Castro and Diaz (Child support)

[2023] AATA 2958

Castro and Diaz (Child support) [2023] AATA 2958 (27 June 2023)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2022/SC024525

APPLICANT:  Mr Castro

OTHER PARTIES:  Child Support Registrar

Ms Diaz

TRIBUNAL:Member J Thomson

DECISION DATE:  27 June 2023

DECISION:

The Tribunal sets aside the decision under review and, in substitution, decides that for the period 1 January 2022 to 31 December 2022 Mr Castro’s annual rate of child support is increased by $1,442, and for the period from 1 January 2023 to 31 December 2023 his annual rate of child support is increased by $1,200.

CATCHWORDS

CHILD SUPPORT – departure determination – special needs – a ground for departure established – decision to depart - 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 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. Mr Castro and Ms Diaz are the parents of [Child 1], born 2012, and [Child 2], born 2015, (the children). Both children are recorded as being in the 64% care of Ms Diaz and the 36% care of Mr Castro.

2. On 20 December 2021, Mr Castro applied for a change of assessment of child support on the grounds that the administrative assessment of child support payable by him to Ms Diaz is unfair because:

   ·the costs of his spending time or communicating with the children are at least 5% of his adjusted taxable income (ATI), and significantly affect the costs of maintaining the children (the ground commonly referred to as Reason 1);

   ·the special needs costs of [Child 1] significantly affect the cost of her maintenance (the ground commonly referred to as Reason 2);

   ·Mr Castro has given money, goods or property to the children, the receiving parent, Ms Diaz or another person for the benefit of the children (the ground commonly referred to as Reason 5);

   ·of his or Ms Diaz’s income, financial resources and property or earning capacity (the grounds commonly referred to as Reasons 8A and 8B).

3. On 19 May 2020, a Services Australia – Child Support (Child Support) decision maker (DM) Bray made a decision to change the administrative assessment of child support payable by Mr Castro to provide that for the period 1 January 2020 to 31 December 2020, the annual rate of child support payable by Mr Castro is increased by $2,874 per annum, and for the period 1 January 2021 to 31 December 2021 his annual rate of child support is increased by$1,666 per annum.

4. On 16 October 2020, a Child Support decision maker made a further change to the assessment, increasing Mr Castro’s annual rate of child support for the period 27 July 2020 to 31 December 2020 by $7,374, by $6,166 for the period 1 January 2021 to 26 July 2021, and by $1,666 for the period 27 July to 31 December 2021.

5. At the time of Mr Castro’s change of assessment application on 20 December 2021, the administrative assessment required Mr Castro to pay annual rates of child support as follows:

   ·for the period 1 December 2021 to 31 December 2021, $2,664, based on his 2020–21 ATI of $32,010 and Ms Diaz’s income estimate of $20,857; and

   ·for the period 1 January 2022 to 30 June 2022, $998, based on his 2020–21 ATI of $32,010 AND Ms Diaz’s income estimate of $20,857;

   ·for the period 1 July 2022 to 31 October 2022, $898, based on his 2020–21 ATI of $32,010, and Ms Diaz’s 2020–21 ATI of $28,165.

6. On 16 April 2022, a Child Support decision maker, DM Holder, found Reasons 5 and 8A in Mr Castro’s application established but refused to change the assessment on the grounds that it was not just and equitable to do so pursuant to section 98F of the Child Support (Assessment) Act 1989 (the Act).

7. On 16 May 2022, Mr Castro objected to DM Holder’s decision of 16 April 2022, and on 24 August 2022, a Child Support objections officer disallowed his objection.

8. On 25 August 2022, Mr Castro applied to the Tribunal for review of the objection decision of 24 August 2022.

9. The Tribunal heard the matter on 21 February 2023. Both parents attended the hearing via conference telephone and gave affirmed evidence.  Mr Castro’s legal representative, Ms, solicitor of the firm, [Firm 1] also attended the hearing and made submissions on behalf of Mr Castro. The Tribunal had before it documentation provided by Child Support (folios1 to 873), admitted into evidence and marked Exhibit 1. Mr Castro provided documentation (folios A1 to A131) admitted into evidence and marked Exhibit A, and Ms Diaz provided documentation (folios B1 to B26) admitted into evidence and marked Exhibit B.

10. At the conclusion of the hearing, the Tribunal directed the parents to provide further documentation. In compliance with the Tribunal’s directions, Mr Castro has provided further documentation (folios A203 to A221). These documents have been added to Exhibit A and copies sent to Ms Diaz for her consideration and comment.

11. Ms Diaz has also complied with the Tribunal’s direction and the additional documents she has provided (folios B27 to B37) have been added to Exhibit B. Copies have been sent to Mr Castro for his consideration and comment.

