Blanton and Atterbury (Child support)
[2025] ARTA 246
•13 January 2025
Blanton and Atterbury (Child support) [2025] ARTA 246 (13 January 2025)
Applicant/s: Ms Blanton
Respondent: Child Support Registrar
Other Parties: Mr Atterbury
Tribunal Number: 2024/BC028581
Tribunal:Senior Member A Suthers
Place:Sydney
Date:13 January 2025
Decision:The Tribunal affirms the decision under review.
CATCHWORDS
CHILD SUPPORT – dismissal of application for review – particulars of the administrative assessment – estimate reconciliation – Child Support clerical errors in the assessment – decision under review affirmed
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 pursuant to subsection 16(2AB) of the Child Support (Registration and Collection) Act 1988.
Statement of Reasons
BACKGROUND
The Child Support (Assessment) Act 1989 (the Act) provides for Services Australia – Child Support (Child Support) to make an administrative assessment of child support. Child Support does so by reference to the relevant legislation and to the ‘Child Support Guide’ published by the Australian Government (the Guide) where relevant. The Guide contains governmental guidelines and statements of policy as to how the relevant legislation is to be applied. The assessment is made using a formula containing variables such as the parents’ (or non-parent carer’s) adjusted taxable incomes and the respective percentages of care the parties to the assessment provide, or are likely to provide, to their children.
When a child support assessment is in place, a party to the assessment may elect to estimate their current income in place of the adjusted taxable income for the last relevant year of income, which would otherwise be used in the administrative assessment: subsection 60(1) of the Act.
A parent can make an income estimate for a whole year of income or for part of a year of income. In respect of an estimate for a part year of income, the parent must give an estimate of income for the remaining period and an estimate of their adjusted taxable income from the start of the financial year to the beginning of the estimate period (their year-to-date income).
When the Child Support Agency accepts a parent’s estimate election, their income estimate amount becomes their adjusted taxable income amount for the purposes of assessing the annual rate of child support payable in the application period: subsection 61(1A) of the Act.
If such an election is made, after the end of the year of income, Child Support will compare the party’s estimated income with their actual income for the year. If the actual income is more than the estimated income, the assessment will be amended using the actual adjusted taxable income (ATI): Division 7A of Part 5 of the Act. This is known as an estimate reconciliation.
Mr Atterbury and Ms Blanton are the parents of [Child 1], who is now 20 years old; [Child 2], who is now 18; and [Child 3], who is 17. A child support case was registered with Child Support in 2016.
Ms Blanton made estimates of her income in the 2021/22 financial year for the purposes of the administrative assessment.
As a result, instead of using Ms Blanton’s ATI for the previous financial year in the assessment (which was $137,790), Child Support calculated the assessment using the estimates provided by Ms Blanton.
Those estimates were:
(i)An estimate lodged on 17 May 2021 to apply from 1 July 2021 to 30 June 2022 of $2,115 gross per week, with $3,000 of annual allowable deductions. Child Support accepted that estimate as $107,282 (annualised) for the period 1 July 2021 to 30 June 2022;
(ii)An estimate lodged on 17 August 2021 of ongoing income of nil as of 16 August 2021. Child Support accepted that estimate as $0 (annualised) for the period 16 August 2021 to 30 June 2022;
(iii)An estimate lodged on 5 October 2021 of ongoing income of $10,000 gross per month from 5 October 2021. Child Support accepted that estimate as $119,917 (annualised) for the period 5 October 2021 to 30 June 2022;
(iv)An estimate lodged on 20 December 2021 of ongoing income of nil (annualised) from 20 December 2021. Child Support accepted that estimate as nil for the period 20 December 2021 to 30 June 2022;
(v)An estimate lodged on 27 January 2022 of $850 per fortnight as of 18 January 2022. Child Support accepted that estimate as $22,160 (annualised) for the period 18 January 2021 to 30 June 2022, albeit the estimate was not properly applied to the assessment until later; and
(vi)An estimate lodged on 21 April 2022 of ongoing income of $6,000 per month gross. Child Support accepted that estimate as $71,950 (annualised) for the period 21 April 2022 to 30 June 2022.
