Casey and Derrick (Child support)

Casey and Derrick (Child support) [2023] AATA 3399 (30 August 2023)

DIVISION:Social Services & Child Support Division
REVIEW NUMBER:  2023/MC025645
APPLICANT:  Mr Casey
OTHER PARTIES:  Child Support Registrar
Ms Derrick

TRIBUNAL:Senior Member S De Bono
DECISION DATE: 30 August 2023
DECISION:

The decision of the objections officer is varied so that Mr Casey’s adjusted taxable income is set at $80,000 for the period 1 July 2022 to 30 November 2023.

(This means Mr Casey’s application for review is partly successful.)

CATCHWORDS

CHILD SUPPORT – departure determination – income, property and financial resources of the liable parent – a ground for departure established – decision to depart - decision under review varied

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

The issue to be considered in this application is whether there is a reason to change the administrative assessment of child support and, if so, whether it is just and equitable and otherwise proper to do so.
Ms Derrick and Mr Casey are the parents of [Child 1]. There has been a child support assessment in place since 14 February 2021 and Services Australia (Child Support) has collected child support since the start of the assessment. [Child 1] is recorded as being in Ms Derrick’s 86% care and Mr Casey’s 14% care. Mr Casey is the parent liable to pay child support.
Prior to the departure application, the administrative assessment of child support was as follows:
·      For the period 1 July 2022 to 31 October 2022, Mr Casey was assessed to pay an annual rate of child support of $0. This assessment was based on Mr Casey’s estimated income of $15,017, and the 2020/2021 adjusted taxable income (ATI) of $48,479 for Ms Derrick.
·      For the period 1 November 2022 to 30 June 2023, Mr Casey is assessed to pay an annual rate of child support of $1,521, being the fixed annual rate (FAR). This assessment is based on the income of $15,017 for Mr Casey, and Ms Derrick’s ATI of $44,281 for 2021/2022.
·      On 16 May 2022 Mr Casey’s estimated income was updated following a reconciliation with his 2020/2021 financial year ATI of $171,459 and was applied to the administrative assessment for the period 17 February 2021 to 30 June 2021.
On 4 August 2022 Mr Casey lodged a departure application on the basis that, in the special circumstances of the case, the transfer of property or payments to Ms Derrick are for the benefit of [Child 1] and have resulted in an unjust and inequitable determination of the level of financial support to be provided by Mr Casey to [Child 1] (Reason 5). Mr Casey also applied on the basis that, in the special circumstances of the case, Mr Casey’s ability to provide financial support to [Child 1] is reduced because of his necessary commitments of self support (Reason 7). Child Support established Reason 8A on the basis that, the special circumstances of Mr Casey’s income, property and financial resources resulted in an unjust and inequitable determination of the level of financial support to be paid by Mr Casey for [Child 1]. The following departure determination was made:
· For the period 17 February 2021 to 30 June 2021, Mr Casey’s adjusted taxable income is set at $92,250.
· For the period 25 May 2022 to 31 May 2024, Mr Casey’s adjusted taxable income is set at $90,000.
On 14 November 2022 Mr Casey lodged an objection to this decision. On 10 February 2023 an objections officer partially allowed Mr Casey’s objection and made the following departure determination:
·      For the period 14 February 2021 until 30 June 2021, Mr Casey’s ATI is set at $87,992;
·      For the period 1 July 2021 until 30 June 2022, Mr Casey’s ATI is set at $60,702;
·      For the period 1 July 2022 until 31 December 2025, Mr Casey’s ATI is set at $80,000 per annum.
On 10 February 2023 Mr Casey sought further review with the Social Services and Child Support Division of the Administrative Appeals Tribunal (the Tribunal). Directions were issued to both parties on 26 June 2023. On 17 August 2023 a telephone hearing was held in which Ms Derrick and Mr Casey gave evidence under affirmation. The Tribunal considered the documents and information provided to the parties prior to the hearing, as well as the oral evidence of Ms Derrick and Mr Casey.[1] The Tribunal deferred its decision and requested further documents from Mr Casey which he had inadvertently overlooked to provide to the Tribunal.[2] The Tribunal reconvened on 31 August 2023 to make its decision. Relevant aspects of the material and evidence will be referred to in the Tribunal’s Reasons for Decision.

