Batton and Batton (Child support)

Batton and Batton (Child support) [2022] AATA 1183 (28 March 2022)

DIVISION:Social Services & Child Support Division
REVIEW NUMBER:  2021/PC022579
APPLICANT:  Mr Batton
OTHER PARTIES:  Child Support Registrar
Mrs Batton

TRIBUNAL:Member S Hoffman
DECISION DATE: 28 March 2022
DECISION:

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

For the period from 25 March 2021 to 30 June 2021, Mr Batton’s adjusted taxable income is varied to $260,205.
For the period from 1 July 2021 to 31 March 2024, Mr Batton’s adjusted taxable income is varied to $200,286.
For the period from 25 March 2021 to 20 October 2021, Mrs Batton’s adjusted taxable income is varied to $65,692.

For the period from 21 October 2021 to 31 March 2024, Ms Batton’s adjusted taxable income is varied to $127,000.

CATCHWORDS

CHILD SUPPORT – departure determination – income, property and financial resources of both parents - benefits derived from business - income from family trust - decision under review set aside and substituted

Names used in all published decisions are pseudonyms. Any references appearing in square brackets indicate that information has been removed from this decision and replaced with generic information so as not to identify involved individuals as required by subsections 16(2AB)-16(2AC) of the Child Support (Registration and Collection) Act 1988.

REASONS FOR DECISION

BACKGROUND

This review is about the child support assessments in respect of [Child 1] and [Child 2], who are 15 and 13 years old respectively.
The case was registered with Services Australia – Child Support (the CSA) on 2 September 2020. The CSA has been involved with the collection of child support since then.
On 25 March 2021, the mother applied for a change of assessment. At that time, the father was required to pay an annual rate of child support of $2,330 to the mother, based on his 2019/20 adjusted taxable income of $114,116, the mother’s 2019/20 adjusted taxable income of $64,357 and the care of the children according to the CSA’s records. The father was recorded as providing 100% of [Child 1]’s care and 21% of [Child 2]’ care. The mother was recorded as provided nil care for [Child 1] and 79% care for [Child 2].

On 2 July 2021, a case officer from the CSA decided to vary the father’s adjusted taxable income to $159,769 a year for the period from 25 March 2021 to 30 June 2023 (the original decision).
The letter advising the parties of the decision being made was dated 5 July 2021.[1] With this type of decision, a party seeking to object to it must lodge their written objection within 28 days of the day that they were served with a written notice of that decision. When calculating the start of the 28-day period, allowance is made for the time it takes for the written notice to be received by the person via the mail.[2]
[1] Pages 135 and 136 of the CSA documents.
[2] The Child Support Guide sets out departmental policy in relation to this. See section 4.14 “Can an objection be made”, accessible at
On 10 August 2021, the father objected to the original decision. The CSA determined that an extension of time application in which to lodge the objection was not necessary.[3]
[3] Page 268 of the CSA documents.
On 14 October 2021, an objections officer from the CSA decided to vary the father’s adjusted taxable income to $214,116 for the period from 25 March 2021 to 31 October 2023 (the objection decision).
On 22 October 2021, the father lodged an application for review of the objection decision with this tribunal. A directions hearing was held on 9 February 2022 via conference telephone with the father. The mother chose not to attend. The substantive hearing was held on 23 March 2022. The father attended a remote audio hearing via MS Teams and gave sworn evidence. Again, the mother chose not to attend. Ms [A] of [A] Consultancy attended for part of the hearing as a witness for the father.
Before the hearing, the CSA had provided documents in two bundles, numbered 1 to 502 and 503 to 559. The father had submitted documents numbered A1 to A162 and the mother had submitted documents numbered B1 to B62. Documents numbered A139 to A162 and B53 to B62 were submitted during the week preceding the hearing and were sent to the applicants before the hearing.
The father advised he had not received the CSA documents numbered 503 to 559 or the documents provided by the mother numbered B53 to B52.
The CSA bundle 503 to 559 included copies of documents sent to the parties during October 2021; documents to do with a complaint about the CSA made by the father in November 2021; and a change of assessment application lodged by the father in relation to the mother’s income which the CSA advised they would ‘park’ pending the outcome of this review. The tribunal described this bundle as being made up mainly of documents the father had already seen. There was nothing in it directly relevant to this review that is not covered elsewhere in the evidence before the tribunal or discussed at the hearing.
The tribunal asked the father if he was happy to proceed with the hearing even though he had not seen the bundle 503 to 559 and he said he was.
Both parents sent in what the tribunal regards as late submissions as there was insufficient time for them to be checked, copied and sent to the other party before the hearing.
However as both parties did so, the tribunal decided to accept both late submissions. (The father sent in other documents which the tribunal did not accept as a submission as they had no direct relevance to the decision the tribunal is required to make.)
The mother’s late submission was written largely in response to the father’s submission that she had received (numbered A1 to A38). The tribunal described the content of the mother’s late submission briefly to the father and he indicated he was happy to proceed with the hearing even though he had not seen the late submission. In any event, for reasons set out under the heading “Costs related to the children”, most of the mother’s claims in her late submission did not need to be considered by the tribunal.
In relation to the CSA bundle and the mother’s late submission, the tribunal said to the father that if, during the course of the hearing, he started to feel uncomfortable because he had not seen them, then to let the tribunal know. He did not raise this during the hearing.

