Bateson and McDonald (Child support)

Bateson and McDonald (Child support) [2018] AATA 3079 (21 June 2018)

DIVISION: Social Services & Child Support Division

REVIEW NUMBER: 2018/SC013422

APPLICANT: Mr Bateson

OTHER PARTIES: Child Support Registrar

Ms McDonald

TRIBUNAL: Member J Cuthbert

DECISION DATE: 21 June 2018

DECISION:

The tribunal sets aside the decision under review and substitutes a decision to depart from the child support assessment from 1 September 2017 to 31 January 2020 by varying the annual rate of child support payable by Mr Bateson to the maximum amount payable for a child of 0 to 12 years of age under the Costs of the Children Table for the relevant child support period.

CATCHWORDS

Child support - Departure determination - Income, property, financial resources and earning capacity of liable parent - Business income - Transaction to transfer ownership not at arm’s length - Criteria for earning capacity met - Ground for departure established - Annual rate of child support payable varied - 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

HISTORY

This review concerns an application for a change to a child support assessment made by Mr Bateson on 1 September 2017.
Mr Bateson and Ms McDonald are the parents of [Child 1] (born 2014). There has been a child support assessment in place, made by the Department of Human Services – Child Support, since 15 April 2015. The child support assessment is based on Ms McDonald having a care percentage of 100% for [Child 1].
A decision was made by an objections officer from the Department on 6 June 2016 to depart from the child support assessment by varying the annual rate of child support payable by Mr Bateson to $21,603 from 5 February 2016 to 28 February 2018. Mr Bateson’s application to this tribunal for an extension of time in which to lodge an application for a review of that decision was refused on 15 August 2017.
On 1 September 2017 Mr Bateson applied to the Department for a departure from the assessment on the grounds that his income, property and financial resources were not properly reflected in the assessment. A decision was made not to depart from the child support assessment on 5 October 2017.
Mr Bateson lodged an objection to that decision. On 12 January 2018 his objection was allowed. The objections officer set aside the decision made on 5 October 2017 and decided to extend the departure from the child support assessment by varying the annual rate of child support payable by Mr Bateson to $21,603 from 1 March 2018 to 31 December 2019.
On 2 February 2018 Mr Bateson lodged an application for a review of the objection decision with the tribunal.
The matter was heard on 21 June 2018. Mr Bateson and Ms McDonald both attended the hearing by telephone. Mr Bateson was represented by [his solicitor]. The tribunal was assisted by a [Country 1] interpreter. The Child Support Registrar was not represented at the hearing. The tribunal had access to the statement and documents provided by the Department (folios 1 to 1,389 and 1,390 to 1,398); documents provided by Mr Bateson (folios A1 to 113); and documents provided by Ms McDonald (B1 to B43).
The tribunal did not take into account written material provided by [his solicitor] in a letter dated 7 June 2018 as it was satisfied that the material was not relevant to the proceedings.

CONSIDERATION

The rate of child support payable by a liable parent is usually based on an administrative assessment under Part 5 of the Child Support (Assessment) Act 1989 (the Assessment Act). This requires the application of a statutory formula which takes into account factors such as the number of children, the level of care provided and the income of each parent.
A liable parent or a carer may apply to the Child Support Registrar (the Registrar) for a determination to depart from the child support assessment under Part 6A of the Assessment Act (section 98B). Section 98C provides that the Registrar may make a determination to depart from the formula assessment and establishes a three-step process. The Registrar, and the tribunal standing in place of the Registrar, must be satisfied:
(i) that one, or more than one, of the grounds for departure referred to in subsection [117](2) exists; and
(ii) that it would be:
(A)just and equitable as regards the child, the liable parent, and the carer entitled to child support; and
(B)otherwise proper;
to make a particular determination under this Part;
The grounds for departure from an administrative assessment of child support are set out in subsection 117(2) of the Assessment Act. If satisfied that a ground exists and that it would be just and equitable and otherwise proper to make a particular determination, the tribunal may make one of the determinations in section 98S of the Assessment Act. That section permits a range of determinations, including varying the annual rate of child support payable or a parent’s adjusted taxable income.

