Bambra and McBeth (Child support)

[2021] AATA 4494

Bambra and McBeth (Child support) [2021] AATA 4494 (7 October 2021)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2021/HC020945

APPLICANT:  Miss Bambra

OTHER PARTIES:  Child Support Registrar

Mr McBeth

TRIBUNAL:Member M Martellotta

DECISION DATE:  7 October 2021

DECISION:

The tribunal sets aside the decision under review and, in substitution, decides that for the period 4 May 2020 until a child support assessment terminating event occurs in relation to the child [Child 1] (born [February] 2006), Mr McBeth’s adjusted taxable income is varied to $110,000 per annum.

CATCHWORDS

CHILD SUPPORT – departure determination – 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 omitted 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. Miss Bambra and Mr McBeth are the parents of two children. The child [Child 1] was born [in] February 2006. According to Services Australia – Child Support (the Agency) records, [Child 1] is in the mother’s 100% care. Another child, [Child 2], was born [in] July 2009 and he is in the father’s 100% care.[1]

   [1] Another child is over the age of 18 years of age and not part of the child support assessment. Both parents also have other dependants relevant to the administrative assessment of child support.

2. On 4 May 2020 Miss Bambra lodged a change of assessment application on the ground of Mr McBeth’s income, financial resources, and property (reason 8A). Mr McBeth made a cross application on the same ground, namely Miss Bambra’s income, financial resources, and property.

3. At the time, the following administrative assessment was in place:

   ·For the period 1 March 2020 to 27 Aril 2020 Mr McBeth was assessed at the annual rate of $20,141 based on his 2018/19 adjusted taxable income (ATI) of $268,562 and Miss Bambra’s 2018/19 income tax declaration of $23,000.

·For the period 28 April 2020 to 31 May 2021 Mr McBeth was assessed at a nil annual rate based upon his 2019/20 nil income estimate and Miss Bambra’s 2018/19 income tax declaration of $23,000.

1. An Agency decision maker decided that the ground to depart was established and varied the assessment so that for the period 28 April 2020 until a terminating child support event for [Child 1] Mr McBeth was to be assessed on an ATI of $350,000 per annum.

2. Mr McBeth’s objection[2] to that decision was allowed and another decisionmaker decided to vary the assessment so that for the period 1 March 2020 to 28 February 2021 Mr McBeth was to be assessed on an ATI of $74,353 per annum and thereafter the administrative assessment would apply as per the legislative formula.

   [2] The Agency granted Mr McBeth and extension of time within which to make his objection.

3. Miss Bambra seeks review of that decision. The tribunal issued directions following a telephone directions hearing. On 1 September 2021 it held a hearing. Both parties attended by conference telephone and gave their evidence under affirmation. Mr McBeth was represented by [Representative A] of [firm name]. The tribunal issued further directions following the hearing and provided the parties the opportunity to make submissions in relation to additional documents received by the tribunal.[3]

   [3] The tribunal also sought further submissions from Mr McBeth in relation to documents A28-A29.

4. The following documents were provided. Agency Statement and Documents (722 pages); Miss Bambra (A1–A32) and Mr McBeth B1–B206.

ISSUES

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

2. Child support legislation is interpreted by the Agency with the aid of the Child Support Guide (the Guide). The tribunal is not bound by law to apply the policy as set out in the Guide but provided the policy is consistent with the legislation, it is required to have regard to it and in the ordinary course follow it.[4]

   [4] See Re Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634

3. The issues for the tribunal to determine in this case are:

   ·     Does a ground for departure exist? if so,

   ·     Would it be just and equitable as regards the child, the liable parent, and the carer entitled to child support to depart from the administrative assessment of child support?

   ·     Is it otherwise proper to make a particular departure determination?

CONSIDERATION

Issue 1 – is there a ground to depart from the administrative assessment?

