Burton and Bronson (Child support)

Burton and Bronson (Child support) [2022] AATA 4672 (2 November 2022)

DIVISION:Social Services & Child Support Division
REVIEW NUMBER:  2022/BC024084
APPLICANT:  Mr Burton
OTHER PARTIES:  Child Support Registrar
Ms Bronson

TRIBUNAL:Member S Hoffman
DECISION DATE: 2 November 2022
DECISION:

The tribunal sets aside the decision under review and, in substitution, decides as follows:

For the period from 10 July 2021 to 30 November 2024, Mr Burton’s adjusted taxable income is varied to $133,000 a year.
For the period from 10 July 2021 to 30 November 2024, Ms Bronson’s adjusted taxable income is varied to $52,000 a year.
For the period from 10 July 2021 to 31 December 2021, the annual rate of child support payable by Mr Burton is increased by $12,500 (see paragraphs 131, 139 and 140).

For the 2022 calendar year, the annual rate of child support payable by Mr Burton is increased by $3,293.
For the 2023 calendar year, the annual rate of child support payable by Mr Burton is increased by $2,993.

CATCHWORDS

CHILD SUPPORT – departure determination – income, property and financial resources of both parents – costs of special needs – 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

The child support case relevant to this review was registered with the Child Support Agency (the CSA) on 10 July 2021. The CSA has been involved with the collection of child support since then.
This review is about the child support assessments in respect of [Child 1], [Child 2] and [Child 3], aged 12, 10 and 7 years old respectively.[1]
[1] [Child 2’s] birthday is [in] November and he may have turned 11 years old by the time the parents receive this decision statement
On 5 January 2022, the mother applied for a change of assessment. At that time, the father was required to pay an annual rate of child support of $14,655 to the mother, based on his 2021/22 estimate of income of $103,496 and the mother’s 2020/21 adjusted taxable income of $38,727. The CSA recorded that the mother provided 86% of the children’s care and the father provided 14% of their care.

On 17 March 2022, a case officer from the CSA decided to vary the father’s adjusted taxable income to $159,000 for the period from 11 November 2021 to 30 November 2024 (the original decision).
On 29 March 2022 the father lodged an objection to the original decision.
On 9 June 2022, an objections officer from the CSA decided that for the period from 10 July 2021 to 30 November 2024, the father’s adjusted taxable income was to be varied to $170,000 a year (the objection decision).

On 15 June 2022, the father lodged an application for review of the objection decision with this tribunal. A directions hearing was held on 15 September 2022 via MS Teams audio (equivalent to conference telephone) and attended by both parents. The substantive hearing was held on 26 October 2022 again via MS Teams audio. Both parents attended and gave sworn evidence.
Before the hearing, the CSA had provided documents numbered 1 to 594. The father had submitted documents numbered A1 to A31 and the mother had submitted documents numbered B1 to B66. Copies of all documents were provided to the parties before the hearing.
The tribunal made its decision on 2 November 2022.

ISSUES

The statutory provisions relevant to this review are contained in the Child Support (Assessment) Act1989 (the Act). The Act provides for an administrative assessment of child support to be paid. Pursuant to section 98C of the Act, a decision to depart from the administrative assessment may be made if the following three requirements are met:
i.A ground is established; and
ii.It would be just and equitable as regards the child, the liable parent and the carer entitled to child support to make a particular determination; and
iii.It would be otherwise proper to make a particular determination.

The grounds for departure from an administrative assessment of child support are set out in subsection 117(2) of the Act.
If the tribunal is satisfied that the three requirements are met, it may make one of the determinations prescribed in section 98S of the Act, which include 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

Issue 1 – Does a ground exist to depart from the administrative assessment?

Subparagraph 117(2)(c)(ia) of the Act provides a ground for departure exists where, in the special circumstances of the case, the administrative assessment of child support would result in an unjust and inequitable determination of the rate of child support because of the income, property and financial resources of either parent.

The father’s income

According to the CSA’s records, the father’s taxable income was $173,229 for 2018/19, $170,779 for 2019/20 and $69,774 for 2020/21. The father provided his tax return for 2021/22 which shows his taxable income was $92,672 for the most recent financial year. He lodged an estimate of income of $103,496 which was applied from 8 September 2021.
The father works in the family business. [Business 1] was registered in 1986 and is the trustee for [Family Trust 1] (the trust). The business trades as [Business 2]. The father said its customers are a mix of retail and trade.
According to the trust deed, the trustee has the absolute discretion as to who will benefit from the trust and by how much.
The father’s father, [Grandfather A] (the grandfather) owns 90% of the shares of the trustee company. The father owns the remaining 10%. The grandfather was appointed as secretary and director on 23 June 1986; offices he still holds.
The father was appointed as a director on 7 July 2008 and continued to be a director until 1 August 2022. He said he did not resign and did not sign anything in relation to him ceasing to be a director.
The tribunal is satisfied that the grandfather controls the business and the distribution of funds from the trust.
The father said he has been working in the business since he was [age] years old. This was almost 20 years ago. The father said he was on low pay at the beginning and then it was increased. When his taxable income was about $170,000 a year, he was getting a wage of about $60,000 to $63,000 a year and the remainder was paid as a distribution from the trust. The primary beneficiaries of the trust are [Grandfather A], his spouse and children. The father in this review is one of those children.
The father said that after his marriage broke down, the grandfather decided to stop giving him distributions from the trust and instead increased his basic wage to about $90,000 a year which was what the father has been paid in the last two financial years.
The mother’s position is essentially that the father has continued to receive the same income, even if not directly via a wage and a distribution, and that he has downplayed his role in the business. In her change of assessment application, she claimed that the father stated he and the grandfather would make sure she did not receive much child support.[2]
[2] Page 124 of the CSA documents
The tribunal will first discuss the evidence regarding the father’s role in the family business and will then consider the profits of the business and the trust distributions.

