Beare and Maurizio (Child support)

[2020] AATA 5830

Beare and Maurizio (Child support) [2020] AATA 5830 (26 November 2020)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2020/BC019211

APPLICANT:  Mr Beare

OTHER PARTIES:  Child Support Registrar

Ms Maurizio

TRIBUNAL:Member S Letch

DECISION DATE:  26 November 2020

DECISION:

The decision under review is affirmed.

CATCHWORDS

CHILD SUPPORT – departure determination – high costs of child care – ground for departure established – decision under review affirmed

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

REASONS FOR DECISION

BACKGROUND

1. Mr Beare and Ms Maurizio are the parents of [Child 1], born July 2016. Mr Beare seeks a review of a decision by the Child Support Agency (CSA) to allow Ms Maurizio’s objection to a “change of assessment” decision of 29 November 2019. In that original decision, the original decision-maker found a ground to depart; however, determined it was not just and equitable to depart from the child support formula.

2. It is convenient to set out some extracts from the objections officer decision dated 26 May 2020 by way of background:

   …

   IS A REASON ESTABLISHED?

   Reasons in the application:
   Reason 6: To establish this reason, Ms Maurizio must show her child care costs for [Child 1] exceed
   5% of Ms Maurizio's adjusted taxable income. This reason is only applicable for children under the
   age of 12.

   The evidence of each parent and other evidence available to the decision maker:

   Ms Maurizio requested a decrease be made to the annual rate of child support payable by her from 15
   August 2019, which recognizes [Child 1]`s childcare costs.

   Ms Maurizio states that:
   - [Child 1] attends childcare five days per week
   - Both she and Mr Beare signed the enrolment forms
   - She currently pays the full costs of the childcare, as Mr Beare has not opened his own account
   with the centre
   - Mr Beare has made some contributions to the childcare costs in the past few months, though he
   has not paid for the majority of childcare since their separation
   - The childcare costs $98.90 per week, after the childcare subsidy. This is more than 5% of her
   income

   In support of her application, Ms Maurizio provided the following evidence:
   - A statement from [a named childcare centre] showing childcare costs from 22 July 2019
   to 18 August 2019
   - A payslip for period 22 July 2019 to 4 August 2019, showing a gross payment of $2,887.45 and a

   gross year to date of $8,777.45

   - A personal bank transaction statement

   During the objection process, Ms Maurizio provided more recent evidence:
   - A payslip for the period 3 February to 14 February 2020, showing gross income of $3033
   - A payslip for the period 17 February to 28 February 2020, showing gross income of $3033, and a
   gross year to date amount of $52,615.53
   - A statement from [a named childcare centre] showing [Child 1]`s out-of-pocket childcare
   costs for the period 23 February 2020 to 15 March 2020.

   In conversations with the agency on 19 October 2019 and 28 November 2019, Ms Maurizio stated:
   - [Child 1] will be in childcare until the end of 2022, starting prep in 2023
   - Mr Beare has not signed enrolment form for 2020
   - She is aware Mr Beare has taken leave without pay from his work, but believes he must have some
   source of income, given his expenses
   - She has a letter from Mr Beare`s solicitor advising leave from work due to medical reasons
   - She understood Mr Beare was in receipt of benefits and that this would affect the outcome. She
   and Mr Beare are consider their other options for childcare next year, taking this into account
   - She and Mr Beare have resolved their property matters
   - She is currently living with her parents and the family home has been sold
   - She is trying to find a rental for her and the two dogs
   - Mr Beare will not take the dogs
   - The childcare fees and child support affect her capacity to pay rent, and is the reason she is still
   living with her parents