1. The rate of child support payable by a liable parent is usually based on an administrative assessment calculated using the relevant formula under Part 5 of the Act. This involves the application of a statutory formula, which takes into account factors such as the number of children, the age of each child, the level of care provided and the income of each parent. The income used in the calculation has a number of components making up the adjusted taxable income, which is worked out using section 43 of the Act. The general approach is that the Child Support Registrar (“the Registrar”) will utilise a parent’s ATI as assessed by the Australian Taxation Office (ATO) for the last relevant year of income.

2. Part 6A of the Act allows for a departure from an administrative assessment (a process commonly known as a change of assessment). The liable parent or a carer may apply to the Registrar for a determination to depart from the child support administrative assessment under Part 6A of the Act (section 98B). Section 98C of the Act provides that the Registrar may make a determination to depart from the formula assessment and as noted, establishes a three-step process.

3. The grounds for departure from the administrative assessment are set out in subsection 117(2) of the Act. Only one ground is required in the special circumstances of the case to depart from the administrative assessment and thereby satisfy the requirements of subsection 117(2) of the Act.[5] In this matter the only ground contested at hearing was whether a ground for departure is established pursuant to reason 8A.

Reason 8A – income, property and financial resources of the parties

[5] The phrase “special circumstances of the case” is not defined in the Act. However, the Family Court has held that “it is intended to emphasise that the facts of the case must establish something special or out of the ordinary” (Gyselman and Gyselman (1992) FLC 92-279). Likewise, in Phillippe and Phillippe (1978) FLC 90-433 the Court held that “special circumstances” are “facts peculiar to the particular case which set it apart from other cases”. 

1. Subparagraph 117(2)(c) (ia) of the Act provides a ground for departure exists where, in the special circumstances of the case, application of the provisions of the Act relating to the administrative assessment of child support would result in an unjust and inequitable determination of the level of financial support to be provided by the liable parent for the child because of the income, property and financial resources of either parent.

Miss Bambra

1. Miss Bambra told the tribunal that Mr McBeth has access to income and financial resources through a private company [Business 1] despite his wife Mrs McBeth, being the sole director and shareholder of that entity. She says that he has organised his financial affairs in this way to avoid transparent disclosure of his actual income and financial resources. In support of her submission, she noted that:

   a)Mr McBeth had indicated in October 2018 his intention to establish a company.

   b)The company was established shortly after he resigned from his previous employed role.

   c)Mr McBeth’s spending patterns reflect a lifestyle not consistent with a person with either a nil or income of about $74,000.

   d)Mr McBeth and his wife have joint access to bank accounts including company bank accounts.

   e)Mrs McBeth’s social media [profile] shows that she only commenced work with the company in November 2020 Mrs McBeth also has a full-time job with [Employer 1].  Miss Bambra questions how she would have the capacity to also run the company business in these circumstances.

   f)She cannot say with any certainty what Mr McBeth’s actual income and financial resources are, but she believes it would be more than the $74,000 as set by the objection decision.

2. In terms of her circumstances Miss Bambra told the tribunal that:

   a)She resides in the countryside near [a named town in Country 1].

   b)She is [an occupation 1] who now works [occupation 1 in a relief role].

   c)She previously worked part time due to childcare responsibilities. She changed to relief [occupation 1 work] due to health issues arising from a motor vehicle accident injury she suffered in 2018 and due to COVID-19 restrictions.

   d)[Child 1] lives with her.  She is 15 and a half and goes to high school.

   e)She has recently applied for income support based upon disability but that is to be assessed.

   f)She rejects the submission made by Mr McBeth that she has received a lump sum payment arising from her car accident. There is a case that is ongoing but nothing has settled. Their daughter [Child 1] may also receive some compensation but anything she receives will be held on trust.

   g)In about March 2020 she moved back into the home owned by her son’s father Since then, she has not had any accommodation costs. She no longer receives child maintenance for her son since moving back in. She meets the costs for [Child 1] from her income. Her son’s father provides support for the costs for their son. She otherwise contributes to the household costs. She has not resumed any partnered relationship with their son’s father, but they are living together and sharing some of the living expenses and costs.

