Abrams and Odell (Child support)

[2021] AATA 5030

Abrams and Odell (Child support) [2021] AATA 5030 (11 November 2021)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2021/MC022278

APPLICANT:  Ms Abrams

OTHER PARTIES:  Child Support Registrar

Mr Odell

TRIBUNAL:Senior Member R Ellis

DECISION DATE:  11 November 2021

DECISION:

The decision under review is affirmed.

CATCHWORDS

CHILD SUPPORT – non-agency payments – prescribed payments for school expenses – payments correctly credited – 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

1. Ms Abrams and Mr Odell are the parents of [Child 1] (born December 2010) and [Child 2] (born August 2013).  There has been a child support assessment in place since 27 July 2020 with collection by the Child Support Agency from 21 August 2020.  Mr Odell is currently the parent liable to pay child support under the assessment.

2. From 1 November 2020 the child support assessment reflected that the children were in the 100 per cent care of Ms Abrams.

3. On 13 April 2021 Mr Odell applied to the Child Support Agency for four payments made on 16 November 2020, 21 January 2021, 16 February 2021 and 16 March 2021 totalling $2,673.90 for school fees, one payment made on 20 January 2021 of $688 for school books and one payment made on 4 December 2020 of $680 for podiatry costs as non-agency payments.

4. On 13 April 2021 the Child Support Agency made the decision to credit three payments made on 16 November 2020, 21 January 2021 and 16 February 2021 totalling $2,010.60 for school fees, one payment made on 20 January 2021 of $688 for school books and one payment made on 4 December 2020 of $680 for podiatry costs as prescribed non-agency payments.

5. The Tribunal notes that the fourth payment for school fees made by Mr Odell on 16 March 2021 was the subject of a separate decision made by the Child Support Agency.  This matter is not before the Tribunal.

6. On 26 May 2021 Ms Abrams objected to this decision and on 13 August 2021 the Child Support Agency disallowed the objection (the objection decision).

7. On 9 September 2021 Ms Abrams applied to the Administrative Appeals Tribunal (the Tribunal) for a review of the objection decision.

8. The Tribunal conducted a hearing into the application on 11 November 2021.  Ms Abrams and Mr Odell gave evidence on affirmation by conference telephone.  The Child Support Agency provided the Tribunal and the parties with papers relevant to the review (151 pages).

ISSUES

1. The statutory provisions relevant to this review are contained in the Child Support (Registration and Collection) Act 1988 (the Act).

2. When a child support liability is registered under the Act for collection, the amount payable is a debt due to the Commonwealth and must be paid to the Child Support Agency not the payee.

3. In some circumstances the Child Support Agency may credit payments made directly to a payee or to a third party against a child support liability that is registered for collection (sections 71, 71A or 71C of the Act).  The Child Support Agency refers to the credits under sections 71 and 71A as ‘non-agency payments’.  Credits under section 71C are known as ‘prescribed non-agency payments’ as this section applies to payments of the kind specified in section 19 of the Child Support (Registration and Collection) Regulations 2018 (the Regulations).

4. Section 71C of the Act provides a mechanism whereby payments made by a liable parent to the payee or to another person for items specified in the Regulations may be taken into account in partial satisfaction of the liable parent’s child support liability. A number of specific criteria must be satisfied for this provision to apply. Even where all the criteria are met, there is still a discretion in section 71D of the Act to refuse to credit amounts that would otherwise be able to be credited against the liability.

5. The issue which arises in this case is whether or not any of the five payments made by Mr Odell can be accepted as non-agency payments and credited against his child support liability.

CONSIDERATION

1. Ms Abrams told the Tribunal that Mr Odell had paid all additional costs relating to the children since the parents separated.  She said this included school fees, school books and specialist medical costs.  Ms Abrams said it was her belief that Mr Odell had agreed to meet these costs in addition to paying child support.  Ms Abrams said she did not believe that Mr Odell could claim these payments in lieu of child support.

2. Ms Abrams said Mr Odell had stopped paying these additional costs following their first court hearing regarding financial matters because the outcome was not what he expected.  Ms Abrams said she was the sole carer of the children and was meeting all their extra costs with no assistance from Mr Odell.  Ms Abrams pointed out that deducting the school fees and other costs from her child support had placed her in hardship.

3. The Tribunal notes in evidence from the Child Support Agency interim orders issued by the Federal Circuit Court of Australia dated [in] April 2021.  There is nothing in the orders relating to costs associated with the children’s schooling or medical expenses.

4. Ms Abrams told the Tribunal she did not dispute that Mr Odell had met the payments under consideration for school fees and school books.  She said both children were attending [a named college] and had done so since Prep.  Ms Abrams said Mr Odell had told her he would continue paying all their education costs and she did not think claiming these back as non-agency payments was now fair.  She added that, at the very least, he should only be able to claim half these costs.

5. Ms Abrams said [Child 1] and [Child 2] had been referred to the podiatrist by a GP as they both required specialist orthotics.  She said Mr Odell had paid for the orthotics but she was uncertain if the cost was exclusive of any rebate from Medicare.