   In conversations with the agency on 21 October 2019, 7 November 2019 and 27 November 2019,
   Mr Beare stated:
   - He has had been paying half of [Child 1]`s childcare fees previously, although has not for the last
   two months or so, as he has not been working
   - Work Cover are involved, as he has had psychological injury following car accidents whilst at
   work
   - His solicitors have suggested the claim may not succeed, although documents he has read lead him
   to believe he may
   - He is [Occupation 1], although he cannot see himself returning to that field, and is
   looking at stacking shelves as his employment option
   - He had just received confirmation from Centrelink that his entitlement to the parenting payment
   has been approved, and he will be contacting the agency to advise so his income estimate can be
   amended
   - He is struggling financially
   - He is still employed with [Company 1] but has ongoing leave without pay, which is supported by
   medical evidence
   - It is fair for him to pay his share of the childcare fees when he is working, which is what he was
   doing before he was unable to work
   - He is in receipt of Centrelink benefits only, and may commence employment in the new year, and
   his capacity to pay child support will change
   Mr Beare provided the following evidence:
   - A medical certificate showing that he is unfit for work from 17 October 2019 to 17 November

   2019

   - A Queensland workers` compensation medical certificate dated 12 August 2019, stating return to
   normal duties on 19 August 2019
   - Medical certificates issued by [Hospital 1] dated 21 June 2018 and 11 March

   2019

   …

   The above information shows that over the relevant child support period 1 September 2018 to 30
   September 2019, Ms Maurizio has an income applied in the assessment of $71,814. Over the child
   support period 1 October 2019 to 31 December 2020, Ms Maurizio has an income applied in the
   assessment of $82,629. As her costs would need to exceed 5% of her income over the child support
   periods, her costs would need to exceed $3,591 in the period from 1 September 2018 to 30

   September 2019, and $4,131 in the period from 1 October 2019 to 31 December 2020.

   …

   For the period 1 September 2018 to 30 September 2019, the childcare costs over the period would
   be approximately $5,581 ($98.90 / 7 x 395 days).

   For the period 1 October 2019 to 31 December 2020, the childcare costs over the period would be
   approximately $6603. The costs are $1300 from October until the 30 December 2019 ($98.9 / 7 x
   92) and $5303 from 1 January 2020 to 31 December 2020 ($101.43 / 7 x 366).

   [Child 1]`s childcare costs are greater than $3591 and $4131 in the relevant child support periods.

   Based on the above information I am satisfied special circumstances exist. I find [Child 1] is younger
   than 12 years of age at the start of the child support period. I am also satisfied Ms Maurizio has
   reasonable and necessary child care costs that total more than 5% of her adjusted taxable income.
   Additionally I am satisfied these high child care costs significantly affect the costs of maintaining
   [Child 1] when compared to the assessed costs under the child support assessment. Reason 6 is

   established.

   …

   As discussed in the body of my decision Reason 6 has been established with respect to [Child 1]`s
   Childcare costs. Ms Maurizio’s weekly out-of-pocket childcare costs are $101.43 annualising to $5,274.36. I consider some assistance is required by Mr Beare with respect of these costs, however,
   based on Mr Beare`s income, I cannot be satisfied that he currently has the capacity to contribute
   50% of these costs, being approximately $51 per week or $2637 per year. Consequently, I am
   increasing Ms Maurizio`s self-support amount by $20,000 per annum, in recognition of a portion of
   [Child 1]`s childcare costs. This has the effect of reducing the annual child support payable by Ms
   Maurizio by $1616, and increasing the child support payable by Mr Beare by $1626. This recognises
   approximately 30% of the childcare costs ($1626 of $5200), which I find to be fair, based on the

   circumstances.

   …

   DECISION

   I have found special circumstances exist in this case and that it would be just and equitable and
   otherwise proper to make a change. The change to be made to the assessment is:
   The objection is allowed.

   I have made the decision to set aside the decision made by DM Rachael Timms on 29 November
   2019, to be replaced with the following:

   For the period 1 January 2020 to 31 December 2022, Ms Maurizio`s self-support amount is increased
   by $20,000.