3. Miss Bambra provided copies of payslips showing that on average she earns about [amount] per month (about AU$1,500).

4. Miss Bambra also provided copies of emails showing that a compensation claim for [Child 1] was being explored but as not yet resolved.

Mr McBeth

1. Mr McBeth’s representative, [Representative A], submitted that the objection decision is the correct decision. The assessment should be based upon her client’s taxable income as assessed by the Australian Taxation Office in his personal income tax returns. She submitted that on her instructions:

   a)Mr McBeth’s wife established the company solely for the purpose of developing her own career ambitions as [an occupation 2].

   b)Mrs McBeth had to obtain the permission of her employer [Employer 2] to register the company. Whilst there may have been personal discussions between Mr and Mrs McBeth about establishing the company the decision to register a company was solely that of his wife.

   c)Mr McBeth’s only relationship with the company is that of a sub-contractor. That relationship commenced sometime after Mr McBeth returned to Australia in 2019. He issued his first invoice to [Business 1] in June 2019.

   d)The only two people providing consultancy services through the entity [Business 1] are Mr and Mrs McBeth.

   e)Any profit generated by the company should not be attributed to her client.

   f)Mrs McBeth continued to be an employee of [Employer 2] after establishing the company until she was made redundant in November 2020. This is why her [social media] profile states that she commenced her association with the company at that time.

   g)Mr McBeth operates his consultancy as a sole trader – he does not have an ABN. He has a contract with the company which commenced 1 July 2019 to provide consultancy services to [Business 1]. His only client is [Business 1].

   h)Whilst she operates through [Business 1] Mrs McBeth is also employed by [Business 3] a company to which Mr McBeth also provides consultancy services (via the entity of [Business 1]) She is paid salary from [Business 3]; that salary goes into a joint account operated by Mr and Mrs McBeth. Mrs McBeth is also employed by [Employer 1] but that is a short-term contract for limited hours.

   i)Her client’s only income is that which he receives from services he provides to [Business 1] as a contractor.

   j)His wife produces most of the income generated by the company.

2. [Representative A] rejects any suggestion that her client is an associate of [Business 1] in these circumstances.

3. Mr McBeth provided the following evidence:

   a)His previous area of work was [occupation 3] for a large [Country 1]-based [project]. He had worked with that company since 2008.

   b)The family returned to Australia in 2018 but he was still travelling extensively with his work. He was based in Australia and spending extended periods away for his work. He resigned from that employment in February 2019 mainly due to family and relationship reasons.

   c)He had difficulty finding employment in [occupation 3] with an Australian company because he did not hold relevant tertiary qualification. His wife tried to get him a job with [Employer 2] but was unsuccessful for this reason. The only way he could work in the sector was to provide consultancy through a third-party entity such as [Business 1].

   d)The timing of the company’s registration had nothing to do with his leaving his former employer. He rejects the suggestion that the company is something that he is involved with other than as a sub-contractor of consultancy services to [Business 1]. The company was something that his wife wanted to do for a long time and did not have anything to do with him.

   e)Another company, [Business 4], was also registered by his wife in March 2019 but he does not know why. He is not able to fully explain what the relationship is between [Business 1], [Business 4] and the [Family Trust 1]. He leaves all that to the accountant.

   f)As he understands it, income from [Business 1] goes to the family trust and then distributions from the family trust goes to [Business 4]. Whilst he was a signatory to the [Business 4][6] company bank account he has since ceased being a signatory to that account.

   g)He operates a consultancy as a sole trader and provides his services to [Business 1] (and its clients which include [Employer 2], [Business 3], and [a named business]). He provides consultancy in [occupation 3 and related roles]. His wife provides consultancy services in [her speciality areas]. The company also employs a personal assistant who only provides assistance to his wife.

   h)The only two people providing consultancy services to [Business 1] clients are himself and his wife. He does not derive any other benefits from the company [Business 1]. He covers all the expenses of his consultancy from the income he generates from that business. He works about 25 hours for the company when working from home but when he is onsite, he works full time.

