

Step 3.    The individual’s Part B rate is the maximum rate less the reduction for adjusted taxable income.

Note:    An individual who is a member of a couple works out his or her Part B rate under Subdivision B if the secondary earner of the couple returns to paid work after the birth of a child etc.

112    Returning to Step 2 of the Method statement, it requires a calculation to be made of a “reduction” (as applicable to the relevant individual) for that individual’s “adjusted taxable income” using clauses 32 and 33 of Division 3 of Part 4. Clause 32 addresses the topic of how an individual’s reduction for adjusted taxable income is to be worked out. It too provides for a “Method statement” and that statement involves five steps.

113    Step 1 requires the individual’s “income free area” to be identified using clause 33. Clause 33 identifies a prescribed amount as an income free area.

114    Step 2 requires working out whether the individual’s “adjusted taxable income” exceeds the individual’s clause 33 income free area. The term “adjusted taxable income” is defined in s 3(1) of the FA Act for the purposes of that Act (and all schedules to it), as having “the meaning given by Schedule 3”. Turning to Schedule 3, clause 1 of Schedule 3 provides that an individual’s adjusted taxable income is “relevant to … the rate or amount of family tax benefit …”. Clause 2 of Schedule 3 provides that an individual’s adjusted taxable income for a particular income year is the sum of the six items (called “income components”) set out at clause 2(1) less the amount of the individual’s deductable child maintenance expenditure for that year (if any). One of those six income components is “the individual’s tax free pension or benefit for that year”: see clause 2(1)(e), Schedule 3.

115    Thus, although the pension or benefit is itself free of income tax, it is to be included in the statutory concept of “adjusted taxable income” for the purpose of Schedule 3 which is engaged as an element of the method for calculating the Part B component of a family tax benefit. The policy of the legislation, no doubt, is that in calculating the ultimate rate or amount of a Part B family tax benefit payable to an individual, it is relevant to have regard to an individual’s taxable income adjusted, for this purpose, to include any existing tax-free pension or benefit already received by the individual.

116    Clause 2(2) of Schedule 3 has no application.

117    Clause 3 of Schedule 3 also applies in working out the rate of a family tax benefit.

118    Clause 3(2) provides, for the purposes of Part 4 of Schedule 1 (that is, for the purposes of the Part B calculation process), that if an individual is a member of a couple (as Mr Kristoffersen is), the individual’s adjusted taxable income for an income year, for the purposes of the provisions of Part 4 of Schedule 1 (other than subdivision AA of Division 1 of Part 4, which has no application in the circumstances of Mr Kristoffersen), is the individual’s adjustable taxable income for that year (as to which see clause 2 of Schedule 3) or the adjusted taxable income for that year of the individual’s partner if it is less than the individual’s adjusted taxable income for that year.

119    Clause 2(1)(e) requires Mr Kristoffersen’s adjustable taxable income to include the amount of his “tax free pension or benefit for [the relevant] year”. Clause 7 of Schedule 3 defines the term “tax free pension or benefit”, for the purposes of Schedule 3, by reference to a range of specified pensions and benefits including “a disability support pension under Part 2.3 of the Social Security Act 1991 [Cth]”, which is the class of pension received by Mr Kristoffersen: clause 7(a), Schedule 3. It also includes “a carer payment under Part 2.5 of the Social Security Act 1991”.

120    Thus, it necessarily follows that Mr Kristoffersen’s adjusted taxable income for the relevant income year included the payment he received in that income year as a recipient of a DSP. So far as Mr Kristoffersen’s partner is concerned, it necessarily follows that her adjusted taxable income for the relevant year included the payments she received in that income year as a recipient of a CP.