12. Both parents have provided further written submissions and supporting documentation in response to the additional documentation requisitioned by the Tribunal: Mr Castro’s additional material has been accepted into evidence (Exhibits A 237 to A245) as has Ms Diaz’s additional material (Exhibits B38 to B50). This additional material has been circulated to each parent for comment.

ISSUES

1. The issues which arise in this case are:

   ·Whether a ground is established to depart from the administrative assessment of child support; and, if so,

   ·Whether it is just and equitable to make a particular departure determination; and, if so,

   ·Whether it is otherwise proper to make a particular departure.

CONSIDERATION

1. In reaching its decision, the Tribunal has considered the affirmed evidence given by the parents at the hearing and the documentation contained in Exhibits 1, A and B, including the additional documentation provided by the parents post hearing and their comments on those documents.

2. The statutory provisions relevant to this review are contained in the Act. The rate of child support payable by a liable parent is usually based on an administrative assessment under Part 5 of the Act. A formula is used. It takes into account variables including each parent’s ATI for the last relevant year of income, the number of children, and the level of care provided by each parent. Part 6A of the Act allows for a departure from the administrative assessment (a process commonly known as a “change of assessment”). Under subsection 98C(1), the Registrar may make a departure determination if three matters are established:

   ·One, or more than one, of the grounds for departure referred to in subsection 98C(2) exists (subparagraph 98C(1)(b)(ii));

   ·A departure is just and equitable as regards the children and each parent (sub- subparagraph 98C(1)(b)(ii)(A)); and

   ·It is otherwise proper to make a departure decision (sub-subparagraph 98C(1)(b)(ii)(B)).

3. Subsection 98(2) provides that the grounds for departure are the same as the grounds set out in subsection 117(2) of the Act.

4. If satisfied that a ground or grounds exist and that it would be just and equitable and otherwise proper to make a particular determination, the Registrar may make one of the determinations prescribed in section 98S of the Act. It permits a range of determinations, including varying the rate of child support payable, the ATI or the cost percentage of the child.

Grounds for departure

1. Subparagraph 117(2)(c)(ia) provides as a ground for departure:

   (c) that, in the special circumstances of the case, the 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; or…

2. The words “in the special circumstances of the case” are not defined in the legislation. Whilst it is not possible to define with precision the meaning of that term, it is intended to emphasise that the facts of the case must establish something that is special or out of the ordinary. That is, the intention of the legislation in subsection 117(2) must be guided by the qualification that the Tribunal will not interfere with the administrative formula result in the ordinary run of cases. In Gyselman and Gyselman (1992) FLC 92-279, it was held that “special circumstances” were “facts peculiar to the particular case which set it apart from other cases”. The Tribunal will consider whether the application of the administrative assessment would result in an unjust and inequitable determination of child support payable, having regard to the evidence relevant to the parents’ financial positions.

3. The issues and the outcome being sought by Mr Castro and his representative identified at the commencement of the hearing were as follows:

   ·The determination of his costs of spending time/communicating with the children, in particular his travel costs;

   ·The determination of Ms Diaz’s income and financial resources available to her for child support purposes which he submits is not accurately reflected in the assessment;

   ·The determination of his contribution to the children’s education costs; in particular, the determination of any school fee rebates available to Ms Diaz;

   ·The determination of the extent to which [Child 2]’s speech therapy costs are covered by the National Disability Insurance Scheme (NDIS), in particular, his need for a special laptop computer for speech therapy sessions at his school;

   ·The determination of the level of his contribution to [Child 1]’s special needs tutoring costs.

4. The issues and outcome being sought by Ms Diaz identified at the commencement of the hearing were as follows:

   ·The determination of Mr Castro’s income and financial resources available to him from his [business], [Business 1] (the business), for child support purposes; in particular the legitimacy of certain of the deductions claimed against the gross income of his business and other financial benefits he derives from the business;

   ·The determination of Mr Castro’s contribution to the special needs costs relating to [Child 2]’s speech therapy and paediatrician’s treatment costs, including his NDIS diagnosed medication costs, his special laptop computer costs for special speech therapy training sessions, and Ms Diaz’s travel costs from home to participate in [Child 2]’s school speech training sessions;

   ·The determination of Mr Castro’s contribution to [Child 1]’s special needs learning difficulties tuition costs.

Mr Castro’s evidence at the hearing

Reason 1 – costs of spending time/communicating with the children

1. According to Mr Castro’s evidence at the hearing and the property rental statement and map references he provided post hearing (see exhibits A223 to A225) he resides at [Town 1], a distance of approximately 46.8 km from [City 1], where Ms Diaz resides with the children. His business premises are located at [Town 2], a country town approximately 28.2 km south of [City 1] on the same thoroughfare between [City 1] and [Town 1]. He travels between his place of residence in [Town 1] to his place of work in [Town 2] daily, Monday to Friday.

