Aitkens and Aitkens (Child support)

[2020] AATA 581

Aitkens and Aitkens (Child support) [2020] AATA 581 (6 February 2020)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2019/HC017763

APPLICANT:  Mr Aitkens

OTHER PARTIES:  Child Support Registrar

Mrs Aitkens

TRIBUNAL:Member A Schiwy

DECISION DATE:  06 February 2020

DECISION:

The decision under review is affirmed.

CATCHWORDS

CHILD SUPPORT – particulars of the administrative assessment – whether parent is a resident of Australia – domicile and permanent place of abode – decision 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 Aitkens and Mrs Aitkens are the parents of two children aged seven and nine years.  A child support case has been registered since January 2018.  Mr Aitkens has been assessed to pay child support to Mrs Aitkens.  This application is about whether Mr Aitkens has ceased being an Australian resident and therefore no longer liable to pay child support to Mrs Aitkens.

2. On 30 January 2019 Mr Aitkens contacted the Department of Human Services (‘Child Support’) and notified them that he was living in [Country 1].  [Country 1] is not a reciprocating jurisdiction for child support purposes.  On 5 July 2019 Child Support decided that Mr Aitkens remained a resident of Australia for child support purposes (‘the original decision’).

3. On 12 July 2019, Mr Aitkens objected to the original decision and an extension of time was granted to lodge his objection.  On 1 November 2019 a Child Support objections officer disallowed the objection. 

4. Mr Aitkens applied to the tribunal on 4 November 2019 for a review of the decision of the objections officer.

5. A hearing was held on 6 February 2020.  Mr Aitkens and Mrs Aitkens spoke to the tribunal via teleconference and gave evidence on affirmation.  

6. In considering this matter the tribunal took into account the oral evidence of the parents; and the relevant documentation provided by the Child Support Registrar (numbered 1 to 274), and from Mr Aitkens (A1 to A15).  Copies of the numbered documents were provided to all parties however Mr Aitkens stated that he did not receive the numbered ‘A’ documents.  As these were the documents provided by Mr Aitkens the tribunal was satisfied that he had seen the documents prior to the hearing. 

ISSUES

1. The law relevant to this review is contained in the Child Support (Assessment) Act 1989 (‘the Act’).

2. Section 12 of the Act provides for child support terminating events.  A child support terminating event can happen, in relation to the parent liable to pay child support, if the person ceases to be a resident of Australia, unless they reside in a reciprocating jurisdiction to which international maintenance arrangements can apply.  In this case, Mr Aitkens has submitted that he was living in [Country 1] and now [Country 2].  Neither of these countries are reciprocating jurisdictions.

3. Therefore, if Mr Aitkens is not a resident of Australia, a child support terminating event will have occurred and Mr Aitkens’ liability to pay child support to Mrs Aitkens for the two children will have ended.

4. The issue for the tribunal to determine is whether Mr Aitkens is a resident of Australia for child support purposes.

CONSIDERATION

1. Section 10 of the Act provides that for the purposes of the Act a person is a resident of Australia on a day if on that day the person is a resident of Australia for the purposes of the Income Tax Assessment Act 1936.

2. Section 6 of the Income Tax Assessment Act 1936 sets out the definition of a resident or a resident of Australia.  The Income Tax Assessment Act 1936 establishes four tests to determine whether an individual is a resident. The relevant tests are:

• residence according to ordinary concepts;

• the 183 day test;

• the Commonwealth superannuation fund test; and

• the domicile and permanent place of abode test.

1. In relation to the concept of residence according to ordinary concepts, the Preamble to Taxation Ruling IT 2650 indicates that the dictionary meaning of the word to reside is relevant, stating:

   The ordinary meaning of the word “reside”, according to the Shorter Oxford English Dictionary, is to dwell permanently, or for a considerable time, to have one’s settled or usual abode, to live in or at a particular place.

2. In relation to domicile, Taxation Ruling IT 2650 refers to the relevance of section 10 of the Domicile Act 1982, which provides:

   The intention that a person must have in order to acquire a domicile of choice in a country is the intention to make his or her home indefinitely in that country.

