Belchier and Belchier (Child support)

Belchier and Belchier (Child support) [2022] AATA 3054 (23 June 2022)

DIVISION:Social Services & Child Support Division
REVIEW NUMBER:  2021/PC022564
APPLICANT:  Miss Belchier
OTHER PARTIES:  Child Support Registrar
Mr Belchier

TRIBUNAL:Senior Member R Ellis
DECISION DATE: 23 June 2022
DECISION:

The Tribunal sets aside the decision under review and, in substitution, decides that:

for the period from 22 April 2021 until a terminating event for [Child 1] the adjusted taxable income of Ms Belchier is varied to $50,000; and

for the period from 22 April 2021 until a terminating event for [Child 1] the adjusted taxable income of Mr Belchier is varied to $116,000.

CATCHWORDS

CHILD SUPPORT – departure determination – income, property and financial resources of both parents – a ground for departure established – decision to depart – decision under review set aside and substituted

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

REASONS FOR DECISION

BACKGROUND

This review is about whether or not there should be a departure from the administrative assessment of child support.
Ms Belchier and Mr Belchier are the parents of [Child 1] (born September 2003). There has been a child support assessment in place since 5 January 2006 and Mr Belchier is the liable parent under the assessment.
The following administrative assessments of child support are under consideration:
·     for the period from 1 April 2020 to 10 February 2021 Mr Belchier was assessed to pay an annual rate of $4,803 based on a 2018-19 provisional adjusted taxable income of $54,181[1] for Mr Belchier and a 2018-19 adjusted taxable income for Ms Belchier of $16,998;
·     for the period from 11 February 2021 to 30 June 2021 Mr Belchier was assessed to pay an annual rate of $1,558 based on a 2018-19 adjusted taxable income of $34,855 for Mr Belchier and a 2018-19 adjusted taxable income for Ms Belchier of $16,998; and
·     for the period from 1 July 2021 to 26 November 2021 Mr Belchier was assessed to pay an annual rate of $4,405 based on an amount derived from Male Total Average Weekly Earnings (MTAWE) of $52,638 for both parents.
[1] Pending lodgement of his 2018-19 tax return
On 22 April 2021 Ms Belchier applied to the Child Support Agency for a change to the assessment on the basis of a parent’s income, property, financial resources and earning capacity (the grounds commonly referred to as Reasons 8A and 8B).
On 16 July 2021 the Child Support Agency made the decision to change the assessment so that for the period from 1 May 2021 to 26 November 2021 the adjusted taxable income of Mr Belchier is set at $120,629 (the original decision).
On 31 July 2021 Ms Belchier objected to this decision and on 3 October 2021 the Child Support Agency allowed the objection in part and made the decision to change the assessment so that for the period from 1 May 2021 until a terminating event for [Child 1] the adjusted taxable income of Mr Belchier is set at $120,631 (the objection decision).
On 20 October 2021 Ms Belchier applied for a review of the objection decision by the Administrative Appeals Tribunal (the Tribunal).
A directions hearing was held on 1 February 2022. Both Ms Belchier and Mr Belchier attended by conference telephone. Prior to the directions hearing the Child Support Agency provided the Tribunal and the parties with a bundle of documents in accordance with section 37 of the Administrative Appeals Tribunal Act 1975 (1,426 pages).
Ms Belchier and Mr Belchier were directed by the Tribunal to provide further information. Both parents partly complied with these directions.
A hearing was held on 12 May 2022. Ms Belchier and Mr Belchier gave evidence on affirmation by Microsoft Teams audio. Prior to the hearing the Tribunal received documents folioed A1 to A27 from Ms Belchier and B1 to B29 from Mr Belchier and these were distributed to the parties. During the hearing the Tribunal agreed to allow Mr Belchier to provide additional financial information relevant to the matter and this was received on 12 May 2022 (B30–B33). A copy of this additional financial information was sent to Ms Belchier and no further written comments were received in response.
At the directions hearing and at the commencement of the hearing the Tribunal sought clarification from Ms Belchier and Mr Belchier as to the reasons for their concerns. Ms Belchier said the Child Support Agency had calculated the income and financial resources available to Mr Belchier using out of date information and wanted a more current assessment by the Tribunal. Ms Belchier said she was also seeking to have any decision by the Tribunal backdated by 18 months. Mr Belchier said the Child Support Agency had determined his income and financial resources based on inaccurate information and arrived at an amount which was incorrect. He argued that the proportion of income from his business had also been unfairly split between he and his wife and should have been shared equally between the two of them.

