Aiboni and Howald (Child support)

[2024] AATA 2904

Aiboni and Howald (Child support) [2024] AATA 2904 (25 June 2024)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2024/MC027689

APPLICANT:  Mr Aiboni

OTHER PARTIES:  Child Support Registrar

Ms Howald

TRIBUNAL:Member R Anderson

DECISION DATE:  25 June 2024

DECISION:

The Tribunal sets aside the decision under review and, in substitution, decides that the discretion under section 75 of the Child Support (Assessment Act) 1989 is not to be exercised and the administrative assessment for the period 1 December 2014 to 19 January 2015 and 1 March 2016 to 10 March 2016 is not to be amended for the purpose of correcting the error in respect of the 2013/14 and 2014/15 provisional incomes of Ms Howald. 

CATCHWORDS

CHILD SUPPORT – particulars of the administrative assessment – mother’s provisional income used for two years’ calculations – tax returns submitted later – assessment now ceased and case identified for service recovery work – system error, provisional income incorrectly used and assessment updated – father’s objection disallowed – father had no knowledge of incomes and mother did not object to assessment – father met significantly more costs and amount of error insignificant – registrar not obliged to amend assessment to correct error – decision under review set aside and substituted

REASONS FOR DECISION

BACKGROUND

1. Mr Aiboni and Ms Howald are the separated parents of [the child].  The child support assessment commenced in September 2005, when [the child] was five years of age and ended at completion of his secondary education on 12 November 2018.  [The child] has been in the sole care of Mr Aiboni from the outset.  Ms Howald was always the parent liable to pay child support to Mr Aiboni and Services Australia – Child Support (Child Support) was responsible for the collection of child support from Ms Howald from November 2005. 

2. As Ms Howald had not yet lodged her 2011/12 and 2012/13 tax returns, her adjusted taxable income (ATI) for child support purposes for the child support period commencing 1 December 2014 used a provisional 2013/14 ATI equivalent to two-thirds of the male total average weekly earnings (MTAWE) in the amount of $50,909. Both parties were advised of the assessment in writing on 25 October 2014.

3. Based on new information in relation to Ms Howald’s 2013/14 income, the 2013/14 provisional income used as Ms Howald’s 2013/14 ATI in the administrative assessment commencing 20 January 2015 was altered to $37,452. Both parties were advised of the assessment in writing on 25 October 2014.

4. Based on new information in relation to Ms Howald’s 2013/14 income, the 2013/14 provisional income used as Ms Howald’s 2013/14 ATI in the administrative assessment commencing 13 February 2015 was altered to $36,951. Both parties were advised of the assessment in writing on 13 February 2015.

5. Child Support wrote to the parties on 16 January 2016 in relation to the new child support period commencing on 1 March 2016. As Ms Howald had not yet lodged her 2011/12, 2012/13 and 2013/14 tax returns, her ATI for child support purposes for the child support period commencing 1 March 2016 used a provisional 2014/15 ATI equivalent to two-thirds of the MTAWE in the amount of $51,533.

6. On 24 February 2017, Ms Howald contacted Child Support and advised that she had now lodged her tax returns in respect of 2013/14, 2014/15 and 2015/16. Based on her updated information, the 2014/15 ATI, based on Ms Howald’s 2014/15 tax return was used in the administrative assessment commencing 11 March 2016. Both parties were notified in writing on the same day.

7. Ms Howald’s ATI was based on her 2015/16 tax return for the period commencing 1 April 2017 and both parties were advised in writing on 26 February 2017. However, on 2 March 2017, Child Support accepted an estimate in respect of Ms Howald’s 2016/17 ATI from 2 March 2017 to 30 June 2017 in the amount of $0. Subsequently, Ms Howald was assessed to pay child support at the minimum annual rate of $414. Both parties were notified in writing on the same day.

8. On 6 March 2017, Child Support wrote to both parties advising that more accurate income information based on tax returns had become available in respect of Ms Howald for the 2007/08, 2011/12 and 2012/13 years.  The letters stated that the changes did not affect the current child support assessment.  On the same day Child Support wrote to the parties again and advised that the 2014/15 provisional income used in the administrative assessment of $50,909 had increased to $69,655 and the 2014/15 provisional income had changed from $51,533 to $70,489.  The child support assessments for the various periods from 1 October 2008 to 10 March 2016 were set out in the letter sent to both parties and noted that the child support payable by Ms Howald had changed. The result was a further $685.32 of child support payable to Mr Aiboni, which was subsequently collected from Ms Howald.

9. Following termination of the child support assessment on 22 November 2018, Child Support identified this case on 20 September 2023 for service recovery work.  This was because a 2013/14 provisional income for Ms Howald had been created and incorrectly used in the administrative assessment in respect of the period 1 December 2014 to 19 January 2015.  Furthermore, a 2014/15 provisional income for Ms Howald had been created and incorrectly used in the administrative assessment in respect of the period 1 March 2016 to 10 March 2016. Both parties were notified in writing on the same day and advised that a system error had caused the administrative error and that no further action would take place unless Child Support were contacted by one of the parties.