3. Taxation Ruling IT 2650 goes on to state:

   In determining a person’s domicile for the purposes of the definition of “resident” in subsection 6(1), it is necessary to consider the person’s intention as to the country in which he or she is to make his or her home indefinitely. Thus, a person with an Australian domicile but living outside Australia will retain that domicile if he or she intends to return to Australia on a clearly foreseen and reasonably anticipated contingency e.g., the end of his or her employment. On the other hand, if that person has in mind only a vague possibility of returning to Australia, such as making a fortune (a modern example might be winning a football pool) or some sentiment about dying in the land of his or her forebears, such a state of mind is consistent with the intention required by law to acquire a domicile of choice in the foreign country - see In the Estate of Fuld (No. 3)(1968) p.675 per Scarman J at pp. 684-685 and Buswell v.I.R.C (1974) 2 All E.R. 520 at p. 526.

4. In relation to the concept of a permanent place of abode, Taxation Ruling IT 2650 cites the leading case on this issue, Federal Commissioner of Taxation v Applegate [1979] FCA 37, and states:

   The word “permanent” in subparagraph (a)(i) of the definition of “resident” does not have the meaning of everlasting or forever but is used in the sense of being contrasted with temporary or transitory (Applegate 79 ATC at p.4314; 9 ATR at p.907).

   It is clear from Applegate and Jenkins that a person’s permanent place of abode cannot be ascertained by the application of any hard and fast rules. It is a question of fact to be determined in the light of all the circumstances of each case. Some of the factors which have been considered relevant by the Courts and Boards of Review/Administrative Appeals Tribunal and which are used by this Office in reaching a state of satisfaction as to a taxpayer’s permanent place of abode include:

   (a)     the intended and actual length of the taxpayer's stay in the overseas country;

   (b)     whether the taxpayer intended to stay in the overseas country only temporarily and then to move on to another country or to return to Australia at some definite point in time;

   (c)      whether the taxpayer has established a home (in the sense of dwelling place; a house or other shelter that is the fixed residence of a person, a family, or a household), outside Australia;

   (d)     whether any residence or place of abode exists in Australia or has been abandoned because of the overseas absence;

   (e)    the duration and continuity of the taxpayer’s presence in the overseas country; and

   (f)      the durability of association that the person has with a particular place in Australia, i.e. maintaining bank accounts in Australia, informing government departments such as the Department of Social Security that he or she is leaving permanently and that family allowance payments should be stopped, place of education of the taxpayer’s children, family ties and so on.

5. The tribunal noted that Child Support’s policy in relation to residency is consistent with the taxation ruling (refer to the Child Support Guide at part 1.6.1).

Evidence

1. It is not disputed that:

   ·      Mr Aitkens left Australia on 3 April 2019.

   ·      Prior to leaving Australia Mr Aitkens owned a residence and an adjoining block of land; and another block of land.  He rented out the residence when he left Australia and has since sold that residence and adjoining block of land.

   ·      Mr Aitkens has worked [in an occupation] and owns [Vessel 1] and his self-managed superannuation fund has [Licence 1].

2. The following evidence was obtained from the Child Support papers:

   ·      In August 2018 an administrative assessment issued based on Mr Aitkens’ taxable income of $78,442.  On 6 September 2018 Mrs Aitkens lodged an application to make a departure determination (change of assessment) and on 17 December 2018 Child Support decided to vary Mr Aitkens’ child support liability to $17,650 per annum.  Mr Aitkens objected to this decision on 21 January 2019. 

   ·      On 18 January 2019 a Commonwealth Bank loan officer approved a loan application made by Mr Aitkens for $72,000.  It was signed off by the recommending officer on 18 January 2019 and approved on 11 February 2019.  On the application he stated he was employed by [Company 1] and earning $150,684 per annum.  In addition to real estate Mr Aitkens stated that he had [Vessel 1] valued at $80,000.

   ·      On 27 February 2019 Mr Aitkens was sent an offer of employment (name of employer not provided) on a [specified] basis (six weeks on, four weeks off) with the position located in [Country 2].  Mr Aitkens redacted the amount of salary noted on the offer of employment.  His point of hire was deemed to be [a city].