ISSUES

The statutory provisions relevant to this review are contained in the Child Support (Assessment) Act 1989 (the Act).
The rate of child support payable by the liable parent is usually based on an administrative assessment under Part 5 of the Act.
Under Part 6A of the Act, the liable parent or the carer of the child or children may apply to the Child Support Registrar for a determination to depart from the administrative assessment (section 98B).
Section 98C provides that the Registrar may make a determination to depart from the administrative assessment and establishes a three-step process such that the issues for determination by this Tribunal are:
·     whether or not a ground is established to depart from the administrative assessment of child support; and if so,
·     whether or not it is just and equitable to make a particular departure determination; and if so,
·     whether or not it is otherwise proper to make a particular departure determination.
The grounds for departure from an administrative assessment of child support are set out in subsection 117(2) of the Act.
Each ground is prefaced by the words “in the special circumstances of the case”. The meaning of this expression is not defined in the Act, but the Family Court in Gyselman and Gyselman [1991] FamCA 93 has held that:
as a generality 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 court will not interfere with the formula in the ordinary run of cases.
In Philippe and Philippe (1978) FLC 90-433 the Court held that “special circumstances” are “facts peculiar to the particular case which set it apart from other cases”.
If the Tribunal is 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 prescribed in section 98S of the Act.
The range of determinations which can be made includes 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

In circumstances where multiple grounds for departure are put forward, the Tribunal needs only be satisfied that one ground is established before going on to determine whether or not a particular determination is just and equitable and otherwise proper.

Issue 1 – Is there a ground for departure?

