Calvert and Calvert (Child support)

[2024] AATA 480

Calvert and Calvert (Child support) [2024] AATA 480 (31 January 2024)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2023/MC026724

APPLICANT:  Mr Calvert

OTHER PARTIES:  Child Support Registrar

Ms Calvert

TRIBUNAL:Senior Member K Dordevic

DECISION DATE:  31 January 2024

DECISION:

The Tribunal sets aside the decision under review and, in substitution, decides that Mr Calvert’s annual rate of child support is increased by $2,300 from 7 February 2023 to 6 February 2024.

CATCHWORDS

CHILD SUPPORT – departure determination – special needs of the child – child required dental surgery - ground for departure established – 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. The Child Support (Assessment) Act 1989 (the Act) provides for an administrative assessment of the child support payable. It uses a formula which contains variables such as the parents’ adjusted taxable incomes and their percentages of care of the children. The Act also provides for a departure from the administrative assessment in certain circumstances.

2. Ms Calvert (the mother) and Mr Calvert (the father) are the parents of three children, [Child 1] (born [Date]), [Child 2] (born [Date]) and [Child 3] (born [Date]). This case was first registered with Services Australia – Child Support (Child Support) on 27 January 2021 and has been collected by Child Support from 9 February 2021. For the purposes of the Child Support assessment the children are recorded as being in each parent’s 50% care.

3. The mother lodged a departure application on 7 February 2023. On 29 June 2023 a senior case officer determined that there was no ground established and so refused to amend the administrative assessment. The mother lodged a timely objection to that decision and the objection was allowed on 22 August 2023, whereby the father’s annual rate of child support was increased by $1,744 per annum for the period 7 February 2023 to 6 February 2024.

4. On 6 September 2023 the father sought further review of the objection decision with the Social Services and Child Support Division of the Administrative Appeals Tribunal (the Tribunal). Directions were issued on 24 November 2023 requiring compliance by 10 January 2024.

5. The Tribunal heard the matter on 31 January 2024. Both parents appeared by MS Teams audio. The Child Support Registrar was not represented at the hearing. The Tribunal also considered the documentation provided by Child Support (folios 1 to 276), the father (folios A1 to A11) and the mother (folios B1 to B22).

ISSUES

1. The statutory provisions relevant to this review are outlined in section 98C of the Act, which states that a decision to depart from the administrative assessment may be made if the following three requirements are met:

   (i)that one, or more than one, of the grounds for departure referred to in subsection 117(2) exists; and

   (ii)that it would be:

   (A)just and equitable as regards the child, the liable parent, and the carer entitled to child support; and

   (B)otherwise proper;

   to make a particular determination under this Part …

2. Therefore, the issues which arise in this case are:

   ·     Does a ground exist for departure from the administrative assessment of child support? And, if so

   ·     Would it be just and equitable and otherwise proper to make a particular determination?

CONSIDERATION

A ground for departure

1. Subparagraph 117(2)(b)(ia) of the Act provides a ground for departure if, in the special circumstances of the case, the cost of maintaining the child are significantly affected because of the child’s special needs. The term ‘special needs’ is not defined in the Act. In the matter of Lightfoot and Hampson (1996) 20 Fam LR 69, the Full Family Court stated that needs are special if they are necessary or desirable for that child’s welfare and outside the normal needs of a child that is catered for within the formula. In Gyselman and Gyselman (1992) FLC 92-279 the Full Family Court indicated that for there to be special circumstances, the facts of the case must establish something which is special or out of the ordinary.

2. The Tribunal makes the following findings, noting that they are not in dispute. In November 2022 the child [Child 2] (hereafter referred to as the child) attended a dentist and it was determined that it was necessary that she undergo teeth extractions to address her pain symptoms. On the first occasion the father attended with the child and a tooth was extracted at the dentist and the costs of the extraction were met under the Commonwealth Child Dental Benefits Scheme (the Dental Scheme). On 17 November 2022, whilst in the care of the mother, the child attended the dentist again. However, the planned extraction of two teeth did not occur.[1] The mother did not claim the $203.50 cost associated with the failed extraction under the Dental Scheme. Instead, she met the full cost. The child was then admitted as an in-patient at [Clinic] on 22 February 2023 where the teeth extractions occurred under general anaesthetic.