   ·      On 1 March 2019 Mr Aitkens provided a letter dated 1 March 2019 from Mr Aitkens to his employer stating he was resigning from 27 March 2019.  He also provided a letter from [Dr A] dated 1 March 2019 stating that Mr Aitkens suffers from morbid obesity and hypertension and that his [specified] lifestyle did not help with the management of those conditions.  [Dr A] stated that it would be in Mr Aitkens’ best interest to take a break from [Industry 1] to improve his medical conditions.  (This letter was written after Mr Aitkens had accepted a [specified] job in [Country 2]).

   ·      On 1 March 2019 Mr Aitkens’ mother signed a statement acknowledging she was a trustee and director of Mr Aitkens’ superannuation fund.

   ·      On 12 March 2019 Mr Aitkens spoke to a Child Support officer and stated he would be ceasing his employment on 27 March 2019 and shortly after would be moving to a farm in [Country 1].  He wanted his income to be reflected as nil from 28 March 2019.  He was informed that an income estimate would not override the change of assessment in place and he would need to lodge a new change of assessment application.  He said he did not want to proceed with the objection as he was leaving Australia to a non-reciprocating jurisdiction and would not be wasting time or money sorting out his child support assessment.

   ·      On 15 March 2019 Mr Aitkens contacted Child Support again about lodging an estimate of income.  He said he was moving to [Country 1] permanently due to his health and would be finishing work in three days (on 17 March 2019) and leaving for [Country 1] on 3 April 2019.

   ·      On 17 March 2019 Mr Aitkens ceased employment with [Company 1] and had earned $132,697 from 1 July 2018 to 17 March 2019 (equating to approximately $187,000 per annum).

   ·      Mr Aitkens provided a letter to Child Support dated 18 March 2019 from [a doctor] stating that Mr Aitkens suffers from hypertension and a significant degree of work stress and this condition required him to take indefinite leave from his [specified] occupation to manage his heath.  (This letter was written after Mr Aitkens had accepted a [specified] job in [Country 2]).

   ·      On 19 March 2019 the objection decision relating to the change of assessment decision was made and affirmed the amount of child support payable to be $17,650.

   ·      On 20 March 2019 Mr Aitkens contacted Child Support and stated that he is moving and will not be working.  He said he expected the current care percentage to remain the same as he will travel to Australia multiple times a year to see the children.

   ·      On 5 April 2019 Mr Aitkens informed Child Support that he was now living in [Country 1].

   ·      On 18 April 2019 Mr Aitkens was issued with a temporary driving licence in [Country 2].

   ·      On 24 April 2019 Mrs Aitkens told Child Support that she understood that Mr Aitkens was working in [another location] and he had told the children he planned to come back to Australia six times a year.

   ·      On 9 April 2019 Mr Aitkens took out a lease on a rental property in [Country 1].  The property is located in a high rise apartment block.

   ·      On or around 3 May 2019 Mr Aitkens emailed Child Support in response to a letter sent to him on 23 April 2019 about his residency.  He said he was currently in central [Country 1] on his partner’s family’s farm.  (This appears to conflict with the fact that Mr Aitkens leased a property in the city).

   ·      On 7 May 2019 Mrs Aitkens told Child Support that she believed Mr Aitkens was only in [Country 1] nine days as he stopped taking calls from the children and said he had to catch a plane.

   ·      On 22 May 2019 Mr Aitkens signed a residency questionnaire for Child Support.  He stated he:

   ohad left Australia permanently and had applied for permanent residency in another country but had not kept a copy.

   ohe had been granted permanent residency in another country and said “have attached from [Country 1] Immigration”.   As evidence Mr Aitkens provided a receipt for notification of his address in [Country 1] to the [Country 1] government; it was not evidence of permanent residency being granted.

   ohe was not employed and he added that he was a non-resident of Australia and had no employment in Australia.

   oHe did not intend to move to another country.

   oHe was leasing a property in [Country 1] (lease agreement attached showing Mr Aitkens and [another person] had leased a unit from 7 April 2019 for one year.  The lease was signed on 27 March 2019 by Mr Aitkens.