6. Mr Odell told the Tribunal there was no agreement between the parents that he would meet the children’s education and other expenses as well as paying child support.  He said during discussions with Ms Abrams he had initially agreed to meet these costs but only on the understanding they came to a private arrangement about child support.  He said Ms Abrams had declined and instead decided to seek an assessment through the Child Support Agency.  Mr Odell said while he respected her choice he had informed Ms Abrams that he could not continue to pay child support as well as all other costs.

7. Mr Odell confirmed he had met the full amount of the school fees and school books under consideration.  He said he could not claim the orthotics through Medicare and the $680 was his out-of-pocket cost.

8. It is not in contention and the parents agree that Mr Odell made payments on 16 November 2020, 21 January 2021 and 16 February 2021 totalling $2,010.60 for school fees, a payment on 20 January 2021 of $688 for school books and a payment on 4 December 2020 of $680 for podiatry costs for the children.

9. Section 71A of the Act provides for payments made by the payer of an enforceable maintenance liability to a third party to be credited against the amount payable under the child support liability. The amount paid by the payer to the third party must partially or completely satisfy a debt owed by the payee, the payer or both the payer and the payee (paragraph 71A(1)(a)).  It must be the intention of both parties that the amount paid, or part of the amount paid, be credited against the payer’s enforceable child support liability in relation to the child support enforcement period (paragraph 71A(1)(c)).

10. The Tribunal is satisfied the payments made by Mr Odell for school fees, school books and podiatry costs were not intended by both parents to be in lieu of child support.  The Tribunal finds the payments made by Mr Odell cannot, therefore, be considered as non-agency payments under section 71A of the Act.

11. Where such payments cannot be credited under section 71A, they may be credited under section 71C even if there is no mutual intention between the parents. Section 71C was introduced to give payers more choice regarding the form in which child support is paid. It provides, subject to section 71D, for an amount to be credited against a payer’s child support liability regardless of the intention of the parents at the time the payment was made.  Under subsection 71C(1) of the Act the Child Support Agency must credit an amount when all the conditions set out in paragraphs 71C(1)(a) to 71C(1)(d) are met. 

12. The payment to be credited must be a payment of the kind specified in section 19 of the Regulations.  This section states that for the purposes of paragraph 71C(1)(b) of the Act, specified payments are payments of the following kinds in relation to an enforceable maintenance liability:

    (a)  child care costs for the child who is the subject of the enforceable maintenance liability;

    (b)  fees charged by a school or preschool for that child;

    (c)  amounts payable for uniforms and books required by a school or preschool for that child;

    (d)  fees for essential medical and dental services for that child;

    (e)  the payee’s share of amounts payable for rent or a security bond for the payee’s home;

    (f)  the payee’s share of amounts payable for utilities, rates or body corporate charges for the payee’s home;

    (g)  the payee’s share of repayments on a loan that financed the payee’s home;

    (h)  costs to the payee of obtaining and running a motor vehicle, including repairs and standing costs.

13. The Tribunal finds the payments made on 16 November 2020, 21 January 2021 and 16 February 2021 totalling $2,010.60 for school fees, the payment made on 20 January 2021 of $688 for school books and the payment made on 4 December 2020 of $680 for podiatry costs are payments of the kind specified in the Regulations.

14. The condition in paragraph 71C(1)(a) of the Act is that the payer of an enforceable maintenance liability in relation to a payment period or initial period has made one or more payments to the payee, or to another person.  The Tribunal is satisfied this is the case.

15. The condition in paragraph 71C(1)(ba) is that at the time the payment is made, the payer does not have at least regular care of any of the children to whom the relevant administrative assessment relates. It is also a condition that the payer does not have at least regular care of any of the children at the time at which the Registrar applies section 71C (paragraph 71C(1)(d)).  The Tribunal is satisfied that at the time the payments were made Mr Odell had less than 14 per cent care, or regular care, of [Child 1] and [Child 2].

16. Where the conditions in subsection 71C(1) are met, the Registrar must credit any amount that has not already been credited against the amount payable under the payer’s liability for the period, up to a maximum of 30 per cent of the amount payable for that period.

17. In this case the Tribunal finds the payments made by Mr Odell totalling $2,010.60 for school fees, the payment of $688 for school books and the payment of $680 for podiatry costs meet all the conditions set out under the Act and must, therefore, be credited under section 71C.

18. The Tribunal does not consider the exercising of the discretion set out in section 71D of the Act is warranted in the circumstances of these particular payments.

19. The Tribunal is satisfied the application made by Mr Odell on 13 April 2021 for the credit of three payments made on 16 November 2020, 21 January 2021 and 16 February 2021 totalling $2,010.60 for school fees, one payment made on 20 January 2021 of $688 for school books and one payment made on 4 December 2020 of $680 for podiatry costs should be accepted as prescribed non-agency payments.

DECISION

The decision under review is affirmed.