Cady and Cady (Child support)

[2018] AATA 3989

Cady and Cady (Child support) [2018] AATA 3989 (14 August 2018)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2018/AC014250

APPLICANT:  Ms Cady

OTHER PARTIES:  Child Support Registrar

Mr Cady

TRIBUNAL:Member Y Webb

DECISION DATE:  14 August 2018

DECISION:

The decision under review is affirmed.

CATCHWORDS
Child support - Collection of three months arrears - Whether there were unpaid amounts - No unpaid amounts in the specified period - Decision under review affirmed

Names used in all published decisions are pseudonyms. Any references appearing in square brackets indicate that information has been removed 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 extent of arrears payable (if any) by Mr Cady as the liable parent.

2. Ms Cady and Mr Cady have three children aged 13, 10 and 4 (the children).

3. The parents separated in or about early 2016.

4. Initially the parents elected not to have the Department of Human Services (Child Support Agency) collect child support in relation to the children.  In other words, the parents had a ‘private collect’ arrangement regarding child support.

5. On 27 November 2017, Ms Cady contacted the Child Support Agency to request collection of child support by the Agency.  She also requested collection by the Agency of alleged unpaid amounts of child support for the three month period 27 August 2017 to 26 November 2017.  At that time, the care of the children was 67% to Ms Cady and 33% to Mr Cady.  The Child Support Agency accepted Ms Cady’s request for collection by the Agency from 27 November 2017.

6. The Child Support Agency also decided that no payments had been made by Mr Cady to Ms Cady in the period between 27 August 2017 and 26 November 2017 (arrears period).  The arrears for which the Child Support Agency determined Mr Cady was liable was an amount of $4,212.42.

7. Mr Cady was granted an extension of time to object to that decision.  He contended that he had made payments within the arrears period to third parties, which he asserted were agreed with Ms Cady to be in lieu of child support and which totalled more than $4,212.42.

8. Ms Cady contended that Mr Cady had not made the payments as agreed between them.  She did not accept that Mr Cady had made payments in lieu of child support which totalled at least $4,212.42 in the arrears period.

9. On 31 May 2018, an objections officer of the Child Support Agency allowed Mr Cady’s objection.  The objections officer determined that payments to the value of $7,102 had been made by Mr Cady (as Ms Cady’s share of the joint expenses); that these payments were intended to be in lieu of child support and that Mr Cady had therefore satisfied his liability to pay $4,212.42 in the arrears period.

10. On 5 June 2018, Ms Cady requested review by the Administrative Appeals Tribunal (the Tribunal).  Ms Cady and Mr Cady both attended the hearing on 14 August 2018 in person. Ms Cady gave sworn evidence and Mr Cady gave evidence on affirmation.

ISSUES

1. The issue which must be decided in this case is the amount of child support arrears, if any, Mr Cady is liable to pay.

CONSIDERATION

1. A payee can initially elect not to have a liability which arises from a child support assessment enforceable by the Child Support Agency under subsection 24A(2) of the Child Support (Registration and Collection) Act 1988 (the Act).  In other words, the child support is collected privately.

2. Section 25 of the Act states that if a payee who made an election under subsection 24A(2) applies at a later time to have the liability enforced by the Child Support Agency then the application must be accepted.

3. The Tribunal finds that Ms Cady applied for the liability to become enforceable by the Child Support Agency on 27 November 2017.

4. If an application is made under section 25 of the Act, the payee may also apply for any unpaid amounts to be treated as arrears amounts and collected by the Child Support Agency (subsection 28A(3)).  If the specified period does not exceed three months, the Child Support Agency must grant the payee’s application (subsection 28A(4)) provided the child support liability remains unpaid.

5. The Tribunal finds that Ms Cady applied for arrears of three months to be collected.  Her application must, therefore, be granted.  The Child Support Agency determined, on objection, that an amount of $4,212.42 had been paid by Mr Cady in the arrears period and therefore that Mr Cady had satisfied his child support liability for the arrears period.

Mr Cady’s contentions

1. Mr Cady asserted that he and Ms Cady had an informal agreement since separation that he would make payments in lieu of child support in relation to the following joint debts:

   ·mortgage repayments on the jointly owned home in which Ms Cady and the children were residing ([Property 1])

   ·mortgage repayment on the jointly owned investment property in which Mr Cady was residing ([Property 2])

   ·council rates on both [Property 1] and [Property 2]; and

   ·car loan repayments on the jointly owned car in Ms Cady’s possession.

2. Mr Cady provided bank statements detailing the amounts he had paid towards mortgages and council rates on both [Property 1] and [Property 2] and the car loan repayments to [a named] Credit Union. 

