Amberg and Lineker (Child support) - [2022] AATA 351

Amberg and Lineker (Child support) [2022] AATA 351 (4 January 2022)

DIVISION:Social Services & Child Support Division
REVIEW NUMBER:  2021/MC021766
APPLICANT:  Mr Amberg
OTHER PARTIES:  Child Support Registrar
Ms Lineker

TRIBUNAL:Member R Anderson
DECISION DATE: 04 January 2022
DECISION:

The tribunal sets aside the decision under review and, in substitution, decides that:

·         The departure decision of 16 March 2020 will cease on 31 March 2020;
·         The rate of child support payable by Mr Amberg in respect of [Child 1] for the period 1 April 2020 to 30 June 2021 is varied to $1,700 per annum;
·         The rate of child support payable by Mr Amberg in respect of [Child 1] for the period 1 July 2021 to 31 October 2021 is varied to $8,500 per annum;
·         The rate of child support payable by Mr Amberg in respect of [Child 1] for the period 1 November 2021 to 23 March 2022 is varied to $1,500 per annum;
·         The child support liability in respect of the period commencing 24 March 2022 is to revert to the administrative assessment, based on the most recently lodged tax returns of the parents; and
·         The rate of child support payable by Mr Amberg in respect of [Child 1] for the period 1 April 2020 to 31 December 2022 is to increase by $1,505 per annum.

CATCHWORDS

CHILD SUPPORT – departure determination – special needs of the child – income, property and financial resources of the liable parent – a ground for departure established – decision to depart – decision under review set aside and substituted

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

Mr Amberg and Ms Lineker are the parents of [Child 1]. According to records of Services Australia – Child Support (the Agency), the child support assessment was registered on 29 November 2012. The Agency commenced responsibility for the collection of child support from Mr Amberg in March 2013.
Prior to 23 August 2019, Mr Amberg was assessed to pay child support to Ms Lineker in respect of [Child 1] at the fixed annual rate of $1,443. It is open to either parent to lodge an application for a departure from the administrative assessment under Part 6A of the Child Support (Assessment) Act 1989 (the Act) if they consider the existing administrative assessment results in an unfair amount of child support payable by one parent. Following a departure (change of assessment) application lodged by Ms Lineker in August 2019, a decision was made by an objections officer on 16 March 2020 to depart from the administrative assessment such that Mr Amberg’s adjusted taxable income was varied to $85,000 until 30 June 2022. Furthermore, Mr Amberg was to make a 50% contribution to the education costs of [Child 1] in respect of [Education Provider 1] for the 2020 calendar year in the amount of $1,890. This resulted in the annual rate of child support payable by Mr Amberg increasing to $6,277 and to more than $8,000 in 2020.
Mr Amberg lodged a departure application on 4 September 2020, on the basis that his circumstances had changed significantly since April 2020 on account of the impact of COVID-19 on his business. More particularly, he submitted that the administrative assessment produced an unfair outcome due to the income, property and financial resources available to him (Reason 8A).
At that time, the child support liability was calculated in accordance with the administrative assessment, which in this case was the departure decision discussed in paragraph 2 above.
On 26 November 2020, a delegate of the child support registrar found that a ground was established in relation to Reason 8A and that in the special circumstances of the case, the costs of maintaining the child were significantly affected because of the special needs of [Child 1] (Reason 2). Consequently, a decision was made to vary the adjusted taxable income of Mr Amberg to $46,800 for the period 1 April 2020 to 27 September 2020, $39,000 from 28 September 2020 to 31 December 2020, reverting to $85,000 from 1 January 2021 to 30 June 2022. In addition, Mr Amberg was to make a 50% contribution to the education costs of [Child 1] in respect of [Education Provider 1] for the period 1 April 2020 to 31 December 2020 in the amount of $1,890 per annum.
On 5 February 2021, Ms Lineker was granted an extension of time to lodge an objection to the decision of 26 November 2020. Subsequently, an objections officer decided to allow Ms Lineker’s objection on 14 May 2021, finding a ground established in relation to both Reason 2 and Reason 8A. Accordingly, Mr Amberg’s adjusted taxable income was varied to $45,000 in respect of the period 1 January 2020 to 31 July 2021 and to $85,000 from 1 August 2021 to 31 March 2023. In addition, Mr Amberg was to make a 50% contribution to the education costs of [Child 1] in respect of [Education Provider 1] for the 2020, 2021 and 2022 calendar years in the amount of $1,890 per annum and a further 50% contribution to the dental costs of [Child 1] in the 2021 and 2022 calendar years in an amount of $1,028 per annum. This resulted in the annual child support liability payable by Mr Amberg ranging from $3,523 to more than $10,000 in August 2021.
Mr Amberg then lodged an application to this tribunal on 17 June 2021, requesting an independent review of the Agency’s decision.
The directions hearing was conducted by conference telephone with Mr Amberg and Ms Lineker on 9 November 2021. Following this hearing, directions were made to both parties requiring them to provide further information and documents.
The hearing was held on 7 December 2021. Mr Amberg and Ms Lineker both participated by conference telephone and gave oral evidence on affirmation. The tribunal considered information in the documents provided by the Agency in accordance with the Administrative Appeals Tribunal Act 1975 numbered 1 to 557, documents lodged by Mr Amberg numbered A1 to A76 and documents lodged by Ms Lineker numbered B1 to B125. All of the documents were provided to all parties prior to the hearing. Information received from Centrelink on the day of the hearing, numbered C1 to C2, was discussed at hearing and sent to the parties for their information.
On 7 December 2021, the tribunal decided to defer making a decision in this matter to allow Mr Amberg to provide further evidence. The information was received on 14 December 2021, numbered A77 to A85 and was sent to all parties for comment. Further information was received on 20 December 2021, numbered A86 to A99. As the tribunal was satisfied that no comment was necessary in respect of the latter information, the documents were provided to all parties for their information and the tribunal then proceeded to make a decision.