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

Mr Bateson sought a departure from the administrative assessment on the ground that his income, financial resources and property were less than reflected in the amount of child support he is required to pay.
The grounds for departure are set out in subsection 117(2) of the Assessment Act. Subparagraph 117(2)(c)(ia) provides as a ground for departure:
(c) that, in the special circumstances of the case, application in relation to the child of the provisions of this Act relating to 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:
…
(ia)because of the income, property and financial resources of either parent; …
The term ‘special circumstances’ is not defined in the Assessment Act. In Gyselman and Gyselman (1992) FLC 92-279, the Full Family Court indicated that for there to be special circumstances, the facts of the case must establish something which is special or out of the ordinary.
In Humphries & Berry (SSAT Appeal) [2008] FMCAfam 409 Federal Magistrate Slack dealt with the issue of the disclosure of financial information in matters before the Social Security Appeals Tribunal. His Honour stated that the principle of full and frank disclosure applicable to proceedings in the Family Court was also applicable to child support proceedings before that tribunal. He stated at [31]:
In financial proceedings under the Family Law Act, the authorities make it clear that a Court should not be unduly cautious about making findings in favour of the other party if it is not satisfied that proper disclosure has been made (see Chang & Su (2002) FLC93-117).
Also, in Agrippa & Horton (SSAT Appeal) [2010] FMCAfam 1144 Federal Magistrate Halligan stated:
If the SSAT is satisfied that a parent has made a deliberate non-disclosure of his or her financial circumstances, it should be reasonably robust in assessing the non-disclosing parent’s financial circumstances adversely to that parent and in favour of the other parent. That is not to say that it may arrive at an entirely arbitrary result, but rather that it may draw generous inferences adverse to the non-disclosing party about that parties financial circumstances.