3. Mr Cady stated that in the arrears period of 27 August 2017 to 26 November 2017 he made:

   ·mortgage repayments on [Property 1] property of $4,734.21 of which 50% — $2,367.10 — was agreed to be in lieu of child support;

   ·mortgage repayments on [Property 2] of $3,351.25 of which 50% — $1,675.67 — was agreed to be in lieu of child support;

   ·council rates for both properties totalling $700 of which 50% — $350 — was agreed to be in lieu of child support;

   ·car loan repayments of $2,170 of which 50% — $1,085 — was agreed to be in lieu of child support.

4. In addition, Mr Cady contended that he had paid for private health insurance for the children in the arrears period.  He asserted that the additional cost (above insurance for a single person) of insuring the children was $36.70 per fortnight and that he had paid $252.25 in private health insurance during the arrears period.

5. At the hearing Mr Cady also contended that he paid an amount of $1,750 in repayment of a credit card debt, which he asserted was incurred during the marriage.  He argued that he should be credited with 50% of these payments – being $875 — against his child support liability during the arrears period.

Ms Cady’s contentions

1. Ms Cady contended that she and Mr Cady reached an agreement upon separation that, rather than direct payment of child support, Mr Cady would pay the mortgage payments totalling approximately $710 per week; the council rates totalling approximately $60 per week and the car loan of $155 per week.

2. She strongly denied that there had ever been an agreement that private health insurance payments would be in lieu of child support.  In any event, she contended that she had taken out her own private health insurance for the children.

3. Ms Cady also strongly denied that there had ever been an agreement that credit card repayments would be in lieu of child support.  She stated that Mr Cady’s reference in her lawyer’s recent letter to credit card repayments was part of the property settlement negotiations and was not related at all to the arrears period and Mr Cady’s child support liability.

4. In relation to Mr Cady’s claim that he had paid $4,734.21 in mortgage repayments on the [Property 1] property (of which $2,367.10 was intended to be in lieu of child support), Ms Cady agreed that Mr Cady had paid this amount but she asserted that as he had significantly reduced his total mortgage repayments on [Property 1] property he was not meeting the 50% share of Ms Cady’s expenses to which he committed. 

5. In relation to Mr Cady’s claim that he had paid $3,351.25 of which 50% — $1,675.67 — was intended to be in lieu of child support on the [Property 2], Ms Cady stated that this included the rent of $460 per fortnight which was being paid to them jointly by Mr Cady’s mother who had been renting the [Property 2] for many years. 

6. In relation to the council rates, Ms Cady contended that the rates paid by Mr Cady in the arrears period were arrears of council rates rather than council rates accrued in the relevant period and she contended that the payments made should not be counted as child support in the relevant period.

7. In summary, Ms Cady submitted that Mr Cady was not meeting the terms of their arrangement because he was either underpaying or not paying expenses leaving extra debts for her to meet.  She argued that while Mr Cady was contributing towards their joint expenses, he was only paying his share plus a small proportion of her share of the expenses leaving her with a portion, or a higher portion than expected, of their joint debts at property settlement.

Tribunal’s consideration

1. The Tribunal is satisfied that Ms Cady never agreed that private health insurance and repayments towards the credit card debt would ever be in lieu of child support.  The Tribunal is satisfied that both of these were items which Mr Cady raised recently and which were not agreed to be payments in lieu of child support.  Hence, the Tribunal finds that these payments are not amounts in complete or partial satisfaction of an amount payable under an enforceable maintenance liability.

Mortgage repayments — [Property 1]

1. In relation to the mortgage repayments on the [Property 1], the Tribunal finds (as evidenced by the bank statements) that Mr Cady made the following repayments during the arrears period:

Date	Amount	Date	Amount
29 Aug 2017	$70	17 Oct 2017	$600
5 Sep 2017	$600	24 Oct 2017	$70
12 Sep 2017	$70	26 Oct 2017	$600
19 Sep 2017	$600	31 Oct 2017	$600
26 Sep 2017	$70	7 Nov 2017	$92.11
3 Oct 2017	$600	14 Nov 2017	$600
10 Oct 2017	$70	21 Nov 2017	$92.11
TOTAL PAYMENTS = $4,734.22 50% counted as payment of Ms Cady’s share of the joint expenses and as payment in lieu of child support = $2,467.11

Mortgage repayments — [Property 2]