On 27 July 2022, Child Support received notification of Ms Blanton’s actual income for the financial year 2021/22, which was $120,655. Child Support then conducted an estimate reconciliation.
Section 64A of the Act determines how the estimate reconciliation process should be carried out. Subsections 64A(3) and 64A(4) provide a formula for reconciling the estimates. It is a complex process, but in essence each estimate is annualised and then reconciled with the actual income of the parent in the period (also annualised). If the parent’s actual adjusted taxable income amount is more than their estimated adjusted taxable income amount, the child support assessment will be amended: subsection 64A(2) of the Act.
If Child Support becomes aware that the year-to-date income amount used in an estimate election is incorrect, then a new year-to-date income amount can be determined: section 63AE of the Act. This new amount then replaces the previously advised year-to-date income amount.
Due to a series of errors by Child Support, the application of those estimates in the administrative assessment was conducted wrongly, which led to voluminous, and incorrect, correspondence being issued to the parties.
Finally, on 28 May 2024, Child Support finalised its correction of its errors and issued a decision with an error correction to the parties.
Ms Blanton lodged an objection to that decision under subsection 80(1) of the Child Support (Registration and Collection) Act 1988 (the R&C Act). An objections officer determined the objection on 15 September 2024. The objection was allowed in part, and a final error (from Child Support’s perspective) in the estimate reconciliation was identified and corrected.
From that decision, Ms Blanton has sought review. On 14 October 2024 the Administrative Appeals Tribunal (AAT), to which this application was initially brought, was replaced by the Administrative Review Tribunal (the Tribunal). An application for review by the AAT that was not finalised before 14 October 2024 is taken to be an application for review by the Tribunal, and the Tribunal has the authority to continue and finalise any aspect of the review that was not completed by the AAT: Administrative Review Tribunal (Consequential and Transitional Provisions No.1) Act 2024.
I am satisfied that I have jurisdiction and power to conduct the review: item 2 of the table in subsection 89(1) of the R&C Act, read with sections 12 & 105 of the Administrative Review Tribunal Act 2024.
In conducting the review, I may also have regard to the Guide where relevant, so long as what it contains is lawful and does not purport to control my decision. However, I am not bound to follow it: Re Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634; G v MIBP [2018] FCA 1229.
I have little doubt that the extensive clerical errors made by Child Support have created significant doubt in Ms Blanton’s mind, at least, as to the correctness of the current estimate reconciliation of her 2021/22 income. However, as my role on review is to consider the matter afresh and come to the correct or preferable decision, that unfortunate history of clerical errors has no bearing on my role or my decision.
The issue which arises in this case is whether or not Child Support has made the legally correct re-reconciliation of Ms Blanton’s income in the objection officer’s decision.
For the reasons that follow, I am satisfied that it has, and will affirm the decision under review.
THE LEGISLATIVE PROVISIONS AND POLICY APPLIED BY CHILD SUPPORT
Section 64A of the Act provides, relevantly:
Reconciliation
…
(2)Subject to this section, if the difference (the actual ATI amount) between:
(a) the parent’s actual adjusted taxable income for the year of income; and
(b) the parent’s applicable year to date income amount (if any) for the year of income;
is more than the parent’s estimated ATI amount for the year of income, then the parent’s adjusted taxable income for a day that occurs in the application period of each income election made by the parent is taken to be, and to have always been, the amount worked out for that income election using the method in subsection (4).
Estimated ATI amount
(3)The parent’s estimated ATI amount for the year of income is worked out using the following method:
Method statement
Step 1. For each income election relating to the year of income that had an application period that ended before the last day of the year of income:
(a) if subsection 60(2) applied to the income election—divide the amount that applied under that subsection by 365; or
(b) otherwise—divide the partial year income amount worked out under subsection 60(4) or 62A(1) by the number of days in the remaining period to which the income election related.