CONSIDERATION

[1] Subsection 37(1) Statement and Documents provided by Child Support under the Administrative Appeals Tribunal Act 1975 (pages 1–516), which the Tribunal refers to as the hearing papers; Mr Casey’s documents (A1–A85); and Ms Derrick’s documents (B1–B19).

[2] Additional documents provided by Mr Casey at the Tribunal’s request, A86–A113. This information was provided to both parties after the hearing for information purposes only.

The rate of child support payable by a liable parent is usually based on an administrative assessment under Part 5 of the Child Support (Assessment) Act 1989 (the Assessment Act). The liable parent or a carer may apply for a determination departing from the administrative assessment under Part 6A of the Assessment Act.
Section 98C of the Assessment Act establishes a three-step process to be satisfied, that there is a ground for departure; that it is just and equitable to depart; and that it is otherwise proper to make a departure determination. Once satisfied, the Tribunal may make one of the determinations prescribed in section 98S of the Assessment Act.

Reason 5 – Money, goods or property received by [Child 1], Ms Derrick or a third person

The grounds for departure from an administrative assessment of child support are those set out in subsection 117(2) of the Assessment Act. Subparagraph 117(2)(c)(ii) of the Assessment Act provides that a ground for departure from an administrative assessment arises as follows:
(c)that, in the special circumstances of the case, application in relation to the child of the provisions of this Act relating to administrative assessment of child support would result in an unjust and inequitable determination of the level of financial support to be provided by the liable parent for the child:
….
(ii)because of any payments, and any transfer or settlement of property, made or to be made (whether under this Act, the Family Law Act 1975 or otherwise) by the liable parent to the child, to the carer entitled to child support or to any other person for the benefit of the child.
The term “special circumstances” is not defined in the Assessment Act. In Gyselman and Gyselman [1991] FamCA 93, 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.
Mr Casey understood that setting his income from the start of the administrative assessment of child support on 17 February 2021 to 30 June 2021 which was based on his 2020/2021 ATI income of $87,992 removed the capital gains from being included in the administrative assessment of child support for that period. Mr Casey primarily disagreed with the administrative assessment determined by the objections officer for the period 1 July 2022 to 31 December 2025. Mr Casey submitted that his income should be set for those periods at around $15,000 increasing to $20,000 and then $25,000.
In relation to the Tribunal’s consideration of a departure on the basis of Reason 5, the Tribunal had regard to the information contained in the property settlement between Ms Derrick and Mr Casey based on the interim orders and final orders of the Federal Circuit Court.
Relevantly, in relation to Mr Casey’s departure application, the terms of the interim court orders on 26 May 2021 (amended on 28 May 2021) provided that joint valuations of the properties at [Address 1]; [Address 2] and [Address 3] (the property held in the company, [Company 1] ([Company 1]/the company)) were to be valued. The property at [Address 4] was to be sold, with the proceeds of sale applied to the costs of the sale, to discharge the mortgage on the property, to reimburse Mr Casey the cost of the family report and any remaining proceeds to be held on trust by the solicitors acting for Ms Derrick pending final court orders.[3]
[3] Pages 196–197 of the hearing papers.
The terms of the final property settlement between Ms Derrick and Mr Casey on 31 January 2022 provided for [Address 1] to be sold and the proceeds to pay the costs of the sale, to discharge the mortgage on the property and for any balance to repay the outstanding mortgage on another property.[4] Mr Casey was to retain the properties at [Address 2] and [Address 3] and transfer these properties into his name and refinance any home loans for these properties solely in his name.[5] Ms Derrick was ordered to resign from the company and the Family Trust. Ms Derrick also retained [a vehicle] as part of the settlement.[6] Mr Casey was ordered to pay Ms Derrick $410,000.[7]
[4] Page 202 of the hearing papers.
[5] Page 211 of the hearing papers.
[6] Pages 213–214 of the hearing papers.
[7] Page 211 of the hearing papers.
Mr Casey said the sum of $410,000 was paid to Ms Derrick from the proceeds of the sale of [Address 4] as well as the money in the two joint bank accounts which amounted to $190,000.[8] The final settlement orders determined “all financial relations between the parties”.[9]
[8] Page 213 of the hearing papers.
[9] Page 215 of the hearing papers.
The orders in relation to the property settlement between Ms Derrick and Mr Casey was not a settlement in relation to child support, it was a division of the marital property. As such the Tribunal considered that the transfer of payments to Ms Derrick does not make the amount payable by Mr Casey under the administrative assessment unjust or inequitable. Accordingly, a ground for departure in accordance with Reason 5 is not established.

