Bisek and Bisek (Child support) - [2020] AATA 5834

Bisek and Bisek (Child support) [2020] AATA 5834 (11 November 2020)

DIVISION:Social Services & Child Support Division
REVIEW NUMBER:  2020/MC019391
APPLICANT:  Mr Bisek
OTHER PARTIES:  Child Support Registrar
Ms Bisek

TRIBUNAL:Member S Brakespeare
DECISION DATE: 11 November 2020
DECISION:

The decision under review is varied so that there is a departure determination in the following terms:

For the period 10 February 2020 to 30 June 2020 Mr Bisek’s adjusted taxable income is varied to $61,708;
From 1 July 2020 the child support liability is as per the ordinary administrative assessment of child support.

CATCHWORDS

CHILD SUPPORT – departure determination – income, property and financial resources of the liable parent – a ground for departure established – decision under review varied

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

Mr Bisek is a parent liable to pay child support to Ms Bisek in respect of their children [Child 1] who is 14 and [Child 2] who is 12. According to the Child Support Agency records Ms Bisek has 93% care of the children and Mr Bisek has 7% care of the children.
On 10 February 2020 Mr Bisek lodged an application for a change of assessment with the Child Support Agency on the ground relating to the administrative assessment being unjust and inequitable because of his income, property and financial resources.
At the time the administrative assessment required Mr Bisek to pay an annual child support liability of $16,824. This assessment was based on an adjusted taxable income for Mr Bisek of $89,654 (set by a departure termination)[1] and Ms Bisek’s 2019/20 income estimate amount of $19,666.
[1] On 19 August 2019 an officer of the Child Support Agency varied Mr Bisek’s adjusted taxable income to $89,654 for the period 17 July 2019 to 8 September 2019 and for the period 14 October 2019 to 31 December 2020
On 25 April 2020 an officer of the Child Support Agency refused to make a departure determination (the original decision). Mr Bisek lodged an objection to the original decision. On 19 June 2020 an officer of the Child Support Agency allowed the objection in part and made the following departure determination (the objection decision):
·for the period 17 July 2019 to 30 June 2020 Mr Bisek’s adjusted taxable income is varied to $89,654;
·from 1 July 2020 income of $89,654 is used as per the ordinary administrative assessment.
On 26 June 2020 Mr Bisek lodged an application for review of the objection decision with the tribunal. A telephone directions hearing was held on 7 October 2020 with both parties participating. A hearing was held on 11 November 2020. Mr Bisek and Ms Bisek gave evidence on affirmation to the tribunal by conference telephone. The Child Support Agency provided the tribunal and the parties with papers relevant to the review (426 pages). The tribunal also received documents from the parties; Mr Bisek provided documents folioed A1 to A26 and Ms Bisek provided documents folioed B1 to B22. The documents were exchanged with the parties prior to hearing.
Relevant aspects of the evidence and material before the tribunal will be referred to in the tribunal’s consideration of the issues which it has to decide.

ISSUES

The statutory provisions relevant to these reviews 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 it establishes a three step process such that the issues for determination by this tribunal are:
·whether a ground is established to depart from the administrative assessment of child support; and
·if so, whether it is just and equitable to make a particular departure determination; and
·if so, whether 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 & Gyselman (1992) FLC 92-279 has held:
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.
Likewise, in Phillippe and Phillippe (1978) FLC 90-433 the Court held that “special circumstances” are “facts peculiar to the particular case which set it apart from other cases”.
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.

Issue 1- Is there a ground for departure?