Mr Bateson’s income, property and financial resources

Mr Bateson conducted a business providing [a service] for some years under the name [Company 1]. He was subsequently a director and sole shareholder of [Company 2] which was registered in 2012. Mr Bateson said that [Company 2] commenced trading in about 2014. He resigned as a director of [Company 2] on 24 October 2015 and his wife, [Ms A], was appointed as a director. On 5 January 2018 Mr Bateson sold his shareholding in [Company 2] to [Mr B] for $1,000. [Ms A] resigned as a director at the same time and [Mr B] also became a director of the company.
Mr Bateson stated that such a small sum was paid by [Mr B] as [Company 2] had no assets. He told the tribunal that he was unable to provide the tribunal with financial statements for [Company 2] and said that it was never profitable. However, although [Company 2] recorded a loss of $199,975 for 2014/15, the financial statements for that year indicate that the company had a net equity of $572,578 at 30 June 2015 which was made up of retained earnings. The balance sheet also records that Mr Bateson owed the company $207,138.
Mr Bateson told the tribunal that his wife became a director of [Company 2] as he was stressed and depressed after being charged with offences against Ms McDonald. He said that his wife was also pressuring him as she had found out about his relationship with Ms McDonald and about [Child 1] in 2015.
Ms McDonald suggested that [Ms A] had never previously had any involvement with Mr Bateson’s business and that he kept his financial affairs secret from his wife. She said that any transfer of the business to [Ms A], or suggestion that she operates or operated the business, is a sham. Ms McDonald stated that she was in the offices of the business for an average of three days a week in 2012 and 2013 and that she did not see [Ms A] there. The tribunal notes that Ms McDonald was a director of [Company 2] for a brief period in 2015. Mr Bateson did not dispute that Ms McDonald also performed some work for his business before [Child 1] was born. However, he was adamant that [Ms A] was involved in the business.
On the evidence available, the tribunal finds that Mr Bateson sold his share in [Company 2] at less than market value and that the transaction was not at arm’s length. The tribunal also finds that he resigned as a director and [Ms A] was appointed in order to distance Mr Bateson from the operation of the business after Ms McDonald applied for a child support assessment and perhaps to bolster his wife’s position in relation to marital assets. The tribunal does not accept Mr Bateson’s assertion that he ceased to have any involvement in the operations of [Company 2] from that time. He acknowledged that he continued to be an accreditation manager until at least 2016. Throughout the hearing he referred to the current operations of the business using the pronoun “we”.
The tribunal notes that in April and December 2016 Mr Bateson’s elder daughter, [Ms B] (who is now 27 years old), loaned [Company 2] $185,000. Ms McDonald contends that Mr Bateson was the source of those funds. She also contends that although the title of the unit she lived in for a period was in [Ms B]’s name, Mr Bateson provided the funds to purchase the property. The tribunal does not accept Mr Bateson’s explanation that [Ms B] was able to loan funds to [Company 2] using funds in an offset account against her mortgage on the unit which she had owned for a short time. While Mr Bateson stated that [Ms B] now earns about $100,000 a year, in 2016 she had not long left university. He suggested that she was able to pay a deposit of $70,000 to purchase the unit and to borrow the balance of the purchase price of $650,000. He said that she may have refinanced in order to loan the money to [Company 2].
Mr Bateson’s adjusted taxable income for 2016/17 is made up solely of income from [Company 2]. No income tax deductions were claimed. The tribunal notes that in that year [Ms A] had a taxable income of $34,450. Mr Bateson’s 2015/16 adjusted taxable income was $20,000 and [Ms A]’s adjusted taxable income for the same year was $20,250.
A Statement of Financial Circumstances form signed on 13 March 2018 and provided by Mr Bateson states that he is employed by [Company 2] on a casual basis and earned wages of $674 a week. He stated that his wife’s income was $700 a week. However, in a letter, dated 10 May 2018, Mr Bateson’s accountant[stated] that Mr Bateson ceased employment with [Company 2] on 1 July 2017 and that his only income is director’s fees from [Company 3], about $35,000 for the 2017/18 year. Mr Bateson said that the form was completed by his former representative based on information he provided. The tribunal considers that Mr Bateson did not provide a satisfactory explanation as to how he signed a form in March 2018 which stated that he worked for [Company 2].
[Ms A] has been the sole shareholder and director of another company, [Company 4], since about mid-2017. Mr Bateson told the tribunal that some of the minibuses owned by [Company 2] were transferred to [Company 4]. However, he said that he could not say what consideration was paid. Mr Bateson was adamant that he has nothing to do with [Company 4].
Mr Bateson is the sole director and shareholder of [Company 3]which owns premises at [Suburb 1] from which [Company 2] and [Company 4] operate. Records provided and evidence given by Mr Bateson indicate that the property was purchased in 2016 for $746,045. A loan of about $418,000 was obtained [and] Mr Bateson contributed the balance. Mr Bateson did not provide copies of loan statements [in] accordance with the directions, but a balance sheet for [Company 3] indicates $418,593 owed at 30 June 2016 and 30 June 2017. Mr Bateson was not able to explain where the funds he provided came from apart to say that he got funds from [Company 2].
