Abel and Rachels (Child support)

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.