A ground for departure exists where, in the special circumstances of the case, application of the administrative assessment of child support would result in an unjust and inequitable determination of child support to be provided by the liable parent in respect of the child because of the income, property and financial resources of either parent (subparagraph 117(2)(c)(ia) of the Act).
Ms Belchier told the Tribunal she was employed in the [named] industry on a casual basis and worked three to four shifts a fortnight. Ms Belchier estimated her income from employment at between $1,200 and $1,400 per fortnight depending on the work available.
Ms Belchier said she also ran her own business as a sole trader called [Business 1]. Ms Belchier told the Tribunal [Business 1] focussed primarily on selling [product 1], however, she also [related services] and this work was invoiced through the business. Ms Belchier said the business was not very profitable but did cover most of her motor vehicle and telephone costs. Ms Belchier explained the majority of [product 1] sales were online.
Ms Belchier told the Tribunal she was in the process of filing her 2019-20 and 2020-21 individual tax returns. Ms Belchier provided the Tribunal with a copy of her Australian Taxation Office (ATO) pre-filling report for 2019-20. It shows income from two employers totalling $8,339, government benefits totalling $18,075, franking credits and dividends totalling $204.68 as well as business income received through PayPal of $14,853. This totals approximately $41,472. It was unclear if the business income was net income after taking into account expenses of the business or gross income. Ms Belchier said this was something her accountant would know. Ms Belchier added she did not expect her income in 2020-21 to be significantly different.
In response to directions Ms Belchier provided the Tribunal with draft accounts for 2020-21 for [Business 1]. Ms Belchier explained she was in the process of moving to another accounting software package which was why the accounts had yet to be finalised. The accounts show total income of $48,616 comprised of [product 1] sales of $34,936 and other income ([related services] and [sales]) of $13,680. After allowing for cost of sales of $17,295 and expenses totalling $38,332 the business made a loss of $7,011 in 2020-21.
Ms Belchier also provided the Tribunal with a Statement of Financial Circumstances received on 4 November 2021. It shows total average weekly income of $1,175 including her salary of $600, parenting payment (single) of $400 and family tax benefit of $175. Ms Belchier states she receives no child support. Her total weekly household expenditure is $1,140 including rent of $500, food of $150 and $100 in fuel. Her total personal expenditure is approximately $430 including tax of $200 per week. Ms Belchier has total assets valued at approximately $52,000 including a [Vehicle 1] valued at $32,000, a [Vehicle 2] valued at $10,000 and household contents of $10,000. She lists total liabilities of approximately $8,300 and has superannuation of approximately $7,000.
It is difficult to determine with any precision the financial resources available to Ms Belchier for the purposes of child support. Ms Belchier has not lodged her individual tax returns for either 2019-20 or 2020-21. Based on her pre-filling report for 2019-20 Ms Belchier would have an adjusted taxable income of approximately $41,472, however, this includes income from [Business 1] of $14,853. The Tribunal did not have access to accounts for 2019-20 and the business appears to be operating at a loss in 2020-21 although this is based on draft accounts. By taking her income from employment of $600 per week and including her taxable government benefits as advised, Ms Belchier would have an adjusted taxable income of approximately $52,000 per annum. Allowing for reasonable deductions the Tribunal finds that Ms Belchier has income, property and financial resources equivalent to a person with an adjusted taxable income of approximately $50,000 in 2020-21 and going forward.
The Tribunal notes, according to information provided by the Child Support Agency, Ms Belchier is currently assessed on an adjusted taxable income amount of $52,638 and has been since 1 July 2021. This income is based on MTAWE which is a default amount used when the parent has not lodged a tax return for the previous two years. At the time she made her application for a change Ms Belchier was being assessed on her 2018-19 adjusted taxable income of $16,998.
The Tribunal also considered the income, property and financial resources of Mr Belchier.
Mr Belchier told the Tribunal he was self-employed and ran a business called [Business 2] in Perth. Mr Belchier said [Business 2] did [specified services] and had been operating since around August 2016. Mr Belchier said his focus was on overseeing the [occupation 1s] he employed as he no longer worked on the tools. Mr Belchier said he was also involved with a second [service] business, located in [Town 1], called [Business 3] which started trading in July 2020.
Mr Belchier said that [Business 2] operated under a trust structure called the [Family Trust 1] and the corporate trustee of the trust was [Business 4]. Mr Belchier said he was a director and 50 per cent shareholder of [Business 4] and his wife was the other 50 per cent shareholder. Mr Belchier said his wife played an important role in the business. Mr Belchier said she undertook all the marketing as that was her background but also performed other tasks including scheduling work, ordering parts, payroll and accounts.
Mr Belchier said that [Business 3] also operated under a trust structure called the [Trust 1] and the corporate trustee of this trust was [Business 5]. Mr Belchier said he was a director of the corporate trustee and [Business 4] was a 50 per cent shareholder. He said the other 50 per cent was held by his wife’s parents. Mr Belchier explained that his wife’s parents had provided all the capital to establish the business and he was providing the [occupation 1] expertise. Mr Belchier said [Business 3] was paying him a salary but only from the start of 2022 when he and his wife moved to [Town 1].
The Tribunal notes in evidence from the Child Support Agency an extract from the Australian Securities and Investments Commission (ASIC) database which confirms Mr Belchier is a director and 50 per cent shareholder in [Business 4]. A further extract shows that [Business 4] is a 50 per cent shareholder in [Business 5].
Mr Belchier told the Tribunal that he did not receive a wage from [Business 2] but was paid through weekly drawings. Mr Belchier said this income was reflected in the accounts of the [Family Trust 1] and in his individual tax return. Mr Belchier said he received no income from any other source.