1. In relation to the mortgage repayments on the [Property 2], the Tribunal asked Mr Cady whether his mother continued to pay rent for the property during the arrears period.  Mr Cady initially advised that she did not continue to pay a fixed amount of rent after he and Ms Cady separated but that, after he moved into the property, his mother made a variable contribution to the shared household expenses.  However, Ms Cady provided a copy of a joint NAB bank account statement covering the arrears period which showed that [name] (who the Tribunal accepts is Mr Cady’s mother) continued to transfer a regular fortnightly amount of $460 into Ms Cady and Mr Cady’s joint bank account.  The Tribunal considered how these rental payments should be treated given that these payments were owed jointly to Ms Cady and Mr Cady.  On balance, the Tribunal has determined that half of these rental payments by [Mr Cady’s mother] should not be counted as mortgage payments paid by Mr Cady because if they were Mr Cady would be essentially retaining 100% of the rent moneys and then in effect, giving back to Ms Cady her own share of the rent as child support.  However, the Tribunal determines that Mr Cady was entitled to ‘claim’ half of the rent money as his own and to use his own funds (including his share of the rent money) to pay the mortgage payments on the [Property 2]. 

2. The Tribunal finds that Mr Cady made the following mortgage repayments during the arrears period (as evidenced by the bank statements):

Date

Amount

1 Sep 2017

$281.96

1 Sep 2017

$849.18

1 Oct 2017

$272.87

1 Oct 2017

$819.04

1 Nov 2017

$281.96

7 Nov 2017

$150.00

TOTAL PAYMENTS = $2,655.01

Less 13 weeks rent at $115 per week (Ms Cady’s 50% share of rent = ($1,495) = $1,160.01

50% counted as payment of Ms Cady’s share of the joint expenses and as payment in lieu of child support = $580

Council rates — [Property 1] and [Property 2]

1. In relation to the council rates, the Tribunal accepts that Mr Cady fell behind with the payment of the council rates.  However, during the arrears period, Mr Cady was paying $100 per fortnight (in total) towards the council rates for both properties as follows (as evidenced by the bank statements):

Date	Amount	Date	Amount
30 Aug 2017	$50	11 Oct 2017	$50
30 Aug 2017	$50	25 Oct 2017	$50
13 Sep 2017	$50	25 Oct 2017	$50
13 Sep 2017	$50	8 Nov 2017	$50
27 Sep 2017	$50	8 Nov 2017	$50
27 Sep 2017	$50	22 Nov 2017	$50
11 Oct 2017	$50	23 Nov 2017	$50
TOTAL PAYMENTS = $700 50% counted as payment of Ms Cady’s share of the joint expenses and as payment in lieu of child support = $350

Car loan repayments

1. In relation to the car loan repayments, the Tribunal finds that Mr Cady made the following payments during the arrears period (as evidenced by the Credit Union statement):

Date

Amount

31 Aug 2017

$310

14 Sep 2017

$310

28 Sep 2017

$310

12 Oct 2017

$310

26 Oct 2017

$310

9 Nov 2017

$310

23 Nov 2017

$310

TOTAL PAYMENTS = $2,170

50% counted as payment of Ms Cady’s share of the joint expenses and as payment in lieu of child support =$1,085

1. The Tribunal is satisfied that the total of expenses paid by Mr Cady, which were intended to be in lieu of child support, were the above amounts of:

   $2,467.11 + $580 + $350 + $1,085 = $4,482.11

2. The Tribunal acknowledges that the amounts paid by Mr Cady fell short of the amounts which Ms Cady was expecting to be paid by Mr Cady towards their joint expenses.  However, the Tribunal is satisfied that Ms Cady intended that Mr Cady would make mortgage repayments, pay the council rates and pay the car loan in lieu of child support.  The Tribunal acknowledges that Ms Cady had an expectation that Mr Cady would pay these expenses at the rate which they had been paid during the marriage.  With the exception of the car loan repayments this did not occur.  Nevertheless, the Tribunal is satisfied that Mr Cady made payments towards all of the agreed expenses throughout the arrears period of 27 August 2017 to 26 November 2017.  The Tribunal is also satisfied that 50% of the total amounts he paid (being Ms Cady’s share of the joint expenses) exceeded his child support liability for the arrears period.  His liability was $4,212.42 and the payments he made in lieu of child support (being 50% of the total payments made) were $4,482.11.

3. Hence, the Tribunal concludes that Mr Cady has no unpaid amounts of child support applicable to the arrears period of 27 August 2017 to 26 November 2017.

4. While the Tribunal’s calculations differ from those of the objections officer, the outcome is the same.  The Tribunal therefore affirms the decision.

DECISION

The decision under review is affirmed.