In 2016/17 the only income of [Company 3], $45,976, was the rent received from the [Suburb 1] property. The tribunal notes that in 2016/17 [Company 3] claimed a business expense for four minibuses which were purchased in 2014 and 2015. Mr Bateson said that he drives the vehicles and that they are garaged at [Suburb 1] or on the street. [Company 3] meets the running expenses for the vehicles. The tribunal notes that were it not for the claim for depreciation on the vehicles of $15,340, [Company 3] would have made a profit of $12,850 in 2016/17. The buses are not used to earn income for [Company 3].
Bank statements provided for [Company 3] only show income from [another] business which rents a portion of the [Suburb 1] premises, and no deposits from [Company 2] and [Company 4] who also occupy the premises. Mr Bateson acknowledged that [Company 4] and [Company 2] did not pay rent regularly and may not have made any payments. The tribunal notes that Mr Bateson is forgoing income that he could receive from [Company 3] and benefitting [Company 2] and [Company 4].
The tribunal finds that the finances of Mr Bateson, [Company 3], [Company 2] and [Company 4] are intermingled. On the information available the tribunal finds that Mr Bateson has financial resources and assets from the operation of the businesses which are far greater than suggested by the adjusted taxable income used in the child support assessments.
Mr Bateson told the tribunal that either [Company 3] or [Company 2] previously owned a BMW which is driven by [Ms A]. Mr Bateson told the tribunal that the vehicle was sold to [Ms A]’s sister for $5,000 in early 2018. He said that he and [Ms A] do not own any vehicles.
The tribunal asked Mr Bateson about his household spending. He was unable to tell the tribunal where payments made to his credit card ($1,000 on 13 November 2017, $2,300 on 7 December, $1,200 on 18 January 2018, $200 on 21 February 2018) had come from. He said that his wife is also a cardholder on the account and that a lot of the spending is hers. He suggested that she may have made the payments. Mr Bateson also suggested that some of the expenses relate to [Company 3]. The tribunal notes that the payments do not correlate with any payments made from [Company 3]’s bank account and that the majority of expenses appear to be of a private nature. Mr Bateson did not provide a satisfactory explanation as to how he had reduced his credit card spending from an average of about $4,000 a month in 2017 to less than $1,000 a month in early 2018. He noted that he has a current credit card debt of about $10,000.
The tribunal notes that in March 2018 Mr Bateson stated that he and [Ms A] have total household expenses of $543 a week and that he has personal expenses, including child support of $162 a week, of $271 a week. He said that [Ms A]’s parents pay for two of his older children’s attendance at [School 1]. Ms McDonald suggested that [Child 2]’s grandparents are in receipt of Centrelink payments. Mr Bateson denied this was the case. In any event, the tribunal finds the stated expenses (for three adults and a teenage child) to be understated, even when compared to Mr Bateson’s most recent credit card statements.
Even taking into account that [Ms A] receives family tax benefit for [Child 2] (and previously for [Child 3]) and the family home is unencumbered, the tribunal notes that Mr Bateson and [Ms A]’s combined taxable are substantially less than the spending indicated in Mr Bateson’s bank statements in previous years. The tribunal notes that Mr Bateson did not refute Ms McDonald’s evidence that he supported her from some years prior to [Child 1]’s birth. It is clear to the tribunal that Mr Bateson has had access to significant financial resources through the operation of his business.
The tribunal found that some of the evidence given by Mr Bateson lacked credibility. In a loan application in 2016 he stated that the family home was worth $2.5 million and that he had total assets of more than $4.2 million. In his Statement of Financial Circumstances Form, signed in March 2018, he stated that his share of the home was valued at $1 million. His submission at the hearing that the house is worth between $2.2 and $2.3 million is surprising considering the increases in the [property] market in recent years. The tribunal is satisfied that Mr Bateson retains control of the assets of [Company 2] and perhaps also the assets of [Company 4]. The tribunal accepts that Mr Bateson may also be the beneficial owner of the unit owned by [Ms B]. The tribunal is satisfied that Mr Bateson has assets worth at least several million dollars.
It is not possible to make a precise calculation of Mr Bateson’s income, property and financial resources due to the intermingling of his affairs with [Company 3], [Company 2] and [Company 4] and his unwillingness to provide the tribunal with relevant documents. However, the tribunal finds that he has income, property and financial resources available to him far greater than suggested by his adjusted taxable incomes. The tribunal does not accept Mr Bateson’s submission that his child support assessment should be based on his adjusted taxable incomes for 2015/16 and 2016/17 and his estimated total income of $35,000 for 2017/18.