Mr Belchier said he was unable to provide the Tribunal with his 2019-20 and 2020-21 individual tax returns in accordance with directions as neither had been filed with the ATO. The Tribunal notes in evidence from the Child Support Agency a copy of Mr Belchier’s 2018-19 individual tax return which shows an adjusted taxable income of $34,855 derived from a trust. Mr Belchier said he did not expect his income in 2019-20 or 2020-21 to be much different.
Ms Belchier submitted that Mr Belchier was underestimating his earnings from the business and would not be earning less than the [occupation 1s] he employed. Ms Belchier added that [this service] business was built by [an occupation 1] and not someone with a marketing background. She said Mr Belchier should not be able to allocate income from the business to his wife. Ms Belchier said Mr Belchier had a lifestyle which suggested he was earning much more and he was also paying for his other four children to attend a private Catholic school.
Mr Belchier responded by arguing that he did receive less than his [occupation 1s] as he was trying to build a business. Mr Belchier said in 2018-19 [Business 2] had been running for almost three years and had only just started making money. He said an average [occupation 1] business like his would make a profit of around 15 per cent on gross sales but in 2018-19 it was only around 8 per cent. He said that was not surprising as they were still paying off equipment and expenses were higher as the business was still in its infancy. Mr Belchier told the Tribunal that he had received advice the business should be targeting a profit of 20 per cent on gross sales but that was only achievable after 10 years of operation.
At the start of the hearing Mr Belchier said he was unable to provide the tax returns for the [Family Trust 1] or the accounts for [Business 2] for 2019-20 and 2020-21. Mr Belchier explained that he had recently swapped accountants and they were still being completed. Mr Belchier said [Business 3] had only been operating since 1 July 2020 and he did not have financial information available for that business either.
The Tribunal notes in evidence from the Child Support Agency a copy of the tax return for the [Family Trust 1] for 2018-19. It shows net income of $69,711 derived from total business income of $892,482 less total expenses of $839,893. Profit as a proportion of gross sales was 7.8 per cent. Cost of sales total $461,278 while other major expenses include rent of $50,280, depreciation of $25,853, interest of $25,338 and motor vehicle expenses of $21,206.
Mr Belchier explained that income of $892,482 in 2018-19 was generated by [occupation 1 services]. He said costs of sales of $461,278 included parts, [and related services]. Mr Belchier said rent was for the business premises, depreciation was primarily for the [specified equipment] while motor vehicle expenses included [business vehicles] as well as his [personal car].
Mr Belchier said sales revenue for [Business 2] was down considerably in the first half of 2019-20 due to the COVID-19 pandemic but then bounced back strongly. Mr Belchier said sales in 2020-21 were up from 2019-20. Mr Belchier told the Tribunal that [Business 3] generated sales revenue of approximately $1.2 million in 2020-21 but was running at a loss. Mr Belchier said neither he nor his wife had received any drawings from [Business 3] and up until the start of 2022 had not received a salary. He said that business losses were being funded by his in-laws but when the business made a profit it would be reflected in the [Trust 1] and then distributed to shareholders.
Following the hearing Mr Belchier provided the Tribunal with draft profit and loss statements for [Business 2] for 2019-20 and 2020-21. Mr Belchier did not provide balance sheets, depreciation schedules or any other relevant financial information. According to the profit and loss statement the business returned a net profit of $143,917 in 2019-20 based on total income of $935,257 and total expenses of $791,340. Profit as a proportion of gross sales was 15.3 per cent. The profit and loss statement for 2020-21 shows a loss of $4,076 based on total income of $1,122,993 and total expenses of 1,127,069.
The Tribunal was unable to discuss with Mr Belchier the reason for the significant increase in business expenses in 2020-21. This would appear to be at odds with his statement that expenses were expected to be higher in earlier years when the business was still growing. The Tribunal notes, however, that in addition to [wages] of $257,366 in 2020-21 there was an amount of $70,342 for administration wages which is a role Mr Belchier’s wife is effectively performing in addition to marketing activities. The Tribunal also notes an expense amount of $20,726 for [Business 3] which suggests some expenses for this more recently established business are being run through [Business 2].
The Tribunal is not satisfied Mr Belchier has provided full disclosure of his financial circumstances. Partial financial accounts were provided in draft form for [Business 2] following the hearing and none were provided for [Business 3].
The difficulty in determining a parent’s income for the purposes of child support in such circumstances has been considered judicially on a number of occasions.[2] The Tribunal notes that, in calculating an amount of income and financial resources available to Mr Belchier from the operation of [Business 2], the Child Support Agency referred to ATO benchmarks for similar businesses. These show that with an annual turnover of above $750,000 average business expenses would be expected to total around 85 per cent of turnover. In other words, based on annual revenue of $1,122,993 in 2020-21, [Business 2] would be expected to generate net business income of approximately $168,449. This is more consistent with the view expressed by Mr Belchier that an average [occupation 1] business would make a profit of around 15 per cent on gross sales and should be targeting 20 per cent after 10 years of operation. The Tribunal notes that by the end of the 2020-21 financial year [Business 2] had been operating for five years.
[2] Humphries & Berry (SSAT Appeal) [2008] FMCAfam 409 sets out that the Tribunal should not be unduly cautious about making findings in circumstances where it is not satisfied that proper disclosure has been made. Morse & Potts (SSAT Appeal) [2010] FMCAfam 1305 sets out that the onus remains on the applicant to present his financial affairs and records in a manner which is both transparent and readily understandable.