A ground for departure exists where, in the special circumstances of the case, application in relation to the child of the provisions of the Act relating to administrative assessment of child support would result in an unjust and inequitable determination of the level of financial support to be provided by the liable parent for the child because of the income, property and financial resources of either parent (subparagraph 117(2)(c)(ia) of the Act).
At the time of his application Mr Bisek was assessed to pay an annual child support liability of $16,824 which was based on his adjusted taxable income of $89,654. Mr Bisek had voluntarily ceased employment as a [Occupation 1] for [Company 1] on 13 February 2020. His annual salary for that position was $70,000 per annum. A separation certificate indicates that Mr Bisek received a redundancy payment of $6,855 which was paid on 6 March 2020. The Child Support Agency records show that Mr Bisek received fortnightly income support payments from 5 April 2020 through to 18 May 2020 (approximately $587 per fortnight). Mr Bisek commenced full-time employment again on 13 May 2020 with [another company] as a supervisor on a salary of $65,000. He remains on that salary. Mr Bisek told the tribunal that he is employed in similar work to the type of work he has undertaken for most of the past 15 years; however his salary is now lower as the position does not involve shift work or weekend work, hence no penalty rates, or overtime are payable.
The tribunal finds that application of an income for Mr Bisek of $65,000 per annum to the administrative assessment would result in an annual child support liability for him of approximately $10,400 per annum. This amount is significantly less than the assessed liability of $16,824.
The tribunal finds that, in the special circumstances of the case, application of the administrative assessment of child support would result in an unjust and inequitable determination of the level of financial support to be provided by Mr Bisek for the children because of Mr Bisek’s income.