The tribunal made its decision on 28 March 2022.

ISSUES

The statutory provisions relevant to this review are contained in the Child Support (Assessment) Act1989 (the Act). The Act provides for an administrative assessment of child support to be paid. Pursuant to section 98C of the Act, a decision to depart from the administrative assessment may be made if the following three requirements are met:
i.A ground is established; and
ii.It would be just and equitable as regards the child, the liable parent and the carer entitled to child support to make a particular determination; and
iii.It would be otherwise proper to make a particular determination.

The grounds for departure from an administrative assessment of child support are set out in subsection 117(2) of the Act.
If the tribunal is satisfied that the three requirements are met, it may make one of the determinations prescribed in section 98S of the Act, which include variations to the annual rate of child support payable, or to the adjusted taxable incomes of the parents and/or carer, or to other components of the statutory formula used to calculate child support.

CONSIDERATION

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

Subparagraph 117(2)(c)(ia) of the Act provides a ground for departure exists where, in the special circumstances of the case, the administrative assessment of child support would result in an unjust and inequitable determination of the rate of child support because of the income, property and financial resources of either parent.

The father’s income

The father’s taxable income was $96,585 for 2017/18, $118,946 for 2018/19, $114,116 for 2019/20 and $110,004 for 2020/21. The father operates a business, [Business 1], through [Company 1] Enterprises Pty Ltd ([Company 1]). The father said he did not get paid a salary or a director’s fee or take drawings from the company but was paid via a distribution from the Batton Family Trust (the trust). This arrangement was reflected in the financial statements of the two entities.
The business was started by the father’s father, [Mr A], in the 1990s. According to its website, the business provides specialised [services].[4]
[4] [Business 1’s] website can be found here [deleted]
In a submission to the tribunal received 10 November 2021, the father wrote that he held a 51% share of the business and [Mr A] held 49%.
In statements to the CSA dated 10 August 2021 and 7 October 2021, the father wrote that he is the sole trustee of the trust and is joint appointor with his father. In his submission to the tribunal, the father wrote that [Mr A] retired in 2017 as trustee of the trust, which was formalised by way of a Deed of Retirement executed on 29 September 2017. It was from this point that the father became the sole trustee of the trust. Distributions from family trusts are generally at the discretion of the trustee.
According to his statement dated 10 August 2021, the father was made sole director of the company on 29 June 1999. Also based on his statement, on 27 September 1994, the father’s parents each held one ordinary share in the company. On 27 May 2010, they were each issued with 99 ordinary shares, meaning that each then had 100 shares in [Company 1].
At this time the trust was issued with two class A shares. The father wrote that this was the first step for him being involved in the ownership of the company. On 10 May 2017, the father’s parents transferred their 200 ordinary shares to the trust. On 23 July 2020, [Mr A] was issued with 198 class A shares.
As the father set out, the current share structure of [Company 1] is such that the father holds 2 class A shares and 198 ordinary shares and [Mr A] holds 198 class A shares.
The father submitted a letter dated 23 February 2022 from Mr [B], senior accountant. [This] letter stated that its author is the accountant for the father, [Mr A] and the company, and has been their accountant for many years. In his letter, Mr [B] referred to [Mr A] selling the company to the father, noting an agreement that if the father sold the business, got divorced or died, $250,000 would be paid to [Mr A] as payment for the [Company 1] shares that were sold.
Mr [B] wrote that it was a gentleman’s agreement, and he was made aware of it by both the father and [Mr A].
The father confirmed that [Mr A] is over [age] years old. The history of the shares as just set out is consistent with how a business might be transferred from father to son. Mr [B]’s letter makes it very clear that the business was sold by [Mr A] to the father.
In his 10 August 2021 statement, the father wrote that [Mr A] remained a shareholder, that he worked in the business and received income via the trust in recognition of this.
A letter from Mr [B] to the CSA dated 9 August 2021 stated that they could confirm that [Mr A] was working for [Company 1] on an ad hoc basis as needed; that he had many years of expertise that were invaluable to the business; and that he would continue to contribute to the company.
According to the trust distribution statement included in the trust’s financial statement for 2020/21, [Mr A] and the father’s mother, Mrs [C], were each paid a distribution of $70,563. The father was paid a distribution of $87,172. Each of the children was paid $506.
In 2019/20, [Mr A] was paid a distribution from the trust of $18,824, his wife Mrs [C] was paid $15,696, the father was paid $81,108 and each of the children was paid $164. There was no suggestion in the evidence before the tribunal that Mrs [C] worked for the business.
The witness, Ms [A], who is the father’s bookkeeper, said in relation to the 2020/21 figures, that she did not know if the distributions were actually paid out to Mr [A] or Mrs [C]. She said she did the bookkeeping for [Company 1], not the trust. The father said he thought they were not actually paid. That is, they were just book entries.
The tribunal is required to consider what financial resources are available to a parent. As the accountant has made clear, the business was sold to the father, in which case the father is the owner of the business. The father, according to his submission, is the majority shareholder. The father said of [Mr A], that he takes an active interest in the company and the father does consult with him. He could not say how often they discuss the business. It can happen over a family dinner. They may not discuss the business at all some weeks. The father said he could not give an estimate of how many hours a week [Mr A] was involved with the business. He said sometimes they went to a site together as [Mr A]’ knowledge and expertise could assist him.