ISSUES

When calculation of the rate of child support is based on the administrative assessment as discussed above, it also takes into account, relevantly, factors such as the number of children, the level of care provided, the costs of the children, the costs of self-support of each parent and the income of each parent. In this case, rather than the income of Mr Amberg being based on his most recently lodged tax return, as it was for Ms Lineker, his income was based on the departure decision of 16 March 2020.
Section 98C of the Act allows for a decision maker to depart from the usual manner of calculating the rate of child support payable by one parent to the other parent for a child after considering the following issues:
·         whether a ground exists to depart from the administrative assessment; and if so
·         whether any proposed departure is fair to Mr Amberg, Ms Lineker and [Child 1]; and if so
·         whether any proposed departure is fair to the public.

CONSIDERATION

Mr Amberg submitted that his [business], specifically tailored to [specified activities], has suffered significantly since the onset of COVID-19 in April 2020. He further stated that his business expenses have remained high so as to enable immediate uptake following lockdown. However, to date the business has not managed to recover. Mr Amberg gave oral evidence that he is also suffering health issues which will impact on the recovery of his business. He requires a double hip replacement. The first is scheduled for late March 2022, after he has met the waiting period required by his private health insurance, and the second is scheduled approximately six months later, following rehabilitation.
Mr Amberg made it clear that he has no issue with contributing to the special needs of [Child 1]. However, given the change in his financial circumstances he is struggling to do so at the current assessed rate.
Ms Lineker, as a qualified [Occupation 1], also operates her own business and maintains that Mr Amberg could have altered his business operations around the COVID-19 restrictions as she did and should also be flexible enough to work around his upcoming surgery by renting out his facilities. Furthermore, she queried Mr Amberg’s ability to access financial resources from family and his ability to maintain a commercial property for the purpose of providing a storage facility for his parents.

Issue 1 – Does a ground exist to depart from the administrative assessment?

The grounds for departure are set out in subsection 117(2) of the Act. Each ground is prefaced by the words ‘in the special circumstances of the case’. The meaning of this expression is not defined in the Act. However, the tribunal was guided by the courts, which have concluded that the expression relates to the facts peculiar to each case such that those facts are ‘out of the ordinary’ and set the case apart from the usual case (Gyselman and Gyselman (1992) FLC 92-279 (Gyselman) and Philippe and Philippe (1978) FLC 90-433).

Reason 2 – special needs of the child

Subparagraph 117(2)(b)(ia) of the Act provides a ground for departure exists where, in the special circumstances of the case, the costs of maintaining the child are significantly affected because of the special needs of the child. The case of Lightfoot and Hampson (1996) FLC 92-663 (Lightfoot) established the principle that if the costs are necessary or desirable for the child’s welfare, and they impact significantly on the cost of raising the child, a change to the child support assessment may be required. Lightfoot also highlighted that a special need can also exist because of a special talent or ability of the child.
In this case it is common ground that [Child 1] is gifted and has required additional forms of education through [Education Provider 1] and more recently through home schooling with [Education Provider 2] to challenge his thinking, as the government schools do not provide a gifted programme. According to statements provided by Ms Lineker, the costs for [Child 1] to attend [Education Provider 1] were $945 in the 2020 calendar year and $945 in the 2021 calendar year. These costs were less than expected due to COVID-19. There have been no further costs. However, Ms Lineker plans to re-enrol [Child 1] for 2022 at a cost of $945 per term, or $3,780 per annum.
Ms Lineker gave oral evidence that both parents agreed that it would be preferable going forward for Ms Lineker to home school [Child 1] and use material from [Education Provider 2]. The cost was $645 in September 2021 and is expected to be payable in September 2022 at around $500 per annum.
In addition, the curriculum requires [Child 1] to study a language. The cost for [Child 1] to study Spanish is $130 per annum. Ms Lineker also claimed that the cost of a tutor is necessary because she is no longer able to assist [Child 1] in mathematics at his current level. Tutoring costs for two sessions per week approximate $100, or around $4,000 per annum.
Mr Amberg questioned the need for [Child 1] to also attend [Education Provider 1] when he was receiving a curriculum program at the appropriate level through [Education Provider 2]. Ms Lineker responded that it is preferable for him to have access to both. She further stated that [Education Provider 1] offers a teacher qualified in dealing with gifted children and extends beyond lateral thinking. Ms Lineker noted that [Education Provider 1] was recommended by psychologist, [Ms A]. The tribunal notes that this was while [Child 1] was attending a government primary school.
The tribunal considered the special needs of [Child 1] and agrees with Mr Amberg that going forward, the additional costs for [Education Provider 1] appear to be discretionary, given that [Child 1]’s education through [Education Provider 2] now allows him to learn at an appropriate level.
The tribunal is also cognisant that as [Child 1] is being home schooled, the usual education costs associated with government schooling that are incorporated into the child support administrative formula are not being incurred by Ms Lineker at the same level. The tribunal is satisfied that the annual fee payable to [Education Provider 2] and associated language costs would likely closely align to the fees if [Child 1] were to have remained at [School 1] in 2022 and consequently do not consider that they create special circumstances. Furthermore, both parents agreed that [Child 1] would be home schooled. As such, the tribunal is satisfied that associated tutoring costs are necessary to meet the special needs of [Child 1] and create special circumstances. It is also noteworthy that, according to Agency documents, Mr Amberg has previously agreed to meet 50% of the costs of [specified] maths tutoring at a monthly cost of $140. A 50% contribution to the current tutoring costs equates to $166 per month.
While [Child 1] has been involved in various activities such as tennis, judo and soccer, such extra-curricular activities are considered to be discretionary and are therefore not considered to create special circumstances.
Ms Lineker also raised the issue of psychologist and dental/orthodontic costs for [Child 1]. There was no dispute that the costs for [Child 1] were necessary. Based on the invoices provided and the Medicare statement recording the rebates received by Ms Lineker, the tribunal calculates the out-of-pocket costs incurred by Ms Lineker for [Child 1] as follows.

