Advisory from Disability Compensation Branch

No 2/2004

This is an advisory note only.  Disability Compensation Branch and Legal Services Group have agreed this policy view.  It is not a Repatriation Commission Guideline or a Departmental Instruction.   The advice is not intended to conflict with the proper application of the Veterans' Entitlements Act 1986 or the judgements of the Courts.  It may be subject to change as a result of further interpretation by the Courts of the legislation.  Nevertheless it represents a considered view that should be taken into account by all delegates.

Veterans' Children Education Scheme (VCES) and Family Tax Benefit (FTB) payments

ISSUE

Where Centrelink Family Tax Benefit (FTB) payments are split between (separated) parents, should the VCES Education Allowance (EA) benefit:

• also be split?
• split in the same proportion?
• split in all cases?

SHORT ANSWER

Yes, in every case.

BACKGROUND

In many cases FTB payments are split by Centrelink to varying percentages depending upon what the individual living arrangements/child custody situations are. For example splits of 30% to father, 70% to mother, or even 2% to father 98% to mother have been recorded.

REASONS FOR SPLITTING VCES PAYMENTS

The VCES states that the EA payments  “will be made to the person who is entitled to be paid family tax benefit under A New Tax System (Family Assistance) (Administration) Act 1999.” Refer VCES 3.2.3, 3.3.2 and 3.3.3.

Use of the word 'will' leaves no room for any discretion as to the payee destination of the EA payment.

Where the FTB has been split between parents the payment of EA must be split in similar proportions to the FTB payment.

OTHER COMMENTS

In response to the increase in cases where FTB payments are being split, the two current VCES application forms from January 2004 (D2566 and D2697) have been amended to include a new question requesting specific detail on FTB payment, including any 'splitting' and percentages of any split.

The obligations section of these forms have also been amended, now specifically requesting advice “if any change takes place in the applicant's parents' marital/relationship status”.

CONCLUSION

EA payments must be paid to the person FTB payments are made to. Where splitting of the FTB occurs, so too the VCES EA must be split, and in the same proportion.

The FTB payee arrangements must be investigated at the time of the initial VCES application.

For existing beneficiaries, where it becomes apparent that a child's parents have separated, or marital/domestic/accommodation arrangements have altered, it will be necessary for VCES staff to identify the FTB payee(s) and any 'splitting'. EA payments should be reviewed and amended where necessary to ensure any changes are reflected in VCES EA payments.

Signed

Perry Phillips

Director

Policy Eligibility and Research

6 April 2004