Given the evidence just set out the tribunal finds that the father controls the business, [Business 1], which is operated through [Company 1], and that the profits of the business are a result of the father’s skills and experience. Following from this, the tribunal is satisfied that the profit of the business is a financial resource available to him.
Most of the after-tax profit is transferred to the trust and then distributed to the persons named above. It may well be that these transfers do not actually happen, as the father indicated, but that book entries are made as if they had. This is quite standard practice with family trusts. They can be used to minimise tax. The tribunal is satisfied that when considering the financial resources available to the father, it should focus on the business profit.
Based on his tax return, the father’s taxable income for 2020/21 of $110,004 represented a distribution from a trust. As already recorded, the trust was able to pay this because of the income it received from [Company 1].
The father contended that the income he received from the trust should not be added to the profit of the business as that would be double-counting the financial resources available to him. The tribunal agrees and therefore it will focus on the business profit to ascertain the income and financial resources available to the father for child support purposes.
The father also contended that the after-tax figure should be used. With this, the tribunal disagrees. The child support formula relies on gross, before-tax, income figures. However, the tribunal will make an adjustment for tax in its figures, in the father’s favour, for the following reason.
Assuming the father took directors fees of $100,000 and the company profit was $300,000, tax would be paid by the father on $100,000 and by the company on $300,000. If, however, the company profit was $400,000, some of which was transferred to a trust, and the father was paid $100,000 by the trust, tax would be paid on $400,000 and on $100,000. As the father’s taxable income for 2020/21 was $110,004, the tribunal will make an adjustment for $26,000 representing tax that might otherwise be doubled up, based on an online tax calculator.[5]
[5] MoneySmart (n.d.) Australian Income Tax Calculator, accessed 2 April 2022 at
In 2020/21, the business made a profit before tax of $406,205. The tribunal considers it reasonable to deduct from this, $50,000 being the cashflow boost recorded as income. This was essentially a benefit to companies to assist them through the pandemic. Certain conditions were attached to the cashflow boost as to how this money could be used. Given that, the tribunal considers that portion of the business’s income should be disregarded.
The tribunal also considers it reasonable that some recognition is made in respect of the consulting services provided by [Mr A]. While difficult to quantify, the tribunal notes the trust distribution figure even though, according to the father, it probably was not paid out. In the absence of another figure, the tribunal will use $70,000 to represent the contribution to the business by [Mr A].
The vehicle the father drives is owned by the business. It is a [brand]. The depreciation schedule shows that it was purchased on 25 August 2020. High value cars can only be depreciated up to a ceiling which was $59,136 for 2020/21.[6] The depreciation schedule records two costs against the car at that date, being $24,473 and $59,136. The tribunal concludes that the car cost $83,609.
[6] Australian Taxation Office (2022) Assets and exclusions, accessed 26 March 2022 at >
The father said he used his car for business and personal use. Ms [A] said that she believed he reimbursed some of the running costs to reflect his personal use. The profit and loss statement records under the heading Income, fringe benefit employee contributions of $14,940. For that reason, the tribunal will not consider the cost of the company-owned car any further.
The resultant figure is $260,205, as follows:
Profit recorded for 2020/21 for the business      $406,205
Adjustment for tax   $26,000
Less cashflow boost  $50,000
Less amount in relation to [Mr A]  $70,000
$260,205
The tribunal enquired about the expenditure item, legal services, of $18,959 in the 2020/21 financial statements. There was no expenditure on legal services during 2019/20.
The tribunal wanted to ascertain if that was to do with the father’s personal legal bills or if it was business-related. The tribunal understood that these costs were related to the property settlement between the father and the mother which is unresolved at the moment.
The tribunal notes that if a further $18,959 was added to $260,205, the effect on the father’s child support liability, for the period from 25 March 2021 to 30 June 2021, would be to increase it by about $90 and therefore is not material given his rate of child support.
The father submitted that the business was not doing as well in this financial year (2021/22). He said that the business had just broken even in July, August and September 2021. He said he had taken about $70,000 from the business this year to date and no payments had been made to his family members. He said he anticipated his father would take between $10,000 and $15,000 from the business this year. The tribunal notes that $70,000 to the end of March 2022 is equivalent to $93,000 for a full year.
The father submitted sales, wages and profit figures for the five months to November 2021, comparing them to the same period for the previous year.[7] The profit figure for five months to 30 November 2021 was $96,930. If this was typical of the profit for the rest of the financial year, the annual profit would be $232,632.
[7] Page A32 of the documents.
The father also submitted a profit and loss statement for the period from 1 July 2021 to 31 December 2021, and comparative figures for the previous year.
According to the six months figures to 31 December 2021, sales were $806,904 and expenses were $623,668, leaving an operating profit of $183,315. (These figures did not include the cashflow boost of $28.) These figures would suggest an operating profit for a full year of $366,630.
The sales for the five months to 30 November 2021 were $629,298, averaging $125,860. The sales for the six months to 31 December 2021 were $806,984, averaging $134,497 a month. Comparing the sales for five months with those for six months suggests the sales figure for December 2021 alone was $177,686.
The father said that he had been told the profit to the end of February 2022 was $291,611. This was for an eight-month period; the full year equivalent is $437,416. This suggests the profit for 2021/22 will exceed that for 2020/21. However, this fails to take into account that there are certain expenses recorded in the full year profit and loss statement that are not included in the part-year figures.

