Arocher and Spreadboro (Child support)
[2024] ARTA 945
•14 November 2024
Arocher and Spreadboro (Child support) [2024] ARTA 945 (14 November 2024)
Applicant/s: Mr Arocher
Respondent: Child Support Registrar
Other Parties: Ms Spreadboro
Tribunal Number: 2024/SC028347
Tribunal: Member A Byers
Place:Brisbane
Date:14 November 2024
Decision:The Tribunal affirms the decision under review.
CATCHWORDS
CHILD SUPPORT – income, property and financial resources – low income parent – fixed annual Child Support rate – unjust and inequitable result – other financial resources – decision under review affirmed
Names used in all published decisions are pseudonyms. Any references appearing in square brackets indicate that information has been omitted from this decision and replaced with generic information pursuant to subsection 16(2AB) of the Child Support (Registration and Collection) Act 1988.
Statement of Reasons
BACKGROUND
Mr Arocher and Ms Spreadboro are the parents of [Child 1] who is in Ms Spreadboro’s sole care. Mr Arocher is the parent liable to pay child support.
Mr Arocher’s adjusted taxable income for 2022/23, as assessed by the Australian Taxation Office (ATO), is $9,883. Child Support has provisionally assessed Ms Spreadboro’s adjusted taxable income for 2022/23 for child support purposes as $18,686.
The ATO assessment triggered a new child support period from 1 March 2024 to 31 May 2025. It also triggered a reassessment by Child Support of Mr Arocher’s child support liability to a fixed annual rate from 1 March 2024 of $1,720 per annum as provided for in section 65A of the Child Support (Assessment) Act 1989.[1]
[1] All legislative references are to this Act.
On 1 March 2024 Mr Arocher made an application under subsection 65B(1) for section 65A not to apply and on 19 March 2024 Child Support refused the application.
On 19 July 2024 an objections officer disallowed Mr Arocher’s objection.
On 2 August 2024 Mr Arocher sought review by the Administrative Appeals Tribunal (AAT). At the telephone hearing on 14 November 2024 the parties gave sworn evidence. I accepted into evidence the ‘Section 37(1) Statement and Documents’ provided by Child Support, comprising folios 1 to 72 (Exhibit 1).
From 14 October 2024, the AAT became the Administrative Review Tribunal (the Tribunal). Under the relevant transitional provisions, applications for review not finalised before 14 October 2024 are taken to be an application for review to the Tribunal. The transitional provisions enable the Tribunal to continue and finalise any aspect of a review not already completed by the AAT. This decision and statement of reasons is accordingly made by the Tribunal.
ISSUES
The issues for consideration include an assessment of Mr Arocher’s income as at 1 March 2024 and whether he has demonstrated that it would be unjust and inequitable to apply the fixed annual rate of child support.
Mr Arocher has also raised other concerns. Mr Arocher is aggrieved by the fact Child Support applied a fixed annual rate without first consulting him in circumstances where he was accustomed to paying only the minimum annual rate based on his adjusted taxable income. Mr Arocher is also concerned that Child Support has had improper regard to the fact he is employed by a private company owned by his partner.
10. Regarding the first of the concerns, the Tribunal’s review role concerns the correctness of the decision under review and not how the agency concerned went about making the decision. That said, it seems from the structure of the relevant legislation (set out below) that Child Support’s approach is entirely appropriate.
CONSIDERATION
11. Section 65A provides as follows:
65A Annual rate of child support for low income parents not on income support
Assessment of annual rate
(1) The Registrar must assess an annual rate of child support payable by a parent for a child for a day in a child support period as the rate specified in subsection (2) if:
(a) the parent did not receive an income support payment during the last relevant year of income; and
(b) the following amount is less than the pension PP (single) maximum basic amount:(i) if subparagraph (ii) does not apply—the parent’s adjusted taxable income determined in accordance with section 43 for the last relevant year of income for the child support period;
(ii) if the day occurs in the application period for an income election made by the parent—the amount that applied under subsection 60(2) or (3), or that was worked out under subsection 62A(1); and
(c) the parent does not have at least shared care of the child during the relevant care period.