   i)The reason why his wife is employed by [Business 3] and also by [Employer 1] is due to the particular requirements of those clients which require her to be an employee and not a contractor.  Her role with [Employer 1] will be for about 6 weeks.

   j)The household finances operate on the basis that his and his wife earnings are deposited into a joint account[7] from which the household costs are met. His wife contributes more than he does as she earns more than him.

   k)Based on his draft 2020/21 personal income tax return he expects to have an income for that financial year of $74,940.[8]

   [6] Page 127

   [7] B108

   [8] B170

4. The tribunal referred Mr McBeth to [Business 1] company bank statements[9] dated December 2020 which show him to be a co-signatory to those company accounts. Mr McBeth told the tribunal that he is no longer a signatory to those accounts. He thinks he ceased sometime in November 2020 and he ceased being a signatory at his wife’s request.

   [9] Page 448

5. He cannot say why she made this request as she gave no reason for this. He said that he was originally a signatory because his wife was working at [Employer 2] and he was helping her to ‘set it (the business) up’. He also said that he never sought to be a signatory to the company accounts. He says that the change of assessment decision originally made by the Agency which attributed him with company income and profit was not the reason or motivation for him ceasing to be a signatory.

6. [Representative A] told the tribunal that she had raised this question with Mrs McBeth who told her that she asked Mr McBeth to be a signatory to company bank accounts because he would often be working in remote locations and she thought it would be easier if he had to access funds for company expenses.

7. Subsequent to the hearing Mr McBeth provided written submissions that stated that when Mrs McBeth established the company bank accounts, her bank opened the accounts with both her and her husband as signatories without her knowledge and her request that his name be removed was never actioned by the bank. Mrs McBeth also provided a statutory declaration stating that she was not aware that her husband was a signatory to the accounts until the CSA proceedings brought this to light.

8. The tribunal also asked Mr McBeth to comment upon an unsigned ASIC document dated 17 June 2021 which appoints Mr McBeth as Director to [Business 1]. Mr McBeth provided a letter from his accountants stating that it was not Mr McBeth’s intention to be a director and that he was appointed by their error and once their error was identified he was removed.

9. [Representative A] submitted that Miss Bambra has not applied for certain [Country 1] social security benefits [specified] that her children would be entitled to receive.  She also submitted that Miss Bambra lacked credibility because she did not advise the Agency that she was living with her ex-partner. [Representative A] also submits that Miss Bambra has not fully disclosed receipt of a lump sum compensation payment but that her client has no issue with his daughter receiving a lump sum amount for her injuries associated with her motor vehicle accident. In response Miss Bambra said that she has not applied for [the specified benefits] because she did not think that she was qualified and repeated that she has not received any lump sum amount and further rejects that she has withheld relevant information about her circumstances.

Documents

1. The tribunal noted the following information contained in provided documents:

   a)[Business 1] acts as the trustee for the [Family Trust 1] and the net income of the trust is fully distributed to [Business 4]. In year end 2020 the trust received a total income of $379,373 mainly comprised of services fees.

   b)The profit (after expenses which includes the contract work costs of $74,632) of $190,742 was distributed to [Business 4].

   c)Information provided to the Agency by [Bank 1] which shows that Mr McBeth was a signatory to the bank accounts for [Business 4], [Business 1] and the family trust.

2. The tribunal makes the following findings of fact:

   a)Miss Bambra is employed as [an occupation 1] in [Country 1].

   b)Mr McBeth left his former employment in February 2019 and now works as a consultant.

   c)Mr McBeth’s wife is the director and sole shareholder of [Business 1] and [Business 4]. The companies were registered in March 2019.

   d)[Business 1] is the trustee for the [Family Trust 1].

   e)Mr McBeth was a signatory to bank accounts for the companies and the family trust until November 2020.

   f)Mr McBeth invoices [Business 1] for consultancy work. Mrs McBeth provides consultancy services through [Business 1]. They are the only two consultants providing services to [Business 1] clients.

   g)Income generated by personal services provided by Mr McBeth and income generated by his wife are ultimately paid into joint bank offset accounts from which they jointly access funds.