   Impact on assessment:
   In case 927077879, the annual rate payable by Ms Maurizio decreases, as follows:
   - For the period 1 January 2020 to 30 June 2020, the annual rate is $384
   In case 927077862, the annual rate payable by Mr Beare increases, as follows:

   - For the period 1 July 2020 to 31 December 2020, the annual rate is $1890

3. Mr Beare applied for further review by the Tribunal on 8 June 2020. Mr Beare and Ms Maurizio participated in the Tribunal’s hearing by conference telephone. In making its decision, the Tribunal took into account the CSA materials, additional materials submitted by both parties, and the sworn evidence of both parties during the hearing.

CONSIDERATION

The legislative framework

1. 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 Act). A formula is used. It takes into account variables including each parent’s adjusted taxable income for the last relevant year of income, the number of children and the level of care provided by each parent.

2. Part 6A of the Act allows for a departure from an administrative assessment (a process commonly known as a “change of assessment”). Under subsection 98C(1), the Registrar may make such a departure determination if three matters are established:

   ·     one, or more than one, of the grounds for departure referred to in subsection 98C(2) exists (subparagraph 98C(1)(b)(i));

   ·     a departure is just and equitable as regards the children and each parent (sub-subparagraph 98C(1)(b)(ii)(A)); and

   ·     it is otherwise proper to make a departure decision (sub-subparagraph 98C(1)(b)(ii)(B)). 

3. Subsection 98C(2) provides that the grounds for departure are the same as the grounds set out in subsection 117(2).

4. If satisfied that a ground or grounds exist and that it would be just and equitable and otherwise proper to make a particular determination, the Tribunal may make one of the determinations prescribed in section 98S of the Act. It permits a range of determinations, including varying the rate of child support payable, the adjusted taxable income or the cost percentage for a child.

Issue 1 – Is there a ground to depart?

1. Subparagraph 117(2)(b)(ib) of the Act, commonly referred to as Reason 6, provides as a ground for departure:

   that, in the special circumstances of the case, the costs of maintaining the child are significantly affected:

   …    

   (ib) because of high child care costs in relation to the child …

2. The starting proposition is that the child support formula should apply. Only in special circumstances should a departure be made. The words “in the special circumstances of the case” are not defined in the legislation. Whilst it is not possible to define with precision the meaning of that term, it is intended to emphasise that the facts of the case must establish something which is special or out of the ordinary. That is, the intention of the legislature is that the Tribunal will not interfere with the administrative formula result in the ordinary run of cases. In Gyselman and Gyselman (1992) FLC 92-279, it was held that “special circumstances” were “facts peculiar to the particular case which set it apart from other cases”. The Tribunal’s approach to the interpretation and application of the particular grounds in subsection 117(2) must be guided by that qualification.

3. Mr Beare told the Tribunal he “wants a more accurate outcome”. Mr Beare is saying that he should not make a “zero contribution” (by a reduction in the child support he receives); rather he estimates around 5% to 10% would be fair. He does not believe Ms Maurizio is contributing enough. He said he feels he has not had a significant role in choices about [Child 1]’s kindy – he said Ms Maurizio has “run the show”. He said he has taken [Child 1] to another dentist who said the treatment proposed for [Child 1] was “recommended but not needed”. Mr Beare said there have been a “lot of discrepancies over time”, especially with COVID-19. Mr [Beare] said he has been doing some volunteering work – however, he said he would be available to care for [Child 1] whilst Ms Maurizio was at work in order to reduce the need for childcare. Mr [Beare] said he has been “okay” with the assistance of a superannuation withdrawal in accordance with the COVID-19 response, in addition to his Centrelink entitlements; however, his bank account is dwindling in order to meet his expenses and he has only around $5,000 left in his account.  

4. Mr Beare told the Tribunal that he is in the process of applying himself for [Child 1]’s enrolment at the childcare centre as he is eligible for a greater level of Centrelink assistance. He raised no particular issue with the arithmetic applied by the CSA in calculating Ms Maurizio’s out-of-pocket childcare costs. He has started that process with the centre and with Centrelink and expects from January 2021 the situation will materially change. He alleged Ms Maurizio had “tricked him” in the original enrolment process.