The Tribunal is satisfied that Mr Belchier has a net income available to him from the operation of [Business 2] of approximately $168,449. Mr Belchier has told the Tribunal that up until the start of 2022 he was not receiving a salary or other benefits from [Business 3]. Mr Belchier provided no evidence to support this contention.
Mr Belchier has told the Tribunal his wife is a 50 per cent shareholder in [Business 2] and so is entitled to receive 50 per cent of net business income. Ms Belchier has argued that it takes [an occupation 1] to build [this type of service] business and Mr Belchier is the [occupation 1] and his wife is not. While the parents are equal shareholders in [Business 2] it is the skills of Mr Belchier upon which the business is based. Mr Belchier is the [occupation 1] and [the specified service] is the primary business activity. While Mr Belchier’s wife is important in ensuring the ongoing operations of [Business 2] it is appropriate Mr Belchier receives a larger proportion of income generated by the business. In light of the role performed by Mr Belchier’s wife the Tribunal considers her share of business income should more appropriately be 30 per cent.
Mr Belchier provided the Tribunal with a Statement of Financial Circumstances received on 17 December 2021. It shows total average weekly income of $732 being income and benefits from his business. His total weekly household expenditure is $802 including $313 for his share of the home mortgage. There are no motor vehicle expenses. Mr Belchier reports total personal expenditure of $1,198 which includes $1,153 for child support which is obviously not a weekly amount based on the administrative assessment. Mr Belchier has total assets valued at approximately $256,016 including his half share of the family home being $180,000, a [Vehicle 1] valued at $16,000, household contents of $40,000 and personal items. He declares total liabilities of approximately $180,000 being his half share of the home mortgage. Mr Belchier has no superannuation.
The Tribunal is not satisfied that Mr Belchier’s income and financial resources for the purposes of child support are accurately reflected by his taxable income alone. The Tribunal has determined that Mr Belchier has access to income from his business of approximately $118,000. After allowing for reasonable deductions the Tribunal finds that Mr Belchier has income, property and financial resources equivalent to a person with an adjusted taxable income of approximately $116,000 in 2020-21 and going forward.
As Ms Belchier and Mr Belchier are both receiving additional benefits through their respective businesses in the form of a motor vehicle and telephone costs the Tribunal has treated them equally and not considered these benefits in its determination.
Ms Belchier applied for a change of assessment on 22 April 2021. Under the formula assessment in place at that time, Mr Belchier was required to pay an annual rate of $1,558 based on a 2018-19 adjusted taxable income amount of $34,855 for Mr Belchier and an 2018-19 adjusted taxable income amount of $16,998 for Ms Belchier. When using the income, property and financial resources available to the parents as calculated by the Tribunal the annual rate of child support would be approximately $14,092.[3]
[3] This amount takes into account Mr Belchier’s four relevant dependent children and Ms Belchier’s other liable child.
The Tribunal finds this to be significantly more than his liability under the administrative assessment. The Tribunal is satisfied that special circumstances exist and the application of the administrative assessment of child support would result in an unjust and inequitable determination of child support to be provided by Mr Belchier. On this basis the Tribunal finds there is a ground for departure from the administrative assessment.

