Carvey and Carvey (Child support)

[2021] AATA 5181

Carvey and Carvey (Child support) [2021] AATA 5181 (23 November 2021)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2021/MC022524

APPLICANT:  Mr Carvey

OTHER PARTIES:  Child Support Registrar

Ms Carvey

TRIBUNAL:Senior Member R Ellis

DECISION DATE:  23 November 2021

DECISION:

The decision under review is affirmed.

CATCHWORDS

CHILD SUPPORT – particulars of the administrative assessment – whether a fixed annual rate of child support should not apply – income exceeds the allowable limit – the application for fixed annual rate not to apply should be refused - 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 an application by Mr Carvey for the fixed annual rate of child support to not apply to the child support assessment.

2. Mr Carvey and Ms Carvey are the parents of [Child 1] (born May 2016) and [Child 2] (born August 2010).  There has been a child support assessment in place since 30 July 2018 and Mr Carvey is the liable parent under the assessment.

3. On 2 September 2021 Mr Carvey made an application to the Child Support Agency for the fixed annual rate of child support to no longer apply to the assessment for the period from 2 September 2021 to 31 October 2022.

4. On 9 September 2021 the Child Support Agency made the decision to refuse the application made by Mr Carvey for the fixed annual rate to no longer apply to the assessment.

5. On 24 September 2021 Mr Carvey objected to this decision and on 5 October 2021 the Child Support Agency disallowed the objection (the objection decision).

6. On 14 October 2021 Mr Carvey applied to the Administrative Appeals Tribunal (the Tribunal) for a review of the objection decision.

7. The Tribunal conducted a hearing into the application on 23 November 2021.  Mr Carvey and Ms Carvey gave evidence on affirmation by conference telephone.  The Child Support Agency provided the Tribunal and the parties with papers relevant to the matter (106 pages).

ISSUES

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

2. The issue which arises in this case is whether or not the fixed annual rate of child support should apply in respect of Mr Carvey’s child support liability.

CONSIDERATION

1. For low income parents not on income support a fixed annual rate of child support is payable (section 65A of the Act).

2. A parent who has been assessed at the fixed annual rate under section 65A of the Act may make an application to the Child Support Agency for it not to apply (section 65B).  The parent making the application must provide evidence to demonstrate their current income is less than the parenting payment (single) maximum basic amount and that it would be unjust and inequitable to expect them to pay the amount assessed under section 65A.

3. At the time relevant to this review the fixed annual rate was $1,477 per child. The Tribunal is satisfied the Child Support Agency made a determination under section 65A of the Act which required Mr Carvey to pay the fixed annual rate in respect of the children.  The Tribunal also finds that Mr Carvey made an application under section 65B on 2 September 2021.

4. Mr Carvey told the Tribunal that at the time he made his application for the fixed annual rate to no longer apply to the assessment he had not been working for around two years.  Mr Carvey said he had received an accident payout of approximately $98,000 on 14 May 2021 and at one point had also been receiving monthly income protection payments from his insurance company.  Mr Carvey said he was granted early access to his superannuation and paid approximately $222,000 on 2 September 2021.  Mr Carvey said he did not qualify for Centrelink benefits.

5. Mr Carvey explained that most of the funds he had received were now gone as a result of a gambling addiction.  Mr Carvey said he had been gambling online as well as at the casino.  Mr Carvey said as a result of his addiction he was living with his mother who was currently supporting him.

6. Mr Carvey told the Tribunal he had been trying to get his gambling under control because he knew he needed to support his children.  Mr Carvey said as a result of his addiction he was not well off financially and struggling to survive.

7. The Tribunal notes in evidence from the Child Support Agency bank statements provided by Mr Carvey for [a Bank 1] account in his name covering the period from 11 February 2021 to 6 September 2021.  The statements show an opening balance as at 11 February 2021 of $12,178.49 and a closing balance as at 6 September 2021 of $174,235,39.  There are several significant deposits including an amount of $98,369.29 on 14 May 2021, an amount of $12,227.35 from [an insurance company] on 3 June 2021 and an amount of $222,022.58 from [a superannuation fund] on 2 September 2021.  There is nothing in the bank statements indicating any income from employment.  The bank statements also show several large cash withdrawals, including at Crown Melbourne, as well as multiple payments to SAC Directors, SAC Laraca and SAC Cyprus.

8. Ms Carvey told the Tribunal that Mr Carvey had a long-term gambling addiction.  Ms Carvey said she agreed Mr Carvey was not working at the time he made his application for the fixed annual rate to no longer apply and that he was currently living with his mother.

9. The parenting payment (single) maximum basic amount at the time relevant to this review was $20,621 per annum.  For the purposes of determining a parent’s current income it is generally accepted this is the income for the 12 months from the date of application to not have the fixed annual rate apply.  Mr Carvey made his application on 2 September 2021.

10. In considering an application under section 65B of the Act for the fixed annual rate not to be used, the definition of income in subsection 66A(4) of the Act must be considered in order to determine if the parent’s income is no more than this amount.  In subsection 66A(4), “income” is not restricted to taxable income.  It is defined as:

    ·     any money earned, derived or received by the parent for his or her own use or benefit; or

    ·     a periodical payment by way of a gift or allowance.

11. The Tribunal is satisfied, based on the evidence provided, that Mr Carvey has a current income – being his income for the 12 months from the date of his application to not have the fixed annual rate apply – which is more than the threshold amount of $20,621 per annum.

12. In determining whether or not it would be unjust and inequitable for Mr Carvey to pay the fixed annual rate, the Tribunal considered the Child Support Guide at section 2.5.3:

    The fixed annual rate is a set rate of child support payable per child. It is payable by low income parents who did not receive an income support payment in the last relevant year of income (section 65A). It is intended to address the situation where parents minimise their taxable income in a way that does not fairly represent their true income, or real capacity to pay child support, and thereby reduces or avoids the contribution they should make towards meeting the costs of their children.

    If parents are genuinely on a low income they would usually access social security, or other income support payments. Some parents may genuinely be on a low income and either choose not to access income support payments, or are not eligible to receive such payments. These parents are not regarded as minimising their income to reduce or avoid their contribution towards the payment of child support.

    For these parents, it would be unfair to impose this fixed annual rate. Therefore, they may apply for the fixed annual rate not to be used.

13. Although not bound by policy as set out in the Child Support Guide, the Federal Court has held that a tribunal should take into account relevant government policy which is not inconsistent with the provisions or objects of the legislation.

14. Notwithstanding his gambling addiction Mr Carvey had access to a significant financial resource at the time he made his application for the fixed annual rate not to apply to the assessment.  The Tribunal does not consider it would be unjust and inequitable to expect Mr Carvey to pay the fixed annual rate of child support.

15. The Tribunal finds the application made by Mr Carvey on 2 September 2021 for the fixed annual rate of child support to not apply should not be accepted.

DECISION

The decision under review is affirmed.