10.  Ms Howald responded to Child Support, requesting the error be corrected and the overpayment of $685.32 be collected.  Mr Aiboni was advised that usually when an error is identified in a child support assessment it is corrected.  He was told he has objection rights.

11.  On 2 November 2023, Child Support corrected the error and notified both parties of the updated child support assessment in respect of the period 1 December 2014 to 19 January 2015 and 1 March 2016 to 10 March 2016.  This resulted in Mr Aiboni now owing Ms Howald the amount of $685.32.

12.  Mr Aiboni contacted Child Support on 3 November 2023 and objected to the decision of 2 November 2023.  Mr Aiboni lodged a written objection on 28 November 2023.  The objection was subsequently disallowed by an objections officer on 16 February 2024.

1. On 22 March 2024, Mr Aiboni lodged an application with this Tribunal for an independent review of the objections officer’s decision. The matter was heard on 25 June 2024. Mr Aiboni participated by conference telephone and gave oral evidence to the Tribunal on affirmation. Ms Howald chose not to participate in the hearing.  However, she chose to remain a party to the proceedings.

2. The Tribunal considered information in the documents provided by Child Support in accordance with the Administrative Appeals Tribunal Act 1975 numbered 1 to 336. Mr Aiboni confirmed his receipt of these documents.

ISSUE

1. The statutory provisions relevant to this review are contained in the Child Support (Assessment) Act 1989 (the Act).

2. The issue which arises in this case is whether or not it is appropriate for Child Support to amend the administrative assessment for the purpose of correcting the system error that occurred in 2017?

CONSIDERATION

1. Relevantly, subsection 75(1) of the Act provides that the Registrar, (or the Tribunal in its shoes) may, at any time, amend any administrative assessment by making alterations as the Registrar considers necessary to give effect to the Act.

2. Furthermore, without limiting subsection 75(1), paragraph 75(4)(a) of the Act provides that the Registrar may amend any administrative assessment for the purpose of correcting any error or mistake, whether or not it was made by the Registrar.

3. The Tribunal notes that all provisions under section 75 of the Act provide for discretion on the part of the decision maker.  That is, the wording is not that the Registrar MUST amend the administrative assessment,  rather, the wording is that the Registrar MAY amend the administrative assessment.

4. In this case it is undisputed that the incorrect 2013/14 and 2014/15 provisional incomes were applied to Ms Howald for the periods 1 December 2014 to 19 January 2015 and 1 March 2016 to 10 March 2016 respectively as a direct result of a child support system error.

5. According to the hearing papers, the decision maker correctly records in notes on 30 October 2023 that section 75 “provides discretion to not correct an error or mistake.”  The decision maker goes on to note that Child Support’s position is to correct the error, provided there are not special or prescribed circumstances that would make it inappropriate to do so.

6. The decision refers to Child Support policy as set out in Operational Blueprint (OB) Lodgement rules for income in CUBA 277-07010050 as follows:

   Once the tax assessment for the last relevant year of income (LRYI) has been received, no new provisional income can be created for that LRYI. The system may incorrectly create  new provisional incomes after the tax assessment has been received for that year, particularly when multiple tax assessments are received on the same day. These incomes will need to be investigated and any incorrect provisional incomes removed.

7. While the OB does not appear to allow for any discretion, at 2.9.5 of the Child Support Guide (the Guide) it states that the Registrar is not obliged to amend an assessment to correct an error or mistake. At 6.9 of the Guide, it states that the Registrar will generally not consider whether or not to correct an error if the parents were aware of the error and have not requested that the error be corrected, or not corrected, within a reasonable timeframe.

8. The Guide states that the Registrar can consider circumstances including, but not limited to, the wishes of the affected parents, the integrity of the child support scheme, and the impact on each parent of correcting or not correcting the error. Furthermore, error correction decisions are to be made in the context of the particular circumstances of the case. The Guide sets out the following considerations:

   The Registrar may be more likely to decide to correct an error where:

   ·It s an obvious error of fact and can be fixed simply

   ·It impacts the current assessment or liability

   ·Both parents want the error corrected

   ·One parent wants the error corrected and the other parent does not want it corrected

   ·The Registrar caused the error or substantially contributed to it

   ·One parent wants the error corrected and the other parent cannot be contacted.

   The Registrar may be less likely to decide to correct an error where:

   ·Neither parent wants the error to be corrected

   ·There will be no material change to an assessment or financial impact as a result of the correcting of the error

   ·Only one of the affected parents is contactable and they do not want the error corrected

   ·There is no utility to correcting the error, or it would be inappropriate to correct -  such as when the error is the subject of merits or judicial review proceedings.

9. The Tribunal notes that while the decision maker suggested that special or prescribed circumstances should be considered, there is no mention of such considerations in the Guide.  Furthermore, there is no indication in the hearing papers that the circumstances of the parents were discussed or considered by the decision maker.  Mr Aiboni confirmed that there was no discussion with him about his circumstances.

