Bugden and Sarchet (Child support)

[2022] AATA 2120

Bugden and Sarchet (Child support) [2022] AATA 2120 (7 June 2022)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2022/SC023588

APPLICANT:  Mr Bugden

OTHER PARTIES:  Child Support Registrar

Ms Sarchet

TRIBUNAL:Member T Bubutievski

DECISION DATE:  07 June 2022

DECISION:

The decision under review is affirmed.

CATCHWORDS

CHILD SUPPORT – registration details – application for collection of the maintenance liability - whether the application for collection and arrears should be accepted – the application for collection and arrears correctly accepted - 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 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. Ms Sarchet and Mr Bugden are the parents of two children. The care of the children is shared between them. On 20 January 2022 Ms Sarchet applied for Services Australia (Child Support) (the Agency) to commence collecting child support on her behalf. She also asked for the collection of arrears from 22 October 2021, totalling $328.74.

2. On 18 February 2022 the Agency decided to accept the application for the collection of child support and also to collect the arrears.

3. Mr Bugden objected to this decision on the basis that he understood that he and Ms Sarchet had an agreement that neither of them would pay child support to the other. On 4 March 2022 the decision was reconsidered by an Agency objections officer, who found that there was no legally binding agreement between Mr Bugden and Ms Sarchet which would displace the administrative assessment. The parents had also agreed that Mr Bugden had not paid Ms Sarchet any child support during the arrears period. The objection was disallowed and the original decision was unchanged.

4. On 30 March 2022 Mr Bugden made an application for review by the Social Services and Child Support Division of this Tribunal. The matter was heard in Sydney on 7 June 2022. Mr Bugden and Ms Sarchet attended the hearing by telephone and gave sworn evidence. The Child Support Registrar (“the Registrar”) did not seek leave to appear, but the Tribunal and the parties had been supplied with the relevant documents from the Agency’s file.

ISSUES

1. The statutory provisions relevant to this review are found in sections 25, 28 and 28A of the Child Support (Registration and Collection) Act 1988 (the Act). Sections 25 and 28 say that a person who is eligible to receive child support who elected for the Agency not to collect child support for them when they first became eligible, may ask for collection later. Section 28A says that the person can also apply for the Agency to collect arrears for up to three months prior to the date that child support becomes collectable by the Agency. If a person makes such an application, the Agency must accept it to the extent that amounts have been unpaid.

2. The issues which arise in this case are:

   ·      Is there any reason why the Agency should not accept Ms Sarchet’s application for the collection of child support from Mr Bugden?

   ·      Is there child support which remains unpaid during the arrears period? Should Mr Bugden pay arrears of child support of $328.74?

CONSIDERATION

Issue 1 - Is there any reason why the Agency should not accept Ms Sarchet’s application for the collection of child support from Mr Bugden?

1. Mr Bugden told the Tribunal that he understood that he and Ms Sarchet had an agreement that neither parent would pay child support to the other. He said that he had had the children for 12 nights in every 14 for about five years prior to the court orders and that although Ms Sarchet should have paid him child support, she never paid him anything. Mr Bugden explained that when they were negotiating the care arrangements in October 2021, he tried to have no child support included as a term in the parenting orders, but was told that it was not permitted. He said that they then tried to look at the option of a binding child support agreement, but such an agreement was never made.

2. Mr Bugden provided copies of text messages between himself and Ms Sarchet which he said demonstrated that they had agreed that neither parent was to pay child support to the other. Mr Bugden said that this was his understanding of the situation, and he feels like he has been “tricked” by Ms Sarchet as she then went and applied for child support.

3. Ms Sarchet said that she and Mr Bugden discussed the possibility of a private agreement, but that she was obliged to register a child support assessment in order to receive more than the minimum rate of family tax benefit. She also said that the Agency advised her that a private agreement would not protect her in the event that she returned to work and became the paying parent. Mr Bugden would still be able to claim child support from her. The only way that this could be different would be if they had a binding child support agreement in place. Ms Sarchet said that the cost of this would not be covered by Legal Aid and she could not afford the expense. The Tribunal explained to the parents that, in law, they are unable to contract out of the child support system and that it would have been possible for the Registrar to refuse to accept an agreement which provided for no child support being payable in the circumstances of one parent being in receipt of income support and family assistance.

4. Ms Sarchet said that she is in receipt of parenting payment single and family assistance. She said that she had the care of the children for some additional time over the school holidays due to Mr Bugden travelling and also having COVID-19. She said that she asked Mr Bugden to provide her with some additional financial assistance for that period, which he agreed to do, but that he did not end up giving her any money. She said that this spurred her to make an application for child support. Ms Sarchet said that she is in difficult financial circumstances due to her limited income and the increase in the cost of living and the child support received from Mr Bugden makes a difference to her ability to provide for the children.

5. Sections 25 and 28 of the Act allows Ms Sarchet to ask the Agency to commence collecting child support on her behalf. Section 25 says that the Registrar must register an application within 28 days of receiving it.

6. The only circumstances in which the Registrar can refuse to register an application is if there is already an application registered for the same child and parents, or if one of the parents resides overseas and the application has not been made in the correct way (section 25). While the Tribunal accepts that Mr Bugden’s view is that the application should not have been accepted, the Registrar has no discretion to refuse to accept or register the application.

7. When such an application is made, the Registrar must determine the date from which it is effective, which is usually the date that the application is received, in this case 20 January 2022.

Issue 2 - Is there child support which remains unpaid during the arrears period? Should Mr Bugden pay this amount?

1. Section 28A of the Act allows a person to seek arrears of child support for a period of up to three months in normal circumstances, provided that the child support liability remains unpaid. In this case, the maximum arrears period is from 22 October 2021 to 19 January 2022 as the care of the children changed from 22 October 2021 subsequent to court orders of 14 October 2022 which gave the parents shared parental responsibility for the children with a “week about” care arrangement.

2. Subsection 28A(3) of the Act says:

   Application by payee for enforcement of arrears

   (3)  The payee may apply to the Registrar, in the manner specified by the Registrar, for any unpaid amounts payable under the liability in relation to a specified period to be treated as arrears amounts for the purposes of this section. The specified period must:

   (a)  consist of, or be included in, the maximum arrears period; and

(b)  end at the end of the maximum arrears period…

1. Before any amounts can be considered to be arrears, they must be unpaid amounts payable under the liability in relation to a specified period of time. The Agency’s file shows that the parents agreed that Mr Bugden had not paid Ms Sarchet any child support during the arrears period. The administrative assessment generated as a result of the taxable incomes of both parents returns a child support liability payable by Mr Bugden of $111.33 per month. The Tribunal is satisfied that during the arrears period Mr Bugden was liable to pay child support of $328.74, which was not paid. This amount can therefore be collected as arrears from Mr Bugden.

DECISION

The decision under review is affirmed.