   [1] At folio 46

3. The father’s evidence can be summarised as follows. The child required significant dental work. He had received a quote for the total work of $1,010.05,[2] with which he was satisfied as the Dental Scheme would cover most, if not all, of the cost. His position is that the two extractions performed at [Clinic] could have been performed at the dentist. The cost of the procedure would have been met under the Dental Scheme; that is, at no cost to either parent. The child was also anxious when he took her for her first extraction, but he was able to manage her anxiety symptoms that to ensure that the procedure took place. In his view the mother contributed to the child’s anxiety on 17 November 2022. He is upset that the failure to have the extractions occur on 17 November 2022 meant that the child had to continue to suffer pain until February 2023, when the surgery was finally performed. Further, he does not understand why the mother did not have the surgery performed in a public hospital; the child still had to wait three months for a private hospital bed.

   [2] At folio 74

4. The father went on to state that the need for the dental work does not constitute a special need and he should not be required to make any contribution towards the failed extraction or the surgery. He did not consider taking the child to the dentist again when the child was in his care during the intervening months of December 2022 or January 2023 as the mother had “completely taken over” and he did not attempt to participate in any of the dental decisions post 17 November 2022 as it is “dangerous to undermine someone who is threatening you all the time”. He was simply too “frightened” to question any of the later dental decisions, even though he has shared parental responsibility and understands that this includes medical decisions. In the past the mother has “defrauded” him by asking him to contribute to expenses that did not exist; the departure application under review is another example of this.

5. The mother’s position is that it is not in dispute that the child required necessary dental work.  The child became too distressed on 17 November 2022 for the extractions to be performed without a general anaesthetic. It was the dentist that was not willing to continue with the extraction. There was no other option but for the surgery to be performed under anaesthetic. She relies on the dentist’s statement which confirms this. She did call a public dental hospital but was advised that the wait time for surgery would be at least six months. She was not willing to allow the child to be in pain for that long. She continued to email and SMS the father regarding the treatment, but simply never received a response. Therefore, she refutes the father’s claim that she simply took over. She is of the view that it is only “fair” that the father contributes at least half of the cost, especially given she only earns a third of his income.

6. The Tribunal put to the mother that the Dental Scheme balance[3] indicates that the 17 November 2022 and 27 January 2023 dental consultations were likely to be met under the Dental Scheme, which includes oral examinations, x-rays and extractions up to $1,095 per two calendar years.[4] Initially the mother stated that if there was a Medicare rebate available, she would have applied for it rather than use her own limited funds. Later in the hearing, the mother stated that she is simply too exhausted with the father’s refusal to contribute at all to the costs to test what rebate may be available for these two consultations.

   [3] At folio 92

   [4] >

   The Tribunal next considered the medical evidence before it. On 11 July 2023 [Dr A], dentist, provided a statement regarding the child’s dental history. Relevant to this application, it states:[5]

   Due to dental related anxiety, we have been using nitrous oxide for treatment. However, on 17/11/ 2023 an extraction was indicated due to an acute toothache preventing eating. I attempted the procedure with nitrous was distressing and [Child 2] was tearful. To maintain a positive experience at the dentist, [Child 2] was referred to a Paediatric Dentist Specialist to complete treatment under general anaesthetic - a service not readily provided by the public service.

   The Tribunal notes that [Dr A] refers to the attempted extraction taking place on 17 November 2023, whereas the parents’ consistent testimony and the invoice for the procedure[6] indicates that it in fact took place on 17 November 2022.

