Bukhari and Partridge (Child support)

[2020] AATA 2037

Bukhari and Partridge (Child support) [2020] AATA 2037 (11 May 2020)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2020/PC018692

APPLICANT:  Mr Bukhari

OTHER PARTIES:  Child Support Registrar

Ms Partridge

TRIBUNAL:Member M Martellotta

DECISION DATE:  11 May 2020

DECISION:

The decision under review is affirmed.

CATCHWORDS

CHILD SUPPORT – particulars of the administrative assessment – estimate of income – whether the estimated income is less than the amount likely to be the actual income – estimate of income correctly refused – 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. On 10 July 2019 the Department of Human Services – Child Support (the Department) decided to accept an estimate of income for the 2019/20 financial year from Mr Bukhari of $65,700.

2. Ms Partridge objected to that decision[1] on 19 December 2019.  The Department decided to revoke the original decision and instead on 3 March 2020 decided to not accept the estimate.

   [1] She made a successful application for extension of time

3. Mr Bukhari lodged an application with the tribunal seeking independent review of the decision.  The tribunal held a hearing on 11 May 2020.  Mr Bukhari and Ms Partridge attended by conference telephone and provided evidence under affirmation.  The Department provided documents relevant to their decision (191 pages).  Mr Bukhari and Ms Partridge also provided documents (A1-A12 and B1-B10). The tribunal deferred making a decision as Mr Bukhari had further evidence he wished to provide (A13-A14).

ISSUES

1. The statutory provisions relevant to this review are contained in the Child Support (Assessment) Act 1989 (the Act).

2. Child support legislation is interpreted by the Department with the aid of the Child Support Guide (the Guide). The tribunal is not bound by law to apply the policy as set out in the Guide but, provided the policy is consistent with the legislation, it is required to have regard to it and in the ordinary course to follow it.[2]

   [2] See Re Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634.

3. The issue, which arises in this case, is whether there was reason for the Department to refuse the income election.

CONSIDERATION

1. A person may make an estimate of income for a financial year, or part of a year, if the provisions in section 60 of the Act are met. In conjunction with other requirements such an estimate may be accepted if the Department is satisfied that the declaration amount made by a parent is correct (subparagraph 60(1)(b)(ii) of the Act).

2. In relation to estimates for a whole year a parent may estimate their income before the year starts.  The income components will include (subsection 60(2) of the Act):

   (a) the parent’s taxable income for the year;

   (b) the parent’s reportable fringe benefits total for the year;

   (c) the parent’s target foreign income for the year;

   (d) the parent’s total net investment loss (within the meaning of the Income Tax   Assessment Act 1997) for the year;

   (e) the total of the tax free pensions or benefits received by the parent in the   year;

   (f) the parent’s reportable superannuation contributions (within the meaning of   the Income Tax Assessment Act 1997) for the year.

3. A parent can give notice of an election to the Department orally by phone or by person.  The Department can refuse to accept an income election:

   if satisfied that the amount worked out under that subsection is less than the amount that the Registrar considers is likely to be the parent’s actual adjusted taxable income for the year of income to which the income election relates (subsection 63AA(1) of the Act).

4. In this matter as from 1 July 2019 the Department was utilising Mr Bukhari’s 2017/18 taxable income of $143,091 in the administrative assessment of child support.  On 10 July 2019 Mr Bukhari contacted the Department and provided an estimate of income which was accepted.

5. Mr Bukhari told the tribunal:

   a)That at the time of providing the estimate his employment situation had changed.  He works predominantly on contract and at this point was employed on a short-term contract providing [services] with the [Employer 1].

   b)He was employed through an employment agency and was earning about $35 per hour which based on his hours of work came to about $1,260 per week and this is what he based his estimate upon. His hours however could vary depending on the work required.

   c)He subsequently left that contract before the contract ended in order to work for another company where the pay was much better; this was on a fly in-fly out basis.  He is sure that he updated his estimate when this happened.

6. Ms Partridge told the tribunal that:

   a)She has been frustrated by Mr Bukhari’s constant changes in income which has resulted in her not receiving a regular amount of child support; this made it very difficult to financially plan for the children.

   b)She is quite confused by the whole process.

   c)She made an objection because as part of Family Court proceedings Mr Bukhari filed a financial statement which stated his income was much higher than that being used in the assessment as a result of his estimate.