The father’s role in the family business

According to his tax returns for 2018/19, 2019/20, 2020/21 and 2021/22 the father’s occupation was that of Manager – other practice.
The father provided the CSA with a response to the change of assessment application dated 10 February 2022, in which he gave his occupation as yard manager. In a conversation with a CSA officer on 13 April 2022, the father said he was just a labourer.[3]
[3] Page 303 of the CSA documents
The mother told the CSA on 13 April 2022 that the father was the managing director and that he and the grandfather together managed the business. She said that they decided what to do together and the grandfather made the final choice. She said the father was described as a managing director on forms submitted to schools and to the Family Court.
In documents provided to the CSA on 4 May 2022, the mother wrote that during their entire relationship, the father was the managing director of the business and that did not change after they separated on 1 July 2020.
The mother wrote that the father’s duties included ordering, creating and maintaining the website, serving customers, emailing customers and preparing invoices. The mother provided a copy of text messages dated 17 March 2021 between her and the father. The tone of the conversation is friendly. The mother was checking with the father how to fill in a form. She asked him what occupation, and he responded, “managing director”.[4]
[4] Page 368 of the CSA documents
The mother provided a copy of another text message from the father dated 25 March 2021, as follows:[5]
You won’t let me take care of the children by bringing them to work with me. It’s a family business, they’re always welcome here. Customers aren’t allowed in the office, no-one smokes in the office when kids are here, your job is important to you? I’m an integral part of this place and can’t just take time off at the drop of the hat…
[5] Page 369 of the CSA documents
There is another text message exchange dated 9 June 2021 which appears to be in relation to school as the mother wrote she “was getting [Child 2’s] enrolment thing in”. She asked the father for his job title and he responded, “managing director”.[6]
[6] Page 370 of the CSA documents
In another text message exchange dated 18 July 2021, the father wrote “Dad is getting too old and can’t handle things by himself” and “My father is getting old and can’t handle running this place without me here for hours of an afternoon”. The grandfather is [age] years old. These two messages suggest, as stated in the text message of 25 March 2021, that the father is integral to the business and therefore more than a labourer or yard manager.
The objections officer recorded on 13 April 2022 that during a conversation with the father about his income from employment reducing, the father said his work had not actually changed.[7] Later in the same conversation he was recorded as saying he was only a labourer at the business.
[7] Page 303 of the CSA documents
In her response to the father’s objection, the mother wrote that the father had started Family Court proceedings and in his sealed documents from 17 March 2022, he identified himself twice as being “Director – [business type] yard” and stated that he worked 60 hours a week.[8]
[8] Pag3 355 of the CSA documents
As noted earlier, up until 1 August 2022, the father was a director of the company through which the business operated. The father said the grandfather said to him about six months ago (about February 2022) that he (the grandfather) could strike him off as a director whenever he wants and so he did. The father said he did not sign anything. The tribunal asked the father if there was any significance to him being removed as a director on that date. He responded that his father told him he was “still going on about all this” and that the grandfather wanted no part of it. “All this” was a reference to the issues arising from the marriage breakup.
The tribunal asked the father whether other relatives worked in the business and about the number of people employed by the business. He said the grandfather’s partner worked there, helping out in the office with the bookwork.
The father said the grandfather worked there full-time. In addition to the grandfather’s partner and the father, there were [number] people employed there on a casual basis who [did specified duties]. The father said he [did other occupation 1 duties].
In his application for review by the tribunal, he also gave his occupation as yard manager, and wrote that he had been relegated to duties consisting mainly of [occupation 1] work, labouring and occasionally helping to serve customers.[9] He also wrote that as the business was marketed as a family business, he was used at face value. The tribunal understands from this that he was asserting that he was used to project an image that was not really accurate.
[9] Page 2 and 5 of the CSA documents
The father has variously described himself as managing director, manager, director, yard manager and labourer. There are only two full-time employees in the business: the father and the grandfather who is now [age] years old. The father told a CSA officer that his work had not changed even though his income had reduced. The father has worked in the business for more than 20 years.
In light of the foregoing, the tribunal does not find it credible that the father was or is only a labourer in the family business.