12. As noted, the child support period relevant to this matter is 1 March 2024 to 31 May 2025. The last relevant year of income for this child support period is 2022/23 (subsection 5(1)).
13. According to Child Support, at all relevant times the pension PP (single) maximum basic amount was $25,225 per annum.
14. The following is not disputed and I find accordingly that:
-Mr Arocher did not receive an income support payment during 2022/23;
-Mr Arocher’s ATO-assessed adjusted taxable income for 2022/23 is $9,883; and
-Ms Spreadboro has at all relevant times had the sole care of [Child 1].
15. As subsection 65A(1) was triggered on 1 March 2024, Mr Arocher was required to pay a fixed annual rate as provided for in subsection 65A(2). According to Child Support, the fixed annual rate for one child as at 1 March 2024 is $1,720 per annum.
16. As noted, subsection 65B(1) enables a person to lodge an application for section 65A not to apply and Mr Arocher did so on 1 March 2024. Subsection 65B(2) places the following onus on the applicant:
(2) The parent making the application must provide evidence to the Registrar concerning the parent’s income (within the meaning of subsection 66A(4)) to demonstrate that his or her current income is:
(a) less than the pension PP (single) maximum basic amount; and
(b) that it would be unjust and inequitable to expect him or her to pay the amount assessed under this section.
17. That is, the applicant parent has an onus to establish that their current income is less than the pension PP (single) maximum basic amount. If this onus is met, Child Support is then required to determine if the applicant has also demonstrated that it would be unjust and inequitable to expect them to pay the fixed annual rate.
18. Income is defined in subsection 66A(4) to mean:
(a) any money earned, derived or received by a parent for their own use or benefit, other than money earned, derived or received in a manner, or from a source, prescribed by the regulations for the purposes of this paragraph; or
(b) a periodical payment by way of a gift or allowance, other than a payment of a kind also prescribed by the regulations.
19. Subsection 65B(3) contains the additional constraint that an assessment issued by the ATO for the last relevant year of income is not sufficient evidence of the applicant’s current income. Under subsections 65B(4) and 65B(5), if Child Support considers subsection 65B(2) is satisfied, it may (in writing) grant an application from a date that occurs in the relevant child support period.
Was Mr Arocher’s income as at 1 March 2024 less than the pension PP (single) maximum basic amount?
20. Mr Arocher said his partner is the sole shareholder and probably the sole director of [Business 1]. According to Mr Arocher, he knows nothing about this company save for the fact it has been registered for three or four years and has been operating a business called [Business 2] for this period. Mr Arocher said he has been employed by the business for about 12 months and has no idea who the business employed before this.
21. Mr Arocher said he is employed on a casual basis for a set 12 hours per week and earns $25 an hour. Mr Arocher has provided pay advices for the weeks ending 6 and 13 March 2024 showing gross earnings of $300 in each week.
22. As I understood Mr Arocher, he is the sole employee of [Business 2] and the person generating the income of the business through his personal exertion. However, according to Mr Arocher, he has no knowledge of how much is being generated and there is no documentation available to me to indicate, for example, what income the business might have generated in 2022/23 or 2023/24.
23. Ms Spreadboro said Mr Arocher advertises on [various social media] that [Business 2] is his business and a van parked at his home advertises the business as family owned. Ms Spreadboro has also provided a photograph of a public transport bus which reveals an advertisement for [Business 2] which covers one entire side. I understand the inference Ms Spreadboro draws is that the business is generating sufficient income to enable it to do potentially expensive advertising.
24. Mr Arocher indicated I was welcome to look at the social media pages which are public pages. I did attempt to do so using the search facilities on the various sites but was unable to locate anything. [Business 2] does have a website. Mr Arocher is the content creator and his mobile is the contact number for enquiries. I gather from this that he is the public face of the business and I consider it likely that he knows much more about the finances of the business than he appeared to suggest at the hearing.