In arriving at an appropriate income figure for the father from1 July 2021, the tribunal will rely on the detailed profit and loss statement for the period ended 31 December 2021, rather than just a record of the value of sales, expenses and/or operating profit at other month ends during the financial year.
The tribunal compared the profit and loss statement for the six months to 31 December 2021 to the full year to 30 June 2021, line by line. The statement for the year includes $28,155 being a provision for employee entitlements, vehicle depreciation of $59,136 and instant asset write-off depreciation of $38,053. These expenses, which total $125,344, are typically posted to the profit and loss statement via journals as the financial statements are drawn up. No provision for employee entitlements or depreciation were recorded in the six-month profit and loss statement. The tribunal will therefore make an adjustment for these items.
The tribunal will also make allowance for consulting services provided by [Mr A], and perhaps paid to him via the trust. The father said any payment made to [Mr A] would probably be between $10,000 and $15,000 for 2020/21. The tribunal will also make an allowance for tax as with 2020/21, of $26,000. Allowing for these items, the projected profit figure would be $200,286 ($366,630 - $125,344 - $15,000- $26,000) for 2021/22. This compares with $260,205 for 2020/21, a difference of $59,919.
The father gave an explanation as to why he believed business was not as good. He said there had been a slowdown as businesses could not get materials. There had been a change in attitude of long-term customers. A business for which he consulted for 25 years had put work out to tender to get a cheaper quote from elsewhere. Another customer had directed some of their business away from [Company 1]. He said that business had slowed down with the COVID shutdown and there was some of that going on at the moment.
The father referred to the difficulties in the supply chain that is affecting his [customers]. He said that the pandemic had slowed down the business. It is widely acknowledged that there are supply chain problems around the world, and that these have been an issue for some time. The father said he was concerned about the business over the next 12 months and what might happen.
The tribunal notes that as at 30 June 2021, [Company 1]’s net assets were $1,163, 493. The father said the assets were artificially inflated because of adjustments made for previous years, whereby he had to inject and withdrew large sums of money. The balance sheet shows a current asset of $408,888 in respect of a Division 7A loan for 2021. Even if this is disregarded, the net asset position is $754,605.
In summary, the tribunal considers that for the financial year 2020/21, an annual income of $260,205 adequately reflects the father’s income, property and financial resources for child support purposes. For the period from 1 July 2021, this reduces to $200,286.