5. Mr Beare told the Tribunal he continues to receive Centrelink entitlements. He said he is in a difficult position as he has worked all his life and his mental health is presently preventing a return to work. Whilst he still has around $5,000 in the bank, he has many bills coming up, including car expenses. He said Ms Maurizio had “deceived him” into accepting pets which he now incurs ongoing expenses for. He did not identify any other particularly unusual expenses.

6. Ms Maurizio told the Tribunal she is happy with the CSA decision. In recognition of Mr Beare’s financial circumstances, she is not pursuing any assistance for [Child 1]’s dental costs (she is out-of-pocket over $2,000 at this stage). She would consider it unfair going forward for her to pay all of [Child 1]’s childcare costs and dental costs; as an overall assessment, she considers the present CSA assessment fair. She is not convinced that Mr Beare’s proposed changes in January 2021 will result in any material difference to her out-of-pocket expenses, and would prefer the existing assessment to continue pending a material change. She said that Mr Beare had been encouraged in the past to enrol with the centre, but had failed to follow through.  

7. Ms Maurizio confirmed she works full-time earning $1,500 to $1,600 per week (gross). She receives a small amount of family tax benefit (including rent assistance), and is presently living with family. Aside from childcare and dental costs, she did not identify any particularly unusual expenses.

15.The Tribunal has examined the evidence and the CSA calculations and is satisfied that Ms Maurizio’s out-of-pocket and necessary childcare costs exceed 5% of her income. Those costs are significant and give rise to special circumstances which render the assessment unfair. There is a ground to depart from the formula.

Issue 2 – Is it just and equitable to depart from the administrative assessment?

16.The next relevant consideration for the Tribunal is whether a departure from the administrative assessment is just and equitable. This enquiry directs attention to what is fair to the parents and their children. Regard must be had to a variety of factors such as the needs of the children, the parents’ commitments and any hardship that would be caused by departing or not departing from the formula.

1. Mr Beare finds himself in a difficult position as a consequence of his health issues. He has been assisted to some degree by the higher level of Centrelink benefits during the pandemic, and access to his superannuation. Ms Maurizio earns a good income; however, her childcare costs are high, and she has met [Child 1]’s dental costs without assistance from Mr Beare.

2. The Tribunal considers that Mr Beare has a demonstrated and present financial capacity to effectively make a relatively modest contribution to Ms Maurizio’s childcare fees. The Tribunal considers the reduction in Ms Maurizio’s child support liability by some $1,600 per annum (approximately 30%) by increasing her self-support amount (which also contemplates a scenario where Mr Beare becomes the parent liable to pay child support) is a just and equitable result in the overall circumstances of the case.

3. Ms Maurizio’s out-of-pocket expenses may, or may not, change in January 2021. The Tribunal considers the prudent course is to set the present assessment until the end of 2022 in line with the CSA assessment; in the event there is a material change, Mr Beare may approach the CSA in the new year for a reassessment of Ms Maurizio’s out-of-pocket costs. Ms Maurizio, depending on the circumstances, may also seek to raise the matter of [Child 1]’s dental costs. A fresh application by Mr Beare may also be grounded in the event Mr Beare is unable to return to work in the new year, and his financial position materially deteriorates.

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

20.The requirement to consider whether a departure would be otherwise proper directs attention to what is fair to the community. It is necessary to consider the effect of any departure from the administrative assessment on entitlements to income-tested pensions, allowances and benefits. Parents rather than the community have the primary duty to maintain a child.

21.The rate of child support should reflect the obligation of both parents to take financial responsibility for the children and, where increased, may decrease any income-tested benefits payable. A departure is therefore proper.

22.As the Tribunal has reached the same conclusion as the objections officer, the decision under review will be affirmed.

DECISION

The decision under review is affirmed.