Reason 8A – The income, property and financial resources of Mr Casey

The grounds for departure from an administrative assessment of child support are those set out in subsection 117(2) of the Assessment Act. Subparagraph 117(2)(c)(ia) of the Assessment Act provides that a ground for departure from an administrative assessment arises as follows:
(c)that, in the special circumstances of the case, application in relation to the child of the provisions of this Act relating to administrative assessment of child support would result in an unjust and inequitable determination of the level of financial support to be provided by the liable parent for the child:
….
(ia) because of the income, property and financial resources of either parent;
Mr Casey originally lodged his departure application on the basis that the administrative assessment included the capital gains from the sale of the properties which formed part of the property settlement between himself and Ms Derrick. From 16 May 2021, for the period 17 February 2021 to 30 June 2021 the administrative assessment of child support was based on Mr Casey’s ATI of $171,459. Mr Casey wanted his ATI for the 2020/2021 financial year reduced by the capital gains component for that year.
In the 2020/2021 financial year Mr Casey was employed by [Company 2] Pty Ltd ([Company 2]) and [Company 3] ([Company 3]). Mr Casey’s 2020/2021 tax return shows gross income from [Company 2] of $62,979 and gross income from [Company 3] of $28,859. His gross income from employment was $91,838.[10] Mr Casey received supplemental income of $79,209.[11] Mr Casey confirmed this was the capital gains from the sale of either [Address 4] or [Address 1], he was not sure, he said one of these properties sold at a loss.
[10] Page 308 of the hearing papers.
[11] Page 309 of the hearing papers.
Mr Casey said he has just applied for and is waiting for a low income concession card through Centrelink.
The Tribunal is satisfied the capital gains event for the 2020/2021 financial year formed part of the property settlement, accordingly, the amount of $79,209 should be subtracted from Mr Casey’s adjusted taxable income for that period. As the assessment for the period 17 February 2021 to 30 June 2021 was based on Mr Casey’s ATI of $171,459 the Tribunal is satisfied that special circumstances exist which are out of the ordinary and uncommon which make the administrative assessment in place at that time unjust and inequitable. Accordingly, a ground for departure in accordance with Reason 8A is established.

Would departure from the administrative assessment be just and equitable?

Having found that special circumstances exist such that the administrative assessment resulted in an unjust and inequitable result, a ground for departure is established in relation to subparagraph 117(2)(c)(ia) (Reason 8A) of the Assessment Act, the next step for the Tribunal is to consider whether it is just and equitable to depart from the administrative assessment.
In deciding whether it is just and equitable, the Tribunal had regard to the matters set out in subsection 117(4) of the Assessment Act. Section 3 of the Assessment Act makes it clear that the parents of a child have the primary duty to maintain the child over all commitments, other than commitments necessary for self-support or the support of another person to which they have a duty to support.

The needs of [Child 1]

In determining the proper needs of a child, it is necessary to have regard to the manner in which the child is being, and in which the parents expected the child to be, cared for, educated or trained, and any special needs of the child (subsection 117(6) of the Assessment Act). The Tribunal has considered the evidence of the parties relating to the needs of [Child 1].
[Child 1] is currently [age] years old, Ms Derrick told the Tribunal that the psychologist who completed the report for the court recommended play therapy for [Child 1] to assist with the change in the family’s circumstances resulting from their separation. Ms Derrick said the sessions are $107 and [Child 1] has been attending fortnightly sessions. Ms Derrick said this will be ongoing, but Ms Derrick was not sure how long the sessions will continue. She estimates 26 sessions a year will be about $2,800 annually.
[Child 1] has just commenced primary school and is in prep at [a school], the fees are $2,300 a year and the concession rate is $800 annually. [Child 1] also has swimming lessons and ballet. Both parents confirmed that [Child 1] has no income or assets of her own.