The mother’s income

The mother’s taxable income was $120,319 for 2018/19, $64,357 for 2019/20 and $64,692 for 2020/21. She submitted that her 2018/19 taxable income was higher as before she and the father separated, she would get a $60,000 distribution from the trust.
The mother was working part time [and] has taken on a more senior role and now works full time.
The father sent a copy of the mother’s LinkedIn page which showed that since October 2021, she was [a senior role] and had previously been a [Occupation 1].[8] The mother submitted payslips which the tribunal has used to calculate when her pay increased.
[8] Page 550 of the CSA documents.
The mother was paid $4,884.76 a fortnight in her new role, equivalent to $127,000 a year. She was paid about $2,488 a fortnight before then, based on her 2020/21 taxable income. Her year-to-date income as at 4 February 2022 was $55,318. From 1 July 2021 to 20 October 2021 is 16 weeks, or eight pay cycles at the lower pay rate, amounting to gross pay of $19,904. From 21 October 2021 to 4 February 2022 is 15 weeks, say 7½ pay cycles at the higher rate, amounting to $36,635. Added to $19,904 gives $56,539. In the absence of a precise date and based on its calculations, the tribunal finds that the mother was paid at the higher rate from 21 October 2021.[9]
[9] If this date is out by a week or even a month, it will make no appreciable difference to the annual child support liability.
The father had submitted that the mother was also being paid for [casual job]. She informed the CSA that this occurred four to five times in January for which she was paid $70 cash for each session. This information was given to the CSA during 2021. The tribunal finds therefore that the mother was referring to January 2021, which predates the change of assessment application.
The mother, in her written submission to the tribunal, wrote that she [worked casually] four times in December 2020 and January 2021 and she charged $60 an hour.
At the hearing the father said he has a recording of his son saying in August 2021, that his mother was [working].
The mother did not attend the hearing and the tribunal could not therefore ask her about this. As she had acknowledged in writing that she did some [work] in December 2020/ January 2021, the tribunal considers it possible that she also [worked] at another time during the year.
The tribunal will increase the mother’s income while she was working part time by $1,000 a year, to reflect this. There was no evidence to support a claim that the mother was [doing causal work] once she started working full time.
The father had submitted documents on the basis that they showed the mother’s payslips did not accurately reflect her new position and the pay that went with it. The tribunal is firmly of the view that there is nothing untoward about the payslips submitted by the mother. They are very detailed and show that her income has almost doubled from when she was working part time.
The tribunal considers that for the period from 21 March 2021 to 20 October 2021, annual income of $65,692 ($64,692 plus $1,000) adequately reflects the mother’s income, property and financial resources for child support purposes. From 21 October 2021, the appropriate figure is $127,000.

How does the administrative assessment compare with an assessment of child support using the tribunal’s income figures for the parents?