121    Having determined, according to the statutory text of Schedule 3 as discussed, the adjusted taxable income of Mr Kristoffersen on the one hand, and the adjusted taxable income of Mr Kristoffersen’s partner on the other hand, clause 3(2)(b) of Schedule 3 provides, in circumstances where Mr Kristoffersen is a member of a couple, that Mr Kristoffersen’s adjusted taxable income is either his adjusted taxable income for the relevant year or the adjusted taxable income of his partner in that year if it is less than Mr Kristoffersen’s adjusted taxable income for that year.

122    Having determined the answer to the question posed by clause 3(2)(b) and thus having determined “the individual’s adjusted taxable income”, it is necessary to return to the Method statement in clause 32 of Part 4 of Schedule 1 to determine whether the individual’s adjusted taxable income exceeds the clause 33 prescribed “income free area”. If not, the individual’s “income excess” is nil. If there is an excess, the individual’s income excess is the individual’s adjusted taxable income (as determined as described above) less the individual’s clause 33 income free area amount.

123    Having determined the amount of the individual’s income excess (if there is one), the individual’s “reduction” is 20% of the income excess.

124    The calculation of that reduction (if there is one) is necessary for the purpose of Steps 2 and 3 of the clause 29(2) Method statement to be applied in calculating the individual’s Part B rate. Steps 2 and 3, it will be recalled, require the working out of the individual’s “reduction” (if any) (that is, a reduction from the maximum Part B rate determined according to Step 1) according to any “reduction for adjusted taxable income” using Division 3 (clauses 32 and 33). If there is a reduction emerging from the application of clauses 32 and 33, the individual’s Part B rate is the maximum rate less the reduction for adjusted taxable income.

125    The only point Mr Kristoffersen emphatically makes throughout his material, so far as this sequence of steps is concerned, in determining his Part B component is that the AAT in reaching its decision of 15 March 2018 to dismiss the application filed on 10 October 2017 for review of the SSCSD decision (the AAT 1 decision), fell into legal error in the method of calculating his Part B rate (as did the SSCSD, it is said) because it included, in the calculation of adjusted taxable income, payments received in the relevant income year relating to the individual’s tax free pension or benefit for that year.

126    Mr Kristoffersen contends that the calculation of the Part B rate engages clause 38L of Schedule 1. Clause 38L is in these terms:

38L    If an individual, or an individual’s partner, is receiving a social security pension, a social security benefit, a service pension or income support supplement:

   (a)    the individual’s income excess is nil; and

(b)    the individual’s income tested rate is the same as the individual’s maximum rate.

127    As already mentioned, clause 38L falls within Division 2C of Part 5. Division 2C of Part 5 is engaged by the Method statement within Method 1 (at clause 3, Schedule 1) used for the calculation of the Part A rate: see Step 2 at [104] of these reasons.

128    Clause 38L is not engaged by the calculation method required to be used (as earlier described in detail) for the calculation of the amount of the Part B component. As a matter of statutory construction, the challenge by way of review before the AAT to the anterior decision of the SSCSD (the AAT 1 decision) on the ground that clause 38L applies to the calculation of the Part B rate must necessarily fail.

129    The Tribunal, on 15 March 2018, concluded that that part of the application was bound to fail and thus, for the purposes of s 42B(1)(b), the application “had no reasonable prospect of success”.

130    The Tribunal correctly concluded that clause 38L has no application to the calculation of the Part B rate notwithstanding Mr Kristoffersen’s emphatic contentions to the contrary.

131    The application for review of the SSCSD decision filed with the Tribunal on 10 October 2007 was dismissed in its entirety on 15 March 2018. Although the application, so far as it related to the Part B component, was bound to fail (and thus had no reasonable prospect of success), a question arises as to whether the Part A component of the application for review “has no reasonable prospect of success”.

132    As already mentioned, the Department accepts that Mr Kristoffersen is entitled to be paid the maximum Part A rate by reason of Division 2C of Part 5 having regard to clause 38L. The Department says that Mr Kristoffersen has been paid the Part A rate at the maximum rate. The Department also says that the ARO conducted an analysis of the Part A (and the Part B) payments made to Mr Kristoffersen for each financial year for the period from 1 July 2007 to 30 June 2017. That analysis resulted in the ARO’s lengthy letter dated 28 February 2017 which was before the AAT in reaching both the first decision (the SSCSD decision of 11 September 2017) and the second decision (to dismiss on 15 March 2018).