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

As the tribunal is satisfied that there is a ground to depart from the administrative assessment of child support, the next step is to consider whether it is just and equitable as regards the children, 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,[2] which are as set out in subsection 117(4) of the Act:
[2] The tribunal is required to give “overt consideration” to relevant factors listed in subsection 117(4) of the Act re Tyagi & Meares [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.
In having regard to the proper needs of the children, regard must be had to the manner in which the children are being, and in which the parents expected the child to be, cared for, educated or trained, and any special needs of the children (subsection 117(6) of the Act). The tribunal finds that there are no extra costs to be taken into account in respect of the children’s needs and therefore it is appropriate to calculate the costs of the children’s needs by reference to the Costs of the Children Table.[3]
[3] Provided for in section 155 of the Act
The tribunal finds that the children do not have any income, property or financial resources that should be taken into account for the purpose of the child support assessment.
The tribunal finds Mr Bisek’s 2019/20 adjusted taxable income as assessed by the Australian Taxation Office is $61,708. At the time Mr Bisek lodged his departure application he was earning an income of $70,000 per annum. After ceasing employment with [Company 1] he was in receipt of an income support payment from Centrelink until recommencing full employment on 18 May 2020. His income from that position was, a remains $65,000 per annum. Mr Bisek’s only asset of any significance consists of savings of approximately $108,000.,
Ms Bisek’s income at all relevant times is below the self-support amount and does not affect the administrative assessment. She is in receipt of disability support pension and has recently recommended employment working approximately 10 hours per week. Her income is not being contested by Mr Bisek (as noted by Mr Bisek at the telephone directions hearing). Ms Bisek owns 50% of the home in which she and the children live (her parents own the other half). She told the tribunal that she has savings of approximately $7,000 and no other assets of significance.
In relation to earning capacity, subsection 117(7B) of the Act requires the tribunal to consider three matters in determining that the parent's earning capacity is greater than is reflected in his or her income used in the administrative assessment:
o Whether the parent is:
oIf the parent’s decision about his/her work arrangements is not justified by either his/her caring responsibilities (subparagraph 117(7B)(b)(i)) or his/her state of health (subparagraph 117(7B)(b)(ii)); and
oIf the parent has not demonstrated that it was not a major purpose of their decision not to work despite ample opportunity to do so or to stop working, reduce their hours of work or change their occupation, industry or working pattern to affect the administrative assessment of child support paragraph 117(7B)(c).
All three of the above criteria must be met before a departure determination can be made to take into account whether the parent has a greater earning capacity. If the above criteria are satisfied then the tribunal must determine the actual earning capacity of the parent.
The issue of earning capacity was addressed by the Federal Magistrates Court in the case of Carlson & Acuff & Anor (SSAT Appeal) [2010] FMCAfam 677. Riethmuller FM stated:
The section refers to a relevant state of mind. Thus, in referring to ‘a major purpose’ the section is addressing the subjective reasons upon which a person has acted. It is very difficult to prove a person’s subjective intentions, particularly in an area such as child support where emotions run high, and the underlying reasons for actions are often a complex amalgam of motivations, not all of which are necessarily logical. In this context it is understandable that the section reverses the onus of proof, requiring the person whose intention is at issue to provide the proof of their state of mind. In all cases where this is a serious issue there will be an impact upon child support. If this impact always results in a finding that the impact on child support is a major purpose, then the section can never be satisfied. In this regard the appellant is correct in his argument.
The very technical and convoluted wording of the section hides its practical meaning. The section can be seen in a simplified or practical form as requiring consideration of the question of whether the person has proved that their major purposes did not include a desire to simply affect child support. That is, to reframe the consideration into loose colloquial language: was the person’s action motivated (wholly or significantly) by a desire to shirk their child support obligations. If the Tribunal is not satisfied one way or the other, the person with the onus fails. It is important to note that my colloquial reframing of the section is to illustrate the focus of the provision, and not intended to be a precise restatement of the actual provisions of the section which must be carefully applied.
The Tribunal must assess the evidence starting from a blank canvas, not an assumption that the person acted with a major purpose of simply affecting child support. If the Tribunal is unable to be satisfied whether or not a major purpose was to affect child support, then the onus has not been discharged, not a finding of shirking in accord with a presumption.
With respect to the definition of work for the purpose of the subsection, Riethmuller FM stated the following in Waites & Lawson (SSAT Appeal) [2011] FMCAfam 42:
Careful consideration needs to be given to the use of the terms ‘work’ and ‘working pattern’ in the section. In the context of this section work cannot simply mean application of labour or effort, such as working on one’s golf swing or in one’s flower bed. Rather the term refers to the application of one’s labour or efforts toward generating an income. The pattern of work must therefore sound both in the time spent in the performance of tasks and in the bargains struck for the exchange of that labour or effort for remuneration or profit. In this case the appellant still applies his labour or efforts toward generating income, however the pattern of that work has altered. Here the bargains struck have changed in pattern from the appellant receiving a commercial share of profits to one where he receives minimal financial returns in exchange for his labour or efforts.
The tribunal notes that the legislation refers to a major purpose, not the major purpose. This means a person can have more than one major purpose for their actions.
Mr Bisek told the tribunal that he wants the previous earning capacity determination set aside and his actual income used in the assessment. The tribunal takes the view that it was open to Mr Bisek to object to the determination of 6 December 2019. Mr Bisek said he did object to that decision; however there is no evidence before the tribunal of an objection decision being made in respect of that earlier departure decision. The tribunal will therefore only consider the change of assessment application lodged on 19 February 2020 and which has been subject to the objection process.
Ms Bisek contends that Mr Bisek’s earning capacity remains the amount set under the earning capacity determination, as that income was in keeping with his income earned over the previous years. She acknowledged Mr Bisek’s right to choose a position that does not involve shift work; however in her view he was capable of working in more senior positions than his current position and still earning an income that reflects the income set by the earning capacity determination.
Mr Bisek advised the Child Support Agency that he left his previous position which was located on [location 1] as he was not coping with the isolation. He said that after ceasing work he looked for suitable positions in [City 1] and when unsuccessful he returned to Victoria where he continued to look for work.
The tribunal finds that whilst Mr Bisek did cease work voluntarily on 13 February 2020 he applied for income support payments fairly soon afterwards (which involves job search obligations) and recommenced employment within a short period. His current employment is on a full time basis. The tribunal does not find that Mr Bisek is not working despite ample opportunity to do so.
The tribunal then considered whether Mr Bisek had changed his occupation, industry or working pattern. Mr Bisek said that he remains in the same occupation and industry; however he acknowledged that his current position does not involve shift work or overtime, and therefore his income is less. Mr Bisek said that he no longer wants to work long and irregular hours. His decision to accept a position with regular hours was to do with health and lifestyle and is not to do with a desire to get out of paying child support. He acknowledged that he had made remarks to the Child Support Agency (on 6 February 2020) about never working again and never paying child support again; however he said that those remarks were born out of frustration and not any real intent. He had already given notice to his employer before he made those remarks. He said that his actions in engaging in job search activities and subsequently starting full time employment proved his intention to work.
Mr Bisek said that, other than the period when he was unemployed, he has always kept up-to-date with his child support payments. He said that as soon as he started his new employment in May 2020 he addressed the arrears and he remains up-to-date with his payments. Mr Bisek said that he is assessed under a court order to pay a number of other costs in respect of the children and he also continued to make these payments.
The tribunal is satisfied that Mr Bisek’s change in working pattern is not justified by his health or caring responsibilities. The tribunal had regard to Mr Bisek’s reasons for changing his work pattern and also noted his previous history with regard to child support payments. The tribunal notes that Mr Bisek has generally kept his child support liability up-to-date; whilst he accrued arrears during the period he was unemployed he reduced the arrears to nil within a month of recommencing employment. The tribunal is not satisfied that a major reason for Mr Bisek’s decision to change his work pattern was to affect the administrative assessment of child support.