Step 2. For each of those income elections, multiply the result of step 1 by the number of days in the application period for the income election.
Step 3. Add up each of the amounts worked out under step 2.
Step 4. Add the result of step 3 and the partial year income amount worked out under subsection 62A(1) for the last income election relating to the year of income that was made by the parent.
Amount for the purposes of subsection (2)
(4)For the purposes of subsection (2), the amount for each income election is worked out using the following method:
Method statement
Step 1. Subtract the parent’s estimated ATI amount from the parent’s actual ATI amount.
Step 2. Divide the result by the total number of days in the application periods for each income election relating to the year of income that was made by the parent. The result is the additional daily rate.
Step 3. For each of those income elections, multiply the additional daily rate by the number of days in the application period for the income election. The result is the underestimated amount for the income election.
Step 4. For each of those income elections, add the underestimated amount for the income election and:
(a) if the income election had an application period that ended before the last day of the year of income—the amount worked out for the income election under step 2 of the method statement in subsection (3); or
(b) otherwise—the partial year income amount worked out under subsection 62A(1) for the income election.
Step 5. For each of those income elections:
(a) divide the result of step 4 by the number of days in the application period for the income election; and
(b) multiply the quotient by 365.
Section 29 of the R&C Act provides for the conversion of amounts payable over a period into daily rates. It provides:
29Conversion of amounts payable under registrable maintenance liability into daily rates etc.
The regulations may make provision with respect to the conversion of amounts payable under registrable maintenance liabilities into daily, weekly, fortnightly, 4 weekly and monthly rates of payment.
The regulations do make such provision. Section 15 of the Child Support (Assessment) Regulations 2018 (the Regulations) provides:
15Conversion of amounts payable under registrable maintenance liabilities
(1)This section is made for the purposes of section 29 of the Act.
(2)For the conversion of amounts payable under a registrable maintenance liability that are quantified by reference to a period, or a multiple of a period, specified in the following table into a rate of payment quantified by reference to another such period, or a multiple of such period, those periods are taken to comprise the number of days respectively specified in the table.
Period Number of days in the period
Weekly 7
Fortnightly 14
4 weeks 28
Month 30.4375
Year 365.25
(3)In calculating a conversion, the daily rate is to be rounded to 5 decimal places (rounding up if the sixth decimal place is 5 or more).
In accordance with the Guide at 5.15, Child Support generally uses this provision to convert periodic income estimates to a daily rate, before annualising them.
CONSIDERATION
Ms Blanton’s evidence
Ms Blanton raised concerns as to the history of the matter. She says that each time she raised the earlier clerical errors in the assessment with Child Support, her amount payable changed and ultimately increased. She also had to spend extensive time working through the issues with Child Support to have it correct its errors.
The matter was further complicated due to changes in the pattern of care of the parties’ children during the relevant financial year.
Ms Blanton could not, however, identify any specific errors in the objection decision itself. Nor did she disagree with the raw information used in the final reconciliation, such as the dates or amounts of her estimates recorded in the objection decision.
Mr Atterbury’s position
Mr Atterbury participated in the hearing but did not seek to advance a position in respect of the review.
The Objection Officer’s calculations
Child Support conducted a full reworking of the reconciliation of the estimates provided by Ms Blanton in the objection decision. In what follows, I have copied the reasoning and made corrections and additional comments to assist the parties’ understanding, in square brackets:
[Ms Blanton] lodged an estimate of income to commence from 1 July 2021. Therefore, her estimate is a full year estimate.
Our records show [Ms Blanton’s] initial estimate of $107,282 (annualised using her estimate of $2,115 gross per week, minus $3000 worth of annual allowable deductions) was in place for a period of 47 days from 1 July 2021 to 16 August 2021. [I interpolate to note that this is confusing due to the expectation that the annualised estimate would be calculated as $2115 X 52 - $3000 but, as noted above, Child Supports converts to a daily rate and then annualises the result using regulation 15(2) of the Regulations, and so the calculation is $2115 / 7 = $302.14 per day; $302.14 per day X 365.25 = $107,282.]