2. The Child Support records reflect the children as being in Mr Castro’s 36% care and Ms Diaz’s 64% care at the time of Mr Castro’s change of assessment application on 20 December 2021.

3. Mr Castro said in evidence that he rarely has occasion to travel to [City 1] for business purposes. He said he has contracts with his [suppliers] in [City 1] for the delivery of [materials] for his [business] in [Town 2]. However, he gave evidence of a rental property he maintains in [City 1] for the storage of [goods] left with him overnight for [work] or awaiting collection following repair. The Tribunal will comment further on this issue later in these Reasons.

4. He gave evidence he has blocks of overnight care of the children on Wednesdays and from Friday afternoon to Monday morning every second week during school term time; he also has care of the children for half of the school holidays and on other special days (Father’s Day, Christmas Day and his birthday) during the year.

5. During term time, he said he collects the children from [School 1] in [City 1] on Wednesday and Friday evenings on his way home to [Town 1] from [Town 2] and returns them to school in [City 1] on Thursday mornings and Monday mornings at the conclusion of his care periods referred to above.

6. During school holiday periods, he collects the children from [City 1] on the last day of school and returns them to Ms Diaz on the last day of his school holiday care period, effectively one journey from [Town 2] to [Town 1] via [City 1] to collect the children and one return trip from [Town 1] to [City 1] for each school holiday period per year.

7. The distance travelled from [Town 2] to [City 1] is approximately 28.2km and the distance from [City 1] to [Town 1] is approximately 46.8 km. The round-trip [Town 2] to [Town 1] via [City 1] is therefore approximately 150 km (28.2 + 46.8 + 46.8 + 28.2 = 150).  However, an allowance has to be made to account for Mr Castro’s normal travel from [Town 1] to work in [Town 2] and return each week-day, a distance of approximately 37.2 km (18.6 km [Town 1] to [Town 2] x 2 = 37.2 km). The extra distance travelled by Mr Castro to collect and return the children on a weekly basis in term time is therefore 131 km (150 km -18.6 km = 131.4 km rounded down to 131 km)

8. Based on Mr Castro’s evidence regarding his weekly work pattern set out in the preceding paragraphs, the Tribunal finds that during the working week, Monday to midday Friday, in term time he travels an additional distance of 131 km, collecting the children from [School 1] in [City 1] each Wednesday afternoon and on Friday after school each fortnight and returning them to school at [City 1] on his way to his place of business in [Town 2] each Thursday morning and following his fortnightly care periods on Monday morning.

9. During school holiday time, he presumably collects the children from Ms Diaz’s house after school on the last day of school term and returns them to her house on the last day of the school holidays, [Town 2] to [Town 1] via [City 1] and [Town 1] to [City 1], a total distance of 168.6 km.

10. Based on his four school holiday care periods per annum, one night per week and fortnightly weekend care in term time, the Tribunal calculates the distance he travels to spend time and otherwise communicate with his children as follows:

    ·40 weekly Wednesday night care in term time: 40 x 131 km = 5,240 km

    ·20 fortnightly Friday to Monday care in term time: 20 x 131 km = 2,620 km

    ·4 school holiday care periods: 4 x 168.6 = 674.4 km

    Total distance travelled per annum = 8,534.4 km rounded down to 8,534 km.

11. As he has more than 14% care of the children, his claim is limited to his travel costs.

12. Mr Castro asked for an average fuel consumption rate of 13.27 litres per 100 km and did not dispute the objections officer’s application of $2.00 per litre average cost for fuel as a basis for determining his travel costs, the approach the Tribunal considers reasonable and appropriate to use here. Applying that formula, the Tribunal finds Mr Castro’s travel expenses based on total travel of 8,534 km per annum at an average fuel consumption of 13.27 litres per 100 km at an average cost of $2.00 per litre to be $2,265 per annum (8,534 km /100 x 13.27 x $2.00 = $2,264.92 rounded up to $2,265).

13. During the course of the hearing, the Tribunal questioned Mr Castro regarding his business expenses claimed against his gross income from his [business], in response to which he acknowledged that he claimed all of his motor vehicle costs, including his fuel costs, as deductions and does not apportion his fuel costs to reflect personal use as distinct from business use of the vehicles he owns and uses in his business. As noted in the Reasons below, Mr Castro has claimed all his fuel costs as a deduction against his gross income derived from his self-employment in his [business] for the 2020–21 and 2021–22 financial years. Consequently, there is no personal loss to him for his travel costs to spend time with his children, and the Tribunal is therefore satisfied that his capacity to provide financial support for the children is not significantly reduced.