Salary and trust distribution paid to the father

The mother said the grandfather had told her directly that if she went for child support, they would do whatever they had to, to make sure that she would not be paid a good amount of child support, even if that meant restructuring the trust, lowering the father’s income or changing his position in the business.
The mother said that was said to her a few times, in person and over the telephone. She said the father said the same thing to her: “Dad and I will fix it so you don’t get any more of our money”.
The father denied ever saying that to the mother. He said that while he could not speak for his father, he said that as far as he knew, the grandfather had never said that to the mother. The father said that it seemed a strange thing to say to someone, and then do it.
The tribunal asked the father about conversations he had with two CSA officers. The first was on 3 February 2022 and the second was with the objections officer, on 13 April 2022.[10]
[10] Pages 144 and 302 of the CSA documents
At the hearing, about the conversation on 3 February 2022, the father said that the officer put to him what the mother had said (see paragraphs 40 and 41) and then the officer asked the father if the grandfather had ever said anything to that effect. The father said he told the officer that the grandfather did not want his money to have anything to do with this. The officer recorded what the father told him, as follows:
· The father was employed under his father’s trust and the previous year, the grandfather decided not to pass on as much of the profits as (a) they were lower due to COVID and (b) a higher income for the father might affect settlement.
· The grandfather felt the mother had received enough in the previous year when she was living in the grandfather’s home rent-free.
On 13 April 2022, the objections officer spoke to the father. According to the objections officer, the father said the following:
· The grandfather told the father that the income of the trust had changed due to COVID, and that what would otherwise be distributions were being put back into the business because he [the father] was not interested in running it.
· When the grandfather decided not to distribute any funds to the father, the grandfather upped his salary. He used to receive a salary/wage and a distribution from the trust and now he is only receiving his salary/wage. His work had not actually changed.
The objections officer also recorded that when asked about the conversation held on 3 February 2022, the father said he had been misquoted.
The father said that he told the CSA officer that the grandfather told him it (‘it’ could be a reference to sales or profits) would be lower because of COVID although it seemed to him that turnover was much the same, but the CSA officer did not write that down. The father also said that the officer did not write down that the father told him the grandfather had been talking about selling the business.
The father was making the point that in his view, the CSA officer he spoke to on 3 February 2022 was selective in what he recorded of that conversation.
On 13 April 2022, the father told the objections officer that the other person who benefited from the trust was his sister who lives in [Country 1].[11]
[11] Page 303 of the CSA documents
The father told the tribunal that the grandfather told him that he (the father) would not get the distribution from the trust as the grandfather was not happy with how the father had managed his finances and that the marriage had broken down, for which he blamed the father and the mother. The father said the grandfather told him he had decided no more distributions as he (the grandfather) did not trust him (the father) with the funds and instead would increase the father’s wage to $90,000 which was enough to live on.
There is no question that the father’s taxable income has reduced over recent years. The father’s evidence indicated that the grandfather made this decision because of both the effects of COVID-19 on the business, and how a higher income for the father might indirectly benefit the mother.
The objections officer obtained information about the trust from Business Activity Statements. These showed the sales figures were as follows:
2018/19 financial year  $2,404,941
2019/20 financial year  $2,610,801
2020/21 financial year  $2,493,031
First three quarters of 2021/22              $2,017,430
Sales of $2,017,430 over nine months suggest sales of $2,689,000 over a full year; the highest turnover of recent years.
However, based on the trust’s tax returns, net business income (profit) reduced in 2020/21 compared with previous years. The profits were $438,460 in 2018/19, $432,927 in 2019/20 and $253,531 in 2020/21. The following distributions were made each year:
2018/19          2019/20          2020/21
The grandfather          $256,388         $256,697         $182,910
The father                 $102,040         $100,432         $    nil
The daughter[12]           $ 80,032         $ 75,798         $ 70,621
$438,460         $432,927         $253,531
[12] This is the father’s sister who lives in [Country 1]
The tribunal does not have information as to the profits and distributions for 2021/22, which is the year most relevant to this review as the child support case started in July 2021.
The fact that profits were down in 2020/21 supports the father’s claim that he was told by the grandfather that COVID-19 had an effect on the business, even if turnover was much the same as in previous years. The father’s taxable income for 2020/21 was $69,774. As noted earlier, he lodged an income estimate of $103,496 which was applied from 8 September 2021.