133    The Department says that there is no aspect of the application before the Court which asserts error on the part of the AAT in exercising the discretion to dismiss the review application on 15 March 2018 which engages a challenge to, or otherwise asserts error, in the Part A amounts paid to Mr Kristoffersen across the period of the financial years examined by the ARO and set out in the 28 February 2017 letter, except as to the following matter. When all of the 11 contended questions are examined, together with the 11 grounds relied upon as giving content and expression to those contended questions (and identifying the contended correct position in answer to those questions), the scope of the challenge can be expressed as a contention that the AAT failed, for the purposes of the dismissal decision, to correctly identify, construe and apply the relevant statutory provisions governing the calculation of the FTB. Most of the questions and grounds relied upon by Mr Kristoffersen in this proceeding go to matters relating to the Part B payment having regard to Mr Kristoffersen’s contentions of error in the approach to determining “the individual’s adjusted taxable income” on the footing that pension or benefit entitlements were brought to account. Those matters go to the calculation of the Part B component.

134    The ARO’s letter of 28 February 2017 recognises that in the 2007/2008 financial year Mr Kristoffersen was not paid the maximum Part A rate for the period 24 October 2007 to 15 January 2008. This shortfall in payment is said to have occurred due to a process of adjustments to the payment of the maximum rate called MCA. This MCA process is said to occur “where it is determined that the individual/claimant has been paid more than they are likely to be entitled”, and the adjustment is, “calculated automatically upon a change to the customer’s circumstances, income estimate or maintenance income”: ARO letter, 28 February 2017.

135    The ARO, in the letter of 28 February 2017, says that reductions in the maximum rate were made due to a perceived overpayment having been made which, in effect, resulted in a recovery by offset. However, an end of year reconciliation for the 2007/2008 financial year revealed that no overpayment had occurred with the result that the amount of the offset was “returned to you during reconciliation”: ARO letter, 28 February 2017.

136    A further offset occurred in that year to a supplement of $651.21 to offset an overpayment of the Part B rate. An end of year reconciliation confirmed the offset as an adjustment for that overpayment.

137    The ARO says that for the financial years ending 2009, 2010, 2011, 2012, 2013, 2014, 2015 and 2016, Mr Kristoffersen was paid the maximum Part A entitlement for the entire financial year: ARO letter, 28 February 2017.

138    As to payments called the “Part A supplement”, the position set out in the ARO’s letter of 28 February 2017 can be summarised in this way:

139    The reasons for the difference were said by the ARO to be these:

140    In the proceeding before the SSCSD (AAT 1), the Tribunal understood that Mr Kristoffersen was seeking “a review of all decisions pertaining to the five payments listed in his letter of 6 February 2017. Those matters are set out at [75] of these reasons. However, for the sake of convenience, I will restate them here:

1)    The decision to reduce Family Tax Benefit (FTB) part A and not pay at the full or maximum rate since 11/10/07

2)    The decision to not pay the FTB part A annual bonuses at the maximum rate since 11/10/07

3)    The decision to not pay the school kids bonuses at the full or maximum rate since 11/10/07

4)    The decision to reduce FTB part B and not pay at the maximum or full rate since 11/10/07

5)    The decision to not pay the FTB part B annual bonuses at the maximum rate since 11/10/07

141    In the reasons for decision of the SSCSD, the Senior Member considers Mr Kristoffersen’s challenge to the Part B calculations which asserted that the wrong statutory provisions were taken into account in calculating the rate. It will be recalled that Mr Kristoffersen emphatically asserted that the calculation of his Part B rate engaged clause 38L of Schedule 1. The member correctly rejected that challenge.