25. That said, there is no information before me that could lead me to conclude with any confidence what Mr Arocher’s current income as at 1 March 2024 by way of earnings was more than what the pay advices he submitted suggest.
26. As noted, income includes money received by a parent for their own use or benefit. Mr Arocher confirmed at the hearing that that he owns the house he and his partner reside in. Mr Arocher has provided home loan and loan offset accounts, which shows weekly repayments of $970 from (at least) October 2023. Mr Arocher’s entire wage of $300 per week is deposited into the account. Mr Arocher confirmed that his partner pays the balance and also covers all the family’s remaining expenses, including utilities and groceries.
27. Ordinarily, it would be open to say Mr Arocher is receiving a benefit by way of his partner’s significant contribution to the mortgage. Mr Arocher’s response essentially is that the repayments are a loan and he points to the fact the deposits are annotated “[Mr Arocher] loan”. Ultimately, in the absence of evidence to the contrary, I accept this is the case.
28. In the circumstances I find Mr Arocher has discharged the onus of showing his current income from 1 March 2024 was significantly less than the pension PP (single) maximum basic amount.
Is it unjust and inequitable to expect Mr Arocher to pay the amount assessed under section 65A?
29. The Act does not indicate what to consider when determining if it would be unjust and inequitable to expect a person to pay the fixed annual rate. As noted, in Mr Arocher’s case this is $1,720 per annum. The Child Support Guide is also largely silent. Clearly, however, the point of section 65A is that, where a person on a low income has other financial resources at their disposal, or has a capacity due to their circumstances to direct funds to the support of their child, those should be appropriately utilised.
30. In this regard, looking at the objects of the Act, under subsection 3(1), parents have a primary duty to maintain their children. Subsection 3(2) provides that this duty has priority over all commitments other than (amongst other things) the commitments necessary to enable a parent to support themself. As the fixed annual rate is very low when compared to the realistic costs of children, where a person’s circumstances enable them to help meet those costs it is expected that they do so.
31. It also seems to me that what is unjust and inequitable need not be confined to the applicant’s circumstances and that the payee’s financial circumstances, as well as the needs of the children, are also relevant. In this regard, although subsection 117(4) lists the matters to consider when determining what is just and equitable in change of assessment cases under Part 6A, that list is arguably useful in the present context.
32. Ms Spreadboro’s adjusted taxable income is low and she plainly needs whatever financial assistance Mr Arocher can provide.
33. I suggested to Mr Arocher that, since his partner is covering all the household costs and is a major contributor to the mortgage, some of his wage ($300 per week) could be directed to meeting the fixed annual rate assessment ($34.40 per week). Mr Arocher was quite candid in his response. He would “100%” be able to find the resources to do so. I understand that his grievance (referred to earlier) is ultimately that Child Support imposed the fixed annual rate without consultation rather than that he was unable to meet the imposed commitment.
34. I find that, on Mr Arocher’s evidence, he has a capacity to pay the fixed annual rate assessed. As it is a small sum when compared to the costs that Ms Spreadboro has to meet for [Child 1] on her meagre income, I find it is just and equitable that Mr Arocher pay the assessed fixed annual rate.
35. Accordingly, I am satisfied that Mr Arocher has not discharged the onus under section 65B with the result that the fixed annual rate under section 65A applies.
36. For completeness, regarding Mr Arocher’s concern that he has not been assessed to pay the fixed annual rate in prior income years (and so should not have to pay it this time), there is insufficient information in the hearing papers to provide a full explanation. Mr Arocher can of course pursue this matter with Child Support should he wish.
37. However, I note Child Support assessed Mr Arocher to pay the minimum annual rate from 6 April 2021 in response to his assessed adjusted taxable income for 2019/20 of $21,797. As this figure marginally exceeded the then pension PP (single) maximum basic amount of $21,470, section 65A would not have been triggered.
DECISION
The Tribunal affirms the decision under review.
Date of hearing: | Thursday, 14 November 2024 |
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