Period	Provider	Invoiced cost	Rebate received	Net costs incurred
PSYCHOLOGY
13/08/20	[Ms A]	195.00	87.45	107.55
24/08/20	[Ms A]	195.00	87.45	107.55
27/08/20	[Ms A]	195.00	87.45	107.55
Total Psychology	585.00	322.65
DENTAL
17/04/20	[Dental Practice 1]	190.00	0	190.00
19/06/20	[Dental Practice 1]	162.50	0	162.50
10/07/20	[Dental Practice 1]	227.50	0	227.50
13/07/20	[Dr B]	50.00	32.50	17.50
21/07/20	[Dr B]	400.00	12.50	387.50
07/09/20	[Dr B]	65.00	0	65.00
08/10/20	[Dr B]	350.00	0	350.00
08/10/20	[Dr B]	250.00	131.30	118.70
08/10/20	[Dr C]	1275.00	766.75	508.25
03/12/20	[Dental Practice 2]	307.00	113.55	193.45
Total Dentist	2,220.40
26/03/21	[Dr D] - orthodontist	250.00	0	250.00

According to the Medicare statement provided, further dental costs in respect of [Child 1] in March 2021 have been bulk billed. Ms Lineker told the tribunal that she is not expecting further dental costs in 2022. After accounting for Medicare rebates, the costs are significantly less than the amount allowed for by the objections officer of more than $4,000. Orthodontic costs going forward are unknown and therefore will not be considered by the tribunal.
Both parties agreed that the special needs of [Child 1] include additional education costs, psychology and dental costs. Furthermore, it was undisputed that the costs impact significantly on the overall costs of [Child 1]. The tribunal concurs. Therefore, the tribunal finds that, in the special circumstances of the case, the ground for departure in subparagraph 117(2)(b)(ia) of the Act has been established.
Consideration as to an appropriate contribution to the costs discussed above by the parents, in accordance with their capacity, will be discussed under the next heading regarding what is just and equitable.
As the tribunal is satisfied that one of the grounds before it is established, it has not gone on to consider whether Reason 8 is also established as a separate ground. The relevant issues will also be dealt with in detail below under the next heading regarding what is just and equitable.

Issue 2 – Is it fair or ‘just and equitable’ in relation to Mr Amberg, Ms Lineker and [Child 1] to make a particular departure determination?

As the tribunal is satisfied that there is a ground to depart from the administrative assessment of child support, the next step is to consider whether it is fair as regards the parents and the children to make a particular determination in accordance with sub-subparagraph 98C(1)(b)(ii)(A) of the Act. This in turn requires the tribunal to have regard to a range of factors, including but not limited to those set out in subsections 117(4) and (6) to (8) of the Act, such as the needs of the children, the parents’ assets, liabilities, income and commitments and any hardship that would be caused by departing or not departing from the formula. The tribunal does not propose to explore every matter in detail but will discuss those it regards as pertinent to this application (Gyselman).

The needs of the children

Section 3 of the Act makes it clear that the parents of a child have the primary duty to maintain the child, and that this duty has priority over all commitments of the parents other than commitments necessary for self-support or the support of another person the parent has a duty to maintain (Ashcroft and Ashcroft (SSAT Appeal) [2008] FMCAfam 1250). In this case Mr Amberg and Ms Lineker have the primary duty to financially support [Child 1].
In determining the proper needs of [Child 1], the tribunal had regard to the issues discussed above under Issue 1. The tribunal found that the out-of-pocket costs incurred by Ms Lineker in respect of the special needs of [Child 1] for [Education Provider 1] in 2020, his dental costs, orthodontic costs and psychology costs totalled $3,737 ($945 + $2,220 + $250 + $322) and $945 for [Education Provider 1] in 2021. From September 2021, the tribunal found that the expected annual costs in respect of the special educational needs of [Child 1] are limited to tutoring costs of $4,000 per annum. It was undisputed that [Child 1] is generally in good health.
According to her Statement of Financial Circumstances, Ms Lineker estimates the average weekly costs of [Child 1] to be $990. This includes additional costs for activities, entertainment, education, medical/dental, books, magazines and gifts of $412.
Mr Amberg is attributed with 28% care of [Child 1] and estimated his average weekly costs to be $130, including discretionary costs such as activities and holidays of $75. It is noteworthy that Mr Amberg has not attributed any household costs to [Child 1] other than food.
Accordingly, the tribunal calculates the estimated, ‘necessary’ costs of [Child 1], excluding his special needs that are dealt with separately, as estimated by the parents to be $633 or $32,916 per annum.
In considering the proper needs of the children, the tribunal may also have regard to published guidelines as to the needs and the costs of children as used in the administrative assessment (Eades and Cadell (SSAT appeal) [2009] FMCAfam 275). The tribunal turned to the Costs of the Children Table. The administrative formula calculates the maximum capped cost for one child less than 13 years where the combined income of the parents exceeds $250,000 to approximate $24,082 per annum. Based on the parents’ evidence in respect of their income and financial resources, as discussed below, the costs in respect of [Child 1] are clearly significantly overstated.