10. While the Tribunal is not bound by such policy, in Drake v Minister for Immigration and Ethnic Affairs (1979) 2 ALD 60 the Full Federal Court held that a Tribunal should take into account relevant government policy which is not inconsistent with the provisions or objects of the legislation. In this case the Guide states that considerations are not limited to those listed in the Guide. The Tribunal considers that the individual circumstances of the parents are also relevant considerations.

11. Mr Aiboni gave oral evidence that he was in receipt of a disability support pension through the entirety of [the child]’s schooling.  He further stated that he always lodged his tax returns on time if he earned an income, otherwise his accountant would advise the Australian Taxation Office that he was not required to lodge a tax return.  According to the income screens, Mr Aiboni’s ATI was always below the relevant self-support amount.

12. Mr Aiboni’s now wife always worked full-time and he cared for [the child].  He told the Tribunal that they were able to meet the costs of the household, in addition to meeting [the child]’s discretionary costs.  Mr Aiboni gave oral evidence that [the child] had been an excellent student and tried his hand at many activities during his school years, including [Activities]. Mr Aiboni gave oral evidence that he and his wife paid in the vicinity of $10,000 for orthodontic treatment for [the child] in his last two years of school. It is evident that Mr Aiboni and his wife met many costs for [the child] that were not considered in the child support assessment.

13. Since completing his secondary education, [the child], who is now 24 years of age, resides interstate and is [an occupation 1].  Mr Aiboni further stated that after [the child] moved out of home he began working as [an occupation 2]. 

14. According to the income screens, Ms Howald’s ATI in the relevant periods was more than the self-support amount.  When the child support assessment ended in November 2018, Ms Howald had no child support arrears and had been consistently meeting the child support liability on a monthly basis.

15. In response to a question from the Tribunal, Mr Aiboni stated that after having the error explained to him at hearing he can see what has occurred.  The mental drain on him due to threatening letters from Child Support in respect of collection has been great and he does not understand why the error was not investigated in relation to possible correction many years ago.  The error occurred in 2017 and it is now 2024. He does not agree that it is reasonable to amend the assessment  years later.  He told the Tribunal that Child Support intercepted his last tax return and withheld around $178.

16. The Tribunal considered whether or not it was appropriate to exercise the discretion in section 75 of the Act.  In this case Ms Howald wanted the error to be corrected and Mr Aiboni did not.  The Tribunal observed that both parents were notified of the change in Ms Howald’s 2013/14 and 2014/15 provisional incomes on 6 March 2017.  As Mr Aiboni and Ms Howald had no communication it is reasonable that Mr Aiboni would have no knowledge as to whether or not the increased provisional incomes were correct.  Conversely, Ms Howald was made aware of the increased provisional incomes and was also aware of what her actual income was, yet did not object to the assessment.  As set out in 6.9 of the Guide, if a parent was aware of the error and has not requested that the error be corrected within a reasonable timeframe, the Registrar will generally not consider whether or not to correct it.

17. While the error was caused by Child Support, as the child support assessment ended on 22 November 2018, there is no impact on any current child support assessment or liability.  The needs of [the child] have been met many years ago.  The Tribunal acknowledges that through payment of child support Ms Howald has contributed to the necessary costs of [the child] until 22 November 2018,  However, given that Mr Aiboni has had sole care of [the child] since 2005 he has met significantly more costs over and above those necessary costs which are considered in the administrative assessment, for example, [the child]’s orthodontic costs.

18. When one considers the overall child support assessment from September 2005 to November 2018 and the costs to maintain [the child], the result of the error correction in the amount of $685.32 seems to be somewhat insignificant. This is particularly so when one considers that the correction occurred more than three years after the end of the child support assessment and that Ms Howald failed to take up the opportunity in early March 2017 to object to the assessment when notified.  Furthermore, based on the explanation from Child Support that the error was triggered by lodgement of multiple tax returns on the same day, had Ms Howald lodged her tax returns in a timely manner each year, it is likely that the system error would not have occurred.

19. Accordingly, the Tribunal finds that it is not appropriate in the circumstances of this case to exercise the discretion under section 75 of the Act.  Therefore, the administrative assessment for the period 1 December 2014 to 19 January 2015 and 1 March 2016 to 10 March 2016 is not to be amended for the purpose of correcting the error in respect of the 2013/14 and 2014/15 provisional incomes of Ms Howald. This means that there is no overpayment of child support by Ms Howald.

20. It is concerning that in response to Mr Aiboni lodging an objection, prior to any investigation or objection decision being made, he was advised by Child Support that while he has objection rights, his objection would be disallowed “as the best incomes have been used” and he can choose to withdraw.

DECISION

The Tribunal sets aside the decision under review and, in substitution, decides that the discretion under section 75 of the Child Support (Assessment Act) 1989 is not to be exercised and the administrative assessment for the period 1 December 2014 to 19 January 2015 and 1 March 2016 to 10 March 2016 is not to be amended for the purpose of correcting the error in respect of the 2013/14 and 2014/15 provisional incomes of Ms Howald.