Mr Bateson’s earning capacity

The tribunal also considered Mr Bateson’s earning capacity and the three criteria in subsection 117(7B) of the Assessment Act. Mr Bateson told the tribunal that he has never worked full-time and was working 25 to 30 hours a week. The tribunal is satisfied that he changed his work pattern when he sold [Company 2]. However, the tribunal is satisfied that he has continued to be involved in the [business].
Mr Bateson told the tribunal that he was unable to work due to depression and stress caused by issues with Ms McDonald, the apprehended violence order, his arrest and the subsequent court proceedings. The tribunal notes that Mr Bateson swore an affidavit in September 2016 in which he stated that his relationship with Ms McDonald broke down in November 2015. He was arrested and charged in January 2016. He told the tribunal that his wife had found out about Ms McDonald and [Child 1] prior to that time. While there were subsequent paternity proceedings, the tribunal notes that the charges against Mr Bateson were withdrawn in March 2016.
Mr Bateson told the tribunal that he was referred to [a psychologist] in 2015. The tribunal notes that letters from [the psychologist] provide differing dates about the time Mr Bateson commenced treatment, 20 July 2015 and 13 January 2017. Although [the psychologist] states that she had weekly or regular appointments, Mr Bateson told the tribunal that he has had 12 visits in total in accordance with mental health plans. The tribunal notes that [the psychologist]’s letters do not provide any opinion about the effect of Mr Bateson’s condition, described as persistent depressive disorder with anxious effect, on his ability to work.

Mr Bateson said that he had no other treatment until prescribed an antidepressant [by] [a doctor] in February 2018. In his referral to a psychiatrist on the same date, [the doctor] refers to “problems regard [sic] business, stress depression”. Mr Bateson told the tribunal that the particular psychiatrist he was referred to had a conflict of interest and that he has not yet made a specialist appointment.
The evidence suggests that Mr Bateson was diagnosed by [the psychologist] as suffering from depression in 2015 or 2017. However, the tribunal notes the lack of any medical evidence concerning the effect of the condition on his ability to work. The evidence provided does not suggest that the decision Mr Bateson made to resign as a director of [Company 2], to sell the shares in that company and to cease to work for the company, were justified on the basis of his health.
Mr Bateson told the tribunal that for the last four years he has provided physical care for his elderly parents, particularly his mother, who requires his physical assistance about three times a day. He said that while his parents have some external assistance with housework, his mother does not receive any additional assistance in relation to her personal care. The tribunal notes that Mr Bateson’s care for his parents did not previously affect his ability to run his business.
The tribunal finds that Mr Bateson has altered his work pattern. He claims to no longer be working. The tribunal finds that any decision not to work or to alter his work pattern is not justified on the basis of his caring responsibilities for his parents or his mental health.
On the evidence provided the tribunal is not satisfied that the decision Mr Bateson has made not to work was not made in order to affect the child support assessment. On the contrary, Mr Bateson said that his loss of interest in the business, including the decisions he made to resign as a director of [Company 2] and to sell his share in that company, were to do with Ms McDonald and [Child 1] and his wife’s reaction to finding out about his relationship with Ms McDonald. The tribunal finds that the three criteria of subsection 117(7B) of the Assessment Act are satisfied and as a consequence the tribunal is able to determine whether Mr Bateson has any unused earning capacity. The tribunal finds that Mr Bateson continues to have the same earning capacity he had previously.

Do the existing assessments provide a result which is unjust and inequitable?

Ms McDonald’s income, property, financial resources and earning capacity

In order to determine whether Mr Bateson’s income, property, financial resources and earning capacity result in child support assessments which are an unjust and inequitable determination of the financial support he should provide for [Child 1], the tribunal considered whether Ms McDonald’s adjusted taxable income is indicative of her income, property, financial resources and earning capacity.
Ms McDonald receives parenting payment (single). Since June 2016 she has also worked [on] a casual basis. Her payslip for 9 May 2018 shows year to date income of $23,362, or about $27,000 a year. The payslips she provided indicate work for between 32.75 and 41 hours a fortnight.
Ms McDonald’s 2016/17 adjustable taxable income is $42,724, made up of parenting payment of $8,598 and wages of $34,476, less deductions.
The tribunal notes that Ms McDonald lives in rented accommodation, the cost of which is subsidised by [a state agency]. There is no evidence that she has any assets apart from a car, personal and household goods and some superannuation. The tribunal accepts that Ms McDonald has no other income, financial resources or property of significant value which is capable of providing her with any significant income.
Mr Bateson asserted that Ms McDonald has been partnered for the last three years. However, the tribunal notes that, even if that is the case, any partner would not have a duty to support [Child 1] and their income, financial resources and property would not be relevant to the child support assessment.
Ms McDonald told the tribunal that she has lived in Australia since 2010. She said that she had little work experience prior to [Child 1]’s birth as she was largely supported by Mr Bateson. She said that she had performed some unpaid work for [Company 2] between 2012 and 2013.
The tribunal notes that Ms McDonald was not working in April 2015 when she applied for a child support assessment for [Child 1] and that she obtained part-time work some months prior to his second birthday. The tribunal finds that the three criteria in subsection 117(7B) of the Assessment Act are not satisfied in Ms McDonald’s case as the tribunal accepts that the decisions Ms McDonald has made not to work and then to work part-time were not motivated by a desire to affect the child support assessment, but by her caring responsibilities for her young child. As a consequence the tribunal is unable to determine that Ms McDonald has any unused earning capacity.

