Astor and Hinch (Child support)

[2018] AATA 3278

Astor and Hinch (Child support) [2018] AATA 3278 (17 July 2018)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2018/MC013945

APPLICANT:  Ms Astor

OTHER PARTIES:  Child Support Registrar

Mr Hinch

TRIBUNAL:Member F Hewson

DECISION DATE:  17 July 2018

DECISION:

The tribunal decided to affirm the decision under review.

CATCHWORDS

Child support - Whether a fixed annual rate should apply - Current income likely to be higher than the parenting payment (single) maximum basic amount - Fixed annual rate should apply - 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. This review is about whether Ms Astor’s application for the fixed annual rate of child support to not apply should be accepted.

2. Ms Astor and Mr Hinch are the parents of [Child 1] (the child). A child support case in respect of the child was registered in May 2008 and Ms Astor is currently assessed as liable to pay child support to Mr Hinch.

3. For the period 25 December 2017 to 30 November 2018 Ms Astor was assessed to pay Mr Hinch an amount of $1,390 per annum (the fixed annual rate) in respect of the child, based on Ms Astor’s adjusted taxable income, assessed by the Australian Taxation Office, of $16,859 for 2016/17.

4. On 16 January 2018 Ms Astor made an application to the Department of Human Services – Child Support (the Department) for the fixed annual rate to not apply. On the same date an officer of the Department decided to grant Ms Astor’s application for the fixed annual rate to not apply to the assessment from 25 December 2017 (the original decision).

5. Mr Hinch objected to the original decision. An objections officer allowed the objection on 9 April 2018. This had the effect of increasing Ms Astor’s child support liability to $1,390 per annum.

6. Ms Astor lodged an application for review of the objection decision with the Social Services and Child Support Division of the Administrative Appeals Tribunal (the tribunal) on 27 April 2018. The application was heard on 17 July 2018. Ms Astor gave evidence on affirmation by conference telephone. Mr Hinch also gave evidence on affirmation to the tribunal via conference telephone. The tribunal also had regard to documents provided by the Department, a copy of which was also given to Ms Astor and Mr Hinch.

ISSUES

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

2. The issue which arises in this case is whether the fixed annual rate of child support should apply in respect of Ms Astor’s child support liability.

CONSIDERATION

1. Section 65A of the Act provides that there is a fixed annual rate of child support payable for low income parents not on income support. At the time relevant to this review the fixed annual rate was $1,390 per child. The tribunal finds that the Department made a determination under section 65A which required Ms Astor to pay the fixed annual rate in respect of the child of the case.

2. Section 65B of the Act provides that if the Department has made a determination under section 65A, the liable parent may apply for this section to not apply. The parent making the application must provide evidence to demonstrate that his or her current income is less than the parenting payment (single) maximum basic amount; and that it would be unjust and inequitable to expect him or her to pay the amount assessed under section 65A. The parenting payment (single) maximum basic amount at the time relevant to this review was $19,568.

3. The tribunal finds that Ms Astor made an application under section 65B.

4. At the hearing Ms Astor confirmed that she does not receive payments from Centrelink. She said her farm work is seasonal, and during the lambing season she works very long days. She said it is difficult, therefore, for her to take other jobs, which she would have to do if she applied for newstart allowance.

5. As well as her farm income of $200 per week, Ms Astor said she was also employed by [Company 1] until 14 April 2018. She said she left this position because her employer was emotionally abusive and was not paying her on time. On top of that it was expensive for her to get to the job, due to the long distance travelled.

6. Ms Astor said she also works two nights a week at [a business]. She started in that position in February 2018. She was working three nights a week, but that was later reduced to two nights. It costs $25 a day for fuel to get to work.

7. Ms Astor agreed that her taxable income for 2017/18 is likely to be over the threshold amount of $19,568, even after deductions for work related expenses, but she said her income has now reduced.

8. Ms Astor said [Child 1] stays with her overnight for one weekend a month, and she has expenses associated with him staying, such as for haircuts. She said this is not being taken into account in the child support assessment.

9. Mr Hinch said as far as he knows, Ms Astor’s employment with the [business] is cash in hand. Ms Astor agreed that she is paid in cash, but this is on the books and a group certificate will be issued.

10. The tribunal considered whether, for the purpose of section 65B, Ms Astor has demonstrated that her income is less than the parenting payment (single) maximum basic amount of $19,568. Subsection 65B(3) provides that an assessment by the Commissioner of Taxation for the last relevant year of income is not sufficient evidence of the income of the parent for the purpose of the section.

11. The Department’s policy in relation to applications for the fixed annual rate of child support not to be used is at Part 2.3.3 of the Child Support Guide. In relation to the meaning of income for the purpose of section 65B it provides ‘income’ is not restricted to taxable income and:

    ·     includes coins and bank notes, cheques and deposits into bank accounts (but not goods, services, or some other benefit, even if the payment is capable of being valued in money terms)

    ·     is ‘earned’ when it is received in return for labour or service, in compensation or as profit

    ·     is taken to be ‘derived’ in accordance with ordinary business and commercial principles. It includes capital payments, trust distributions and royalties

    ·     is taken to be ‘received’ when it comes into a person’s possession. This covers most money which comes into a person’s hands including capital payments, e.g. a tax refund, Lotto wins, lump sum compensation, profit from the sale of an asset, deposits into a joint bank account

    ·     must be received for the person’s own use or benefit. Income received by a person in another capacity is not included.

12. The evidence before the tribunal indicates that Ms Astor’s income for the 2017/18 year is likely to be more than $19,568 per annum. At the time she made her application for the fixed annual rate to not apply, on 16 January 2018, Ms Astor’s income comprised income from [Company 1] of about $350 per week, based on her year to date income shown on her payslips (i.e. $12,059 at 23 February 2018) and farm income of $200 per week. This is equivalent to about $28,600 per annum and, even allowing for reasonable work related deductions (e.g. $4,000, being a 10% increase in the amount claimed for 2017/17), Ms Astor’s current income, for the purpose of the application on 16 January 2018, was more than the parenting payment (single) threshold amount of $19,568. The tribunal decided, therefore, to refuse Ms Astor’s application, under section 65B, for the fixed annual rate of child support to not apply.

13. As noted above, Ms Astor’s income has reduced since she made her application for the fixed annual rate to not apply. It is open to Ms [Astor] to make a new application based on her current income.

DECISION

The tribunal decided to affirm the decision under review.