Reason 8A – Ms Diaz’s income and financial resources available for child support

1. Mr Castro’s submissions focused on an online sales business he submitted Ms Diaz had recommenced under the trading name “[Business 2]”. However, although he provided documentation reflecting the establishment of such a business, comprising extracts from text messages, face-book advertisements, a business insurance certificate and photographic images depicting [stock], much of which referred to dates in 2013 to 2016, including an extracted text message from Ms Diaz reflecting her intention to close her [Business 2] business (see pages 418 to 431 and 651 to 719 of Exhibit 1, and pages A77 to A87 of Exhibit A) and references to a stall Ms Diaz operated at the [City 1] district show in 2014, no evidence was provided to suggest the business is currently trading or that she is in receipt of income other than her fortnightly Centrelink payments of $700 to $900 she discloses in her Statement of Financial Circumstances dated 15 December 2022 at pages B21 to B25 of Exhibit B.

2. Documentation at pages 476 and 477 of Exhibit 1 reflect closure of her [Business 2] business and cancellation of her Australian Business Number (ABN) from 16 November 2022 (see page B17 of Exhibit B).

3. Mr Castro also asserted that Ms Diaz sells [Item 1]s but was unable to provide any evidence as to her likely income from this source.

4. In his response to the additional documentation, he provided copies of photographs depicting a range of [Item 2]s and [Item 3]s labelled “[Label 1]” which he submitted reflected a business operation Ms Diaz was conducting and from which she is currently deriving assessable income. However, no further evidence was offered in support of that assertion.

5. Ms Diaz was provided with copies of this additional material and invited to comment. She declined to provide any further comment.

6. Ms Diaz gave evidence at the hearing that prior to the parent’s separation in September 2017, she had been employed as a [Occupation 1] in the [specified] industry, [undertaking specified work].

7. She gave evidence that she was not engaged in any gainful occupation between 2018 and 2021 while she was expecting her daughter, born in 2021, other than the [Business 2] business which she described as a hobby style business, selling [specified] items.

8. She acknowledged she had operated a stall at the local [City 1] show and had attempted to revive the business in 2022, establishing an ABN. However, although she advertised the business on Facebook, she said she was unable to secure any significant orders for her products, and ultimately closed the business in November 2022. She estimated her average income from the business while she was trading at approximately $70 per week.

9. Ms Diaz provided her 2022 income tax estimate (see Exhibit B page B20,) reflecting her taxable income at $23,300. The administrative assessment in place at the time of Mr Castro’s change of assessment application, the subject of this review, reflects her 2020–21 ATI of $28,165 and there was no evidence at the hearing that she has an unexercised income earning capacity.

1. The Tribunal is satisfied her income is accurately reflected in the assessment and her income for the 2021–22 financial year referred to above will be recorded in the normal assessment process in due course.  

Children’s school fees contribution adjustment

1. At the hearing, Mr Castro raised Reason 5 (a payment by the paying parent to the child of the assessment … or another person), as a ground for departure. In this respect, the objections officer in the decision under review found the issue had already been dealt with in the context of [Child 1]’s special needs claim for his purchase of her glasses under Reason 2 and found no basis for establishing either Reasons 2 or 5. Mr Castro did not challenge this part of the objection decision at the review hearing.  

2. However, at the hearing, Mr Castro raised the issue in the context of a claim for the adjustment of school fees he submitted he had paid to [School 1] for the benefit of [Child 1], from August 2020. This issue did not form part of the objection decision before the Tribunal, and had its genesis in an earlier decision by Child Support delegate V Bray, on 19 May 2020, increasing Mr Castro’s annual rate of child support by $2,874 for the period 1 January 2020 to 31 December 2020, and by $1,666 for the following 12 months, 1 January 2021 to 31 December 2021, by way of his contribution to the children’s school fees: DM Bray’s decision was before the Tribunal (see pages 27 to 41 of Exhibit1).

3. Mr Castro’s evidence at the hearing was based on a change in the [School 1] school fees for [Child 1] in the course of the 2020 school year in the form of a COVID-19 rebate he submitted was a consequence of his application to the [Organisation 1] for school fee concessions for families financially impacted by COVID-19 (see his application at pages A9 to A11 , Exhibit A), as a consequence of which he was granted a total rebate in school fees for [Child 1] of $1,999 (see page A6 of Exhibit 1). He provided evidence of a further rebate of $90 for excursion and sports fees granted by [School 1] for the same year. The school credited these rebates in later fee invoices (see page A8 of Exhibit A).