The tribunal does not find that the earning capacity provisions apply to Mr Bisek in respect of his decision to cease employment of 13 February 2020. The tribunal will not therefore make an earning capacity determination.
In his Statement of Financial Circumstances Mr Bisek indicated that his net income after income tax is $980 per week. He said that his household expenditure is about $407 per week (as he currently lives with his parents). He deposited $100,000 to his parent’s mortgage to help them out; however the funds are still his and can be accessed within a reasonable period if required. The $100,000 came from the property settlement.
In her Statement of Financial Circumstances Ms Bisek indicated that the home she owns is mortgage free. She owns her home jointly with her parents and her portion of the home (50%) was funded via the property settlement. Ms Bisek indicated that her parents currently pay the private school costs of the children.
The tribunal proposes to make a determination in the following terms:
·For the period 10 February 2020 to 30 June 2020 Mr Bisek’s adjusted taxable income is varied to $61,708;
·From 1 July 2020 the child support liability is as per the ordinary administrative assessment of child support.

The income reflects Mr Bisek’s adjusted taxable income for 2019/20. It takes effect from the date he lodged the change of assessment application relevant to this review.
Mr Bisek’s child support liability will be approximately $185 per week from 10 February 2020 and approximately $202 per week from 1 July 2020 (based on his estimate of $64,996).
The tribunal notes that this amount is a reduction of approximately $140 per week of the amount payable to Ms Bisek from 14 February 2020 and $120 per week from 1 July 2020. However the tribunal is satisfied that the proposed assessment is just and equitable as it is a more accurate reflection of Mr Bisek’s actual income but still ensures that Mr Bisek contributes significantly to the children’s needs. The tribunal acknowledges that Mr Bisek was unemployed for a short period; however the tribunal is satisfied that his financial resource, coupled with his minimal living expenses, mean that he has capacity to cover the children’s costs in that period. Given both parties have some savings the tribunal is satisfied the proposed determination is not likely to cause hardship.

Issue 3 – Is it otherwise proper to make a particular departure 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) of the Act 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.
The tribunal finds that Ms Bisek is in receipt of family assistance payments. The proposed determination may increase her entitlement to that payment; however as it results from a more accurate reflection of Mr Bisek’s actual income the tribunal finds it to be otherwise proper.
The tribunal makes a departure determination in the following terms:

For the period 10 February 2020 to 30 June 2020 Mr Bisek’s adjusted taxable income is varied to $61,708;
From 1 July 2020 the child support liability is as per the ordinary administrative assessment of child support.

DECISION

The decision under review is varied so that there is a departure determination in the following terms:

For the period 10 February 2020 to 30 June 2020 Mr Bisek’s adjusted taxable income is varied to $61,708;
From 1 July 2020 the child support liability is as per the ordinary administrative assessment of child support.