Mr Casey’s income, property and financial resources

At the time of Mr Casey’s change of assessment application, the administrative assessment of child support was assessed in part on an estimate of income of $15,017 for the period 1 July 2022 to 31 October 2022 and, for the period 1 November 2022 to 30 June 2023 on the FAR of $1,521. The initial estimate resulted in Mr Casey paying no child support for the period 1 July 2022 to 31 October 2022 and $1,521 for 1 November 2022 to 30 June 2023. The objections officer’s decision increased Mr Casey’s child support by $5,833 annually for the period 1 July 2021 to 31 December 2025.[12]
[12] Page 4 of the hearing papers.
Mr Casey is the director of [Company 1], which is the trustee of the [Company 1] Property Investment Trust (the Trust). Following the financial settlement between Ms Derrick and Mr Casey, Mr Casey was the sole director of the company and sole trustee of the Trust. For the financial year ending 30 June 2021 the company was not required to lodge a tax return.[13] The company owns the property at [Address 3] which Mr Casey said was sold in around June 2023. Prior to the sale of the property Mr Casey said this property was rented. The tax return for the Trust and the company has not yet been completed for the financial year ending 2023.
[13] Page 294 of the hearing papers.
The Trust tax return for [Company 1] for the financial year ending 2022 shows rental income of $7,850 and interest of $12,264, with a total net loss of $15,544.[14] A letter from Mr Casey’s accountant said following the settlement of liabilities for the Trust the company will be deregistered and the Trust divested. The Tribunal is satisfied that no income was generated from the company and no disbursements were made from the Trust, the rental property operated at a loss for the 2021/2022 financial year. Mr Casey said he lost money on the sale of the property following deductions for the associated sale costs and repayment of the home loan, he did not receive any money from the sale of the property. As the property formed part of the settlement between Ms Derrick and Mr Casey any capital gains would have been excluded from the administrative assessment in any event.
[14] A62 of Mr Casey’s submissions.
Mr Casey said he ceased working for [Company 2] towards the end of the 2021 financial year because he suffered a [medical condition] necessitating surgery, there were complications with the surgery and he required [a medical device] to manage the [condition], it was a long surgery and he said he has a scar from “one side of him to the other”. He said he was unable to work for about a year. He said he returned to work on light duties with reduced hours, he was paid by WorkCover during this period. He resigned from [Company 2] as the work became too difficult and he was unable to increase his hours to full-time work due to the risk of damaging the [medical device] or the risk of injuring himself further. Mr Casey said he has worked for [Company 3] on a casual basis for about 12 years. He said this is his main income source at present and he is currently trying to increase his hours of work with [Company 3].
Mr Casey’s personal tax return from the financial year ending 30 June 2022 shows a gross income from [Company 2] of $64,308 and [Company 3] of $1,893,[15] with a taxable income of $60,702.[16]
[15] A91 of Mr Casey’s submissions.
[16] A95 of Mr Casey’s submissions.
Mr Casey is also the director of [Company 4] Pty Ltd (the business). Mr Casey said he set up the business to e[Bank 1]le him to have flexibility in his working arrangements in order to care for [Child 1] but also to work for himself, he was hopeful he could make something of the business. Mr Casey said the business commenced trading in around May 2022. Mr Casey said he set up the business to do [work], but found he was unable to do this due to the physical toll it was taking on him and the risk of further injury. He found he could not do the physical labour and had to hire others from labour hire companies to undertake the work he was unable to do.
Mr Casey said he has not paid himself a wage since the commencement of the business and he has not paid any superannuation, he said the company has not earned any profits and has operated at a loss. He has not completed a tax return for either the business or a personal tax return for the financial year ending 30 June 2023. Mr Casey said he has put a lot of his own money into the business, which includes some proceeds of the property settlement between himself and Ms Derrick which he said were transfers from funds held in the account associated with [Company 1].
A letter from Mr Casey’s accountant states that the business ceased trading from November 2022.[17] Mr Casey said he was advised by his accountant to cease trading because the business was operating at a loss. The tax return for the business for the financial year ending 2022 shows gross income of $11,064, this would be for about two months of trading from when the business commenced trading around May 2022 to 30 June 2022. Following the deductions of business costs, the tax return shows the business operated at a loss of $10,442 for that period.[18] Payslips before the Tribunal show Mr Casey’s year-to-date income from [Company 3] at 25 June 2023 is $7,761.30 gross.[19]
[17] A13 of Mr Casey’s submissions.
[18] A75 of Mr Casey’s submissions.
[19] A15 of Mr Casey’s submissions.