4. He submitted that neither of these rebates had been factored into his increased child support school fee contribution determinations pursuant to DM Bray’s decision of 19 May 2020.

5. He also sought recompense for his payment of an amount of $1,214 to [School 1] on 23 October 2020, acknowledged in the school’s principal’s letter of that date at page A12 of Exhibit A.

6. In response, Ms Diaz provided detailed submissions recorded at pages A32 and A33 of Mr Castro’s Exhibit A.

7. Her response reflects both parents applying for a COVID-19 school fee concession of $1,200 and the concession being granted and credited to the parents’ joint school fee account on 25 August 2020 with a further similar concession credit of $700 being applied on 27 August 2020, as reflected in the account statement at page A6 of Exhibit A.

8. On 16 October 2020, a Child Support Delegate K O’Hanlon changed DM Bray’s decision of 19 May 2020, increasing the annual rate of child support payable by Mr Castro to reflect additional costs relating to special needs for [Child 2] not reflected in the child support assessment in response to Ms Diaz’s change of assessment application dated 6 July 2020, but the increases determined by DM Bray in the decision of 19 May 2020 were added to the new annual rates of child support determined by DM O’Hanlon.

9. Regarding Mr Castro’s school fee payment of $1,214 on 23 October 2020, the Tribunal notes Mr Castro applied to Child Support for credit of that payment as a non-agency payment (NAP) against his child support liability. His application was refused on 22 March 2022 (see Exhibit 1, pages 242 to 243) and his late application for an extension of time to object to Child Support’s decision of 22 March 2022 was also refused on 25 August 2022 on the basis that he had rested on his rights (see Exhibit 1, pages 784 to 788). In any event, he was recorded as having more than regular care of the children at the time he applied for credit of his payment and the provisions of section 71C of the Child Support (Registration and Collection) Act 1988 precluded recognition of his school fees payment as a prescribed NAP.

10. .The Tribunal considers Mr Castro has rested on his rights and it would not be just and equitable to effect any adjustment to the assessment of child support payable to Ms Diaz at this late stage.

11. The Tribunal is not satisfied there are special circumstances which would justify a departure from the administrative assessment formula on the grounds of Reasons 1, 8 and 8A in Mr Castro’s application.

Special needs – [Child 2]’s learning difficulties

1. Both parents raised the issue of [Child 2]’s special needs, the subject of the increase in Mr Castro’s annual rate of child support determined by DM O’Hanlon in the decision of 16 October 2020 referred to above by $4,500 to cover the costs of [Child 2]’s speech therapy special needs for the period 27 July 2020 to 26 July 2021.

2. The issue at the hearing related to the out-of-pocket costs incurred by Ms Diaz for speech therapy treatment for [Child 2] to address his receptive and expressive language skills, literacy and social communication skills as described in a report compiled by [Ms A], a speech pathologist employed by [service provider] (see page B36, Exhibit B).

3. This report makes reference to [Child 2] having been treated for his speech disability under the supervision of an occupational therapist, [Ms B], and his paediatrician, [Dr C], and, since September 2022 by [Ms A] of [service provider], in the course of which he is required to access specialist teletherapy speech pathology services by means of an appropriate laptop with adequate screen size for sharing resources, microphone and sound quality to allow him to complete his online therapy.

4. Ms Diaz gave evidence that [Child 2] had commenced treatment for his speech disabilities in 2020 (see pages A184 to A189, Exhibit A).

5. In October 2020, DM O’Hanlon considered Ms Diaz’s application for a change of assessment on the ground of Reason 2, and subsequently, Reasons 8 and 8A. DM O’Hanlon’s decision was before the Tribunal at pages 191 to 201 of Exhibit 1, and reflects the decision to increase Mr Castro’s annual rate of child support by $4,500 in recognition of his contribution to the costs of [Child 2]’s speech therapy needs covering Ms Diaz’s out-of-pocket costs for a paediatrician’s fee of $300, the cost of the first of three sessions with a speech pathologist totalling $247.30, a single 45-minute session on 22 July 2020 costing $136.40 and ongoing speech pathology treatment costs of $181 per week for a period of 50 weeks – a total annual cost estimated at $9,050.

6. Both parents acknowledged and agreed at the hearing that Ms Diaz’s application for NDIS funding for [Child 2]’s speech therapy was approved from 15 October 2020, but no change to DM O’Hanlon’s determination of Mr Castro’s contribution of $4,500 to [Child 2]’s treatment costs was sought, and Ms Diaz gave evidence that she had applied Mr Castro’s increased child support payments pursuant to DM O’Hanlon’s decision of 16 October 2020 to meet [Child 2]’s speech therapy needs.