The following rates of child support are the result of the tribunal’s calculations. Due to the complexity of the calculations, they should be regarded only as estimates. The CSA will provide accurate notices of assessment in due course.
At the time the mother applied for a change of assessment, the father was required to pay an annual rate of child support of $2,330 to the mother, based on his 2019/20 adjusted taxable income of $114,116 and the mother’s 2019/20 adjusted taxable income of $64,357.
Using incomes of $260,205 for the father and $65,692 for the mother, the tribunal estimates that the father’s child support liability would be about $9,426 a year.
Given the difference between the father having an annual child support liability of $9,426 rather than $2,330, the tribunal is satisfied that in the special circumstances of this case, the administrative assessment does result in an unjust and inequitable rate of child support, and that a ground for departure from the administrative assessment has been established pursuant to subparagraph 117(2)(c)(ia) of the Act.

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

As the tribunal is satisfied that there is a ground to depart from an administrative assessment of child support, the next step is to consider whether it is just and equitable as regards the child, the father and the mother 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 a variety of factors, as set out in subsection 117(4) of the Act.[10]
[10] The tribunal is required to give “overt consideration” to relevant factors listed in subsection 117(4) of the Act: Tyagi and Meares (SSAT Appeal) [2008] FMCAfam 886.
Section 3 of the Act makes it clear that parents have the primary duty to maintain their children, and that this duty has priority over all commitments of the parents other than commitments necessary for self-support or the support of another person the parent has a duty to maintain. In this case the father and the mother have the primary duty to financially support the children of this case.
The tribunal observed that the mother has stated to the CSA and to the tribunal that as she does not see [Child 1], she does not have to pay anything for her. This is incorrect. The child support formula takes into account the parents’ respective incomes and the care each provides for each of their children. The formula works out what the father should pay to the mother for the care she provides for [Child 2] and what the mother should pay to the father for the care he provides for [Child 1]. The two amounts are netted off, after which the father has the child support liability.

Income, property and financial resources – the father

The father submitted his Statement of Financial Circumstances (SFC) on 10 November 2021. He referred to an attached assets and liability statement (numbered A2). He provided an updated version as at the same date, except where noted otherwise (numbered A123).
Assets
[Vehicle], owned by him, used by the mother           $24,000
Personal bank accounts as at 20 February 2022  $62,113
50% of property at [address]  $550,000
Net assets of [Company 1]  $600,000
Net value of property owned by the trust (business premises)         $229,196
His interest in the self-managed super fund as at 30 June 2020     $227,954
Liabilities
Owed on credit cards   $4,951
Owed to father  $250,000
Against the value of [Company 1], the father wrote $600,000 less $250,000 payable to his father (see paragraph 29). The father also noted that the mother was trying to gain $300,000 from the business. The father recorded that if this happened and he repaid his father, then his interest in the business would be $50,000.
As noted earlier, the parents are involved in a property settlement which is a matter for the Federal Circuit and Family Court, not the tribunal.
The father submitted a weekly household expenses schedule with expenses totalling $2,475 a week, equivalent to $128,700 a year.
The CSA documents at page 558 show that the father was essentially up to date with his child support payments as at 28 February 2022. There was a small balance of $343.95 to be paid which may be to do with timing of payments.

Income, property and financial resources – the mother

The mother’s SFC was dated 9 November 2021. She recorded her income on the basis of her working part time. She also wrote that she was in receipt of family tax benefit.
In relation to assets, the mother recorded her 50% share in [a] property at $550,000. She wrote that she has $54,961 in one bank account, $50,000 of which was paid to her as a partial property settlement.
The mother recorded about $4,000 in two other bank accounts and $1,500 invested in what she referred to as “[name deleted]”. She recorded $75,000 in household contents, and $156,842 in her superannuation account.
The mother did not record any liabilities in her SFC. However, in a later submission to the tribunal, she wrote that she owed her lawyers $19,992 which she is paying at the rate of $100 a fortnight. She hopes that when the mediation the parties are engaged in is complete, she can pay that bill. She submitted an invoice from her lawyers dated 3 March 2022 which corroborated the amount owed.
The mother listed her weekly household expenses amounting to $1,852 a week ($96,304 a year). The father observed that some of the line items, such as car maintenance of $30 a week when the car was under warranty, looked high. He said that the car the mother drove was registered in his name. The mother summarised her weekly outgoings as amounting to $2,292 a week and her income as $1,861 a week. Her income has since increased to $2,442 a week, sufficient to cover her outgoings even if some line items were overstated. She included a number of items that were discretionary spending, as did the father, which is quite reasonable given their respective incomes and bank balances. The tribunal would note that it is not uncommon for parties in these matters to make mistakes when filling out their SFCs. If the mother did overstate how much she spends on some types of expense, the tribunal draws no adverse inference from this. It has relied on her payslips, not the SFC, when determining her income for child support purposes.
There was nothing else of particular note in the mother’s SFC.