Are there special circumstances for which to depart from the assessment?

Taking into account the objects of the Assessment Act (section 4), including that children should share in the standard of living of both their parents, the tribunal finds that the income, property, financial resources and earning capacity of Mr Bateson provide special circumstances for which to depart from the assessment. Mr Bateson would be liable to pay far more child support if the assessment was based on his income, property, financial resources and earning capacity rather than his adjusted taxable income. The tribunal finds that the assessment is unfair to Ms McDonald and to [Child 1] for that reason, and that grounds are established to depart from the assessment under subparagraphs 117(2)(c)(ia) and (ib) of the Assessment Act.

Issue Two – Would a departure from the administrative assessment be just and equitable?

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 just and equitable to depart from the assessment having regard to the matters set out in subsection 117(4) of the Assessment Act.
Section 3 of the Assessment Act states that it is the duty of both parents to financially support their children. In accordance with the objects set out in section 4 of the Assessment Act, [Child 1] should receive a proper amount of financial support from his parents in accordance with their capacity to contribute.

[Child 1]’s needs

[Child 1] is three years old. He attends child care for three days a week and attends [Country 1] school (at a cost of $300 a semester). The tribunal notes that Ms McDonald’s child care costs are currently $117 a week. For a period of six months while her mother was visiting from [Country 1], the costs were about $80 a week.
Apart from the child care costs, the tribunal is satisfied that the costs Ms McDonald has related to the care of [Child 1] are not out of the ordinary range of expenses for a child of his age.

[Child 1]’s income, property, financial resources and earning capacity

The tribunal has no evidence that [Child 1] has any income, property or financial resources or any unused earning capacity that needs to be taken into account in the child support assessment.

The parents’ duty to support others

Ms McDonald told the tribunal that she supported her mother while she was in Australia. However, the tribunal finds that she has no legal duty to do so.
Mr Bateson has three older children: [Ms B], [Child 3] (aged 18) and [Child 2] (aged 16). The tribunal notes that [Ms B] is not dependent on Mr Bateson. She has been employed on a full-time basis for a few years and currently lives overseas with her fiancé. The tribunal finds that Mr Bateson does not have a legal duty to support [Ms B].
[Child 3] and [Child 2] live with Mr Bateson and [Ms A]. [Child 3] was 18 [in] October 2017 and left school at the end of that year. She now attends university. Mr Bateson told the tribunal that in 2016/17 [Child 3] had income from casual employment with [Company 2] of about $11,000 or $12,000. He said that, despite her limited income and the incomes of her parents, she has not sought payment of youth allowance. The tribunal finds that, despite her income, [Child 3] was not self-supporting before she finished school and Mr Bateson had a legal duty to support her. However, the tribunal considers that Mr Bateson does not currently have any duty to support [Child 3]. Although she is studying, the tribunal is not satisfied that she does not have the capacity to support herself. Even if Mr Bateson does have a duty to continue to support [Child 3], the tribunal finds that it should not have priority over his duty to support [Child 1].
[Child 2] attends [School 1]. Mr Bateson stated that his school fees are paid by his maternal grandparents. He said that [Child 2] has a part-time job and earns about $100 a week. The tribunal finds that Mr Bateson has a legal duty to support [Child 2]. There is nothing to suggest that Mr Bateson has any expenses in relation to [Child 2] that are out of the ordinary for a child his age. Quite the opposite, Mr Bateson’s evidence is of very low household expenditure generally.