The earning capacity, income, property and financial resources and commitments of each parent

Ms Lineker maintains that Mr Amberg’s business choices have been a deliberate attempt to minimise his tax obligations and evade paying child support. A parent’s earning capacity can only be taken into account in limited circumstances, as set out in subsection 117(7B) of the Act which requires the tribunal to consider three matters, as set out below, in determining that the parent’s earning capacity is greater than is reflected in his or her income used in the administrative assessment. All three of the criteria must be met before a departure determination can be made to take into account whether the parties have a greater earning capacity.
·Whether the parent is:
o   not working despite ample opportunity to do so (subparagraph 117(7B)(a)(i)); and/or
o   has reduced their weekly hours of work to below full-time work (subparagraph 117(7B)(a)(ii)); and/or
o   has changed their occupation, industry or working pattern (subparagraph117(7B)(a)(iii)); and
·If the parent’s decision about his/her work arrangements is not justified by either his/her caring responsibilities (subparagraph 117(7B)(b)(i)) or his/her state of health (subparagraph 117(7B)(b)(ii)); and
·If the parent has not demonstrated that it was not a major purpose of their decision not to work despite ample opportunity to do so or to stop working, reduce their hours of work or change their occupation, industry or working pattern to affect the administrative assessment of child support (paragraph 117(7B)(c)).
Based on Agency records, Mr Amberg’s taxable income has remained below the self-support amount for many years. In this case any change in working hours in respect of both parties has been a direct result of COVID-19. As such, it is difficult to determine that the change in the working pattern of either parent in the relevant period was driven by a motivation to impact on the child support liability. Therefore, the third criterion under paragraph 117(7B)(c) of the Act is not met. The tribunal also notes that the caring responsibilities for [Child 1] justify Ms Lineker’s decision to not work full-time hours. Consequently, the second criterion under paragraph 117(7B)(b) of the Act is not met in respect of Ms Lineker. As all three criteria under subsection 117(7B) of the Act cannot be met in respect of Mr Amberg or Ms Lineker, it is not open to the tribunal to make an earning capacity determination.
Subsection 117(7A) of the Act provides that the decision maker must have regard to “the capacity of the parent to derive income, including any assets of, under the control of, or held for the benefit of the parent that do not produce, but are capable of producing, income” and disregard “the income, earning capacity, property and financial resources of any person who does not have a duty to maintain the child”. Mr Amberg’s partner has no legal duty to provide for [Child 1].
The tribunal reiterates that the Court has observed on numerous occasions that the tribunal is not required to undertake a “forensic audit” or major investigation of the financial circumstances of a party (Podmore & Pillai [2011] FMCAfam 952 and Frost and Frost [2011] FMCAfam 1311). Rather, the tribunal must be satisfied on the balance of probabilities as to the party’s income, property and financial resources available to the parties for child support purposes, such that a fair decision can be made in respect of the child support liability (Shearer & Benson (SSAT Appeal) [2011] FMCAfam 623).
The tribunal considered the financial circumstances of Mr Amberg and examined his individual income tax returns for the 2019/20 and 2020/21 years. Other than minimal interest and a small amount of dividends from [Company 1] shares, Mr Amberg’s income is from his [business] (the business), which he operates as a sole trader and has done so since 2002. As such, he does not have the same ability as an incorporated entity to disguise income through the use of a loan account. Mr Amberg gave oral evidence that he has a [Discipline 1] background and operates a specialist [workplace] with a specific culture which makes it difficult to find other [employees] that are suitable. The taxable income recorded for 2019/20 and 2020/21 was $5,532 and $6,466 respectively. It is noteworthy that prior year losses have reduced the taxable income in 2019/20 and 2020/21 by $8,500 and $3,000 respectively.
According to the tax returns, gross income from the business in 2019/20 was just under $43,000 and in 2020/21 was just under $19,000. Mr Amberg was also in receipt of jobkeeper from April 2020 until 30 June 2020 in the amount of $6,000 and in 2020/21 in the amount of $27,900. In addition, Mr Amberg also received an additional $10,000 in tax- exempt Business Costs Assistance Programme grants from the Victorian State Government in 2020/21.
While a breakdown of all expenses in respect of 2019/20 was not before the tribunal, non-cash depreciation in 2019/20 and 2020/21 approximated $7,000. Following the hearing, Mr Amberg provided supporting evidence in respect of the rent expenses declared in his tax returns of around $20,000 per annum. There is no supporting evidence that interest payments declared in 2020/21 of $3,635 are related to the business. Other expenses listed were largely unremarkable, noting that Mr Amberg receives a small benefit through claiming his phone and internet through the business. It also appears that Mr Amberg incurs no accounting fees. The tribunal is satisfied that in 2019/20, the net income available to Mr Amberg through his business and jobkeeper would likely not exceed the self-support amount used in the administrative assessment of $25,575. However, in 2020/21 the tribunal estimates the net income available to Mr Amberg through his business, jobkeeper and Business Costs Assistance Programme grants to approximate $30,000.
The tribunal observed that despite the significant reduction in payments from clients, given the government assistance payments the business was not in a worse position due to COVID-19. Mr Amberg agreed. However, he told the tribunal that he does not consider the Agency calculation of his adjusted taxable income in the amount of $85,000 has taken into account all of his business expenses, in particular his high rental costs.
According to his [Bank 1] statements, client fees in the period 1 July 2021 to 31 October 2021 totalled $2,615 while the month of November was $715. Furthermore, Mr Amberg told the tribunal that he commenced renting a room in the [business premises] to [a service provider] in July 2021 at a cost of $80 per day on an “as needs” basis, which is generally one to two days per week. According to the [Bank 1] statements, rent received in the period 1 July 2021 to 31 October 2021 was $1,200 and appears to be on a more regular basis since October 2021. Mr Amberg also qualified for five rounds of Business Costs Assistance Programme grants from the Victorian State Government between 1 July 2021 and 27 October 2021 in the amount of $34,000, which are tax-exempt. According to Centrelink, Mr Amberg has received no other benefits or allowances.
The tribunal notes that Mr Amberg registered the business for GST in January 2021. Based on the government grants, GST exclusive client fees and rent received, the tribunal calculates that the total income received by the business in the 123-day period 1 July 2021 to 31 October 2021 approximates $37,468, ($34,000 + $2,615/1.1 + $1,200/1.1), well exceeding the amounts received in 2019/20 and 2020/21. Based on prior year expenses, excluding non-cash depreciation, interest and accounting for GST exclusive rent costs paid of $4,545, the tribunal calculates the net business expenses in the period 1 July 2021 to 31 October 2021 to approximate $6,700 and the net business income to approximate $30,768, annualising to $91,303.
The tribunal accepts that going forward from 1 November 2021, the financial circumstances of Mr Amberg will become more difficult in the absence of any government assistance and his upcoming hip replacement surgery. Mr Amberg confirmed that he has no income protection insurance and his working hours are already limited by his inability to stand for long periods. It is difficult to predict how his business will fare in the current COVID-19 affected environment. Based on the most recent information in respect of client fees ($715 per month) and rent received from the [service provider] on average twice a week ($693 per month), his GST exclusive income approximates $1,280 per month. There is no evidence of rent relief offered to Mr Amberg from November 2021 and based on past expenses, the tribunal estimates that Mr Amberg will not likely receive net business income that exceeds the self-support amount used in the administrative formula prior to the end of March 2022, even if client fees were to triple in the meantime.
The tribunal accepts the oral and written evidence of Mr Amberg that at 30 June 2021, he held a balance in his [superannuation fund] account of $23,038. The tribunal accepts the oral evidence of Mr Amberg that no personal contributions have been made during the relevant period under review, nor has he made any withdrawals.