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

As the Tribunal finds 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 as regards the child, the liable parent, and the carer entitled to child support to make a particular determination in accordance with sub-subparagraph 98C(1)(b)(ii)(A) of the Act. This in turn requires the Tribunal to consider the matters discussed below,[4] which are as set out in subsection 117(4) of the Act:
[4] The Tribunal is required to give “overt consideration” to relevant factors listed in subsection 117(4) of the Act: Tyagi & Meares(SSAT Appeal) [2008] FMCAfam 886.
(4)In determining whether it would be just and equitable as regards the child, the carer entitled to child support and the liable parent to make a particular order under this Division, the court must have regard to:
(a)the nature of the duty of a parent to maintain a child (as stated in section 3); and
(b)the proper needs of the child; and
(c)the income, earning capacity, property and financial resources of the child; and
(d)the income, property and financial resources of each parent who is a party to the proceeding; and
(da) the earning capacity of each parent who is a party to the proceeding; and
(e)the commitments of each parent who is a party to the proceeding that are necessary to enable the parent to support:
(i)himself or herself; or
(ii)any other child or another person that the person has a duty to maintain; and
(f)the direct and indirect costs incurred by the carer entitled to child support in providing care for the child; and
(g)any hardship that would be caused:
(i)to:
(A)the child; or
(B)the carer entitled to child support;
by the making of, or the refusal to make, the order; and
(ii)to:
(A)the liable parent; or
(B)any other child or another person that the liable parent has a duty to support;
by the making of, or the refusal to make, the order; and
(iii)to any resident child of the parent (see subsection (10)) by the making of, or the refusal to make, the order.

The nature of the duty of a parent to maintain a child

Section 3 of the Act states that it is the primary duty of a parent to maintain the child and this has priority over nearly all other commitments.
In this case the parents have a duty to support [Child 1]. Mr Belchier also has four relevant dependent children and Ms Belchier has one other liable child. The Tribunal will take this into account under subparagraph 117(4)(e)(ii) of the Act when making its assessment.

The proper needs of the child

In relation to the proper needs of the child, regard must be had to the manner in which the child is being, and in which the parents expected the child to be, cared for, educated or trained, and any special needs of the child (subsection 117(6) of the Act).
The Tribunal was not made aware that the parents expected [Child 1] to be cared for, educated or trained in a particular way or that he had any special needs. The Tribunal is satisfied it is therefore appropriate to calculate the costs of their needs by reference to the Costs of the Children Table (provided for in section 155 of the Act).

The income, earning capacity, property and financial resources of the child

The Tribunal is satisfied that [Child 1] has no income, earning capacity, property and financial resources which should be taken into account for the purpose of child support.

The income, property, financial resources and earning capacity of each parent

The Tribunal has already considered in detail the income, property and financial resources of both parents.
In her original application for a change of assessment Ms Belchier raised the earning capacity of Mr Belchier. In order to establish that Mr Belchier’s earning capacity might be greater than that reflected in the child support assessment and render the assessment unfair, all three compulsory criteria set out in subsection 117(7B) of the Act must be satisfied. Those three criteria are:
(a)    one or more of the following applies:
·the parent does not work despite ample opportunity to do so (subparagraph 117(7B)(a)(i));
·the parent has reduced the number of hours per week of their employment or other work below the normal number of hours per week that constitutes full-time work for the occupation or industry in which the parent is employed or otherwise engaged (subparagraph 117(7B)(a)(ii));
·the parent has changed their occupation, industry or working pattern (subparagraph 117(7B)(a)(iii)); and
(b)    the parent’s decision not to work, to reduce the number of hours, or to change their occupation, industry or working pattern is not justified on the basis of:
·the parent’s caring responsibilities (subparagraph 117(7B)(b)(i)); or
·the parent’s state of health (subparagraph 117(7B)(b)(ii)); and
(c)    the parent has not demonstrated that it was not a major purpose of that decision to affect the administrative assessment of child support in relation to the child (paragraph 117(7B)(c)).
Mr Belchier runs his own [occupation 1] businesses. He remains in the same industry and there is no evidence to suggest he is working other than full-time. The first criterion is not met.
As all three criteria must be satisfied, it follows that if one is not satisfied, then this ground cannot be considered. The Tribunal finds that the earning capacity criteria (set out in subsection 117(7B) of the Act) are not met for Mr Belchier in this case. The Tribunal is also satisfied that the earning capacity criteria are not met in relation to Ms Belchier.