The trust distributions over the years show how the grandfather distributed the profits. Clearly, they were not equally shared between him and the father even though they are the only two full-time employees in the business.
Typically trust distributions are made after the end of the financial year. The father said that when his taxable income was $170,000 a year, he would get his wage of about $63,000 during the financial year and was usually paid the trust distribution in the October or November for the financial year just ended.
The tribunal notes that the father spoke with the CSA on 4 August 2021. At that time, he told them his income for 2020/21 was $170,000.[13] Based on what previously occurred, he was expecting to be paid the 2020/21 distribution of about $100,000 in October or November 2021.
[13] Page 67 of the CSA documents
On 8 September 2021, the father lodged an online form regarding an income estimate.[14] In this, he stated that he had been informed that he would no longer be paid an annual distribution and would be paid on a salary of $1,800 a week ($93,600 a year) from 5 August 2021. He also provided the CSA with details of his pay from 1 July 2021 according to which he was paid $1,350 a week then $1,380 a week (about $71,000 a year) until 5 August 2021.
[14] Page 75 of the CSA documents

The tribunal is satisfied that the father’s explanations, and the timing of them, make sense when considered as a whole.
The tribunal notes that the father was of the view that turnover had not reduced during 2020/21. The records available for that year show that although turnover was broadly similar to turnover for previous years, profits had reduced considerably.
The tribunal notes that 90% of the shares in the trustee company have always been owned by the grandfather; that he controls the distributions from the trust; and that his share of business profits has been significantly more than the father’s share over the three years for which figures are available.
The tribunal also notes that the mother told the CSA on 13 April 2022 that the father and the grandfather together managed the business. She said that they decided what to do together and the grandfather made the final choice. That leaves open the possibility that the grandfather might make a choice that was different to what the father may have wanted.
The fact that the shares are split 90/10 in the grandfather’s favour, rather than say 60/40 or 55/45, and how the profits have been split each year, suggests that the grandfather exerts practical as well as legal control over the business and over how much the father has been paid.
The tribunal also notes that distributions of between $70,000 and $80,000 were paid to the father’s sister who lives in [Country 1] for three consecutive years, including one year when no distribution was paid to the father. There was no evidence before the tribunal that the sister is involved in the day to day running of the business. This suggests that the distributions from the trust were made because of the family connections rather than work undertaken for the family business.
The tribunal is not satisfied that it was the father’s choice, or within his control, to be paid less in 2020/21 and 2021/22 than in previous years in order to affect the child support assessment.

The former family home

The former family home is owned by the grandfather. Based on statements made to the CSA by both parents, when the parents separated on or about 1 July 2020, the father moved out of the family home and returned to live with the grandfather. The mother and children stayed in the family home rent-free until July or August 2021, after which the father moved back into that property.
The father told the tribunal that at one time, the grandfather had received letters suggesting the former family home should be sold and half the money be given to the mother, and he was stressed out by it; the grandfather said he wanted nothing to do with it.[15] The father said the grandfather said he was sick of being brought into the conflict between the father and the mother.
[15] The mother told the CSA that she had thought the property was jointly owned by the grandfather and the father, but found out that it was only owned by the grandfather
The father said there was a domestic violence order (DVO) which named the grandfather and it was after that, that the grandfather decided he would charge the mother rent through a rental agency.
The mother submitted that the DVO was made against the father, not the grandfather. She also said that after the DVO, the grandfather obtained a rent appraisal for the property where she and the children were living. The rent appraisal dated 7 July 2021 is included in the documents at page 361.
The mother’s application for a child support assessment was registered on 10 July 2021. On 19 July 2021, the grandfather’s solicitors wrote to the mother to advise that the grandfather wanted to charge rent for the property from 16 August 2021 of $730 a week which is equivalent to $37,960 a year and in line with the appraisal. According to a notice issued by the CSA on 22 July 2021, the father was assessed to pay child support of $37,797 from 10 July 2021.
The mother pointed out that the rent she was asked to pay was the same amount as the child support assessment. They are almost identical. However, the notice issued by the CSA setting out the amount of the assessment was sent after the rental appraisal and the letter from the solicitors. The tribunal is not satisfied that charging rent was an attempt by the grandfather to recoup child support paid by the father.

