Cada and D’Uva (Child support)

[2020] AATA 4926

Cada and D’Uva (Child support) [2020] AATA 4926 (8 October 2020)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2020/SC019678

APPLICANT:  Mr Cada

OTHER PARTIES:  Child Support Registrar

Ms D’Uva

TRIBUNAL:Senior Member R Ellis

DECISION DATE:  8 October 2020

DECISION:

The Tribunal sets aside the decision under review and, in substitution, decides that the estimate of income lodged by Ms D’Uva on 23 April 2020 should be refused.

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 - discretion to refuse should be exercised - 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

1. This review is about the acceptance of an estimate election used to assess child support in respect of the children [Child 1] and [Child 2].

2. Mr Cada and Ms D’Uva are the parents of [Child 1] (born May 2007) and [Child 2] (born March 2013) and Mr Cada is the parent liable to pay child support under the assessment.

3. On 23 April 2020 the Child Support Agency made the decision to accept an income estimate from Ms D’Uva of $31,077 (annualised) to be used in the child support assessment from 23 April 2020 to 30 June 2020.

4. On 15 May 2020 Mr Cada objected to this decision and on 14 August 2020 the Child Support Agency disallowed the objection (the objection decision).

5. On 17 August 2020 Mr Cada applied to the Administrative Appeals Tribunal (the Tribunal) for a review of the objection decision.

6. The Tribunal conducted a hearing into the application on 8 October 2020.  Mr Cada gave evidence on affirmation by conference telephone.  On 3 September 2020 the Tribunal wrote to Ms D’Uva advising her of the date and time of the hearing.  On 7 October 2020 Ms D’Uva was sent a SMS text reminding her of the details of the hearing.  The Tribunal attempted to contact Ms D’Uva on 8 October 2020 as advised but was not successful.  Ms D’Uva did not participate in the hearing.

7. The Child Support Agency provided the Tribunal and the parties with papers relevant to the matter (91 pages).  Mr Cada provided additional documents prior to the hearing and these were distributed to the parties (A1-A4).

ISSUES

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

2. The Child Support Agency makes child support assessments for a child support period using a formula outlined in Part 5 of the Act.  The variables in the formula include the adjusted taxable incomes of both parents and ordinarily this is equal to the taxable income and supplementary amounts for the financial year that ended before the start of the child support period.  Supplementary amounts include such things as reportable fringe benefits.

3. Section 60 of the Act allows a parent to elect to use an estimate of their adjusted taxable income to apply from the day of the election to the end of the financial year (estimate period).  The estimate is an annualised amount of their taxable income and supplementary amounts for the estimate period.  It must be no more than 85 per cent of the adjusted taxable income that applies when the parent makes the estimate election.

4. The parent making the estimate election must also estimate their adjusted taxable income from the start of the financial year to the beginning of the estimate period (year to date income).  This allows the Child Support Agency to reconcile the estimate when information is available from the Australian Taxation Office for the relevant financial year.

5. The Child Support Agency may refuse to accept an estimate election if satisfied the amount estimated for the partial year is less than the amount considered likely to be the actual adjusted taxable income for the partial year (section 63AA of the Act).

6. The issue which arises in this case is whether or not the Child Support Agency made the legally correct decision to refuse Ms D’Uva’s estimate of income made on 23 April 2020.

CONSIDERATION

1. Mr Cada told the Tribunal in his view the Child Support Agency had made the decision to accept the estimate of income provided by Ms D’Uva without any firm evidence.  He said the Child Support Agency had simply relied on verbal advice from Ms D’Uva.

2. Mr Cada said he was aware Ms D’Uva had started a new job as [an Occupation] at the new [workplace] near [City] because she sent him her roster every week so he could care for the children.  Mr Cada said he would arrange his schedule around Ms D’Uva’s roster.

3. Mr Cada said he recalled Ms D’Uva may have commenced on a short shift for the first week of her new role but was soon working 38-40 hours a week.  He said she was also regularly working weekend shifts so would be receiving penalty rates.  Mr Cada told the Tribunal it was his understanding that [an Occupation] was paid around $25 per hour so it was not possible Ms D’Uva was earning as little as $31,077 per annum.

4. Mr Cada said he was pleased Ms D’Uva had a new job and was happy to care for the children but wanted child support to be fair.

5. Although Ms D’Uva did not participate in the hearing the Tribunal notes in evidence from the Child Support Agency that when she made her estimate election on 23 April 2020 Ms D’Uva advised the child support officer she had just started a new job and was working casually.  According to the record of the conversation Ms D’Uva stated she believed she would earn approximately $192 gross per week and was also in receipt of government benefits.  Ms D’Uva also provided her year-to-date income.

6. An income estimate can be made if, in the case of a first election for a year of income, the estimate is 85 per cent or less than the parent’s adjusted taxable income for the last relevant year of income (paragraph 60(1)(b) of the Act).  A parent may not make an income estimate if an income amount order is in force in relation to the parent and any part of the period to which the election would apply if made (subsection 60(6) of the Assessment Act).

7. The last relevant year of income for the child support period which commenced on 1 September 2019 is Ms D’Uva’s 2018-19 adjusted taxable income of $76,782.  The Tribunal is satisfied the annualised estimate of income of $31,077 meets the 85 per cent test.  The Tribunal is also satisfied there was no income amount order in place at the time Ms D’Uva elected to lodge her estimate.

8. The Tribunal also considered the discretion, under section 63AA of the Act, to refuse the estimate election made by Ms D’Uva.  This discretion may be exercised in circumstances where evidence suggests a parent’s estimated income is less than the amount considered likely to be their actual adjusted taxable income for the election period.

9. Ms D’Uva lodged her estimate on 23 April 2020.  The Tribunal notes that on 1 July 2020 the Child Support Agency wrote to Ms D’Uva requesting copies of her payslips for April 2020.  This would have enabled an informed decision about the income Ms D’Uva was earning at the time she made her estimate election.  Ms D’Uva did not respond to the Child Support Agency.

10. The courts have held that while an estimate election is speculative by nature there is nonetheless an onus upon the person making the estimate to support the basis of the election with supporting evidence if called upon to do so.[1]

    [1] Lefroy and Lefroy (SSAT Appeal) [2009] FMCAfam 1043

11. There was no response by Ms D’Uva to the request from the Child Support Agency for information about her salary.  Ms D’Uva did not participate in the hearing conducted by the Tribunal.

12. For the reasons outlined above, in the circumstances of this particular case, the Tribunal considers the discretion to refuse to accept the estimate election made by Ms D’Uva on 23 April 2020 should be exercised.

DECISION

The Tribunal sets aside the decision under review and, in substitution, decides that the estimate of income lodged by Ms D’Uva on 23 April 2020 should be refused.