7. At the hearing, Ms Diaz gave evidence of additional costs for [Child 2]’s speech therapy covering paediatrician, speech therapist and occupational therapist reports between July and September 2020 and occupational therapy sessions from July 2020 to December 2020, for which she said she sought recompense from Mr Castro.

8. At the direction of the Tribunal that she provide evidence of the payment of these costs, she provided additional material, post hearing, reflecting occupational therapist, paediatrician, speech therapy lessons, fuel costs and the cost of a laptop totalling $5,925 (see pages B28 to B37 and B40 to B42 of Exhibit B).

9. The Tribunal finds that, with the exception of the laptop costs of $1,700, about which the Tribunal will comment later in these Reasons, these additional costs are replicated in the costs identified by DM O’Hanlon in the decision of 16 October 2020 for which Ms Diaz has already been recompensed, and consequently, no ground for departure is established.

10. However, the Tribunal is satisfied, based on the reports from speech pathologist [Ms A] at pages B36 and B50 of Exhibit B, that a dedicated laptop computer of the type reflected in the [Retailer 1] invoice for $1,640 provided by Ms Diaz at page B18 of Exhibit B, purchased by her on 8 July 2022, is a necessary requirement for the effective treatment of [Child 2]’s speech therapy special needs as are the special therapy treatment programs reflected in the invoice from the Sensory Poodle at a cost of $244.77. The Tribunal is satisfied these costs are not covered by NDIS funding, as certified in the NDIS approved service provider Noah’s Inclusion Services’ letter of 31 May 2023 at page B48 of Exhibit B submitted by Ms Diaz post hearing.

11. The Tribunal finds that the combine cost of the laptop and the Sensory Poodle programs at $1,884.77 (laptop $1,640.00 plus programs $244.77 = $1,884.77) is a cost which significantly affects the cost of maintaining [Child 2], making the case special and a departure from the formula assessment is established.

Special needs – [Child 1]

1. Mr Castro did not challenge the objections officer’s refusal to find a ground for departure based on his payment for [Child 1]’s glasses. However, at the hearing, Ms Diaz gave evidence of [Child 1]’s special tutoring needs.

2. Her claim was based on a report provided by [Ms D], a registered psychologist employed by [Organisation 1] dated 24 August 2022, a copy of which was provided by Ms Diaz at pages B2 to B9 of Exhibit B together with receipts for tutoring sessions provided by [tutoring service] from 4 June 2020 to 24 November 2021 totalling $1,146 (see page B12 of Exhibit B) and 7 April 2022 to 25 August 2022 (see page B15 of Exhibit B).

3. The Tribunal has considered this report carefully and notes it concludes that [Child 1]’s academic skills are assessed as falling in the bottom 10% when compared with students of the same age, despite receiving intervention and in-class support.

4. Although the author of the report considers [Child 1]’s significant weaknesses in reading, writing and numeracy are not considered a specific learning disorder, [Ms D] opines [Child 1] does present with cognitive delays in working memory, fluid reasoning and verbal comprehension, and her significant academic delays in reading, writing and numeracy will require substantial support for her to engage with the school curriculum. The report also noted [Child 1] has been receiving weekly private tuition since 2020.

5. As Mr Castro’s change of assessment application was lodged on 20 December 2021, the Tribunal can only consider back-dating the change for the period 18 months prior to the date of the application, i.e. from 20 June 2020. Accordingly, the Tribunal can only consider the tutorial costs for 5 August 2020, $550, and 24 November 2021, $190, totalling $740 and the costs from 7 April to 25 August 2022, totalling $800.

6. In her written submissions to the Tribunal at page B11of Exhibit B, Ms Diaz contends for a 50% contribution from Mr Castro for [Child 1]’s tutorial fees from November 2021 of $1,800 for which she provided receipts totalling $1,000 (see page B15, Exhibit B), and ongoing tutorial fees of $2,400 for 2023. Although she has not provided specific evidence of those costs, having regard to her evidence as to the likely amount of those costs as reflected in the receipts at page A15 referred to above, the Tribunal accepts her evidence as to the likely quantum of those costs.

7. In response, Mr Castro has provided an undated email from [School 1] acting principal, [Ms E], (see pages A133 and A134 of Exhibit A) confirming that the school has initiated a ‘Personal Plan’ to assist [Child 1] with her learning difficulties.

8. Mr Castro’s response to Ms Diaz’s evidence at the hearing was limited. He gave evidence of a discussion with [Ms D] he had on a date he could not recall in which she suggested [Child 1]’s school’s ‘Personal Plan’ would be adequate for dealing with [Child 1]’s learning difficulties and suggested the Tribunal speak directly with [Ms D] to ascertain her further comments. The Tribunal offered Mr Castro the option of obtaining a further report from [Ms D], but he has not availed himself of that option.