Other evidence

The mother provided the CSA with a copy of an email from the grandfather dated 21 September 2021 which stated that as she had refused to discuss parenting issues with the father directly, he – the grandfather – would act on his behalf. There were then a series of questions about care arrangements and the children’s mobile phones. The content of the email strongly suggests the grandfather was being supportive of the father rather than distancing himself from the disagreements between the parents.
The mother said the grandfather has arranged that the trust would send more money to the father’s sister, which she would then feed back to the father. The father said his sister, who lives in [Country 1], sent him the money he used to pay legal fees.
The tribunal has already set out the trust distributions for three years. The father’s sister received a similar distribution in each of those years. If the trust distribution to her had increased sufficiently to cover the father’s legal fees, then it would suggest that funds intended for him had been sent to his sister initially to reduce his child support liability. But as the distribution paid to the sister was similar to the distribution paid to her in previous years, the tribunal is not satisfied that is the case. If a parent’s relative chooses to assist them by paying their legal fees, it does not necessarily follow that the child support assessment should increase by that amount. The mother said that her parents were helping her pay her legal fees but the money they spent on legal fees was a loan. The father said he had spent $10,000 on legal fees so far and was told the fees could amount to $35,000 to $40,000 in total. The mother said she was told her legal fees might amount to $100,000 in total.
The tribunal has to make a finding as to whether the grandfather decided the father’s income would be reduced despite the father’s wishes or whether the father was involved with, and agreed to, this decision and received the income in some other way even though not recorded as a distribution to him.
The tribunal considers it credible that the grandfather was annoyed with the father due to his management of finances and that the issues arising from the marriage breakdown continued. And for these reasons, the grandfather refused to make a distribution from the trust to the father.
The tribunal notes that the mother said she was warned off arranging child support, by both the father and the grandfather, not long after the marriage broke up. The tribunal asked the mother if she had any proof of what she said the grandfather had said to her. She said these threats were made to her in the first few months after separation as they did not want her to go to the CSA. She did not have any proof of them.
The father said he did not make these threats. Further, if these threats were made, according to the mother they were made in or around July 2020. The tribunal notes that it was a year later when the mother registered a child support claim with the CSA. There was no evidence before the tribunal that these threats were repeated in the interim. Nevertheless, the tribunal places some weight on this aspect of the mother’s contentions.
While part of the evidence from the father was that the grandfather did not want to be involved and caught up in the issues between the mother and the father, on September 2021 the grandfather emailed the mother, stating that he would act on the father’s behalf with regard to care arrangements of the children. This email strongly suggests the grandfather did involve himself with some of the issues between the father and the mother.
The father said the grandfather has health issues and was talking about selling the business. He did not know what the timeline for that might be. He said that he, the father, was not interested in taking the business over.
The mother said in relation to this, she was told that the father’s partner, [named], would take over the grandfather’s business. The mother agreed that was just gossip. The father said that he knew the source of that information and that was not true. The tribunal gives little weight to this.
The father said he still worked at the family business full-time as he had little choice. If the business shut down, he could try and find work at another [similar] business or as [an occupation 1] but he would not get paid as much; maybe $70,000 or $75,000 a year.
The father’s position has consistently been that the grandfather made the decisions about the father’s pay and the amount the father received by way of trust distributions. The tribunal is of the view that the evidence, on balance, supports this. The tribunal places particular weight on the father holding 90% of the shares of the business and this being unchanged over many years. When parents and children work together in a business, it is not uncommon to see the share ownership change to benefit the adult child or children as the years progress to a more equitable split, say 60/40, even if the parent maintains the majority shareholding.
The amount of the distributions paid to the grandfather over the three years, compared to what was paid to the father, is also indicative of where the actual control of the trust and the business lies.
Weighting up the evidence, as noted earlier, the tribunal is not satisfied that it was the father’s choice, or within his control, to be paid less in 2020/21 and 2021/22 than in previous years.
The tribunal notes that the father benefits from renting a house owned by his father for $300 a week even though the weekly rent has been assessed to be $730. That equates to a benefit of $22,360 a year. When considered as grossed-up income, that amounts to about $35,000 a year.
In addition, the father’s fuel and vehicle repair costs are paid for by the business. The father said he rarely used his vehicle for business purposes. The mother told the CSA that he regularly travels interstate to see his mother.[16] She referred to his bank statements showing charges from businesses in [specified towns], [Town 1] and other locations. The distance between the father’s home in [Town 2], Queensland to [Town 1] is between 230 and 260 kilometres (one way), depending on the route taken. This indicates that the father does not only make local trips.
[16] Page 357 of the CSA documents
According to one study, between April and June 2022, the average cost of fuel exceeded $100 a week for Australian households, assuming a man and a woman each driving approximately 14,000 kilometres a year.[17] On that basis, the tribunal considers it reasonable to increase the father’s income for child support purposes by $2,600 to reflect a benefit of $50 a week in relation to fuel costs. During the period relevant to this review, fuel has been both cheaper and more expensive so allowing $50 a week for fuel costs seems appropriate. The tribunal will add a further $800 a year for repairs and maintenance, given the age of the father’s vehicle. Based on his Statement of Financial Circumstances (SFC) it is an 11-year old ute. The total of $2,600 and $800 is $3,400. The grossed-up equivalent is approximately $5,400.
[17] Mulach, Jordan (2022), Australian fuel costs rise to more than $100 per week for the first time on record, accessed 6 November 2022 at
In light of the foregoing, the tribunal determines that $133,072 – rounded to $133,000 ꟷ adequately reflects the father’s income, property and financial resources for child support purposes from 10 July 2021. It is made up of the following components:
Taxable income for 2021/22            $92,672
Benefit from rent  $35,000
Benefit from fuel, etc.  $ 5,400

The mother’s income

Based on CSA records, the mother’s taxable income was $8,632 for 2018/19, $3,304 for 2019/20 and $38,727 for 2020/21. The mother submitted her notice of assessment for year ended 30 June 2022 which recorded her taxable income as $52,219.
The mother is [an occupation 2] who works part-time. In her SFC, she stated that she earns $2,304.06 a fortnight which is equivalent to $59,905 a year. The mother said that she increased her hours from two days a week to three days a week at the beginning of this year. This largely accounts for the difference between her 2020/21 taxable income and her current income.
The father said he was not disputing the mother’s income.
In relation to the period starting from 10 July 2021, the tribunal considers that $52,000 better reflects her income for child support purposes rather than her 2020/21 taxable income of $38,727.

