Abbott and Abbott (Child support)

[2024] AATA 1181

Abbott and Abbott (Child support) [2024] AATA 1181 (28 March 2024)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2023/PC027245

APPLICANT:  Mr Abbott

OTHER PARTIES:  Child Support Registrar

Ms Abbott

TRIBUNAL:Member R Prasad

DECISION DATE:  28 March 2024

DECISION:

The decision under review is affirmed.

CATCHWORDS

CHILD SUPPORT – non-agency payment – car lease payments – no mutual intention – decision under review affirmed 

Names used in all published decisions are pseudonyms. Any references appearing in square brackets indicate that information has been removed from this decision and replaced with generic information so as not to identify involved individuals as required by subsections 16(2AB)-16(2AC) of the Child Support (Registration and Collection) Act 1988.

REASONS FOR DECISION

BACKGROUND

1. Mr Abbott (the father) and Ms Abbott (the mother) are the parents of three children, aged 16, 14 and 12 years old. A child support case was registered with Services Australia – Child Support (Child Support) on 19 May 2022. The mother has had 100% care of the oldest child and 86% care of the younger children, and the father has had 14% care of the younger two children. The father is required to pay child support in respect of the children.

2. The father has made 11 payments of $330 totalling $3,630 to a car lease. On 4 August 2023, he applied to Child Support for the payments to be credited towards his child support liability. On 30 August 2023, in support of his application, the father provided a copy of a schedule of assets and liabilities, a letter from [Law Firm 1] dated 29 June 2023 (the lawyer’s letter of 29 June 2023), phone account transactions, bank account transactions and payslips.

3. On 31 August 2023, the mother advised Child Support that there was no mutual intent for the third party car payments to be credited towards the father’s child support liability as the car lease was in the father’s name, that she was allowed to use the car to transport the children and that the car was sold two days ago. She advised that the father was allowed to pay $350 a week and she would get to use the leased car. However, from April 2023, the father had refused to pay the child support amount of $350 a week and she told him that he would need to pay the full amount of $530 each week or she would ask Child Support to collect payments. He started paying her lower amounts directly and continued to let her use the car while he paid the lease payments.

4. Child Support decided not to credit the payments as non-agency payments. The father was notified by letter on 31 August 2023, and he objected to the decision on 13 September 2023.

5. On 9 December 2023, Child Support disallowed the father’s objection and refused to accept the payments as non-agency payments as there was no mutual intention (the objection decision).

6. On 21 December 2023, the father sought review of the objection decision by the Social Services and Child Support Division of the Administrative Appeals Tribunal (the Tribunal). The father provided documentation (folios A1 to A38) as did the mother (folios B1 to B11).

7. The matter was heard on 25 March 2024. The parties appeared by MS Teams audio and the Child Support Registrar elected not to be represented at the hearing but provided documentation (folios 1 to 141).

ISSUE

1. The issue before me is whether the 11 payments of $330 totalling $3,630 can be considered to be non-agency payments or prescribed non-agency payments and be credited against the father’s child support liability.

CONSIDERATION

What is required?

1. The Child Support (Registration and Collection) Act 1988 (the Act) allows payments by a payer of a child support liability to be made in lieu of the liability. These payments are known as non-agency payments or prescribed non-agency payments.

2. Section 71 of the Act provides that if the payee and payer of a child support liability mutually agree that a direct payment made to the payee by the payer is a complete or partial satisfaction of the child support liability, the amount can be credited against the liability as a non-agency payment.

3. Section 71A provides that if a payer makes a payment to a third party that partially or completely satisfies a debt and it is intended by both the payee and payer to be in a complete or partial satisfaction of the child support liability, the amount can be credited against the liability as a non-agency payment.