This calculates to an estimated income $13,814.24 in this 47 day period.
(Calculation: $107,282/365 x 47 days= $13,814.24).
On 17 August 2021, [Ms Blanton] amended her income estimate to $0 and this was in place for 49 days from 17 August 2021 to 4 October 2021. This calculates to nil income during this 49 day period.
On 5 October 2021, [Ms Blanton] amended her income estimate to $119,917 (annualised using her estimate of $10,000 per month) and this later estimate was in place for 76 days from 5 October 2021 to 19 December 2021. [Again, I interpolate to note that the estimate of $10,000 per month has been annualised using Regulation 15(b), i.e. $10,000 / 30.4375 = $328.54209 per day; $328.54209 X 365 = $119,917.]
This calculates to an estimated income of $24,969.04 in this 76 day period.
(Calculation: $119,917/365 x 76 days= $24,969.04)
On 20 December 2021, [Ms Blanton] amended her income estimate to $0 and this was in place for 29 days from 20 December 2021 to 17 January 2022. This calculates to nil income during this 29 day period.
On 27 January 2022, [Ms Blanton] amended her income estimate to be $22,160 (annualised using her estimate of $850 per fortnight) and this later estimate should have been in place for 93 days from 18 January 2022 to 20 April 2022.
This calculates to an estimate income of $5,646.03 in this 93 day period. (Calculation: $22,160/365 x 93 days= $5,646.03)
On 21 April 2022, [Ms Blanton] amended her income estimate to be $71,950 (annualised using her estimate of $6,000 per month) and this later estimate was in place for 71 days from 21 April 2022 to 30 June 2022. [$6000 / 30.4375 = $197.125257 per day; $197.125257 X 365 = $71,950.]
This calculates to an estimated income of $13,995.89 for this 71 day period.
Therefore, in the period 1 July 2021 to 30 June 2022, [Ms Blanton] estimated her income as $58,425.20 ($13 814.24 + $0 + $24,969.04 + 0 + $5,646.03+ $13,995.89).
We must now determine [Ms Blanton’s] actual income earnt during the estimate period, 1 July 2021 to 30 June 2022.
[Ms Blanton’s] actual adjusted taxable income earnt during the estimate period was $120,655 as provided by the ATO.
Therefore, [Ms Blanton] has underestimated her income by $62,229.80 ($120,655 [minus] $58,425.20).
As [Ms Blanton] has underestimated her income, we have made the decision to reconcile her 202l/2022 estimate of adjusted taxable income of $58,425.20 with her ATO assessed adjusted taxable income of $120,655.
The child support assessment will be recalculated using the annualised income for each estimate period based on the actual adjusted taxable income.
For the initial estimate period 1 July 2021 to 16 August 2021 (47 days), [Ms Blanton’s] estimated income was $13,814.24. The additional income in this period is $8,013.03. (Calculation: $170.49 x 47 days). [This is because there was additional income earnt of $170.49 for each day in the financial year – $62,229.80 (the total underestimate for the year) / 365 = $170.49260, which Child Support rounded to $170.49 per day.]
Therefore, [Ms Blanton’s] reconciled income for the period 1 July 2021 to 16 August 2021 (47 days) is $21,827.27 (Calculation: $13,814.24 + 8,013.03). We convert this to an annual income of $169,509.65 ($21,827.27 / 47 days x 365 days) for use in the child support assessment from 1 July 2021 to 16 August 2021.
For the period 17 August 2021 to 4 October 2021 (49 days), [Ms Blanton’s] estimated income was $0. The additional income earnt in this period is $8,354.01 (Calculation: $170.49 x 49 days).