Other issues pertaining to the parents’ incomes, property and financial resources

Subsection 117(7B) of the Act prescribes the circumstances in which a parent’s earning capacity may be taken into account; certain criteria have to be met. These include that the parent has failed to demonstrate that decisions made about their work arrangements were not substantially motivated by the effect they would have on the rate of child support.

The father has worked in his company for many years. The mother has recently increased her hours from part to full time.
The tribunal concluded that it need not consider earning capacity and the application of subsection 117(7B) of the Act in relation to either parent any further.
The tribunal is required to have regard to the commitments of each parent 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 (paragraph 117(4)(e) of the Act). There was no evidence before the tribunal of either parent having the legal duty to maintain another person apart from the children of the case.
Costs related to the children

In determining the proper needs of the children, it is necessary to have regard to the manner in which they are being, and in which the parents expected them to be, cared for, educated or trained, and any special needs they may have (subsection 117(6) of the Act).
The children are educated in private schools. [Child 1] was attending [a] College but was unhappy there. The father said she had been bullied and was self-harming. He said that [Child 1] wanted to change schools and go to [another] College. She did change schools.

100.At the hearing, the father requested that his child support liability be reduced in recognition of the school fees he paid for [Child 1].
101.The mother submitted an email from the father’s lawyer to her lawyer, dated 31 March 2021. That stated that the father would pay for [Child 1]’s school fees.[11] She then wrote that a consent order to that effect was drawn up and signed by both parties, and that on 12 April 2021, her lawyers informed her that the Family Court had stamped the signed consent order.
[11] B56 of the documents.
102.The father agreed that he paid the school fees in accordance with the consent order. He said that he paid $9,000 in child support and $9,000 in school fees for [Child 1] and this was not fair. He wanted a reduction in his child support liability because of this. He said there was nothing in the child support legislation that prevented the tribunal from doing this. He requested that the tribunal make a change to his child support liability in consideration for care, which the tribunal understood to mean the amount of child support he paid and the care he provided to the children.
103.There was no suggestion that the father was struggling to pay the school fees and his child support.
104.The tribunal has decided not to vary the rate of child support because of the school fees paid by the father for [Child 1] for the following reasons. During March and April 2021, the father agreed to pay the school fees. It would be unjust and inequitable to the mother to make a determination that effectively undoes or undermines an agreement between the parents, which was made via their respective lawyers and which was the subject of a consent order.
105.Further, the tribunal’s determination means that the father’s child support liability has reduced significantly from October 2021 when the mother’s income increased. The tribunal will not consider [Child 1]’s school fees any further.
106.According to the mother, [Child 2] is in receipt of NDIS funding of about $25,000. The mother in her submission wrote that there were expenses she paid for that were not covered by the NDIS, such as specialised glasses and appointments, attending a paediatric rheumatologist and any future specialists for [Child 2]’ diagnosed special needs. She submitted an invoice dated 13 January 2021 showing the cost of spectacles to be $420. She also submitted an invoice dated 23 November 2021 and associated Medicare claim form, showing an out-of-pocket cost of $115 for [Child 2]’ attendance at a child and adolescent rheumatology centre.
107.The amount of $420 predates the lodgement of the change of assessment application. An out-of-pocket expense of $115, given the parents’ incomes, is not significant enough to consider varying the rate of child support.
108.For the parents’ benefit, the child support formula is intended to cover occasional medical costs that all parents may incur for their children from time to time.
109.The father wanted the mother to contribute to the cost of [Child 1]’s glasses and contact lenses. He estimated that he paid $400 to $500 for her glasses and made a monthly payment of $70 for her contact lenses. The mother made submissions stating that these were not necessary.
110.The father said that there was a case before the Family Court brought by the mother concerning who was responsible for the payment of [Child 2]’ school fees and other costs pertaining to the children’s special needs. He said that there was no need for these matters to be considered by the tribunal.
111.In light of the foregoing taken together, the tribunal declines to consider the children’s special needs or schooling any further.
112.The parents each provided details of their weekly average expenses in their SFCs. Not all relevant costs were allocated to the children even though a portion of them would have been incurred on behalf of, or because of, the children. That being the case, the tribunal considers it appropriate to rely on the Costs of the Children Table available from the CSA’s website.[12]
[12] For the parents’ information, a Costs of the Children Table is available at the Services Australia website which can be found at align="left">Hardship
113.The tribunal is required to consider any hardship its determination might cause and is guided by Gyselman and Gyselman[13] in this respect:
[13] [1991] FamCA 93.
This requires the Court to balance the “hardship” which the parents or the children may suffer as a result of either making or refusing to make the order. It is a recognition of the circumstance that in this area there is likely to be hardship both ways and the Court is required to take into account the balance of that hardship and give it the weight which is appropriate to the circumstances of the individual case.
114.The tribunal is satisfied that its decision will not cause either parent hardship, given their respective incomes and bank balances.