How does the administrative assessment compare with an assessment of child support using the tribunal’s income figures for the parents?

The figures that follow should be regarded as estimates, due to the complexity of the child support formula.
On 5 January 2022, when the mother applied for a change of assessment, the father was required to pay an annual rate of child support of $14,655 to the mother, based on his 2021/22 estimate of income of $103,496 and the mother’s 2020/21 adjusted taxable income of $38,727.
On an income of $133,000 for the father and $38,727 for the mother, the father’s child support liability is about $20,232 a year. Using an income of $52,000 for the mother, the father’s child support liability would be about $19,275.
Given the difference between the father having an annual child support liability of about $14,655 rather than $20,232 or $19,275, the tribunal is satisfied that in the special circumstances of this case, the administrative assessment does result in an unjust and inequitable rate of child support, and that a ground for departure from the administrative assessment has been established pursuant to subparagraph 117(2)(c)(ia) of the Act.

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

As the tribunal is satisfied that there is a ground to depart from an administrative assessment of child support, the next step is to consider whether it is just and equitable as regards the children, the father and the mother 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 a variety of factors, as set out in subsection 117(4) of the Act.[18]
[18] The tribunal is required to give “overt consideration” to relevant factors listed in subsection 117(4) of the Act: Tyagi and Meares (SSAT Appeal) [2008] FMCAfam 886
Section 3 of the Act makes it clear that parents have the primary duty to maintain their children, and that this duty has priority over all commitments of the parents other than commitments necessary for self-support or the support of another person the parent has a duty to maintain. In this case the father and the mother have the primary duty to financially support the children of this case.

Income, property and financial resources – the father

The father submitted his SFC dated 28 June 2022. He recorded weekly income to be $1,800 which is equivalent to $93,600 a year.

103.Based on his SFC, the father lives with his partner who is a casual shift worker and earns about $1,500 a week or $78,000 a year. He said she works [in an occupational area] and does not work in the family business.
104.The father recorded that he had $4,033 in two bank accounts and owned a 2011 [ute] which he valued at $12,000. Other assets included $182,157 in superannuation and household contents worth about $30,000.
105.The father wrote that he owed $4,230 on his visa card. He advised at the hearing that he cleared the balance of his credit card each month.
106.The father recorded that his total outgoings amounted to $1,940 a week ($685 + $1,255) and his income was $1,800, suggesting his outgoings exceeded his income by $140 a year.
107.The father wrote that his minimum credit card payment each week was about $260. This amount was included in the total outgoings of $1,940. It may be that there has been some doubling up in that some of his weekly expenses were paid by credit card. That is, they were recorded in the household expense schedule and also as part of the $260 weekly credit card payment.
108.The father said that when he filled in the household expense schedule in the SFC, he took into account something he was told by the CSA which was that it was only his income that was relevant to child support, not his partner’s. While that is the case, the intention of the household expense form is that it is filled in to reflect the household expenses, not just expenses paid for by a party to a review.
109.As an example, the father recorded that the total weekly expense on food for him, his partner and the children was estimated to be $100 a week. He explained that his partner purchased most of the food as she had children also who stayed at the house and what she spent was not included in the amount of $100. He said that the rent for the property was $300 a week and he paid that himself without assistance from his partner. That was the way they arranged the household finances.
110.The father did not record any fuel or vehicle maintenance costs. He said these were paid for by the business and that he rarely used his vehicle for business purposes.
111.In his application for review, the father wrote that his partner helps him with some occasional day to day expenses and gifts for his children but being assessed on an income of $170,000 a year left him in a severe financial disadvantage.
112.The tribunal notes that on an income of $93,600 a year, the net income is about $70,000. After paying child support of $27,000 a year (the assessment as a result of the objection decision) and rent of $15,600 a year, which total $42,600, there is about $27,400 left over or $526 a week. Given the father recorded he spent about $100 a week on food, this does not suggest he was in severe financial disadvantage.
113.Put another way, the father recorded that he spent about $685 a week on household expenses, including what he paid on rent and food. That is equivalent to $35,620 a week. Adding child support of $27,000 gives $62,620 in outgoings.
114.The tribunal has formed the view that the father is able to cover his expenses and outgoings satisfactorily.