According to his Statement of Financial Circumstances, Mr Amberg owns his residence jointly with his partner, which according to the council rates notice is valued at $630,000. The corresponding [mortgage], also in joint names, had a closing balance at 30 June 2021 in the amount of $479,436. He is also the sole owner of a commercial property, which according to the council rates notice is valued at $335,000. The corresponding [mortgage], also in Mr Amberg’s sole name had a closing balance at 30 June 2021 in the amount of $244,906. Mr Amberg estimated his bank balance to be $450, his [motor] vehicle valued at $6,000, [business] equipment at $50,000 and household contents at $30,000.
In response to a question from the tribunal, Mr Amberg stated that his parents have been in ill health, in particular his mother and it has not been appropriate to raise the issue of finding alternative storage space for their goods. Mr Amberg confirmed that his parents pay no rent.
According to the ATO integrated client account, Mr Amberg has an outstanding liability of just over $1,000 from 2018/19 and an outstanding credit card debt in the amount of $5,692. Mr Amberg recorded an outstanding rent liability in excess of $20,000. It is unclear from the statements provided exactly what amount of rent is outstanding. Therefore, the tribunal finds that Mr Amberg has a net asset base of at least $220,000. In respect of loans of more than $200,000, Mr Amberg confirmed that there are no formal arrangements in respect of repayment to family or his partner’s family business.
The tribunal considered the evidence in relation to Mr Amberg’s expenses, who currently shares his residence with his partner and [Child 1] for 28% of the time. Based on his Statement of Financial Circumstances, his average weekly living costs approximate $915, or $47,580 per annum. In response to a question from the tribunal, Mr Amberg confirmed that he only meets the mortgage costs for his commercial property of $300 per week and his partner meets the mortgage and other household costs, including rates and utilities. His partner works for her family business and according to his Statement of Financial Circumstances earns a weekly gross income of around $1,600. He further stated that he pays for the internet and TV, of which a portion is claimed through the business. Mr Amberg estimated his medical and pharmacy costs at $110 per week. He is also paying private health insurance premiums of $97 per week and is expecting the majority of the surgery costs to be met. Mr Amberg gave oral evidence that as a household the weekly costs can be met, largely due to his partner meeting the shortfall. It is apparent that the actual “necessary” costs met by Mr Amberg fall well short of the self-support amount used in the administrative formula.
The tribunal considered the evidence of Ms Lineker regarding her income from all sources, her assets and liabilities. Ms Lineker told the tribunal that she operates a sole trader business as a [Occupation 1]. Prior to COVID-19 her weekly hours averaged 20. However, her hours have fluctuated throughout the lockdown periods. She currently juggles work commitments around home schooling [Child 1] and estimates that her working hours average between six and ten hours per week. Ms Lineker further stated that she has done a minimal amount of website work and is intending to start up an online [business], although it is yet to commence operations.
The tribunal examined the 2019/20 and 2020/21 tax returns of Ms Lineker, recording taxable incomes of $29,961 and $34,034 respectively, including jobkeeper payments in the amounts of $6,000 and $27,900 respectively. Her income consisted of minimal interest and dividend income and net income from her [Occupation 1] business. In addition, in 2020/21, net capital losses incurred through investment sales resulted in carry forward capital losses which had no impact on her taxable income.
Ms Lineker’s gross income from her personal training business reduced from $28,147 in 2019/20 to just over $11,000 in 2020/21. While her expenses were largely unremarkable, it is evident that in 2020/21 she claimed a significant amount for home office, likely including a portion of her rent as she commenced her business operations from her garage in 2020/21. Ms Lineker has continued to claim the maximum motor vehicle expenses, despite operating from her home residence. In addition, education costs for a nutrition course she is currently completing are expensed at $5,900, which the tribunal considers to be discretionary. In addition, Ms Lineker incurs accounting fees of $660 per annum. Ms Lineker also receives a small benefit through expensing phone and internet costs through her business. Similarly to Mr Amberg’s situation, the receipt of jobkeeper payments resulted in an improvement to Ms Lineker’s financial position. Ms Lineker confirmed that she did not qualify for any state government assistance payments.
Given that Ms Lineker is attributed with the majority care of [Child 1], the increase in her available income and/or benefits due to various discretionary expenses discussed above has no impact on the child support assessment.
According to her tax returns and Centrelink information, Ms Lineker was in receipt of jobseeker and parenting payment (single) payments (PPS) in 2019/20 in the amounts of $19,875 and jobseeker in 2020/21 in the amount of $15,898. She is currently receiving the maximum fortnightly rate of jobseeker in the amount of $692.50. It is noteworthy that any increases in Ms Lineker’s business income results in a corresponding decrease in her jobseeker entitlements.
Ms Lineker is also in receipt of family tax benefit (FTB) parts A and B, in addition to rent assistance. Her current fortnightly payment is $320. Pursuant to subparagraph 117(7)(b)(ii) of the Act, for child support purposes FTB is not considered to be a part of Ms Lineker’s adjusted taxable income. FTB is an income-tested benefit. FTB is not defined as a tax-free benefit under section 5 of the Act to be included in adjusted taxable income (paragraph 43(1)(e) of the Act). Therefore, as FTB is not required to be included in adjusted taxable income, it is to be disregarded, as clarified at 2.6.17 of the Child Support Guide.
The tribunal accepts the oral and written evidence of Ms Lineker that at 30 June 2021, she held a balance in her [superannuation fund] account of $59,491. It was evident that she accessed $10,000 as an early release withdrawal in July 2020 which was used to purchase a car following an accident. Ms Lineker has made small personal contributions in order to qualify for a government co-contribution. In 2020/21, the personal contribution amount was $200. Ms Lineker confirmed that she has made no further withdrawals.
Going forward, it is also difficult to predict the impact on Ms Lineker’s business of the current COVID-19 affected environment. However, her access to jobseeker will continue at the maximum rate if her business does not recover.
The tribunal considered the assets and liabilities of Ms Lineker, who shares her rented accommodation with [Child 1]. Ms Lineker’s assets consist of combined bank balances of approximately $1,200 and a share portfolio held in trust for [Child 1] with a current value of approximately $15,000. A [stockbroking firm] report provided to the tribunal records sales in the 2020/21 year of $13,878 and purchases of $23,752. In response to a question from the tribunal, Ms Lineker stated that she deposits $50 per week into a bank account and once it accumulates she purchases shares through [stockbroking firm]. The additional $10,000 used to purchase shares was as a result of her saving. Further assets consist of a [specified make] vehicle ($33,000), which was funded by the superannuation withdrawal and the excess income received through government assistance payments. Her household contents are valued at approximately $3,000.
Ms Lineker gave oral evidence that she has no debts and is up-to-date with all of her commitments. Therefore, the tribunal calculates the net asset base of Ms Lineker to approximate $52,000 and finds accordingly.
According to her Statement of Financial Circumstances, Ms Lineker’s average weekly expenses are estimated at $821 with minimal discretionary costs. She submitted that she has suffered from a chronic neck condition since the age of 10 years. However, she is unable to afford the regular treatment required from a chiropractor and rehabilitation physiotherapist. Other than the odd assistance from her brother, Ms Lineker stated that she has no other means of financial resources. Given that the estimated household expenses annualise to more than $90,000, Ms Lineker continues to make regular deposits into a share portfolio account and has accumulated no debt, it is difficult not to conclude that her estimated expenses are significantly over-stated, as also indicated in the discussion in respect of the estimated costs of [Child 1].