142    On the factual questions about calculation of the Part A rate, the supplements and the SKB (including the matters mentioned at [138] and [139] of these reasons), the Senior Member (having made preliminary remarks at paras 25 to 26), in reaching the SSCSD decision, said this at paras 27 to 29 of the reasons:

27.    The ARO correctly points out to Mr Kristoffersen that his payment of FTB A has not been calculated taking into account his own and his wife’s social security payments. Further, with the exception of a period from 24 October 2007 to 15 January 2008 he has been paid at the maximum rates. In relation to the reduction in FTB A from 24 October 2007 to 15 January 2008, the reason for the reduction and the shortfall being paid as part of the subsequent reconciliation process after the end of the 2007/2008 year is clearly explained. The evidence that supports the explanation is set out in the Department’s documents commencing at page 39 for the 2007/2008 income year.

28.    I have considered the evidence provided by Centrelink in its documents and the explanation of the calculation of FTB A, FTB B and supplements for the various income years from 2007/2008 to 2017 as set out in the ARO’s decision statement. I am satisfied that Mr Kristoffersen’s payments of FTB A, FTB B and respective supplements which are summarised in the payments schedules commencing on page 32 of Centrelink’s documents and summarised in Table 1 attached to the decision statement of 28 February 2017 [the ARO’s letter] are correct. I am also satisfied that the SKB payments made in the income years 1 January 2013 to 1 July 2016 are correct.

29.    In summary, I am satisfied that Mr Kristoffersen has been correctly paid the five family assistance payments he requested to be reviewed. If any of the payments as set out in the schedule starting at page 32 of Centrelink’s documents and that received to his bank account are missing or incorrect they should be identified by date and amount and brought to Centrelink’s attention. It is not the function of this tribunal to conduct a forensic review into whether an individual’s entitlement as determined by Centrelink arrive in their nominated bank account. The tribunal’s role is to consider the facts and the law of a decision made under the family assistance law and not the administration of the law.

143    The scope of the review Mr Kristoffersen sought to agitate before the AAT as a second review of the decision of the ARO, as affirmed by the SSCSD, is to be found in his application for review filed on 10 October 2017.

144    In his application, Mr Kristoffersen identifies the “reasons for the application” and the elements of the review he seeks to agitate. His first contention to be examined upon review is put this way:

1)    The first tier AAT decision, 2017/S109644, to affirm the payment reduction decisions in 10/11/07 to the present date as correct decisions, in (4) and (5), as noted under review, is an incorrect/wrong decision.

145    In that ground, as he does in ground 2, Mr Kristoffersen reverses the relevant date by making reference to 10/11/07. It seems clear enough that he was intending to refer to decisions which he earlier describes as decisions made on 11/10/07 as to which see [75] and [140] of these reasons.

146    By ground 1, Mr Kristoffersen is contending that the first tier AAT decision affirming the decision of the ARO in relation to the matters at points 4 and 5 of his letter of 6 February 2017 is an incorrect or wrong decision. The decisions mentioned at points 4 and 5 of his letter of 6 February 2017 are decisions to reduce the FTB Part B rate of payment. Mr Kristoffersen’s contention is that the Part B rate has been calculated having regard to the wrong clauses of Schedule 1 and thus the wrong provisions of the FA Act. There is no basis for that contention for the reasons already indicated.

147    The second matter that Mr Kristoffersen sought to agitate by his application for a second review is put this way by him:

2)    The decisions on 10/11/07 to the present, to reduce the payments noted under review as (1), (2) and (3), have been decided as wrong/incorrect decisions by the AAT’s Mr B. Pickard. He confirms Mr Kristoffersen was entitled to the maximum payments for these three payments at all times and makes note that the applicant must now request full restitution in regards to these payment decisions.