9. The Tribunal is satisfied [Ms D]’s report identifies [Child 1] has significant special learning difficulties, that despite having received intervention and in-class support she is still assessed as falling in the bottom 10% of her class and that she will require substantial support to engage with the school curriculum.

10. The Tribunal considers it appropriate and reasonable that [Child 1] continue to receive additional private tuition. However, as regards the earlier costs incurred in August 2020, November 2021 and between April and August 2022, the Tribunal considers it was open to Ms Diaz to apply for a change of assessment to seek a contribution from Mr Castro toward those costs but she did not do so in a timely manner. The Tribunal finds she has rested on her rights to do so and will not consider an adjustment in the assessment for those costs.

11. The Tribunal finds that the cost of the additional tutoring for the period from May 2022 to July 2022 reflected in the receipts at page B15, Exhibit B referred to above and the anticipated tutoring costs for the 2023 academic year of $2,400 significantly affect the cost of maintaining [Child 1] because of her special needs, making the case special and a ground for departure is established.

Just and equitable considerations

1. The requirement to consider whether a departure would be just and equitable directs attention to what is fair to the parents and the children. Regard must be had to a variety of factors such as the needs of the children, the parents’ requirements and any hardship that would be caused by departing or not departing from the formula.

2. Both parents provided a Statement of Financial Circumstances (SOFC).

3. Mr Castro affirmed the contents of his SOFC at pages A88 to A96, Exhibit A. He also provided copies of his 2021and 2022 income tax returns (see pages A99 to A128, Exhibit A).

4. He reports his occupation as a self-employed [Occupation 2] trading as [Business 1] at [Town 2] NSW and estimates his current gross income at approximately $900 per week, annualised to $46,800. In addition, he lists his receipt of FTB A and B of $138.74 per fortnight, annualised to approximately $3,607.

5. He lists his current partner’s gross income at $500 per week, annualised to $26,000. She is also listed in his 2022 income tax returns as an employee in his [business] on an income of $7,250.

6. His listed assets totalling $85,000 comprising his [Vehicle 1] valued at $55,000 and household contents to an estimated value of $25,000. Although he lists his [business] as an asset, he does not ascribe a value to the business.

7. Ms Diaz noted in her post-hearing documentation at page B38 of Exhibit B that, in addition to [Vehicle 1], Mr Castro has a number of additional assets, including [various vehicles] stored in a rented storage facility in [City 1], upon which the Tribunal will comment later in these Reasons. These additional assets were not listed in his SOFC, but Mr Castro refers to some of them in his submissions to the objections officer during the objection proceedings at page 16 of Exhibit 1.

8. The Tribunal questioned Mr Castro regarding certain business expenses claimed by him in his income tax returns, in particular, his motor vehicle expenses, the salary paid to his current partner and the rental paid for the [City 1] storage facility.

9. He gave evidence that [Vehicle 1] is his primary family vehicle and also the vehicle he uses in his [business]. He confirmed he claims all his fuel expenses, both personal and business, through his business; there is no differentiation between personal and business use. On that basis, the Tribunal finds he has no personal expenditure on fuel for the travel costs regarding his contact time with the children.

10. He also gave evidence that his partner provides book-keeping and other administrative services in his business. Ms Diaz did not challenge this evidence and the Tribunal is satisfied the salary his partner receives is appropriate and reasonable.

11. Regarding the rental expense for the [City 1] storage facility, in response to the Tribunal’s questioning, Mr Castro gave evidence at the hearing that he maintains this facility for the secure storage of [goods] left with him for [work] and awaiting [collection], implying that, although he contends he does not have occasion to travel between his place of business in [Town 2] to [City 1] for business purposes because he has delivery contracts with his [City 1] [suppliers], nonetheless, he does need to travel to [City 1] to store or collect customers’ [goods] as part of his normal daily business activities, and presumably would be able to collect his children for his routine care periods.

12. At the direction of the Tribunal, he provided a copy of the lease agreement for the [City 1] storage facility (see page 208, Exhibit A). The Tribunal accepts his evidence regarding the business use of this facility.

13. Mr Castro listed liabilities totalling $9,085 comprising current and past income tax liabilities. He also reported a business activity financial resource of $9,620.87, superannuation entitlement of $4,150.12, negligible weekly personal expenditure and average weekly household expenditure of $605, including his contribution to rental of his residential accommodation in [Town 1] of $260 which he shares with his current partner.