Any other relevant matters

115.The tribunal may take into account any other matters it considers relevant in making a particular departure determination (subsection 117(9) of the Act).
116.The tribunal has started its determination from 25 March 2021, being the date that the mother lodged her change of assessment application.
117.Following the objection decision, the father was assessed to pay child support at an annual rate of $8,435 from 25 March 2021. The tribunal estimates that the effect of its decision compared to the objection decision for the period from 25 March 2021 to 31 March 2022 will benefit the father by about $3,100. The tribunal would emphasise that because of the complexities of the child support formula, its calculations are just estimates and the CSA will send out assessment notices in due course.

118.The most significant single factor in the reduction of the father’s liability is the increase in the mother’s income. The tribunal estimates that the rate of child support at different times will be as follows:

*Period*	*Number of days*	*Annual rate $*	*Rate for the period $*
25 March 2021 to 30 June 2021	98	9,426	2,530
1 July 2021 to 20 October 2021	112	8,100	2,485
21 October 2021 to 31 March 2022	162	$555-$609, say $580[14]	257
*Total*	5,272

[14] The rate changes when James turns 13 years old.

119.At the hearing the father said that he did not want the assessment to continue too far into the future because he was unsure of how well his business would perform given supply chain and other potential problems. The tribunal suggested ending its determination on 31 March 2023 which was agreeable to the father. The tribunal then said it would do this unless a reason emerged to do otherwise.
120.Having now estimated the annual rate of child support from 21 October 2021, which is only about $600 a year, the tribunal considers it reasonable to end its determination on 31 March 2024, rather than 31 March 2023. This will give the parents greater certainty into the future. If there is a change in the percentages of care as recorded by the CSA, then the rate of child support will, of course, change.
121.It remains open to either parent to apply for a change of assessment between now and 31 March 2024 if circumstances change.

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

122.The requirement to consider whether a departure determination would be otherwise proper is concerned with what is fair to the community; it is preferable for a child or children to be primarily supported by their parents rather than by government assistance. Paragraph 117(5)(b) of the Act means that the tribunal must consider whether the level of a benefit, in particular family tax benefit (FTB), received by the party caring for a child or children, may be affected by the level of child support.
123.The mother recorded in her SFC that she was receiving FTB. The tribunal is satisfied that its determination will result in an appropriate apportionment of financial responsibility between the parents and the community and would be otherwise proper.

DECISION

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

For the period from 25 March 2021 to 30 June 2021, Mr Batton’s adjusted taxable income is varied to $260,205.
For the period from 1 July 2021 to 31 March 2024, Mr Batton’s adjusted taxable income is varied to $200,286.
For the period from 25 March 2021 to 20 October 2021, Mrs Batton’s adjusted taxable income is varied to $65,692.
For the period from 21 October 2021 to 31 March 2024, Ms Batton’s adjusted taxable income is varied to $127,000.

[2022] AATA 1183

28 March 2022

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