Conclusion

After consideration of the income, resources, benefits and assets together with the commitments and liabilities of Mr Amberg and Ms Lineker and the special needs of [Child 1], the tribunal considers it is just and equitable to make a departure determination from the current administrative assessment in accordance with section 98S of the Act. The tribunal may make one of the determinations set out in section 98S of the Act. Section 98S sets out a range of determinations, including varying the annual rate of child support payable, the adjusted taxable income of a parent, or the costs of self-support.
The tribunal may not make a determination in respect of any period more than 18 months earlier than the date on which the application for a change in the way the child support liability is calculated was made (subsection 98S(3B)). In this case, Mr Amberg did not lodge a change of assessment application until 4 September 2020. Given that the administrative assessment at that time was a previous departure decision, the tribunal must be satisfied that there has been a significant change in the circumstances relied upon to make the previous departure decision before consideration of any backdating.
The tribunal must also be cognisant of whether either party has rested on their rights in not pursuing an objection or appeal process and also whether backdating or overriding any part of the previous departure decision would cause prejudice to either party in the form of overpayment or additional arrears. In addition, there is also the generally accepted principle that the parties should be able to rely on the child support assessment in making financial decisions until such time as they are put on notice of a possibility of a change.

In this case, as a result of government payments throughout COVID-19, the overall financial position of Mr Amberg had not declined at the time of his lodgement. However, more detailed financial information before the tribunal reflects that Mr Amberg’s income is significantly less than $85,000 per annum, as determined by the Agency in March 2020.
While the special needs costs in respect of [Child 1] were over-stated in the existing departure decision of 19 March 2020, the tribunal will take this into account in determining an appropriate contribution by Mr Amberg to the education, psychology, dental and orthodontic costs in respect of [Child 1].
The tribunal considered the circumstances of the parties, who were both in agreement that 1 April 2020 was a fair commencement date for a departure decision. The tribunal concurs.
It is evident that [Child 1]’s needs, both necessary and discretionary, are prioritised by both parents and as already discussed, Mr Amberg agrees to an equal contribution to the special needs of [Child 1] in accordance with his capacity. While Ms Lineker maintains that Mr Amberg incurs significant discretionary spending such as on tattoos and eating out, it is clear that his partner meets a significant portion of his costs.
As discussed at hearing, Mr Amberg’s partner has no legal duty to contribute to the costs of [Child 1] and it is open to her to meet whatever portion of Mr Amberg’s costs she wishes to meet. At the end of the day there is no obligation on her to continue to provide such assistance. In any event, in this case it is impossible to quantify such costs. Consequently, the tribunal does not consider it appropriate to increase the income of Mr Amberg for child support purposes in relation to his partner choosing to meet a significant portion of his costs, both necessary and discretionary (Magee and Magee [2008] FMCAfam 896 and Wright and Wright & Anor [2009] FMCAfam 979). However, in the tribunal’s view, it is appropriate to account for Mr Amberg’s reduced costs of self-support, given that he is not meeting a significant amount of his “necessary” costs that are included in the administrative formula, such as mortgage on his residence, rates and utilities.
In respect of Mr Amberg, the tribunal found above that his available income and financial resources in the 2020/21 year approximated $30,000. However, his financial position improved significantly from July 2021 to 31 October 2021 on account of government assistance grants, reverting to hovering around the self-support amount again from November 2021. The tribunal is cognisant of Mr Amberg’s favourable asset base and acknowledges the moral obligation he feels towards his parents. The tribunal also sympathises in regard to the recent medical diagnosis of his mother. However, Mr Amberg has a legal duty to arrange his financial affairs in a manner such that he can contribute to the needs of [Child 1] accordingly. He told the tribunal that he is considering listing the property for sale. However, his mother’s ill-heath has interrupted the process. His equity in the commercial property is more than $90,000.
In addition to the income recorded on Ms Lineker’s annual tax return from all sources, she also receives financial benefit through her business meeting a portion of her rental costs and has also chosen to meet discretionary costs such as further education and contributes regularly to an investment portfolio for [Child 1]. According to [stockbroking firm] and her 2020/21 tax return, share sales in 2020/21 resulted in amounts received of almost $14,000. As noted above, given that Ms Lineker is the primary caregiver, the changes in her available income from all sources from one year to the next, both increasing and decreasing, have not been significant enough to unfairly impact the child support assessment.
The tribunal is cognisant of the concerns of the parents and the difficulty in extending a departure decision too far into the future in such uncertain times and also due to Mr Amberg’s position in respect of his hip replacement surgeries.
The tribunal found that the special education needs of [Child 1] in 2020 in respect of [Education Provider 1] were $945 per annum in 2020. If Mr Amberg were to contribute 50%, this would equate to $472. The existing departure decision resulted in Mr Amberg contributing $1,890 in the 12-month period to 31 December 2020, or $466 from 1 January 2020 to 31 March 2020. As such, he has already met his share of the 2020 [Education Provider 1] costs by 31 March 2020.