Mr Casey said the tax return for the business for the financial year ending 2023 has not yet been completed. The Tribunal directed Mr Casey to provide bank accounts for the business for the period 1 July 2022 to 30 June 2023 as well as his personal accounts. The following accounts were provided by Mr Casey:
·[BANK 1] account ending in account number 3192;
·[BANK 1] account ending in account number 6481;
·[BANK 1] account ending in account number 6810; and
·[BANK 1] account ending in account number 9826.
The [BANK 1] account ending in account number 3192 is linked to 6481. Both these accounts are for the business. The [BANK 1] accounts ending in account numbers 6810 and 9826 are Mr Casey’s personal accounts.
The [BANK 1] account ending in account number 3192 shows deposits of $201,276.97 and withdrawals of $201,426.74 for the period 1 July 2022 to 30 June 2023. Transfers were made from this account to the linked business account ending in account number 6481. For the period 1 July 2022 to 30 June 2023 deposits of $49,994.69 and debits of $57,494.69 were made into this account from the account ending in 3192. Mr Casey said the transfers were to pay his upcoming tax liability in relation to the business. Given the balance of this account on 30 June 2023 was 80 cents the Tribunal did not accept this submission.[20]
[20] A52 of Mr Casey’s submissions.
The Tribunal notes various debits from the account ending in 3192 which would indicate expenses of a personal nature (see Appendix 1). The Tribunal did not ask Mr Casey about all of these expenses but selected a few and asked Mr Casey to respond to questions about these transactions. Mr Casey said that the deposits were from the sale of a car to his parents, and he sold another car privately (see Appendix 2). The Tribunal did not include costs relating to petrol but did include costs related to mobile phone charges as personal expenses. In doing this the Tribunal thought the cost of petrol for some personal use would balance out the cost of the mobile phone for business use, it is for this reason the Tribunal excluded all costs relating to the purchase of petrol. The Tribunal noted payment for food, utilities, water, counselling fees, legal costs, accountancy costs and rates were all deducted from the business account. The Tribunal has determined that personal expenditure deducted from the business account by Mr Casey totalled $23,376.27 for the period 1 June 2022 to 30 June 2023. Deducting the costs of accounting fees paid by Mr Casey to [accounting] means Mr Casey’s personal expenditure deducted from his business account was $19,406.72.[21]
[21] $23,376.72– $3,970 for [accounting fees = $19,406.72.
There were also transfers between the two [BANK 1] business accounts ending in account numbers 3192 and 6481.
Mr Casey said he also transferred his own money into the business account, he identified two deposits made on 8 August 2022 of $29,000 and $16,000 as money from the settlement that he put in to “prop up the business”. The Tribunal notes Mr Casey also withdrew $45,000 on 8 August 2022 which he said was money owed to him from the business that he had transferred from [Company 1].[22] The Tribunal accepted this submission.
[22] A33 of Mr Casey’s submissions.
Mr Casey said he sold a car, the deposits for the sale was made to the [BANK 1] business account ending in account number 3192 on 3 February 2023 and 6 February 2023 totalling $32,000 (see Appendix 2).[23] This money was transferred to the linked transaction account on 6 February 2023 in two instalments.[24] The Tribunal’s perusal of the other three accounts could not find a corresponding transaction for these amounts. As the car was not part of the property settlement the Tribunal is satisfied that the proceeds of the sale of the car are a financial resource available to Mr Casey.
[23] A42 of Mr Casey’s submissions.
[24] A42 of Mr Casey’s submissions.
The Tribunal did not have the bank accounts for [Company 1] but notes the following debits from the second business account ending in account number 6481 which were made to a linked account which as stated was not before the Tribunal. The remaining withdrawals were for repayment of personal loans:[25]
·7/11/2022: $10,000: Linked account[26]
·7/12/2022: $5,000: Personal loan repayment[27]
·16/12/2022: $5,000: Personal loan repayment[28]
·3/1/2023: $5,000: Withdrawal[29]
·11/1/2023: $5,000: Transfer to account 3192, then withdrawn on 11/1/2023 as a personal loan repayment.[30]
[25] A47 of Mr Casey’s submissions.
[26] A47 of Mr Casey’s submissions.
[27] A47 of Mr Casey’s submissions.
[28] A48 of Mr Casey’s submissions.
[29] A48 of Mr Casey’s submissions.
[30] A48 and A42.
Mr Casey said he transferred money from [Company 1] to supplement the business. As stated, the Tribunal accepted that $45,000 was repayment of money transferred from [Company 1] to the business (see paragraph 37 of these Reasons). In the absence of further information the Tribunal also accepted that payments totalling $16,000 were repayments to [Company 1] while the remaining withdrawals totalling $20,000 were used to repay personal loans by Mr Casey and as such are a financial resource available to Mr Casey.
The [BANK 1] accounts ending in account numbers 6810 and 9826 are Mr Casey’s personal accounts. The account ending in 6810 shows deposits from Mr Casey’s casual employment at [Company 3].[31] Payslips provided by Mr Casey to the tribunal show that Mr Casey’s year-to-date gross income from [Company 3] is about $7,761.20, this was for the period ending 25 June 2023.[32] No funds from the business accounts were transferred into Mr Casey’s personal accounts.
[31] A49 of Mr Casey’s submissions.
[32] A15 of Mr Casey’s submissions.
Mr Casey is currently living in the former marital home at [Address 2]. Mr Casey only partially completed his Statement of Financial Circumstances (SOFC), he said he was unable to complete this due to the complexities of his current financial situation. Mr Casey is currently paying a home loan on [Address 2] of $500 monthly.[33] The Tribunal is unclear about the amount currently outstanding on the home loan.
[33] A27 of Mr Casey’s submissions.
Mr Casey confirmed he has no other person he has a legal duty to support.