4. Section 71C allows for payments to be credited as partial satisfaction of a child support liability without mutual agreement, if the payments are the types of payments prescribed and the payer of the child support liability does not have at least regular care of any of the children at the time payment was made and at the time of application of this section.[1] Under regulation 19 of the Child Support (Registration and Collection) Regulations 2018, the costs to the payee of obtaining and running a motor vehicle, including repairs and standing costs, are prescribed payments for the purpose of section 71C of the Act. The Child Support Guide at 5.3.1 states that for a vehicle cost to be consider a prescribed non-agency payment, the payee must have an obligation to pay the costs of obtaining and running the motor vehicle, including payments that are necessary to keep the vehicle on the road and to maintain its safety. If the payee is a party to a loan or lease agreement for a vehicle, the costs may include the payee's share of lease payments or loan repayments.

   [1] Subsection 5(2) of the Child Support (Assessment) Act 1989 provides that a person has regular care of a child if the person has at least 14% but less than 35% care of the child.

5. Section 71D of the Act provides that consideration be given to whether there are circumstances to suggest that the payment should not be credited.

What information has been provided?

1. The father has advised that he and the mother had a private arrangement for child support that he pay her $200 and she could use his car, which he fully paid through his work at $330 each week. This arrangement was made by text message and was equivalent to the first child support amount of $530 each week, referring to the first child support assessment after the mother’s request for Child Support collection was accepted on 2 August 2023. The father advised that he also paid school fees for the oldest child and swimming fees for the middle child. He stated the oldest child was going to a different public school which cost four times the amount of the other children’s school, and that the mother was paying for the other children’s school fees, but he was still paying much more. When the oldest child stopped attending school in April 2023, he advised the mother that he would stop paying the extra $100 towards the school fees. He asserted that around this time the mother reported he was not paying the correct amount of child support and that the lease car was not included, after having followed this arrangement for more than a year. In support of his claims, the father provided payslips that show $330 was being deducted from his weekly pay for the lease car as well as bank statements showing $200 weekly transfers to the mother for the period 6 June 2023 to 23 August 2023. He also provided a copy of text messages with the mother, including a message of 7 June 2022 stating that he had transferred $400, comprising $200 for food, $35 health insurance, $50 swimming lessons and $115 for the older child’s school. It also stated that the transfer was on top of $334 a week he pays for the car she drives, $40 for phones and $15 for Netflix. The mother responded with ‘Thanks’. The lawyer’s letter of 29 June 2023 stated that the father’s post-separation financial contributions to the mother were about $250 weekly for maintenance, $330 weekly for the lease of the car which the mother drives, and $70 weekly for the mother’s phone account. The father asserted that it was 100% the mother’s intention for the car lease payments to be in lieu of child support.

2. The mother advised that there was no mutual intention that the car lease payments were in lieu of child support. She said that when they first separated in 2022, Child Support advised that an amount of around or over $500 for child support should be paid. The Child Support papers indicate that the registered child support assessment commenced on 19 May 2022 and that the parties had a private collection arrangement until August 2023, when Child Support agreed to collect child support from 16 June 2023. The mother advised that when they separated, they had reached an agreement based on the earlier child support amount, and that she was happy to receive $350 to allow the father pay for the petrol and other costs for driving their other car, as she and the children had moved into her mother’s house where she did not pay rent nor have many outlays. Further, the mother advised the car lease was in the father’s name and part of his salary sacrificing, and he allowed her to use the car to transport the children as he would not let her use the other car that had been paid off. She asserted that in April 2023, the father started paying her $200 weekly in child support which was less than the agreed $350 each week but let her continue to use the lease car while he paid the lease payments until he sold the car in late August 2023. To support her claims, she provided text messages exchanged with the father including a message from 18 April 2023 where the father said that as the older child was no longer in school, he would only be transferring $250 weekly which he said was still over the amount required when taking into account the car and phone payments on top of the cash payment. He said that due to an extra phone bill which the older child could pay her back, he would be only transferring $150 a week until the bill is paid, being seven weeks from that week. The mother responded that he did not get to just decide to lower his child support and that if he did not wish to pay the amount agreed, then she would go through Child Support. The father stated the school fees were on top of the child support and that he did not need to pay for the older child’s school fees of $100 a week when she was not going to school. The mother stated that he did not pay anything above child support which was $500 each week and they had a private arrangement for $350. At the hearing, the mother advised that she did not keep any text messages from 2022, which would have shown what had actually been agreed between the parties at the time they had separated.