148    At point 1 of his letter of 6 February 2017, Mr Kristoffersen was agitating a review of the payment of his Part A rate on the footing that since 11 October 2007, the Part A rate has not been paid at the full or maximum rate. However, the material before the AAT demonstrates that Mr Kristoffersen was paid the maximum Part A entitlement for the financial years ending 2009 to 2016. The material also demonstrates that although Mr Kristoffersen was not initially paid the maximum Part A rate for the period 24 October 2007 to 15 January 2008 in the 2007/2008 financial year, he was paid the full amount upon a reconciliation taking place at the end of that financial year.

149    At points 2 and 3 of his letter of 6 February 2017, Mr Kristoffersen is agitating a review of something he describes as “annual bonuses” payable under Part A and the payment of the “School Kids Bonuses”. I take the reference to annual bonuses as a reference to the “Part A supplement”. The position as to the Part A supplement is set out at [138] and [139] of these reasons arising out of the letter of analysis undertaken by the ARO dated 28 February 2017. As to the “School Kids Bonuses” no part of Mr Kristoffersen’s material before the AAT on the application for dismissal called into question payment of the School Kids Bonuses.

150    The third matter agitated by Mr Kristoffersen within the second tier review is put this way:

3)    The information supplied by Mr Kristoffersen was not taken into account and if the legislations, policies and evidence was taken into consideration in an unbiased independent manner the Tribunal would need to affirm decisions (4) and (5) as incorrect/wrong decisions also.

151    This ground re-agitates the notion that in calculating the Part B rate payable to Mr Kristoffersen, the wrong statutory provisions within Schedule 1 have been relied upon in reducing Mr Kristoffersen’s Part B rate. That is not so.

152    The fourth matter agitated by Mr Kristoffersen within the second tier review is put this way:

4)    The law was not applied correctly.

153    That ground has no content and to the extent that it reasserts a failure to properly apply the statutory provisions within Schedule 1 of the FA Act generally, there is no basis for that contention.

154    The fifth matter agitated by Mr Kristoffersen within the second tier review is put this way:

5)    No legal argument has been presented that details any legislation detailing how a single parent family on welfare only income is paid at the Maximum Rates for decisions (4) and (5), (as detailed by the ARO on the basis of his decision) and how the law for a coupled family on welfare only income is legislatively paid at a reduced rate.

155    It can immediately be seen that this fifth ground reasserts the central contention made by Mr Kristoffersen throughout all of his material that in calculating the Part B rate, the wrong statutory provisions have been applied largely because he says that clause 38L governs the calculation of the Part B rate so as to remove from any consideration of his adjusted taxable income, any aspect of his social security pension or benefit or that of his partner.

156    As already indicated, Mr Kristoffersen is wrong about that matter.

157    Having regard to the decision of the ARO as affirmed by the SSCSD (the first tier AAT review), the AAT, on the application before it for dismissal of the second tier review application, was satisfied that “the application has no reasonable prospect of success” as to any of the five grounds now agitated by Mr Kristoffersen. No basis is identified for calling into question the calculations which have been extensively analysed by the ARO and affirmed by the SSCSD. The fundamental criticism of the decision of the SSCSD in affirming the decision of the ARO is that in the calculation of the Part B rate, an incorrect view has been adopted of the notion of Mr Kristoffersen’s “adjusted taxable income” by incorrectly taking into account for that purpose Mr Kristoffersen’s social security pension and the carer payment to which his partner is entitled.