Ms Derrick’s income, property and financial resources

Ms Derrick works part time in administration for a [company]. Her standard hours are 40 hours fortnightly. Ms Derrick said she has worked for her current company for about seven years. Ms Derrick said she worked full time until the birth of [Child 1] when she reduced her hours to part time. She also worked casually at [Company 3] for 15 years but said she resigned last year. Ms Derrick’s annual gross income is $45,614. In the year ending 2022, Ms Derrick’s tax return shows income from what is likely to be [Company 3] of $1,389 and income from the freight forwarding company of $45,614.[34]
[34] B13 of Ms Derrick’s submissions.
Ms Derrick said following the financial settlement she purchased a home to live in. The SOFC confirms she has a home loan of $159,677 and she borrowed $146,000 from her parents. She values her home at $535,000.[35] Ms Derrick indicates an average weekly income of $1,056 (which includes family tax benefit and single parent payment), this is an annual amount of $54,912 gross.[36] Ms Derrick said she has not made contributions in excess of her employer contributions to her superannuation, the current balance is $20,650.17.[37]
[35] B4 of Ms Derricks submissions.
[36] B3 of Ms Derrick’s submissions.
[37] B5 of Ms Derrick’s submissions.
Ms Derrick indicates weekly expenses of $1,075.[38] This amount is more than her weekly gross income. Ms Derrick said the cost of $107 for play therapy for [Child 1] was a fortnightly cost and not a weekly cost. Ms Derrick’s weekly expenses will be reduced accordingly. Ms Derrick indicates $195 in home loan repayments weekly, there were no other costs that the Tribunal found were out of the ordinary for Ms Derrick.[39] Ms Derrick has limited savings which indicates she is living week to week on the money she receives from employment and Services Australia payments.[40] Ms Derrick said she is repaying her parents when she can but her parents understand when she cannot make repayments and she is not making payments currently. Ms Derrick said her SOFC was an accurate reflection of her assets, liabilities and expenses.
[38] B8 of Ms Derrick ’s submissions.
[39] B8 of Ms Derrick ’s submissions.
[40] B4 of Ms Derrick ’s submissions.
Ms Derrick said she does not have a legal duty to support anyone else.