1. In this matter, the key issue in dispute was the relationship between Mr McBeth and the private companies of which his wife is the sole director and shareholder. Mr McBeth resists suggestions that he is an associate of those entities and that for the purposes of the assessment any income or financial resources of those entities should be attributed to him. In effect he says that he operates is at arm’s length from the business of [Business 1] and associated entities, and that his only relationship is that of a sub-contractor. Mr McBeth asserted at hearing that if the genders were reversed and he was the director and shareholder of the entities and not his wife then this matter would be viewed differently.

2. The Guide[10] discusses circumstances in which a parent may seek to alienate their income:

   A reduction of a parent's taxable income by alienation of personal services income or other income will result in an artificially reduced or increased child support liability.

   Generally, income is alienated when the income generated or derived by a person is attributed to others and, consequently, reduces the first person's taxable income. Personal services income, or income derived through personal exertion, can be defined as income that an individual earns predominantly as a direct reward for their personal efforts. Personal services income paid to a company, trust or partnership is also alienation of income.

   If a parent is involved in alienation of their personal services income, this may indicate that they have additional income or financial resources that make the current child support assessment unjust and inequitable (CSA Act section 117(2)(c)(ia)).

   [10] 2.6.14

   How the Registrar identifies income that is alienated

   In determining whether personal services income has been alienated through a company, trust or partnership, the Registrar will consider the following factors:

   ·the nature of the parent's activities

   ·the extent to which the income depends upon the parent's own skill and judgment

   ·the extent to which the company's assets, or trust's assets, are used to derive the income

   ·the number of employees and others engaged in the income-producing activity

   ·the time at which the company, trust or partnership was established, and

   ·any other relevant matters.

3. In this matter the tribunal formed the view that on balance the evidence supports a conclusion that it is appropriate to look beyond Mr McBeth’s personal income tax return and take into the financial resources available to him through the business operated by the private companies of which his wife is the sole director and shareholder.

4. In coming to this view the tribunal considered the following:

   a)    Mr McBeth and his wife are the only two people who provide consultancy services through the entity [Business 1]. It is through their activities as consultants that income is generated by that company. The creation of that income is derived by Mr McBeth’s and his wife’s skills and judgment.

   b)    The establishment of the entities in March 2019 occurred shortly after Mr McBeth made the decision to stop working for [Country 1]-based company. He explained in evidence that by contracting through [Business 1] he was able to work around the issue of not having the technical qualifications to work directly for companies such as [Employer 2]. From this perspective the establishment of the entities provided the means by which Mr McBeth could continue to provide consultancy services in his area of expertise and this was of direct benefit to Mr McBeth.

   c)    Mr McBeth was a co-signatory to the bank accounts operated by the private companies and the trust. In this regard the tribunal has been provided with three different explanations of why Mr McBeth was a signatory.

   d)    As noted, Mr McBeth’s evidence at hearing was that he became a signatory to assist his wife in setting up the companies because she was busy with her work with [Employer 2]. [Representative A] told the tribunal that she was advised that it was so that Mr McBeth could access company funds when working remotely for [Business 1]. Mrs McBeth subsequently declared that it was due to an error by the bank in assuming that her husband would be a signatory.

   e)    The tribunal found the various accounts seeking to explain Mr McBeth’s involvement and the decision by which he was removed as signatory to the company bank accounts inconsistent and unsatisfactory.

5. Ultimately whether or not the tribunal considers Mr McBeth to be an associate or to have alienated income does not detract from its ultimate conclusion that through the existing financial arrangements Mr McBeth has shared access to financial resources which are  derived from the income generated by the business of [Business 1] and this goes beyond the income he receives through contracting services to [Business 1].

6. In Costa & Fairbank[11], the Court said about the interpretation of the term "financial resources":

   Financial resource" refers to something which is not property but from which financial benefit is or may be gained. In light of the objects of the Act, the term should be broadly defined and would refer to any financial benefit that would enhance the capacity of parents to provide a proper level of financial support for their children."

