Abel and Rachels (Child support) - [2020] AATA 5576

Abel and Rachels (Child support) [2020] AATA 5576 (19 November 2020)

DIVISION:Social Services & Child Support Division
REVIEW NUMBER:  2020/SC019986
APPLICANT:  Mrs Abel
OTHER PARTIES:  Child Support Registrar
Mr Rachels

TRIBUNAL:Member M Douglas
DECISION DATE: 19 November 2020
DECISION:

The decision under review is affirmed.

CATCHWORDS

CHILD SUPPORT – particulars of the administrative assessment – estimate of income – whether the estimate should have been refused – estimate of income accepted – decision under review affirmed

Names used in all published decisions are pseudonyms. Any references appearing in square brackets indicate that information has been omitted 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

Mrs Abel and Mr Rachels are the parents of [the child]. A child support assessment has issued for [the child] requiring Mr Rachels to pay child support to Mrs Abel.
The child support assessment that issued for the child support period commencing 1 September 2019 used an adjusted taxable income for Mr Rachels of $112,365. On 24 March 2020 Mr Rachels elected that his adjusted taxable income for the remainder of the financial year be $29,982, which reflected what he estimated his income would be for the remainder of the year when annualised. Services Australia, being the government department through which the Registrar acts, accepted his estimate and on 6 April 2020 amended the assessment such that for the period from 24 March 2020 to 30 June 2020 it was calculated on an adjusted taxable income for Mr Rachels of $29,892.
On 29 July 2020 Mrs Abel objected to that decision. Her objection was lodged out of time; however, Services Australia granted her an extension until 29 July 2020 within which to lodge her objection.
On 28 September 2020 Services Australia disallowed her objection. Mrs Abel then applied to the Tribunal for a review of that objection decision.
The Tribunal heard her application on 17 November 2020. She and Mr Rachels participated in that hearing by telephone. They both gave sworn oral evidence. The Tribunal has had regard to that evidence.
The Tribunal, at the hearing, required Mr Rachels to provide, subsequent to the hearing, his payslip that his employer, [Employer 1], issued to him for the pay period ending 26 March 2020 and his payslips for last three months of 2019 financial year. He did so. The Tribunal has had regard to those documents and also to the documents Services Australia provided to the Tribunal in accordance with its obligation under subsection 37(1) of the Administrative Appeals Tribunal Act 1975.

CONSIDERATION

Subsection 43(1) of the Child Support (Assessment) Act 1989 (the Act) stipulates the components that are to comprise a parent’s adjusted taxable income. Those components include the parent’s taxable income from the financial year preceding the commencement date of a child support period. The other components listed within subsection 43(1) are not relevant to this case.
Subsection 43(1)…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2020] AATA 5576
Decision Date

CaseChat Overview and Summary

This matter concerned a review by the Administrative Appeals Tribunal (AAT) of a decision by the Child Support Registrar regarding child support payments between Mrs Abel and Mr Rachels for their child. The dispute arose from Mr Rachels's election to change his estimated adjusted taxable income for the remainder of the 2020 financial year, which resulted in an amended child support assessment. Mrs Abel objected to this amended assessment, and her objection was disallowed by Services Australia, leading to her application for review by the Tribunal.

The primary legal issue before the Tribunal was whether Services Australia had erred in accepting Mr Rachels's election regarding his adjusted taxable income for the remainder of the financial year, and consequently, whether Mrs Abel's objection should have been allowed. This required the Tribunal to consider the provisions of the Child Support (Assessment) Act 1989, specifically subsections 43(1) and 60(1), which govern the calculation of adjusted taxable income and allow for income estimates under certain circumstances. The Tribunal also had to consider its discretion under subsection 63AA(2) to refuse an income election if the estimated income was considered to be less than the likely actual income.

The Tribunal reasoned that subsection 60(1) permits a parent to elect their estimated income if it is less than 85% of their previous financial year's income, and that such an estimate requires a forecast of likely income for the remainder of the tax year. While Services Australia did not initially require verification of Mr Rachels's estimate, the Tribunal did. Upon reviewing Mr Rachels's payslip for the period ending 26 March 2020, the Tribunal noted that his average fortnightly income extrapolated to an annual figure slightly higher than his elected estimate. However, the Tribunal also acknowledged that Mr Rachels would likely incur deductible expenses, making his elected estimate a reasonable forecast. Consequently, the Tribunal found that Services Australia was correct in not exercising its discretion under subsection 63AA(2) to refuse the election.

The Tribunal affirmed the decision of Services Australia to accept Mr Rachels's income election and amend the child support assessment accordingly. Therefore, Mrs Abel's objection was disallowed, and the decision under review was affirmed.

Orders