158    Both the Tribunal, in its tier 1 decision, in its capacity as the SSCS Division and in its capacity in undertaking a tier 2 review, observed that it is not part of the Tribunal’s role to determine whether the amounts to which an individual is entitled have been received by that party. The mechanical question of whether amounts have been paid into a relevant account may, in a particular case, be a question in issue. In this case, the question in issue is whether the rate of the tax-free benefit has been properly calculated according to law. However, the scope of that review, as a tier 2 review, depends entirely upon the way in which the application is framed. In this case, Mr Kristoffersen has put in issue as the grounds of review the matters which fell within the five points identified in his letter of 6 February 2017. For the reasons already indicated, the Tribunal was entitled to reach a state of satisfaction that the matters raised in relation to items 4 and 5 of that letter have no reasonable prospect of success. Similarly, the Tribunal is entitled to be so satisfied in relation to the family tax benefit Part A. However, as to the question of whether the Part A supplement was properly paid, the letter from the ARO sets out the matters described at [138] and [139] of these reasons. Mr Kristoffersen was entitled to call upon the Tribunal to conduct a review, on the merits and the facts (and the law), as to whether those amounts not paid were properly not paid. The Tribunal had a statutory obligation to examine that matter and the reasons given for the shortfall. In the face of the ARO letter and the application for review raising a request for a review of that matter, the Tribunal on tier 2 review could not conclude, in the absence of a review of the underlying merits, that the challenge to the offsets in question has “no reasonable prospect of success”.

159    There are some other aspects to the challenge, on question of law, to the decision of the Tribunal to dismiss Mr Kristoffersen’s application for tier 2 review. The first concerns question 6 and ground 6 which asserts that the dismissal of the application was “unreasonable” in the sense that there is no evident and intelligible justification for the decision. As indicated above, the decision of the Tribunal was open to it in respect of all matters put in issue in the tier 2 application but for the matters arising in [138] and [139] of these reasons. The decision of the Tribunal in relation to those matters cannot be characterised as unreasonable in the sense in which that term is understood having regarding to Minister for Immigration and Citizenship v Li (2013) 249 CLR 332 at [76].

160    The second issue concerns the questions and grounds which assert these things. First, the applicant says that the Tribunal failed to identify, construe and apply, the correct legislation in reaching its decision. The applicant also says that it was not open to the Tribunal either in the tier 1 review or in considering whether the tier 2 application ought to be dismissed, to consider the legislation in the way it did and apply it in the way reflected in the reasons as described earlier. The applicant says that these failures demonstrate “actual bias” on the part of the Tribunal. The difficulty for the applicant, of course, is that the Tribunal correctly identified the legislative provisions and correctly applied them. However, even if the Tribunal had failed to identify the correct provisions and had misapplied the law in determining the calculation of the benefit, the result on the material would be that the Tribunal had fallen into error. Nothing in the material demonstrates actual bias on the part of the Tribunal.

161    Finally, as earlier noted, Mr Kristoffersen does not appear to take issue with the calculation of the School Kids Bonus. The respondent, for completeness, notes that the SKB formed part of family assistance payments from 1 January 2013 to 31 December 2016. The respondent notes that the now repealed s 35UA and s 35UB of the Act set out the eligibility criteria for SKB which was paid to individuals in receipt of FTB Part A on the bonus test day (1 January and 30 June of each year). The respondent says that the SKB was paid at a set amount depending upon whether the child was in primary or secondary school and, accordingly, there was no reduction in the applicant’s rate of the SKB.

162    Accordingly, the decision of the Tribunal is in large part to be affirmed subject to an order that the matter be remitted to the Tribunal for determination solely on the question of whether the amounts identified at [138] of these reasons not paid to Mr Kristoffersen as part of the Part A supplement were, for the reasons identified at [139], properly withheld as a matter of offset as suggested. All other aspects of the application for review before the Tribunal filed by Mr Kristoffersen on 10 October 2007 before the AAT which were dismissed by the Tribunal in the exercise of the power conferred under s 42B(1)(b) are affirmed. The applicant has failed to demonstrate any error in the exercise of the discretion arising under s 42B(1)(b) in reaching a state of satisfaction that those other matters have no reasonable prospects of success. The Tribunal will make its own decisions about the procedural arrangements for taking evidence and deciding the question in issue in relation to the sole matter remitted to the Tribunal.

163    The respondent will be ordered to pay the costs of the applicant of and incidental to the application before this Court.

Associate:

Dated:    10 October 2019