The income, property, financial resources and earning capacity of Ms McDonald

The income, property, financial resources and earning capacity of Ms McDonald have been discussed above.

Ms McDonald’s necessary commitments

Ms McDonald lives with [Child 1] in a unit she rents for $200 a week. The tribunal is satisfied that she relies on child support from Mr Bateson in order to meet [Child 1]’s reasonable and necessary expenses. Her stated expenses, of more than $900 a week, are necessarily limited by the income she receives.

The income, property, financial resources and earning capacity of Mr Bateson

The income, property, financial resources and earning capacity of Mr Bateson have been discussed above.

Mr Bateson’s necessary commitments

Mr Bateson lives with his wife, [Child 3] and [Child 2] in a house which is jointly owned. The house is not encumbered. On the basis of the findings made above the tribunal finds that Mr Bateson has the capacity to meet his reasonable and necessary costs and those he has for [Child 2] as well as discretionary expenses.

Terms and period of departure

Mr Bateson made his departure application on 1 September 2017. He is seeking a reduction in the amount of child support payable following the departure decision made on 6 June 2016 as he contends his circumstances have changed. The tribunal finds that it would not be just and equitable to reduce the amount of child support payable by Mr Bateson. The tribunal proposes to continue to depart from the assessment by varying the annual rate of child support payable by Mr Bateson from 1 September 2017 to the maximum amount payable for a child of [Child 1]’s age in accordance with the Costs of the Children Table which is a schedule of the Assessment Act. The tribunal notes that for the child support period from 1 March 2017 to 31 May 2018, the amount is $22,101. For the child support period which started on 1 June 2018, the amount is $22,449.
In proposing to set an annual rate of child support, the tribunal takes into account Mr Bateson’s income, financial resources and property as well as his duty to support [Child 2] (and previously [Child 3]). It also takes into account the significant difference between the parents’ incomes, financial resources, property and earning capacities. The tribunal also takes into account that although since June 2016 Ms McDonald has had income greater than the self-support amount used in the child support assessment formula, she also incurs significant child care costs in order to be able to work.
To provide some certainty to the parties the tribunal finds that it would be just and equitable to depart from the assessment until 31 January 2020, after which time [Child 1] may start school and the expenses relating to his care may change.
The tribunal finds that the proposed variation results in a child support liability ($432 a week) which reflects a reasonable level of support for [Child 1] given the differences between his parents’ incomes, property, financial resources and earning capacities.

Hardship

The child support payable on the basis of the decision proposed should assist Ms McDonald to meet [Child 1]’s proper needs.
At the time of the hearing Mr Bateson stated that he owed child support arrears (including penalties) of about $37,000. The proposed decision will result in a small increase to the arrears. However, in light of the findings made about his property and financial resources, the tribunal finds that the proposed decision will not result in hardship to Mr Bateson or to [Child 2].

Issue Three – Is it otherwise proper to depart from the administrative assessment?

The final step for the tribunal to undertake is to determine whether it is ‘otherwise proper’ to depart from the administrative assessment. Subsection 117(5) of the Assessment Act requires the tribunal to take into consideration the following matters:
(a) the nature of the duty of a parent to maintain a child (as stated in section 3) and, in particular, the fact that it is the parents of a child themselves who have the primary duty to maintain the child; and
(b) the effect that the making of the order would have on:
(i)any entitlement of the child, or the carer entitled to child support, to an income tested pension, allowance or benefit; or
(ii)the rate of any income tested pension, allowance or benefit payable to the child or the carer entitled to child support.
The child support law recognises that each parent has a primary duty to maintain their children. Ms McDonald receives family tax benefit. The tribunal is satisfied that it is otherwise proper to depart from the administrative assessment in this matter and to properly reflect Mr Bateson’s income, property and financial resources by setting an annual rate of child support.

DECISION

[2018] AATA 3079

21 June 2018

Key Legal Topics

Areas of Law

Family Law

Administrative Law

Legal Concepts

Statutory Construction

Jurisdiction

Remedies

Judicial Review