   ·      In June 2019 Mr Aitkens told Child Support that he was living between [Country 1] and [Country 2] and he said he had a attached a [Country 2] residence permit and a copy of his [Country 1] residency stamp (same document provided previously notifying Government of his address).  He stated he had deregistered from the electoral roll, listed his property for sale, deregistered with Medicare, leased his [Licence 1] and told the ATO he was a non-resident for tax purposes. The residence permit provided for [Country 2] states Mr Aitkens can live in [Country 2] from 29 April 2019 while he was employed with a certain employer (Mr Aitkens redacted the name of the employer).  It was for 12 months.

   ·      Mr Aitkens’ superannuation fund leased its [Licence 1] to [Mr B] from July 2019 to 31 December 2019.

   ·      On 3 July 2019 Mr Aitkens told Child Support he was engaged to his new partner and would commence a [Country 1] spousal visa that would allow him to reside in [Country 1] indefinitely.  He said he considers himself a resident of [Country 1].

   ·      On 14 October 2019 Mr Aitkens leased a property in [Country 2] for 12 months.

   ·      In a letter dated 1 November 2019 Mr Aitkens stated that he now has a lease on a property in [Country 2] and his fiancé can come and stay with him.

   ·      On or around 7 November 2019 Mr Aitkens sold his residence and adjoining land with settlement due on 16 March 2020.

   ·      On 2 January 2020 Mr Aitkens’ superannuation fund re-leased [Licence 1] to [Mr B] until 31 December 2020.

3. Mr Aitkens submitted that he has sold his residence in Australia with settlement due in March 2020 and therefore it is impossible for him to be considered a resident of Australia.  He has stated that :

   ·      He and Mrs Aitkens had agreed some time ago that she would obtain work to enable him to resign from [Industry 1] work and go back to working on  [Vessel 1].

   ·      He only keeps an Australian bank account because he rents out his properties and the rent is paid into the accounts and his mortgage payments are then made.

   ·      He cannot get a permanent residency in [Country 1] unless he is married to a [Country 1] national and then has three consecutive one year visas.

   ·      He gifted his personal effects to his mother.

   ·      He has registered a motorbike in [Country 1] and has [Country 1] driving licence. 

   ·      He has a bank account in [Country 1].

4. At the hearing Mr Aitkens stated that:

   ·      In 2018 he had to pay so much out on rates, insurance and loans that he could no longer afford to live in Australia.  With his financial liabilities, including child support, he was working for no reason.  He was not earning enough to service his debts.

   ·      He decided in late December 2018 that he would leave Australia permanently and started to plan how he would go about this.  He said his planning involved deciding on where he was going to live ([Country 1]) and living off his savings. 

   ·      His doctor told him he should not work.

   ·      He was then forced to go back to work due to Child Support’s decisions about his income and residency.

   ·      He is only entitled to two month tourist visas for [Country 1] but to renew them he simply has to cross the border for five minutes and come back again.  He cannot apply for a permanent visa until he has been residing there three years.

   ·      He met his fiancé in May 2018 and she came to Australia a few times, the last being in September 2018.  During this last trip he decided he wanted to be with her and they became engaged.  They have not planned a wedding as he is being harassed by Child Support and he wants to settle this matter so he can move on.

   ·      He decided in December 2018 that he would work overseas.  He asked a friend to find him a job and he had no idea where it would be.  His friend found him jobs in [Country 2], [another country] and [another country].  He chose [Country 2] as it was the safest option.

   ·      He said at this time he was fighting with Child Support; he had provided them with medical certificates but they didn’t take them into account. (It was pointed out that the doctors’ letters provided to Child Support were not dated until after December 2018 and Mr Aitkens then said he went to the doctor in December 2018).  

   ·      He decided to live in [Country 1] and work in [Country 2]. 

   ·      He cannot live permanently in [Country 1] until he gets married.  He has decided to make [Country 2] his permanent place of residence.  He only has to have three 12 month residencies in a row and then he can apply to be permanent.  The only other requirement is to pay an application fee.

   ·      He has rented a place in [Country 2] and has a driving licence and residence permit.

   ·      His employment contract in [Country 2] is open ended.

   ·      He has not opened a bank account in [Country 2] so he does not have to pay multiple fees.  However his salary is paid into his [Country 1] bank account and he pays fees when he accesses this account in [Country 2].