7. As noted, the profit of [Business 1] is distributed through the family trust and the private company [Business 4] and ultimately are available to Mr McBeth through the joint offset accounts that he operates with his wife.

8. For the reasons outlined in paragraph 33 of these reasons for decision the tribunal is also in any event satisfied that those factors establish  special circumstances  which make it appropriate to have regard to the financial resources of the entities for which Mrs McBeth is the [specified] director and shareholder.[12]

   [12] Subparagraph 117 (b)(ii) of the Act.

9. In the tribunal’s view for child support purposes Mr McBeth has access to financial resources which includes at least 50% of the profit made by [Business 1]. As noted in the financial year 2019/20 the company as trustee of the family trust had a profit after expenses of about $190,700, adding back in the expense of contract services of $74,600 (in effect the amount Mr McBeth claims as his personal income from invoicing [Business 1]) results in a total figure of about $265,300 making Mr McBeth’s share an amount of $132,650 in the 2019/20 financial year.

10. The question is whether in the special circumstances of this case application of the assessment in place at the time of the change of assessment application would result in an unjust and inequitable determination of child support. In this matter the tribunal concludes that in the 2019/20 financial year Mr McBeth had access to income and financial resources of about $132,650. The assessment in place at the time utilised a 2019/20 estimate of $nil for Mr McBeth. If the amount as found by the tribunal were to be used in the assessment it would result in a significant change to the assessment. The tribunal is satisfied that for this reason a ground to depart from the administrative assessment is established.

Issue 2 – Is it just and equitable to make a particular departure determination?

1. As the tribunal is satisfied that there is a ground to depart from the assessment of child support as set out above, the next step for the tribunal is to consider whether it is just and equitable as regards the children and the parents 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 consider the matters set out in subsection 117(4) of the Act, which is discussed in the following paragraphs.[13]

Proper needs of the children

[13] The tribunal notes the Federal Magistrates’ Court case of Tyagi & Meares(SSAT Appeal) [2008] FMCAfam 886 which directs that in considering the matters set out in subsection 117(4) the section need not be “slavishly followed, each of the relevant factors listed … should be considered”.

1. In determining the proper needs of the children it is necessary to have regard at a broad level to the manner in which the children are being, and in which the parents expect the child to be, cared for, educated or trained, and also any other needs of the children.

2. Mr McBeth said that [Child 2] is awaiting diagnosis in relation to issues that have been identified in relation to his learning style. Mr McBeth said that he is paying about $240 a month in extra tuition support for the child. Miss Bambra did not make any specific submission other than to note that their daughter [Child 1] was injured in a motor accident and she required medical treatment as a result. On the basis of the presented evidence, the tribunal concludes that there is no basis for any adjustment pursuant to this consideration.

Income, earning capacity, property and financial resources of the children

1. In having regard to the income, earning capacity, property and financial resources of the children the tribunal must disregard any entitlement of the children or the carer entitled to child support to an income tested pension, allowance or benefit (subparagraph 117(7)(b)(ii) of the Act).

2. There was no evidence presented to the tribunal that the children have any income or unused earning capacity that needs to be taken into account in the child support assessment and as such the tribunal concludes that there is no basis for any adjustment pursuant to this consideration.

Other party receiving money, goods and property for the benefit of the children

1. Neither party made submissions in this regard and as such the tribunal concludes there is no basis for any adjustment pursuant to this consideration.

The income, property and financial resources of each parent who is a party to the proceeding

1. The tribunal has concluded that Miss Bambra’s income is derived from her employment as [an occupation 1] and other social security payments she receives from the [Country 1] government. The assessments utilise Miss Bambra’s taxable income as provided in her income tax declarations and the tribunal is satisfied that the assessment should continue to utilise those declarations.

2. In terms of other property or financial resources according to her Statement of Financial Circumstances and evidence provided at hearing, the tribunal finds that Miss Bambra owns no real property and owns no other significant assets other than a vehicle (about $4,000) and some savings of about $2,500.