Income, property and financial resources – the mother

115.The mother’s SFC was received by the tribunal on 10 October 2022. In addition to her income from employment, the mother receives carer allowance of $273 a fortnight and family tax benefit (FTB) of $434.28 a fortnight.
116.The mother wrote that she has $217 in her bank account, owns a 2018 [vehicle] worth $35,000 and has household contents worth $8,000. She recorded having $161,542 in superannuation.
117.The mother did not record any liabilities although she said she owed her parents money as they have assisted her with legal fees in relation to Family Court matters. She said she does not have a credit card.
118.The mother wrote that she pays rent of $450 a week and the household food bill is $300 a week. She recorded $300 a week in medical, dental and optical costs and $110 a week on chemist and pharmaceutical costs. The mother did not split any of the household costs between her and the children.
119.The mother recorded that her total outgoings amounted to $2,196 a week ($1,808 + $388) and her income was $2,006, meaning there is a shortfall of $190 a week.

Other issues pertaining to the parents’ incomes, property and financial resources

120.Subsection 117(7B) of the Act prescribes the circumstances in which a parent’s earning capacity may be taken into account; certain criteria have to be met. These include that the parent has failed to demonstrate that decisions made about their work arrangements were not substantially motivated by the effect they would have on the rate of child support.

121.The father has continued to work full-time in the family business. The mother has increased the hours she works over the last two or so years. Her decision to increase her hours of work reduces the amount of child support payable to her. The tribunal is satisfied that neither parent was substantially motivated to change their work patterns to affect the rate of child support.
122.The tribunal concluded that it need not consider the application of subsection 117(7B) of the Act in relation to either parent any further.
123.The tribunal is required to have regard to the commitments of each parent that are necessary to enable the parent to support himself or herself, or any other child or another person that the person has a duty to maintain (paragraph 117(4)(e) of the Act). There was no evidence before the tribunal of either parent having a legal duty to support another child or person. Therefore, the tribunal will not consider this provision any further.

Costs related to the children

124.In determining the proper needs of the children, it is necessary to have regard to the manner in which they are being, and in which the parents expected them to be, cared for, educated or trained, and any special needs they may have (subsection 117(6) of the Act).
125.Parents will likely incur medical and related costs for their children over the course of a year and the child support formula is intended to cover such costs. However, there can be a basis for varying the child support assessment when a child has special needs and additional costs are incurred.
126.The mother requested that the father contribute to medical costs for each of the three children. The father expressed his willingness to contribute 50% of the costs as long as he was not assessed on an income of $170,000 a year. The mother agreed with that.
127.According to the mother’s written submission, the children have the following conditions:
·     [Child 1’s] diagnoses/conditions
o   Autistic spectrum disorder (ASD) level 2
o   Generalised anxiety
o   Allergies
o   Food intolerances
o   Eczema, only when exposed to the foods to which she is intolerant
o   Asthma
o   Glasses
o   Orthotics
o   Braces
o   Moderate depression

·     [Child 3]
o   ASD level 2
o   Generalised anxiety
o   ADHD combined type
o   Food intolerances
o   Eczema, only when exposed to the foods to which she is intolerant
o   Asthma
o   Glasses

·     [Child 2]
o   Generalised anxiety
o   Adjustment disorder
o   Allergies
o   Food intolerances
o   Eczema
o   Asthma
o   Glasses
o   Orthotics
o   Seeing an orthodontist for assessment for braces
o   Functional neurological disorder (FND) – dissociative seizures

128.As recorded in the objection decision, the mother submitted that the two girls need regular support and therapy for their ASD diagnoses. Whereas [Child 3’s] expenses for ASD are covered by the NDIS, that does not apply to [Child 1].
129.The mother provided medical reports and invoices which showed the out-of-pocket costs she incurred in relation to the children’s special needs. She did not summarise these costs.
130.The objections officer calculated the total costs of the children’s special needs for the period relevant to this review. Neither parent had checked his figures and neither disagreed with them, although the mother noted that there was a further ongoing cost in relation to [Child 2] that had started after the objection decision was made.
131.The objections officer calculated that the mother had incurred out-of-pocket costs of $12,501.41 from 10 July 2021 to 31 December 2021. This was made up of $6,700 for [Child 1’s] braces ($4,600) and psychotherapy ($2,100), and $5,466.35 for [Child 2’s] psychology and occupational therapy. In addition, the mother spent $335.06 on asthma medications.
132.The objections officer also calculated that the mother has $5,266.97 in ongoing annual costs during calendar year 2022.
133.The mother said that there were additional costs in relation to psychology appointments for [Child 2] in relation to his FND and [Child 1’s] depression. She said that the recommendation was for weekly, fortnightly or monthly sessions depending on how each child was progressing and she did not know for how long the sessions would be needed.
134.She said that [Child 2] had been seeing a psychologist on a weekly basis since the diagnosis in August 2022 which had reduced to fortnightly sessions the week before the hearing.
135.Although the mother has submitted various medical records that support this diagnosis, the mother did not provide clear evidence as to the out-of-pocket costs she incurred over a period of time.
136.A report from [Doctor A] dated 12 September 2022 stated that [Child 2] needed medication and cognitive behaviour therapy.[19] A receipt dated 5 September 2022 from [Doctor A] recorded an out-of-pocket expense of $210.
[19] Page B19
137.As explained at the hearing, if a parent wants the tribunal to determine if a contribution to the costs of the special needs of the children via the child support system should be made, then the onus is on the parent to calculate the amount of their out-of-pocket costs, and provide documents that support that figure. It is not the role of the tribunal to undertake that task. The tribunal notes that the mother provided a significant amount of paperwork to the CSA which the objections officer helpfully analysed.[20] The objections officer included the cost of ongoing therapy for [Child 1] in his calculations so the tribunal will not make an adjustment for that.
[20] Page 35 of the CSA documents
138.With regard to [Child 2], the tribunal has made the following calculations.
Weekly sessions from 1 Sept 2022 to 19 Oct 2022 = 7 weeks @ $120 = $840
Fortnightly sessions from 20 Oct to 20 Dec 2022 = 9 weeks, say 4 @ $120 = $480
Monthly sessions for six months of 2023, say 6 @ $120 = $720