7. A review of the Department documents confirms that:

   a)Mr Bukhari provided a first estimate on 10 July 2019 which was based upon a calculation of his estimate of each of the relevant income components taken from his payslip.

   b)In his estimate Mr Bukhari advised an estimate based upon $1,260 gross per week over a year.  He was advised this was annualised at $65,520[3] which Mr Bukhari agreed.

   c)Mr Bukhari was issued with a notice under section 160 of the Act. Section 63A of the Act allows the Department to amend an assessment where a parent gives notice pursuant to that provision.  Division 7A, Part 5 of the Act also allows for reconciliation of an estimate with a parent’s actual adjusted taxable income where the estimate is found to have been more than the amount applied pursuant to subsection 60(2) of the Act.

   [3] The tribunal notes that the estimate is not an amount more that 85% of the ATI in place subparagraph 60 (1)(b) of the Act.

8. As noted, in his evidence Mr Bukhari agrees that subsequent to providing his estimate his employment changed again and that his income increased.  Whilst he says he believes he advised the Department of this and provided an update of his income; this is not reflected in the Department records provided by the Department.

9. A payslip subsequently provided by Mr Bukhari to the tribunal for the relevant employer shows that at the time he was being paid at the rate of $35 per hour at 7.5 hrs per day ($262.50 per day).

10. In this matter the tribunal is satisfied that the election made by Mr Bukhari on 10 July 2019 was a first election in the financial year and it included all the relevant income component amounts. As noted the Registrar may refuse to accept an estimate if satisfied that the estimate is likely to be less than the amount that the Registrar considers likely to be their actual adjusted taxable income.

11. In this regard, at the time of review by the tribunal it is apparent that time has passed since the date of the election and as such there have been changes in Mr Bukhari’s circumstances – the task however for the tribunal on review is to determine whether at the time of the estimate was the estimated amount likely to be less that the actual income for the financial year? If a later unforeseen event affects the estimated amount there are other avenues for the Registrar to amend the assessment to better reflect the changes in the estimated amount.  This includes the Registrar’s powers to amend the assessment under sections 63A or 63B of the Act or the parent revoking the estimate under section 62 of the Act and making a new election under subsection 62A of the Act.

12. At the time of providing his estimate the assessment was based upon Mr Bukhari’s 2017/18 adjusted taxable income which as noted his estimate was a significant reduction in income. As the tribunal understands his evidence at the relevant time of making the estimate Mr Bukhari says that he was employed in a short-term contract and was actively seeking other better paid opportunities. He was employed as a contractor and in actual fact he was able to secure a better paying contract which meant that he ended his contract with the [Employer 1] before the contract had been completed. Mr Bukhari provided payslips of his subsequent employment showing an hourly rate of about $54.

13. The Child Support Guide[4] notes that:

    The Registrar can refuse to accept an income estimate election for a full year if satisfied that the parent's adjusted taxable income for the year of income is likely to be higher than their estimated amount (CSA Act section 63AA(1)).

    The Registrar will consider all the circumstances and may obtain further information, either from the parent or a third party (e.g. an employer or an overseas authority), in making the decision as to whether to refuse to accept the income election (CSA Act section 63AA(4)). A history of underestimating alone is not enough for the Registrar to refuse to accept an estimate, however it may prompt the Registrar to investigate the circumstances further.

    The Registrar will give a parent the opportunity to show that their estimate is accurate before deciding whether to refuse to accept an estimate.

    [4] 2.5.1

14. The relevant question is whether at the time of the election the decision maker is satisfied that Mr Bukhari’s adjusted taxable income is likely to be higher than the estimated amount.  If so the estimate can be refused.  The Guide provides that relevant inquiry can be made to look at all the circumstances.  In this matter the tribunal was satisfied given the particular circumstances of this case that it was likely Mr Bukhari’s adjusted taxable income was likely to be higher than the estimate he provided.  The tribunal reached this conclusion for the following reasons.

15. In this matter it appears that at the time limited inquiry was made by the Department.  Mr Bukhari’s oral advice of the estimate appears to have been accepted on the same day based solely upon his verbal advice.  However, at the time of the estimate being provided the available evidence demonstrated that Mr Bukhari had a history of being employed as a contractor.  His previous employment within his area of expertise was such that his annual adjusted taxable income would usually be in the vicinity of over $100,000 per annum. This much is evident from information held by the Department of previous adjusted taxable income (e.g. 2017/18 it was $143,091; in 2018/19 it was $153,749). The evidence also (as provided by Mr Bukhari) shows that he was at that point in time employed in a short-term contract as a “filler” until he could move back into better paid employment more in line with his usual remuneration.

16. On this basis the tribunal concluded that it was satisfied on the evidence relevant to the time of the estimate that Mr Bukhari’s actual adjusted taxable income for the 2019/20 financial year was likely to be higher than the estimate amount of $65,700 as notified and for this reason the estimate was correctly refused.

DECISION

The decision under review is affirmed.