3. The tribunal has found that Mr McBeth has access to financial resources generated through the consultancy business of [Business 1]. In terms of other property or financial resources according to his Statement of Financial Circumstances and evidence provided at hearing, the tribunal finds that Mr McBeth owns 50% of the principal place of residence valued in total at $653,000, a [vehicle] valued at $10,000 and superannuation of about $160,000. He is also a joint borrower on the home mortgage of $479,800.

Earning capacity

1. A ground for departure exists if, in the special circumstances of the case, the administrative assessment of child support would result in an unjust and inequitable determination of the level of financial support to be provided by the liable parent for the child because of the earning capacity of either parent (subparagraph 117(2)(c)(ib)).

2. The tribunal was satisfied in the absence of submissions and evidence there was no basis to vary the assessment on this basis.

The commitments of each parent who is a party to the proceeding that are necessary to enable

the parent to support himself or herself, or any other child or another person that the person has

a duty to maintain

1. The tribunal is satisfied after taking into account the relevant costs of self-support utilised in the assessments and based upon evidence provided at hearing that neither party has extraordinary costs of self-support that are relevant to the assessment.

2. Mr McBeth submitted that his dependent children have significant out of pocket medical expenses which he says amounts to $40,000 per annum. He provided a medical report which showed that one of the children has been diagnosed with [a medical condition] which requires regular [treatment] for which they do not qualify under the PBS publicly funded scheme. The tribunal was satisfied that this expense is a relevant consideration in any departure determination.

Any hardship that would be caused

1. Miss Bambra told the tribunal that the current rate of child support limits her ability to meet the costs of care of [Child 1] in the sense that it is hard to provide her with extra benefits other than the basic needs which are covered. She thinks there are arrears owed but is not sure.

2. Mr McBeth says that he and his wife have significant medical costs for his dependent children. The impact of any increase to his liability under the assessment will affect their ability to meet those out of pocket medical costs for those children.

Proposed departure

1. In this matter the tribunal concluded to depart from the administrative assessment by varying Mr McBeth’s ATI for child support purposes to $110,000 per annum. This would result in an annual child support liability of about $8,381 per annum or $161 per week payable by Mr McBeth.

2. Varying Mr McBeth’s income to this amount makes some allowances for the out of pocket medical costs associated with the dependent children but also in the tribunal’s view strikes a fair and equitable balance taking into account the parties respective financial circumstances and their respective access to income, financial resources and property.

3. In terms of the period of any departure, the tribunal noted that Miss Bambra lodged a change of assessment application on 4 May 2020. The tribunal may not (without the leave of a court) depart from an assessment for a period which is more than 18 months prior to the date of application.

4. In this matter the tribunal considered it is not appropriate to amend the assessment to any period prior to the date of her application. In terms of the conclusion of any departure the tribunal notes that [Child 1] is currently 15 and half years of age. The assessment in relation to her will conclude when she turns 18 years of age a period of just over two years. In the circumstances the tribunal concluded that ending the departure upon a terminating child support event for [Child 1] provides the parties certainty and consistency.

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

1. The final step for the tribunal to determine is whether it is “otherwise proper” to make a particular departure determination. Subsection 117(5) of the Act requires the tribunal to take into account whether the proposed departure is proper in the context of public interest and welfare expenditure of the community. A prime objective of the legislation is that parents are obliged to support their own children to the extent of their real capacity and such obligation should not be unnecessarily abrogated to the public welfare system.

2. According to his Statement of Financial Circumstances neither parent is in receipt of family tax benefit and the proposed departure from the administrative assessment will not have any impact on the public purse. In this case the tribunal finds that the requirements under paragraph 117(5)(a) of the Act are met. The tribunal concludes that it is otherwise proper to depart from the administrative assessment.

DECISION

The tribunal sets aside the decision under review and, in substitution, decides that for the period 4 May 2020 until a child support assessment terminating event occurs in relation to the child [Child 1] (born [February] 2006), Mr McBeth’s adjusted taxable income is varied to $110,000 per annum.

[11] (SSAT Appeal) [2010] FMCAfam 39