Conclusion

In relation to both parents’ income, property and financial resources the Tribunal concludes that Mr Casey has access to the following financial resources for the financial year ending 30 June 2023:
·$19,406: personal expenditure debited from the business account;
·$32,000: from the sale of the car;
·$20,000: for repayment of personal loans;
·$7,761: gross income from [Company 3] to 25 June 2023.
$79,167: Total
The Tribunal concludes that the objections officer was correct to reduce Mr Casey’s income from the start of the administrative assessment for the period 14 February 2021 until 30 June 2021 from $87,992 and $60,702 for the period 1 July 2021 to 30 June 2022.
In relation to the period from 1 July 2022 the Tribunal concludes that Mr Casey’s income and financial resources are not reflected in the administrative assessment of child support and finds it is just and equitable to depart from the administrative assessment in place from that period.
Accordingly, the Tribunal makes the following departure determination as follows:
·      For the period 14 February 2021 until 30 June 2021 Mr Casey’s ATI is set at $87,992 (this is the same as the objections officer’s decision);
·      For the period 1 July 2021 to 30 June 2022 Mr Casey’s ATI is set at $60,702 (this is also the same as the objections officer’s decision);
·      For the period 1 July 2022 to 30 November 2023 Mr Casey’s ATI is set at $80,000. (this varies the objections officer’s decision by reducing the departure period).

Would there be resulting hardship from a departure from the administrative assessment?

Subsection 117(4) of the Assessment Act requires the Tribunal to take into account whether any departure determination or failure to make a departure will cause any hardship to the child, the carer, the liable parent or any other person the parents have a duty to support.
The Tribunal finds that, based on the evidence and information provided to Child Support and to the Tribunal, it is unlikely that either parent will experience hardship from this departure determination. Once Mr Casey completes his business tax return for the 2022/2023 financial year it is highly likely the business will show an operating loss.
However, the Tribunal has determined that Mr Casey has had access to funds from his business account for personal expenses during this period and he has used funds generated from the business to repay personal loans. He also has had access to funds from the sale of his car, which is a financial resource available to him. As Mr Casey’s ATI determined by the Tribunal is similar to the objections officer’s decision the Tribunal will not vary the ATI used in the administrative assessment determined by the objections officer.
Mr Casey’s accountant provided a letter which states that the business ceased trading in November 2022,[41] but the Tribunal notes that further deposits were made into the business account ending in account number 3961 to 20 January 2023 which appear to be payments for work undertaken by the business.[42]
[41] A3 of Mr Casey ’s submissions.
[42] A42 of Mr Casey ’s submissions.
The Tribunal will shorten the departure period set by the objections officer on the basis of the notification from Mr Casey’s accountant that the business will be wound up. This also allows Mr Casey time to complete tax returns for the financial year ending 30 June 2023 and also creates some certainty for Ms Derrick for that period.

Is it otherwise proper to make a particular departure determination?

The third step is to consider whether it would be otherwise proper to make a particular departure determination in accordance with sub-subparagraph 98C(1)(b)(ii)(B) of the Assessment Act. Subsection 117(5) of the Assessment Act sets out the matters that must be considered when deciding whether it would be “otherwise proper” to make a departure determination. Subsection 117(5) focuses on the balance of support carried between the parents on the one hand and the taxpayer on the other. It is appropriate for the children to be primarily supported by their parents rather than by government assistance. Paragraph 117(5)(b) of the Assessment Act means that the Tribunal must consider whether the level of a benefit, in particular family tax benefit, received by the party caring for the children may be affected by the level of child support. The Tribunal has concluded that it is otherwise proper in the circumstances to depart from the administrative assessment.
The Tribunal notes that it is open to either party to lodge further change of assessment applications should future circumstances of either party change significantly from the circumstances upon which this decision is based.

DECISION

The decision of the objections officer is varied so that Mr Casey’s adjusted taxable income is set at $80,000 for the period 1 July 2022 to 30 November 2023.

(This means Mr Casey’s application for review is partly successful.)

Appendix 1:

Identified personal expenditure from [Company 4] [BANK 1] account ending in account number 3192:

Date	Item	Debits	Page
4/1/2022	7 Eleven	$75.02	A31
8/7/2022	Optus internet	$159.91
11/7/2022	7 Eleven	$90.62
11/7/2022	7 Eleven	$7.00
19/7/2022	[an energy company]	$211.32	A32
20/7/2022	7 Eleven	$87.01
25/7/2022	7 Eleven	$60.48
27/7/2022	Coles	$21.75	A33
4/8/2022	Optus	$194.18
4/8/2022	7 Eleven	$40.01
8/8/2022	ALDI	$49.98
8/8/2022	BigW	$69.00
9/8/2022	Cheap Auto	$50.99	A34
9/8/2022	Lifeworks	$100
15/8/2022	[an energy company]	$110.57
18/8/2022	7 Eleven	$73.24
29/8/2022	Coles Express	$129.07
2/9/2022	Optus Billing	$238.91	A35
12/9/2022	Kmart	$34.43
12/9/2022	[an energy company]	$292.45
12/9/2022	Water Rates	$482.00
19/9/2022	Super Cheap Auto	$9.99	A36
20/9/2022	7 Eleven	$74.02
26/9/2022	McDonalds	$5.95
27/9/2022	National Photos	$60.00
27/9/2022	School Photos	$28.00
27/9/2022	7 Eleven	$91.81
30/9/2022	Bras n things	$50.00
3/10/2022	Optus Billing	$238.91	A37
3/10/2022	Rapid Pay Legal	$3,144
6/10/2022	[Post]	$71.95
17/10/2022	Eternity D	$254.63
28/10/2022	[Accountant]	$500	A38
1/11/2022	7 Eleven	$95.23
7/11/2022	[an energy company]	$149.58
7/11/2022	Greater Western Water (GWW)	$242.18	A39
8/11/2022	Coles Express	$23.99
21/11/2022	WCC Rates	$484.00
24/11/2022	7 Eleven	$82.00
5/12/2023	Optus Billing	$238.91	A40
12/12/2022	[hotel][hotel]	$12.90
12/12/2022	[Accountant]	$500
14/12/2022	7 Eleven	$93.59
19/12/2022	7 Eleven	$96.85	A41
23/12/2022	[hotel]	$25.80
23/12/2022	[hotel]	$71.80
23/12/2022	7 Eleven	$146.57
28/12/2022	Liquorland	$40.00
28/12/2022	[an energy company]	$113.80
28/12/2022	Liquorland	$116.00
28/12/2022	Coles Express	$72.33
28/12/2022	West End Motor Group (hotel)	$260
4/1/2023	Airport pharmacy	$14.95
5/1/2023	Chemist Warehouse	$10.98
9/1/2023	Optus Billing	$238.91
18/1/2023	Lifeworks	$355	A42
23/1/2023	7 Eleven	$85.06
23/1/2022	Liquorland	$21.00
24/1/2023	Accountant	$1,485.00
27/1/2023	Ist Choice (bottle shop)	$28.00
27/1/2023	[hotel]	$29.35
30/1/2023	McDonalds	$6.95
30/1/2023	7 Eleven	$37.49
2/1/2023	GWW	$147.06
2/1/2022	Reserve Cars (Mechanic)	$200
2/1/2023	Optus Billing	$238.91
2/1/2022	WWC Rates	$484.00
2/1/2023	Hungry Jacks	$13.70
8/2/2023	7 Eleven	$95.02
8/2/2023	7 Eleven	$49.87
14/2/2023	Bruno’s Italian	$73.50	A43
23/2/2023	AMMI	$1,374.03
24/2/2023	7 Eleven	$79.68
28/2/2023	Ace Tyers and Auto	$1,700
6/3/2023	[an energy company]	$145.31
6/3/2023	Optus Billing	$238.91
8/3/2023	Accountant	$1,485
27/3/2023	7 Eleven	$97.43
3/4/2023	Optus Billing	$238.91
13/4/2023	7 Eleven	$68.22
13/4/2023	AAMI	$943.61
5/5/2023	7 Eleven	$81.68
5/5/2023	Optus Billing	$238.91
8/5/2023	7 Eleven	$68.22
12/5/2023	7 Eleven	$76.15	A44
24/5/2023	7 Eleven	$78.88
8/6/2023	7 Eleven	$83.44
9/6/2023	Optus Billing	$238.91
23/6/2023	7 Eleven	$60.17
26/6/2023	Mega Auto parts	$1,880.00
26/6/2023	7 Eleven	$65.59
28/6/2023	AAMI	$526.74
Total	$23,376.27

Appendix 2: Miscellaneous deposits into [Company 4] [BANK 1] account ending in account number 3192:

Date	Item	Amount	Page and explanation
6/2/2023	[Car]	$20,000 / $12,000	Proceeds from sale of car.
Total	$32,000

[2023] AATA 3399

30 August 2023

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