   [5] At folio 151

   [6] At folio 46

7. As outlined above, the case of Lightfoot established the principle that if costs are necessary or desirable for the child’s welfare, and they impact significantly on the cost of raising the child, a change to the child support assessment may be required.

8. In light of the statement provided by [Dr A] the Tribunal is satisfied that the referral for surgery to a paediatric dentist was necessary for the child’s health and welfare. The Tribunal calculates on the basis of the documents in evidence, that the mother’s out-of-pocket expenses in relation to the child’s necessary dental work from the 17 November 2022 consultation and 22 February 2023 surgery were:

Date	Provider	Cost
17 November 2022	[Dr A], Dentist[7]	$203.50
27 January 2023	[Dr B], Paediatric Dentist[8]	$265
29 January 2023	[Dr B], Paediatric Dentist[9]	$870
20 February 2023	[Dr C], Anaesthetist[10]	$618.20
22 February 2023	[Dr B], Paediatric Dentist[11]	$870
23 February 2023	[Private Hospital][12]	$670
TOTAL	$3,496.70

[7] At folio 46

[8] At folio 66

[9] At folio 47

[10] At folio 66, net of rebate provided of $176 as outlined at folio 104

[11] At folio 64

[12] At folio 65

1. The total costs of the child in this case from 1 December 2022 were assessed as $10,830.[13] The actual cost to the mother arising from the child’s special needs is more than 32% of the assessed costs of the child. The mother’s 2023 adjusted taxable income was $41,831, so the dental cost alone required her to apply over 8% of her total income that financial year to the child’s necessary dental work.

   [13] At folio 259

2. The Tribunal is satisfied that the child’s special needs reduced the capacity of the mother to provide financial support to the child and the other children of the case. Therefore, in the special circumstances of the case, the costs of maintaining the child are significantly affected because of her special needs. The Tribunal concludes that the ground provided for in subparagraph 117(2)(b)(ia) of the Act is established.

Just and equitable

1. The requirement to consider whether a departure would be just and equitable directs attention to what is fair to the parents and their children. Regard must be had to a variety of factors such as the parties’ respective earning capacities, the needs of the children, the parents’ commitments and any hardship that would be caused by departing or not departing from the formula assessment. The Tribunal has considered all the factors outlined in subsection 117(4) of the Act but will only refer to those considerations pertinent to the application.

2. The mother’s 2020 to 2023 adjusted taxable incomes are $16,011, $57,321, $41,831 and $38,777 respectively. The mother did not complete a Statement of Financial Circumstances form. The Tribunal accepts that the mother lives with her partner, [Mr D]. In her departure application she declared that she is in receipt of gross income of $11,242 “to date” as well as income support payments of $600 per fortnight.[14] She denies the father’s allegation that she is in receipt of undeclared cash income, stating that she works casually as [an Occupation] and her income is deposited directly into her bank account from her employer. In reference to the deposits into her account from [Mr D],[15] the Tribunal accepts her evidence that these payments represent her partner’s share of the household rent and other expenses.[16] She declared expenses of $570 per week in rent (both she and her partner are responsible for the rental payment),[17] $200 per week in food, $200 per week in personal costs and education expenses of $3,720 every six weeks in respect of her Master of [Subject], which she anticipates completing in about 14 months.[18] She reports savings of about $35,000. At hearing she stated that though her savings would indicate she has capacity to meet the child’s dental fees, she stressed that the father also has capacity to meet the dental cost from his savings. She also stressed that her savings are decreasing as she must meet her necessary expenses from these costs. The mother declares that she is in good health.

   [14] At folio 36

   [15] As provided by the father at folio A10

   [16] Noting that Mr Fothergill is named as a tenant on the lease agreement dated 17 March 2022 at folio B20

   [17] At folio B20

   [18] At folio 37

3. The father alleges that the mother has an unused earning capacity. At hearing the father testified that prior to separation the mother worked 40 hours per fortnight in [Work sector]. The father stated that upon separation the mother quit her employment and never worked 40 hours per fortnight again. Further, he believes that the mother could not meet the expenses as outlined in her bank statement he provided[19] on the basis of her adjusted taxable income alone and that, given the mother has a bachelor and honours degree, she could be earning a greater income than she is currently. He also alleges that the mother is committing income support fraud but did not provide any further evidence to support the allegation.  