139.The tribunal has calculated the following out-of-pocket costs, drawing mainly on the analysis by the objections officer:
From 10 July 2021 to 31 December 2021    $12,501  50%, say $6,250
Ongoing costs from 1 January 2022          $5,267   50%, say $2,633
Additional costs for calendar year 2022     $840 + $480              50%, say $660
Additional costs for calendar year 2023     $720  50%, say $360

140.The tribunal’s determination assessment requires the father’s annual rate of child support to be increased by $12,501 for the period from 10 July 2021 to 31 December 2021. As this increase applies only to a six-month period, this will have the effect of him contributing $6,250 for that period.
141.From 1 January 2022, the father’s annual rate of child support is increased by $2,633 plus $660, totalling $3,293 and from 1 January 2023, the annual rate is increased by $2,633 plus $360, giving $2,993 a year.

142.With regard to the costs of the children more broadly, neither parent filled in the household expenses form in their SFC in the manner intended and so the tribunal cannot ascertain other costs of the children based on these forms. That being the case, the tribunal considers it appropriate to rely on the Costs of the Children Table available from the CSA’s website.[21]
[21] For the parents’ information, a Costs of the Children Table is available at the Services Australia website which can be found at
Hardship
143.The tribunal is required to consider any hardship its determination might cause and is guided by Gyselman and Gyselman[22] in this respect:
[22] [1991] FamCA 93
This requires the Court to balance the “hardship” which the parents or the children may suffer as a result of either making or refusing to make the order. It is a recognition of the circumstance that in this area there is likely to be hardship both ways and the Court is required to take into account the balance of that hardship and give it the weight which is appropriate to the circumstances of the individual case.
144.The tribunal is of the view that the mother is in the more difficult financial situation of the two. Based on their evidence, both parents receive financial support from their families. They each referred to incurring significant legal fees which they are paying with the assistance of their respective families. The father benefits from paying a lesser amount of rent than the market value as he lives in a property owned by the grandfather. The father also wrote in his application for review that he has a supportive partner who helps him with occasional day to day expenses.

Any other relevant matters

145.The tribunal may take into account any other matters it considers relevant in making a particular departure determination (subsection 117(9) of the Act).
146.The tribunal determines that it is appropriate in this case to start its determination from the same date used in the objection decision, being 10 July 2021 which was when the case started.
147.Consistent with the objection decision, the tribunal has ended its determination on 30 November 2024. This is to give the parties some certainty with regard to child support for the next two years.
148.It remains open to either parent to apply for a change of assessment between now and 30 November 2024 if their circumstances change.

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

149.The requirement to consider whether a departure determination would be otherwise proper is concerned with what is fair to the community; it is preferable for a child or children to be primarily supported by their parents rather than by government assistance. Paragraph 117(5)(b) of the Act means that the tribunal must consider whether the level of a benefit, in particular FTB, received by the party caring for a child or children, may be affected by the level of child support.
150.The mother recorded in her SFC that she was receiving FTB. The tribunal is satisfied that its determination will result in an appropriate apportionment of financial responsibility between the parents and the community and would be otherwise proper.

DECISION

The tribunal sets aside the decision under review and, in substitution, decides as follows:

For the period from 10 July 2021 to 30 November 2024, Mr Burton’s adjusted taxable income is varied to $133,000 a year.
For the period from 10 July 2021 to 30 November 2024, Ms Bronson’s adjusted taxable income is varied to $52,000 a year.
For the period from 10 July 2021 to 31 December 2021, the annual rate of child support payable by Mr Burton is increased by $12,500 (see paragraphs 131, 139 and 140).
For the 2022 calendar year, the annual rate of child support payable by Mr Burton is increased by $3,293.
For the 2023 calendar year, the annual rate of child support payable by Mr Burton is increased by $2,993.

[2022] AATA 4672

2 November 2022

Key Legal Topics

Areas of Law

Family Law

Administrative Law

Legal Concepts

Jurisdiction

Judicial Review

Remedies

Costs