In respect of [Child 1]’s dental, orthodontic and psychology costs, the tribunal found in paragraph 25 above that the out-of-pocket costs equated to $2,793, of which a 50% contribution from Mr Amberg equates to $1,396. Furthermore, Mr Amberg’s 50% contribution to the [Education Provider 1] costs for 2021 are $473. In addition, 50% of the tutoring costs to 31 December 2022 (being half-term November 2021 of $275 and $2,000 per annum for 2022), total $2,275. The tribunal therefore calculates the remaining 50% of [Child 1]’ special needs costs to be $4,144 and so finds.
Throughout COVID-19, the income available to the parents from their respective businesses improved because of the jobkeeper payments. Ms Lineker was able to reduce her expenses in 2021 by operating her business from her garage. In contrast, Mr Amberg chose not to make use of his commercial property for business purposes and continued to meet significant rental costs. While it is open to Mr Amberg to make his own business decisions, there is no question that Ms Lineker requires his assistance in maintaining [Child 1], in accordance with his capacity, which may require consideration of financial decisions and the arrangement of his financial affairs.
On balance, after considering Mr Amberg’s superior asset position, his significantly reduced costs of self-support, his significantly increased income due to the state government grants from 1 July 2021, the income and benefits available to Ms Lineker and the undisputed special needs of [Child 1], the tribunal proposes to set an annual rate of child support payable by Mr Amberg in the period from 1 April 2020 to 30 June 2021 in the amount of $1,700. In respect of the period 1 July 2021 to 31 October 2021 the tribunal proposes to set an annual rate of child support payable by Mr Amberg in the amount of $8,500. Commencing 1 November 2021 to 23 March 2022 the annual rate of child support payable by Mr Amberg is to reduce to $1,500, in line with his reduced income.
Furthermore, the annual rate of child support payable by Mr Amberg is to increase in the period 1 April 2020 to 31 December 2022 by $1,505 ($4,144/1005 days x 365) to reflect a 50% contribution by Mr Amberg to the psychology, dental and orthodontic costs incurred in respect of [Child 1] in late 2020 and 2021, [Education Provider 1] in 2021 and tutoring costs of [Child 1] from September 2021 as discussed earlier in these Reasons for Decision.
Commencing 24 March 2022, Mr Amberg is scheduled to be hospitalised and will have little capacity to operate his business. Given that he has 28% care of [Child 1] and his contribution to [Child 1]’ special needs, application of the minimum annual rate is not applicable. In the circumstances, the tribunal is satisfied that it is appropriate for calculation of the child support liability to revert to the administrative assessment, based on the most recently lodged tax returns of the parties. Prior to lodgement of the 2021/22 tax returns, this would result in the annual rate of child support being nil. The tribunal is satisfied that Mr Amberg can arrange his financial affairs such that he can continue to meet his share of [Child 1]’ special needs.
According to departmental records, Mr Amberg’s child support arrears at 30 June 2021 were $3,781. If Mr Amberg has paid the required child support since 1 July 2021, his arrears overall to 31 December 2021 will reduce by almost $2,000.
Subsection 117(4) of the Act requires the tribunal to take into account whether any departure determination or failure to make a departure will cause any hardship to the children, the carer, the liable parent or any other person the liable parent has a duty to support. Mr Amberg told the tribunal that he simply cannot afford to pay the child support assessed by the objections officer on 14 May 2021 of $10,000 per annum which would result in an ever-increasing debt and a further negative impact on his mental health. In respect of the special education needs of [Child 1], he stated that he would just have to “figure it out”.
The tribunal notes that the administrative assessment under consideration is based on an adjusted taxable income for Mr Amberg of $85,000 until 30 June 2022 and a corresponding child support liability in the vicinity of $9,000 per annum until 31 December 2020 and then in the vicinity of $7,000. If the annual rate of child support were to reduce, Mr Amberg acknowledged that it would likely cause hardship to Ms Lineker and [Child 1], as [Child 1] would be unable to attend the range of extra-curricular activities to which he has become accustomed.
Ms Lineker agreed that she and [Child 1] would suffer hardship if the annual rate of child support payable by Mr Amberg were to reduce. She asserted that she is barely staying afloat now and has struggled to meet the needs of her and [Child 1] for 10 years. She further stated that in her view Mr Amberg should not be incurring hardship based on the existing administrative assessment as he has made poor choices in respect of his discretionary spending and choosing not to use his commercial property as an income source.
The tribunal is satisfied that the proposed departure decision will not cause hardship to Mr Amberg, albeit it may be necessary for him to consider the arrangement of his financial affairs so as to manage the child support liability and his business commitments. The current liability equates to around $250 per month. Mr Amberg is currently meeting monthly mortgage payments on the warehouse of more than $1,300. It is open to him to seek rent for these premises. Meanwhile, Ms Lineker is managing to contribute $50 per week to an investment portfolio for [Child 1] and various other discretionary expenses. The law requires Ms Lineker to prioritise the present needs of [Child 1] over providing for his future. While the tribunal acknowledges the desire of both parents to provide every opportunity and experience to [Child 1], it is also open to both of them to prioritise his “necessary” needs, in line with their financial capacity.