   [19] At folio A10

4. The mother’s evidence in relation to her earning capacity is that in 2019 she was working five days per fortnight on a permanent part-time basis, made possible as the father was available to care for the children when she was at work. The parents separated on 6 January 2020. Following the separation, she moved home and changed employer to make commuting easier. The employment she secured was in [Work sector] care, but on a casual basis, which was all that she could secure at that time. She asserts that even though she does not have set days, her increased hourly rate has meant that there has been no impact on the child support liability. She stressed that she has never stopped working or significantly reduced her availability to work since separation.  

5. The Tribunal considered the mother’s payslips in evidence for the period 16 to 30 October 2023 which indicate that she worked 34.5 to 37 hours in each fortnight, about 50% of a full-time load. This is not materially different to the father’s description of the mother’s work arrangements pre-separation.

6. The Tribunal finds that the mother’s adjusted taxable income in the financial year that the parents separated was $16,011. The father testified that the mother stopped working immediately after separation for a period of about six months. Even if this was the case, the Tribunal does not have jurisdiction to make a determination for a day that is more than 18 months earlier than the day on which the mother lodged her departure application, being August 2021.[20] As outlined above, upon registration of the child support case, the mother’s income initially increased to $57,321 in the 2021 financial year and then decreased to $41,831 and $38,777respectively in the 2022 and 2023 financial years. The Tribunal analysed the father’s child support liability in the same period. The annual rate of child support payable by the father reduced from $14,853 in August 2021 to $9,840 from 1 February 2022, increasing to $12,414 from 1 December 2022 to $14,158 from 7 February 2023, reduced again to $12,871 from 20 June 2023, with a moderate increase to $13,309 for 21 days and then reduced to $10,864 from 22 September 2023, with a further reduction to $9,120 from 7 February 2024. During this same period the father’s adjusted taxable income has also reduced from $140,400 in the 2020 financial year to $127,343 in the 2023 financial year. The current assessment is based in part on the father’s income estimate of $108,000 from 22 September 2023.

   [20] As outlined at paragraph 98S(3B)(a) of the Act.

7. After analysis of the variations to the child support liability, with particular reference to the mother’s adjusted taxable incomes, the Tribunal is not persuaded that the mother has an unused earning capacity. The Tribunal is satisfied that the mother has demonstrated that it was not a major purpose of her decision to work on a casual part-time basis to affect the administrative assessment of child support. Certainly, her decision not to work on a full-time basis is justified on the basis of the ages of the children and her caring responsibilities, notwithstanding the fact that there is a shared care arrangement in place.

8. There is no evidence that the children have income or financial resources that would render the administrative assessment unjust or unfair and the Tribunal finds accordingly. The Tribunal accepts that the children attend public schools and are in good health generally, apart from the child’s dental needs. The mother submits that she is not seeking a contribution from the father in respect of the youngest child’s 2023 child care costs. Without evidence associated with these costs, the Tribunal is unable to make any findings about whether these costs significantly impact on either parent’s capacity to provide for the children.