14. The Tribunal is satisfied Mr Castro’s income for the 2020–21 financial year is accurately reflected in his income tax return for that year at $32,010, the income applied in the assessment for that particular year. His income for the 2021–22 financial year reflected in his income tax return for that year at pages A114 to A128 of Exhibit A records a taxable income of $40,314, which will be adjusted in the normal assessment process in due course. The Tribunal is satisfied his income for the 2021–22 financial year of $32,010 is a reasonable reflection of his income for child support purposes for that particular financial year and does not consider it just and equitable to disturb his income for that financial year.

15. Ms Diaz affirmed the SOFC she provided dated 15 December 2022 (see pages B21 to B25, Exhibit B). She also provided a copy of her 2022 income tax return (see pages B19 and B20, Exhibit B), reflecting her Centrelink income of between $700 and $900 per fortnight, annualised to approximately $23,400, which reconciles with her 2022 income tax return referred to above. She confirmed this is her only current source of income.

16. She refused to provide details of her current partner’s income.

17. Ms Diaz listed assets totalling $10,200 comprising her [motor vehicle] valued at $10,000 and bank savings of $200. She listed no liabilities and reports her average weekly household expenditure at approximately $530, including private school fees and tutoring fees and extra-curricular school, dancing, martial arts and swimming fees.

18. Mr Castro did not challenge her SOFC.

19. The Tribunal has found both children have special needs as detailed above. Both parents are being assessed on modest incomes with relatively modest assets and liabilities.

Conclusions

1. As a consequence of the change in care decision by DM Bray on 19 May 2020, for the period 1 January 2020 to 31 December 2020 Mr Castro was assessed to pay child support at annual rate of $7,598 ($145.62 per week), comprising an increase of $2,874 on the normal assessment to cover his contributions of $1,474 for [Child 1]’s [School 1] private school fees and $1,400 for [Child 2]’s child care costs, and from 1 January 2021 to 31 December 2021, his annual rate of child support was assessed at $6,390 ($122.46 per week), comprising an increase of $1,666 on the normal assessment to cover his contribution to private school fees for both children, based on Mr Castro’s 2019 ATI of $50,933 and Ms Diaz’s provisional income of $18,098.

1. As a consequence of the decision of DM O’Hanlon on 16 October 2020, DM Bray’s decision ceased to have effect from 27 July 2020. However, DM O’Hanlon left Mr Castro’s annual rate increase of $1,666 in place from 27 July 2021 to 31 December 2021 but changed the assessment for the period 27 July 2020 to 31 December 2020 to provide that Mr Castro’s annual rate would increase by $7,374, from 1 January 2021 to 26 July 2021 the increase would be $6,166, and from 27 July 2021 to 31 December 2021 the increase would be $1,666.

2. The Tribunal has found there is no basis for a change in the formula assessment on the ground that his costs of communicating with or contact with the children exceed his ATI by at least 5%.

3. The Tribunal has also found there is no basis for changing the formula assessment because of the overpayment of school fees made by Mr Castro directly to [School 1] in October 2020 or the application of the COVID-19 fee rebates in August 2020.

4. However, the Tribunal has found there are special circumstances due to the speech therapy needs of [Child 2] and the learning difficulties experienced by [Child 1] and a ground for departure is established to increase Mr Castro’s annual rate of child support to recognise his contribution to the costs of meeting those needs.

5. Having regard to the financial positions of the parents, the Tribunal considers a contribution of 50% of the costs would be appropriate and reasonable without causing undue hardship to either parent or the children. The Tribunal has assessed [Child 2]’s special needs costs for the laptop computer and the Sensory Poodle therapy program at $1,884.77 and [Child 1]’s special needs costs for the additional private tuition costs at $3,400 and finds Mr Castro’s 50% share of those costs is $2,642 ($1,884.77 + $3,400.00 = $5,284.77 / 2 = $2,642.38 rounded down to $2,642).

6. The Tribunal considers it fair and reasonable to increase Mr Castro’s annual rate of child support from 1 January 2022 to 31 December 2022 by $1,442 and for the period from 1 January 2023 to 31 December 2023 by $1,200 in recognition of his contribution to the combined total of $2,642 for the special needs of the children. 

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 effects 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. Increasing the annual rate of child support payable by Mr Castro to reflect his contribution to the special needs of the children as set out above, will result in an appropriate apportionment of financial responsibility between the parents and the community. Such a result would be otherwise proper.

DECISION

The Tribunal sets aside the decision under review and, in substitution, decides that for the period 1 January 2022 to 31 December 2022 Mr Castro’s annual rate of child support is increased by $1,442, and for the period from 1 January 2023 to 31 December 2023 his annual rate of child support is increased by $1,200.