Can the payments be considered to be non-agency payments or prescribed non-agency payments?

1. The father has made an application to credit 11 payments of $330, totalling $3,630, for a lease vehicle as non-agency payments. The father asserts that the mother had agreed that he pay her $200 each week and pay the car lease, which was to be in lieu of child support, which the mother disputes. The parents separated in 2022 and have had a registered child support case from 19 May 2022. They had a private arrangement where child support was paid directly between themselves. The exact details of the private agreement have not been provided, but the father provided a copy of a text message that he sent to the mother on 7 June 2022, which stated that he had transferred $400 for food, health insurance, the middle child’s swimming lessons and the older child’s school fees. The message says the $400 was in addition to the $334 each week he pays for the car the mother drives, $40 for phones and $15 for Netflix. The father asserts that the parties had agreed that he pay $200 each week to the mother and make car lease payments of $330 each week, and that these amounts equalled the $530 he was required to pay in child support each week. He also provided a letter from his lawyers stating that he was paying $250 weekly for maintenance and $330 weekly for the car lease.

2. The information before me, however, suggests otherwise. The text message from 7 June 2022 indicates that he was paying $400 each week to the mother. The mother also provided text messages from April 2023, prior to her requesting Child Support collect the child support payments from the father, that they had agreed that he pay her $350 each week in child support. She asserted that she had agreed to receive a lower amount of child support as she was not paying any rent and her outlays were low when they had initially separated, and that the father could use the remainder to pay for petrol and maintenance of driving the other car. She also stated that the car lease payments were part of the father’s salary sacrifice at work. As mentioned above, I do not have exact details of the agreement that was made in 2022, but the arrangement does not appear to be only $200 or $250 a week for child maintenance. Rather, the evidence indicates the father paid $400 weekly to the mother in June 2022, and that was in addition to the car lease payments and other payments he made. I consider that it was more likely the arrangement was for the father to pay $350 weekly for maintenance.

3. Further, with the full child support liability being around $500 weekly, I am unable to be satisfied that the car lease payments of $330 weekly were intended to be in lieu of the child support payment. In particular, the weekly amount of the car lease payments of $330 and the agreed amount of $350 weekly for maintenance, is not equivalent to the weekly child support liability. While the father may have wished for the car lease payments to be in lieu of child support, that was not what the mother had understood or intended. I am therefore satisfied that there was no mutual intention by the parties for the payments to be in satisfaction of the child support liability.

4. As the car lease payments were not made directly to the mother, and there was no mutual intention by the parties, I am not satisfied the requirements of section 71 of the Act are met.

5. Section 71A of the Act involves payments made to third parties. While the father has made payments towards the car lease, as the mother had not agreed for the payments to be a complete or partial satisfaction of the child support liability, pursuant to section 71A of the Act, I am not satisfied the payments totalling $3,630 can be credited against the liability as non-agency payments.

6. Regulation 19(h) prescribes vehicle costs where the payee has an obligation to pay for costs of obtaining and running the motor vehicle. The car lease was solely being repaid by the father through weekly deductions from his salary. Paragraph 71C(1)(a) is satisfied as the father has made payments of the child support liability to the mother. However, as the mother was not a party to the car lease agreement nor making payments towards the car lease, she cannot be considered to have any costs of obtaining and running the car, and therefore the payments are not prescribed payments in accordance with the regulations for the purposes of paragraph 71C(1)(b) of the Act. Further, as the father has 14% care of the younger children since 19 May 2022, pursuant to subsection 5(2) of the Child Support (Assessment) Act 1989, he has had regular care of the younger children since that date. As he did not have less than regular care of the children, the requirements of paragraphs 71C(1)(ba) and (d) of the Act have also not been satisfied. Accordingly, the amounts cannot be credited as prescribed non-agency payments.

7. I determine that the 11 payments of $330, totalling $3,630, made by the father do not satisfy the requirements of sections 71, 71A or 71C of the Act and therefore cannot be credited towards his child support liability as non-agency or prescribed non‑agency payments. As the payments are not to be credited, I do not need to consider the requirements of section 71D of the Act.

DECISION

The decision under review is affirmed.