Burwick and Layley (Child support)

[2023] AATA 274

Burwick and Layley (Child support) [2023] AATA 274 (23 January 2023)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2022/PC024768

APPLICANT:  Mr Burwick

OTHER PARTIES:  Child Support Registrar

Ms Layley

TRIBUNAL:Member J Leonard

DECISION DATE:  23 January 2023

DECISION:

The decision under review is affirmed.

CATCHWORDS

CHILD SUPPORT – particulars of the administrative assessment – estimate of income - estimate of income 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. Mr Burwick and Ms Layley are the separated parents of one child born in 2005. At all relevant times Mr Burwick was the parent liable to pay child support to Ms Layley.

2. Mr Burwick contacted Services Australia (Child Support) to lodge an income estimate for the 2020-21 financial year. Mr Burwick estimated his income to be “nil”. On 8 November 2021 Child Support accepted Mr Burwick’s estimate election and applied it to the assessment from 19 October 2021.

3. On 27 June 2022 Mr Burwick contacted Child Support to advise that his income had increased and to request that his estimate for the 2021-22 financial year be updated. Mr Burwick told Child Support that he had been approved to receive jobseeker payments from Centrelink on 12 January 2022 and had commenced employment with [Employer] from 13 May 2022.

4. On 27 June 2022 Child Support accepted the subsequent estimate election from Mr Burwick and applied an adjusted taxable income of $54,320 (annualised) to the assessment for the period 12 January 2022 to 30 June 2022. Both parties were notified of the decision by letter dated 27 June 2022.

5. On 18 July 2022 Mr Burwick objected to the decision made on 27 June 2022. On 6 September 2022 a Child Support objections officer disallowed the objection.

6. On 2 October 2022 Mr Burwick applied to the Tribunal for a review of the objection decision. The application was heard on 5 January 2023. Mr Burwick attended the hearing by telephone and gave evidence on affirmation. Ms Layley elected not to participate in the hearing. Child Support provided documents numbered 1 to 158. Mr Burwick stated he had not received the documents and would follow this up with Child Support immediately after the hearing. He provided additional documents which were numbered A1 to A19.

7. Following the hearing the Tribunal directed Child Support to provide further information pursuant to section 33 of the Administrative Appeals Tribunal Act 1975. This was received, and the Tribunal made its decision on 23 January 2023.

ISSUES AND CONSIDERATION

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

2. In general, a person’s child support liability is calculated by using an adjusted taxable income, which is based on the person’s taxable income for the previous financial year. The Act makes provision however for a child support assessment to be based on an estimate of current income if there has been a decrease in income of at least 15%.

3. A person may make an estimate of income if the provisions in section 60 of the Act are met. There is no dispute that Mr Burwick made an income election for the 2021-22 financial year of $0, which was applied to the assessment from 19 October 2021.

4. Section 62 of the Act states that a parent who has made an income election relating to a year of income may, by notice given to the Registrar, revoke the income election. Section 62A of the Act further provides that if a parent revokes an income election (the earlier election), the parent must make another income election for the year of income. Subsection 62A(3) provides that the start date for the election for a later part year estimate is either the day on which the parent makes the election (subsection 62A(2) refers) or, if the annualised amount of the later estimate election is more than the amount of the earlier election, the date of the event that occurred to change the parent’s income (subsection 62A(3) refers).

5. Mr Burwick provided the Tribunal with a copy of a letter dated 27 June 2022 which stated in part: “We are writing to advise you that we are unable to accept the estimate of income you provided on 27 June 2022”. In his submissions Mr Burwick stated:

   3) Child Support Agency breached (CSA Act section 64AA) to allege that on 27 June 2022 I advised CSA of a change to my financial circumstances and elected to amend my 2021/2022 estimate of adjustable taxable to $54,320.00 (annualised for the period 12 January 2022 to 30 June 2022. I disagree with the figure because it was trumped up and imposed. On 27 June 2022 CSA wrote to advise me that they were unable to accept the estimate of income I provided on 27 June 2022 with reason that they were satisfied that my actual income would be higher than my estimate for case 49332030 (Refer to evidence marked 04 and 04A).

   4) The created gross incomes of $25,299.84 and $54,320.00 (annualised) by CSA were illegally utilised in calculation as follows: $25,299.84 /170 (170 days in estimated period) x 365 = $54,320.00 (Refer to evidence marked 03A).

6. Mr Burwick submitted that he earned $15,093.43 from [Employer] for the period commencing 13 May 2022 and ending 20 June 2022. Additionally, according to records from the Australian Taxation Office, he received $5,399 from Centrelink in the period 12 January 2022 to 30 June 2022. He believes these amounts should be used to determine his annualised child support income from 12 January 2022.

7. In response to further information, Child Support advised that Mr Burwick rang on two occasions on 27 June 2022. Initially he advised of his income from [Employer] and an annualised income of $181,004 was determined. He then called back later that day to clarify the pattern of his employment income and to advise he had also received payment from Centrelink. An annualised income of $54,320 from 12 January 2022 was determined on the basis of the amounts he advised.[1]

   [1] Page 57 in the Child Support documents.

8. Child support advised that on 27 June 2022 Mr Burwick also lodged a request for a new estimate to commence from 1 July 2022 for the 2022-23 financial year. This estimate was disallowed, and Mr Burwick was notified. The letter provided to the Tribunal by Mr Burwick dated 27 June 2022 is a copy of the invalid estimate letter in respect of the 2022-23 financial year.[2] The letter dated 27 June 2022 advising Mr Burwick of the updated annualised income from 12 January 2022 on the basis of the figures he provided is contained in the Child Support papers at pages 59 to 63.

   [2] Child Support advised that Mr Burwick successfully lodged an estimate for the 2022-23 financial year on 21 July 2022.

9. The Tribunal finds that Child Support accepted Mr Burwick’s income estimate from 12 January 2022 which is the date on which the event occurred that increased his income amount in accordance with subsection 62A(3) of the Act. Section 63 of the Act provides that unless the income estimate is refused, Child Support must apply the estimate to the administrative assessment.

10. The estimate calculations (pages 61 to 62) completed by Child Support on 27 June 2022 indicate that Mr Burwick expected his taxable income to be $25,299.84 in the period 12 January 2022 to 30 June 2022. This was annualised to $54,320. Section 63AA of the Act provides a discretion to refuse to accept an income estimate election. Subsection 63AA(3) enlivens the potential exercise of discretion to refuse if Mr Burwick’s income estimate for the period 12 January 2022 to 30 June 2022 was likely to be too low. Mr Burwick’s position however is that the income estimate was higher than his adjusted taxable income, and this has resulted in an unwarranted increase to his child support liability.

11. An estimate of income is by its very nature imprecise. The Tribunal finds that Mr Burwick made a subsequent income election on 27 June 2022 and there is no provision in the law to refuse to accept the income election on the basis that it subsequently turned out to be inaccurate.

DECISION

The decision under review is affirmed.