Therefore, [Ms Blanton’s] reconciled income for the period 17 August 2021 to 4 October 2021 (49 days) is $8,354.01 ($0 + $8,354.01). We convert this to an annual income of $62,228.85 (Calculation: $8,354.01 / 49 days x 365 days) for use in the child support assessment between 17 August 2021 to 4 October 2021.
For the period 5 October 2021 to 19 December 2021 (76 days), [Ms Blanton’s] estimated income was $24,969.04. The additional income earnt in this period is $12,957.24 (Calculation: $170.49 x 76 days).
Therefore, [Ms Blanton’s] reconciled income for the period 5 October 2021 to 19 December 2021 (76 days) is $37,926.28 ($24,969.04 + $12,957.24). We convert this to an annual income of $182,145.95 (Calculation: $37,926.28 / 76 days x 365 days) for use in the child support assessment from 5 October 2021 to 19 December 2021.
For the period 20 December 2021 to 17 January 2022 (29 days), [Ms Blanton’s] estimated income was $0. The additional income earnt in this period is $4,944.21 (Calculation: $170.49 x 29 days).
Therefore, [Ms Blanton’s] reconciled income for the period 20 December 2021 to 17 January 2022 (29 days) is $4,944.21. We convert this to an annual income of $62,228.85 (Calculation: $4,944.21/ 29 days x 365 days) for use in the child support assessment from 20 December 2021 to 17 January 2022.
For the period 18 January 2022 to 20 April 2022 (93 days), [Ms Blanton’s] estimated income was $5,646.03. The additional income earnt in this period is $15,855.57 (Calculation: $170.49 x 93 days).
Therefore, [Ms Blanton’s] reconciled income for the period 18 January 2022 to 20 April 2022 (93 days) is $21,501.60 ($5,646.03 + $15,855.57). We convert this to an annual income of $84,388.00 (Calculation: $21,501.60 / 93 days x 365 days) for use in the child support assessment from 18 January 2022 to 20 April 2022.
For the period 21 April 2022 to 30 June 2022 (71 days), [Ms Blanton’s] estimated income was $13,995.89. The remaining additional income for this period is $12,105.74. [$170.49 X 71 actually equals $12,104.79 but I will deal with the difference below]
Therefore, [Ms Blanton’s] reconciled income for the period 21 April 2022 to 30 June 2022 (71 days) is $26,101.63 ($13,995.89 + $12,105.74). We convert this to an annual income of $134,184.43.9
(Calculation: $26,101.63 / 71 days x 365 days) for use in the child support assessment from 21 April 2022 to 30 June 2022.
Save for the minor apparent error I have noted above in respect of the period 21 April 2022 to 30 June 2022, totalling 95 cents, the reconciliation has been conducted in an orthodox manner in accordance with section 64A of the Act, and the dates, estimate amounts and the calculation of the reconciliation for each period is correct.
The apparent error is explained due to the rounding down of the previous five estimates when Child Support came to reconcile the sixth and final estimate. That is, because Child Support had used the sum of $170.49 per day instead of $170.49260, an accumulation of the rounding’s led to a different final daily figure being used in order to accurately reconcile the annual figure.
By the time the first five reconciliations were complete, the total income estimate was $50,124.06. It is necessary to deduct that from the ATI of $62,229.80 ( $62,229.80 less the $50,124.06 accounted for in the first 5 periods = $12 105.74). That means the correct daily rate in the final period needs to be adjusted to $170.50338 (i.e., $12,105.74 / 71). Whilst this was not explained in the objection decision, it was nonetheless correctly calculated.
Finally, whilst Ms Blanton raised concern that her reconciled income in some of the reconciliation calculations is higher than her actual adjusted taxable income for 2021/22 (see, for example, at page 11 of the bundle of documents provided by Child Support), this is because her reconciled income for each estimate period must be annualised for use in the child support assessment in accordance with the Act.
DECISION
The decision under review is affirmed.
| Date(s) of hearing: | Thursday, 5 December 2024 |
| Representative for the Applicant: | Self-represented |
| Representative for the Other party: | Self-represented |
0
1
0