   ·      His fiancé can join him in [Country 2] on a tourist visa.  She will be able to reside in [Country 2] if he sponsors her.

   ·      Mrs Aitkens noted that on a quick internet search it appeared that Mr Aitkens, if not married to a [Country 2 National], would have to have lived in [Country 2] for ten years before applying for a permanent visa.  Mr Aitkens said certain areas in [Country 2] allow you to have a sponsor and it is a corrupt country and “money talks”.

   ·      When asked why he told Child Support on 12 March 2019 that he was retiring to [Country 1] and not earning an income when he had already accepted the job in [Country 2]; Mr Aitkens said he was referring to having nil income in Australia.

   ·      When asked why he told Child Support on 20 March 2019 that he was moving and would not be working; Mr Aitkens said he was referring to not working in Australia.

   ·      Mr Aitkens said he borrowed $72,000 to build a 12 by 9 metre shed on his block of land in [a location].  When asked what the purpose of the shed was, Mr Aitkens said “because one day I will…”; he then broke off his sentence and said he built it to “put stuff in”.  The main structure was completed in July 2019 but more has to be done inside and a concrete driveway put in.  He has spent $80,000 to date.  He is using it to store [Vessel 1] and will rent it out to another person who wants to store [Vessel 1] and gear for $50 per week.  He said his own [Vessel 1] is on the market.

   ·      His superannuation fund leases out [Licence 1] for $4,000 per annum; its sale value is about $30,000.

1. Mrs Aitkens stated that, to her knowledge, Mr Aitkens has not told the children he will not be returning to Australia and he has told her that he is planning to build a house in Australia.

Discussion of evidence

1. Mr Aitkens told Child Support that his motivation for leaving Australia was to live in [Country 1] with his partner and live off his savings.  He said he was medically unable to continue with his [specified] work however it is clear that he was looking for [specified] work in December 2018.  He stated to the tribunal that his motivation for leaving Australia was because he was not making ends meet; but at the time he was on a salary of around $187,000, and in addition to his residence he owned two blocks of land, [Vessel 1] and [Licence 1] (as beneficiary of his superannuation fund).  He had mortgages of around $600,000 however these would have been easily serviceable on his salary.  It is not clear what his motivation was, however he appears to have decided to leave Australia shortly after the original decision was made about a change of assessment on 17 December 2018.  The tribunal decided that it was more likely than not that his decision was influenced by the fact that his child support assessment had been increased significantly. 

2. Mr Aitkens does not appear to have made any attempt to apply for permanent residency in either [Country 1] or [Country 2].  

3. He signed a form for Child Support stating he had a permanent visa for [Country 1] when in fact he only had a two month tourist visa.  He has since stated he needs to marry and live in [Country 1] for three years but at this stage has made no plans to marry.

4. The visa Mr Aitkens has obtained for [Country 2] is tied to his employment; he cannot remain in [Country 2] if he ceases his employment.  The tribunal noted that Mr Aitkens has stated he should not be working on a [specified] basis for medical reasons and if this is correct his ability to retain the [Country 2] job is in doubt.  His evidence about obtaining permanent residency in [Country 2] did not appear credible and after it was put to him that his statement about this was incorrect he inferred that he would be able to bribe someone to obtain permanent residency.   The tribunal did not consider this to be credible; it would appear Mr Aitkens is only in [Country 2] while he has a job there and has no intention of living there permanently. 

5. Mr Aitkens has taken steps to reduce his asset holdings in Australia however after he made the decision to go to [Country 1] he commenced building a substantial shed on his property to store [Vessel 1] he is apparently selling and to rent out for $50 per week.  The tribunal did not think it was credible that Mr Aitkens would go to the trouble and expense of doing this if he had no plans to return to Australia.  To hold onto a block of land valued at around $90,000 with an $80,000 shed; only to earn $50 per week is not credible.  Mr Aitkens also started to say the purpose of building the shed was “because one day I will…”  He then cut off his sentence.  The tribunal decided it was more likely than not that Mr Aitkens was going to say “because one day I will return to Australia”.