9. The father’s 2021 to 2023 adjusted taxable incomes were $133,642, $127,232 and $127,343 respectively. As outlined above, on 22 September 2023 he lodged an income estimate of $108,000.[21] At hearing the father stated that he was reluctant to disclose the reasons for the reduction in his income, with the exception of stating that he became unwell on 31 May 2023 and required in-patient treatment for 26 days. He provided a Statement of Financial Circumstances form completed on 9 January 2024[22] where he declared gross weekly income of $2,032 from his full-time employment. He lives with his partner and her children (who are only in his partner’s 50% care). He declares that his partner earns $200 per week. He owns a share in two vacant blocks of land; his first share is valued at about $50,000 and the second at about $35,000. He declares savings of about $20,000, household contents valued at $10,000, shares valued at $10,000, superannuation of $150,000 and a motor vehicle valued at $25,000. His weekly personal expenditure includes a Visa card of $150 and private health insurance (for himself only and not the children of the assessment) of $22.40 per week. He declares household expenditure of $1,831 per week, including $600 in food, $150 for children’s activities, $60 in entertainment and $100 in holidays. The Tribunal is of the view that the father may have overstated his expenses, given that it exceed his declared net household income. The father provided a heavily redacted payslip for the period 5 to 18 November 2023[23] which indicates that his net fortnightly income was $3,840.77 and his year-to-date income $35,815.05, which corroborates his evidence that he had exhausted his sick leave and other leave entitlements and was not in receipt of income for a period during his hospital admission.

   [21] At folios 239 to 249

   [22] At folios A1 to A8

   [23] At folio A9

1. Section 3 of the Act stipulates that a parent’s duty to maintain their children has priority over all other commitments, other than their necessary commitments to support themselves. The Tribunal is satisfied that it would be both just and equitable that the father contribute to the costs associated with the child’s dental surgery. As outlined above, the Dental Scheme balance[24] indicates that the 17 November 2022 and 27 January 2023 dental consultations could be met by the scheme. In the Tribunal’s view it is appropriate that the mother seek reimbursement under the Dental Scheme rather than the father contribute to these costs. It is for this reason that the Tribunal will exclude from its calculation of the mother’s costs the 17 November 2022 and 27 January 2023 consultations, totalling $468.50.  

   [24] At folio 92

2. The child’s surgical procedure took place in the 2023 financial year. The parents’ relative 2023 adjusted taxable incomes indicate that the father earned 76% of the parents’ combined adjusted taxable incomes. In the Tribunal’s view it is just and equitable that the father contribute to 76% of the out-of-pocket costs associated with the child’s surgery being $2,300[25] (rounded). The Tribunal is satisfied that his annual rate should be increased by this amount from the date the mother lodged her departure application, being 7 February 2023.

   [25] $3,027.70 x 76%

3. The Tribunal has reached the requisite level of satisfaction that the father has capacity to meet his ongoing necessary expenses and child support liability in addition to the arrears created by this decision, being $2,300. The Tribunal concludes that the father will not suffer undue hardship in meeting these arrears. Certain hardship would be caused to the mother and the child were the father not to contribute to the child’s special needs to the extent that his income and financial resources allowed.

4. The Tribunal is satisfied that the administrative assessment is unfair given the child’s special needs. This results in an unjust and inequitable level of child support given the circumstances of each parent. For all these reasons, it is just and equitable to depart from the administrative assessment.

Otherwise proper

1. The requirement to consider whether a departure would be otherwise proper directs attention to what is fair to the community. It is necessary to consider the effect of any departure from the administrative assessment on entitlements to income-tested pensions, allowances and benefits. Parents, rather than the community, have the primary duty to maintain a child. The mother is in receipt of income-tested benefits.

2. Changing the child support payable by the father may not affect the mother’s rate of family tax benefit, depending on how Centrelink treats the increase in the administratively assessed rate of child support. As there has been an increase to the annual rate on the basis of the child’s special needs, Centrelink may determine that this increase in the child support payable should be excluded from the maintenance income amount. It is open to the mother to provide a copy of this decision to Centrelink so it may determine if the increase in the rate of child support payable should be excluded from the maintenance income amount used to calculate her entitlement to family tax benefit.

3. The determination is otherwise proper.

DECISION

The Tribunal sets aside the decision under review and, in substitution, decides that Mr Calvert’s annual rate of child support is increased by $2,300 from 7 February 2023 to 6 February 2024.