Issue 3 – Is it otherwise proper to make a particular departure determination?

The third step is to consider whether it would be otherwise proper to make a particular departure determination in accordance with sub-subparagraph 98C(1)(b)(ii)(B) of the Act. Subsection 117(5) sets out the matters that must be considered when deciding whether it would be ‘otherwise proper’ to make a departure determination.
As a sole parent, Ms Lineker is in receipt of FTB Part B. Given her low taxable income, any change in the child support payable by Mr Amberg will have no impact on her entitlement to FTB Part B in the relevant period. In respect of FTB Part A, Ms Lineker receives a payment in between the base rate and the maximum rate. Any decrease in the child support payable by Mr Amberg will only impact the rate of FTB payable to Ms Lineker in excess of the base rate by 20 cents in the dollar. In the circumstances, the tribunal considers that it is otherwise proper to make the particular proposed determination.
It is open to either party to lodge a further change of assessment application should the future circumstances of either party change significantly from the circumstances upon which this decision is based. In particular, in relation to Mr Amberg’s hip surgery and recovery period.

DECISION

The tribunal sets aside the decision under review and, in substitution, decides that:

·         The departure decision of 16 March 2020 will cease on 31 March 2020;
·         The rate of child support payable by Mr Amberg in respect of [Child 1] for the period 1 April 2020 to 30 June 2021 is varied to $1,700 per annum;
·         The rate of child support payable by Mr Amberg in respect of [Child 1] for the period 1 July 2021 to 31 October 2021 is varied to $8,500 per annum;
·         The rate of child support payable by Mr Amberg in respect of [Child 1] for the period 1 November 2021 to 23 March 2022 is varied to $1,500 per annum;
·         The child support liability in respect of the period commencing 24 March 2022 is to revert to the administrative assessment, based on the most recently lodged tax returns of the parents; and
·         The rate of child support payable by Mr Amberg in respect of [Child 1] for the period 1 April 2020 to 31 December 2022 is to increase by $1,505 per annum.