Findings of fact

1. After reviewing all of the evidence the tribunal found that:

   ·      Mr Aitkens has two young children residing in Australia.

   ·      Mr Aitkens has a history of operating [Vessel 1] and working in [Industry 1].

   ·      In around December 2018 Mr Aitkens decided to apply for a job working on a [specified] basis overseas; with [Country 1] as his base.  His motivation to do this appears to have been influenced by issues he has with Child Support and his assessment.

   ·      Prior to 27 February 2019 he obtained a position working on a [specified] basis in [Country 2].

   ·      Mr Aitkens decided to move temporarily to [Country 1] and live with his girlfriend/fiancé and travel back and forth to [Country 2] for work.  He moved to [Country 1] on 3 April 2019 and commenced working in [Country 2] shortly after.

   ·      Mr Aitkens has not commenced applying for permanent residency in either [Country 1] or [Country 2].

   ·      Mr Aitkens has retained a block of land in Australia and since leaving has built a substantial shed on the block.  He has not sold [Vessel 1] or [Licence 1].

   ·      Mr Aitkens is storing some personal belongings in the shed.

   ·      Mr Aitkens has informed the ATO he is not a resident for tax purposes and he has taken himself off the electoral role and deregistered from Medicare.  None of these decisions are permanent; for example Mr Aitkens, as an Australian citizen, can re-enrol at any time.

   ·      Mr Aitkens is planning to move back to Australia however it is unclear when this will be.

‘Residence’ according to ordinary concepts

1. The tribunal has found that since 3 April 2019 Mr Aitkens has been living in [Country 1] and working in [Country 2].

2. On the basis of the evidence the tribunal was satisfied that Mr Aitkens was not a resident of Australia within the ordinary meaning of the word from 3 April 2019.

Domicile and ‘permanent place of abode’

1. The tribunal then considered whether Mr Aitkens is domiciled in Australia, and, if he is, whether he had established a permanent place of abode outside Australia.

2. According to the evidence, Mr Aitkens was born in Australia and lived here until at least April 2019; thus Mr Aitkens’ domicile by birth and choice is Australia.

3. The expression ‘place of abode’ refers to a person’s residence, where one lives with one’s family and sleeps at night. In essence, a person’s ‘place of abode’ is that person’s dwelling place or the physical surroundings in which a person lives. As noted in Taxation Ruling IT 2650 discussed above, ‘permanent’ in this context does not have to mean ‘forever’ but should be used in the sense of being contrasted with ‘temporary’ or ‘transitory’.

4. Mr Aitkens has rented a property in both [Country 1] with his girlfriend and also in [Country 2] where he works.

5. Mr Aitkens has submitted that he has decided to live permanently in [Country 2]. 

6. The tribunal was satisfied that if his employment was terminated he would be required to leave [Country 2] unless he was able to get another employer to sponsor him.  Mr Aitkens’ evidence about permanent residency in [Country 2] was not considered credible; he did not appear to have actually researched the requirements and stated that bribery was an option.

7. Mr Aitkens has several ties to Australia.  The first being that he has two young children living in Australia.  Mr Aitkens holds bank accounts; real estate and [Vessel 1] and [Licence 1] (through his superannuation fund) and some personal possessions in Australia.

8. Mr Aitkens has ties in [Country 1], the first being that his fiancé resides there.  He has a bank account and motor bike in [Country 1] and a 12 month residential lease. 

9. Having considered the evidence, the tribunal was not persuaded that Mr Aitkens has established a permanent place of abode in either [Country 1] or [Country 2].  His right to be in [Country 2] is based solely upon his continued employment and he has stated that he now does not intend to reside in [Country 1].  Were Mr Aitkens’ employment to end it is likely that he will have no right to remain in [Country 2].  It is more likely than not that Mr Aitkens accepted an offer of employment in [Country 2] with the view to returning to Australia at some point.

10. On the basis that Mr Aitkens has not established a permanent place of abode in [Country 1] or [Country 2], the tribunal concluded that Mr Aitkens remained a resident of Australia from 3 April 2019 and therefore a child support terminating event has not occurred.  For these reasons the decision under review is affirmed.

DECISION

The decision under review is affirmed.