Any hardship that would be caused

Ms Belchier is on a low income and relies on government benefits to help meet her expenses. The Tribunal has found that she has access to income, property and financial resources for the purposes of child support of approximately $50,000. Ms Belchier is currently being assessed on a default income amount of $52,638 based on MTAWE. Her average household expenses total $59,280 per annum although this includes an amount for fuel of $5,200 when motor vehicle costs are being met by her business. Ms Belchier declares total personal expenditure of $22,360 per annum.
Ms Belchier told the Tribunal she had a hard life and often went without in order to make ends meet. Ms Belchier said she struggled to meet her expenses and her focus was on providing for the children. Ms Belchier has said she is not currently receiving child support from Mr Belchier.
Mr Belchier is self-employed and the Tribunal has found he has access to income, property and financial resources for the purposes of child support of approximately $116,000 per annum. Mr Belchier declares total estimated household expenditure of $41,704 per annum. He has minimal personal expenditure. Mr Belchier told the Tribunal as the owner of a small business he had limited resources and little time for anything but work.
The Tribunal is limited to making a determination in respect of a day in a period that is not more than 18 months prior to the date the change of assessment application was made (paragraph 98S(3B)(a) of the Act). The Tribunal must decide whether or not it is just and equitable to backdate the determination.
Ms Belchier applied for a change of assessment on 22 April 2021 and requested that any change be backdated by 18 months. Ms Belchier told the Tribunal that Mr Belchier had a long history of understating his earnings from the business and she had raised [Child 1] with little financial assistance from him. Ms Belchier reiterated that she had gone without a great deal to support [Child 1]. Mr Belchier said he was opposed to the backdating of any decision.
The Tribunal notes in evidence that in a submission to the Child Support Agency dated 26 July 2021 Ms Belchier acknowledges, “I do not deny that I have not gone down this track earlier but over the years Child Support has done nothing in resolving any of the monies outstanding”.
The Tribunal is of the broad view that retrospectively changing entitlements should be avoided without compelling reasons. The onus is on a parent to initiate a change of assessment in a timely fashion should they believe the existing assessment is unfair. As there was nothing preventing Ms Belchier from making her application sooner the Tribunal finds it just and equitable to commence the departure determination from 22 April 2021 and not an earlier date.
Having considered the interests of both parents the Tribunal proposes to make the following determination:
· for the period from 22 April 2021 until a terminating event for [Child 1] the adjusted taxable income of Ms Belchier is varied to $50,000; and
· for the period from 22 April 2021 until a terminating event for [Child 1] the adjusted taxable income of Mr Belchier is varied to $116,000.

As previously calculated, when using the income, property and financial resources available to the parents determined by the Tribunal the annual rate of child support payable by Mr Belchier would be approximately $14,092. The Tribunal has continued its determination until the child support assessment for [Child 1] ends.
The Tribunal is satisfied the proposed determination will not cause hardship to Mr Belchier, Ms Belchier or [Child 1] and is just and equitable.

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

The third step is to consider whether it would be otherwise proper to make a particular departure determination in accordance with sub-subparagraph 98C(1)(b)(ii)(B) of the Act. Subsection 117(5) sets out the matters that must be considered when deciding whether it would be otherwise proper to make a departure determination. It focuses on the balance of support carried between the parents on one hand and the taxpayer on the other. It is appropriate for the children to be primarily supported by their parents rather than by government assistance. The Tribunal must consider whether the level of a benefit, in particular family tax benefit, received by the party caring for the children may be affected by the level of child support.
Ms Belchier is in receipt of family assistance in respect of [Child 1]. The increase in child support entitlements as set out in this decision may decrease the extent to which the community will be supporting [Child 1]. The Tribunal is satisfied this is otherwise proper as its determination will result in an appropriate apportionment of financial responsibility between the parents and the taxpayer.

DECISION

The Tribunal sets aside the decision under review and, in substitution, decides that:

for the period from 22 April 2021 until a terminating event for [Child 1] the adjusted taxable income of Ms Belchier is varied to $50,000; and

for the period from 22 April 2021 until a terminating event for [Child 1] the adjusted taxable income of Mr Belchier is varied to $116,000.

[2022] AATA 3054

23 June 2022

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