Alberici and Alberici (Child support)

[2020] AATA 5095

Alberici and Alberici (Child support) [2020] AATA 5095 (3 September 2020)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2020/MC019622

APPLICANT:  Ms Alberici

OTHER PARTIES:  Child Support Registrar

Mr Alberici

TRIBUNAL:Member J Longo

DECISION DATE:  3 September 2020

DECISION:

The tribunal affirms the decision under review.

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 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. Ms Alberici and Mr Alberici are the parents of [Child 1] and [Child 2]. Mr Alberici is the parent liable to pay child support.

2. On 11 June 2020, Mr Alberici made an election to lodge an estimate of his income for the period 1 July 2020 to 30 June 2021 of $0 income (*annualised to $0). On 11 June 2020, Services Australia – Child Support (the Department) accepted Mr Alberici’s estimate of income of $0 income for the period 1 July 2020 to 30 June 2021. 

3. On 22 June 2020, Ms Alberici objected to the estimate of income as she believed the income used for the estimate was not correct. On 9 July 2020, the Department disallowed the objection to Mr Alberici’s estimate of income.

4. On 7 August 2020 Ms Alberici lodged an application with the Administrative Appeals Tribunal (the tribunal) for a review of the decision. On 3 September 2020, Mr Alberici and Ms Alberici spoke to the tribunal via conference telephone and gave sworn evidence. In making its decision, the tribunal took into consideration documents (48 pages) provided by the Department and additional documents provided by Mr Alberici (B1 to B7).

CONSIDERATION

1. The law that applies in this case is the Child Support (Assessment) Act 1989 (the Assessment Act). The rate of child support payable by a liable parent is usually based on an administrative assessment under Part 5 of the Assessment Act. This requires the application of a statutory formula which takes into account factors such as the number of children, the level of care provided and the child support income amount of each parent.

2. Subdivision C of Division 7 of Part 5 of the Assessment Act enables a person to elect that an estimate of their adjusted taxable income is used. The election can be made either before the income year commences, to be used from the start of the income year, or during the income year to replace the adjusted taxable income calculated using last year’s taxable income and supplementary amount under the formula assessment (section 60).

3. The method of estimation is set out in subsection 60(4) of the Assessment Act and appears to have been followed in this case by the Department. Subsection 60(1) provides that a person may make an election to use an estimate if the amount is not more than 85% of the total of the person’s adjusted taxable income and supplementary amount for the last relevant year of income for the child support period.

4. It is uncontroversial that in this case Mr Alberici’s income for child support purposes was based on his 2018/2019 taxable income of $59,520 for the child support period from 1 September 2019 to 31 July 2020. Mr Alberici stated that he lodged an estimate of income on 11 June 2020. He stated that he had been employed at [Employer 1] but was made redundant on 30 April 2020. Mr Alberici provided a letter from [Employer 1] which confirmed the date of his redundancy. He advised the Department that he would not have any income from 1 July 2020. Mr Alberici confirmed that he was paid approximately $15,000 from his employer in redundancy and leave entitlements on 30 April 2020. He stated that he had no income since being paid his redundancy and that he was advised by Centrelink that he would not be entitled to jobseeker payment until September 2020.

5. Ms Alberici stated that while she accepted that Mr Alberici was made redundant, she does not agree that he had no income for the period. Ms Alberici believes that Mr Alberici is receiving jobseeker but, his redundancy should be taken into account. Also, from September, he has stated that he will be receiving jobseeker, which will mean he will have some income.

10.The critical issue in this case is whether the Registrar should accept or refuse the election. The relevant law is set out in section 63AA of the Assessment Act. Section 63AA allows the Registrar to refuse to accept an estimate of income if the income provided for the income year is less than the amount the Registrar considers likely to be the parent’s actual adjusted taxable income for the remaining period.

11.The Department made its decision based on income information provided by Mr Alberici for the period from 1 July 2020. Ms Alberici’s objection stated that she believed Mr Alberici still had income due to his redundancy payment and entitlement to jobseeker. The tribunal notes that Mr Alberici received his redundancy payment from [Employer 1] on 30 April 2020. This is prior to the end of the 2019/2020 income period. Mr Alberici provided an estimate from 1 July 2020, the start of the 2020/2021 income period. He stated that he would not have any income from this date.

12.The tribunal notes that the power to refuse an estimate is discretionary. There are no statutory criteria set out to consider whether to refuse or accept an estimate, other than it being considered that the estimate is likely to be lower than the parent’s actual adjusted taxable income for the remaining period. The tribunal had reference to the policy guide in force at the relevant time and notes that there are no other policy considerations set out for the purpose of deciding whether to accept or refuse an estimate.

13.The tribunal notes that the estimate was less than the amount of Mr Alberici ’s actual income for the last relevant year of income. There is no evidence that he had any income from 1 July 2020. It is not possible for the Registrar to have been satisfied, on 11 June 2020 that the estimate was less than the amount likely to be Mr Alberici’s actual adjusted taxable income for the remaining period. The election of an estimate of income relies on the income during the period, not resources that might be available. If Mr Alberici’s circumstances change, he is able to make further estimates of income for the remaining period.

14.The tribunal considered that in all the circumstances of the case, the election was correctly accepted by the Department. In reaching this conclusion, the tribunal noted that the Assessment Act provides that estimates are reconciled in the future if an estimate is inaccurate. The departure determination process set out in Part 6A of the Assessment Act is available where a person considers that the administrative assessment provisions of a person’s income or financial resources should not be applied due to the special circumstances of the case.

DECISION

The tribunal affirms the decision under review.