Cavanagh and Cavanagh (Child support)

[2018] AATA 1480

Cavanagh and Cavanagh (Child support) [2018] AATA 1480 (27 March 2018)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2017/MC012410

APPLICANT:  Miss Cavanagh

OTHER PARTIES:  Child Support Registrar

Mr Cavanagh

TRIBUNAL:Member A Grant

DECISION DATE:  27 March 2018

DECISION:

The Tribunal sets aside the decision under review and, in substitution, decides that a departure determination is made in the following terms:

• For the period 1 January 2017 to 31 December 2017, the annual rate of child support payable by Mr Cavanagh is increased by $1,492; and

• For the period 1 January 2018 to 31 December 2018, the annual rate of child support payable by Mr Cavanagh is increased by $2,052.

CATCHWORDS

Child support - Departure determination - Ground for departure established - Special needs of the child - 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. Miss Cavanagh and Mr Cavanagh are the separated parents of [Child 1] and [Child 2].  A child support case has been registered since 12 January 2009.  Mr Cavanagh is the parent assessed to pay child support to Miss Cavanagh.  This review relates to a decision of Department of Human Services (Child Support) (the Department) refusing to make a change to the assessment after Miss Cavanagh originally lodged a change of assessment application on 22 March 2017 and a further more complete application on 1 May 2017. 

2. On 23 May 2017, an officer of the Department refused to make a change to the assessment as the decision maker found that no grounds had been established. Miss Cavanagh objected to that decision and on 8 August 2017, an objections officer of the Department reviewed the decision but decided that, again, Miss Cavanagh had not established any grounds and disallowed her objection. 

3. Miss Cavanagh lodged her application for review of the decision with the Social Services and Child Support Division of the Administrative Appeals Tribunal on 29 August 2017.  A directions hearing was conducted on 15 January 2018, and subsequently, the parties each provided additional documents for consideration in this review.  The Department has also provided the relevant papers from its file, numbered 1 – 205.  The Department’s file and the direction documents (A1 – A22 and B1 – B6) had been provided to both parties prior to hearing. 

4. The hearing was conducted on 26 February 2018.  Both parties attended the hearing by conference telephone.  After considerable evidence had been heard, Miss Cavanagh became distressed and decided that she did not wish to participate further in the hearing.  Mr Cavanagh argued that if she made such a decision, her application should be dismissed.  The tribunal formed a view, considering as will be noted below, Mr Cavanagh’s acknowledgement that the child would benefit from tutoring and that he “had always been prepared to contribute to one lesson per week”, that there was a live issue in the review.  Evidence had been fully taken from Miss Cavanagh on that issue and she had agreed to provide additional documentary evidence, which Mr Cavanagh had an opportunity to address during the hearing and to view afterwards.  After considering the distress to both parties evident to that point of the hearing itself, the tribunal decided that it was reasonable to proceed to hear and determine the matter.  Miss Cavanagh was informed that she would not hear Mr Cavanagh’s evidence taken after she had hung up and would have no capacity to challenge that evidence.  She specifically acknowledged that and confirmed that she wanted to proceed with her review but was too distressed to participate further in the hearing. 

5. After hearing, the matter was deferred to enable Miss Cavanagh to lodge letters which she said she had previously provided (either to the Department or to the tribunal) which were relevant to the issue in dispute.  On 1 March 2018, she provided additional documents which were numbered A23 – A42. The tribunal had also received documents from Mr Cavanagh on the day prior to hearing (B7 – B26).  A copy of all of these documents were exchanged between the parties on 8 March 2018.  No additional evidence or response was received from the parties. On 27 March 2018, the tribunal made its decision in this matter.

ISSUES

1. The scheme for the administrative assessment of child support is contained in the Child Support (Assessment) Act 1989 (the Act) and the Child Support (Registration and Collection) Act 1988.  Administrative assessment calculates the rate payable by one parent to another based on a number of factors, such as the care percentage for each parent based on the care arrangement for the children and the parents’ adjusted taxable income (ATI) from the last relevant year of income.  When parents regularly lodge taxation returns, their rates of assessment are therefore regularly updated. 

2. Where a parent believes that the assessment under the administrative process leads to a level of child support which is too high or too low because of factors such as additional resources available to a party but not reflected in his or her income, or the special needs of the children, then Part 6A of the Act enables parties to lodge an application for a departure determination. 

3. Section 98C of the Act provides that before a departure determination is made, the Registrar (or a decision maker standing in the Registrar’s shoes) must be satisfied that one  (or more than one) of the grounds for departure set out in subsection 117(2) of the Act exists and that it would be just and equitable and otherwise proper to make a particular determination under this Part of the Act.

4. In this case, Miss Cavanagh argues that the child [Child 2] has special needs and that those special needs significantly affect the costs of maintaining the children of the assessment.  She seeks a contribution from Mr Cavanagh towards those costs. This reason for seeking a departure determination is covered in the grounds for departure in subparagraph 117(2)(b)(ia) of the Act – the relevant parts of which provide:

   117(2)(b)

   that, in the special circumstances of the case, the cost of maintaining the child are significantly affected:

   …

   (ia) because of special needs of the child; …

5. The issues which arise in this case are therefore:

   ·       Is a ground established to make a departure determination? If so,

   ·       Is it just and equitable and otherwise proper to make a particular departure determination?

CONSIDERATION

1. At the time of Miss Cavanagh’s application for a change of assessment, a previous departure determination affected the assessment.  The annual rate was being increased by $550 pursuant to a decision made on 14 July 2015 which ran until 17 May 2017.  At the time of Miss Cavanagh’s application, the annual rate payable by Mr Cavanagh to Miss Cavanagh was $7,591 per annum, including that $550 increase.  

2. From 18 May 2017, the annual rate according to the administrative assessment was to decrease to $7,041 for the period 18 May 2017 to 31 July 2017.  From 1 August 2017 to 21 March 2018 the administrative assessment of child support, based on the known income details of the parties, was to increase to $8,426. 

3. At the time of Miss Cavanagh’s application in this review (22 March 2017) the ATI for Mr Cavanagh was his 2015/2016 ATI of $55,557 and for Miss Cavanagh was her 2015/2016 derived Centrelink income of $22,228.  From 8 July 2017, the ATI used for Mr Cavanagh was his 2016/2017 ATI of $67,232 and from 7 July 2017 the income used for Miss Cavanagh in the assessment was her 2016/2017 derived Centrelink income of $20,243.

4. In her initial application in this review, Miss Cavanagh had sought an increase to the administrative assessment due to the costs of educating [Child 1] and because of the special needs for [Child 2].  During the review process, at the directions hearing and at the final hearing, Miss Cavanagh agreed that she was no longer pursuing a change to the assessment to take into account the costs of [Child 1] starting high school and the tribunal confirmed with the parties at hearing that the only ground in dispute was whether, in the special circumstances of the case, the costs of maintaining the child [Child 2] are significantly affected because of special needs of the child as described in subparagraph 117(2)(b)(ia) of the Act. 

5. During the hearing, the parties exhibited a highly conflictual relationship and repeatedly referred to issues of historical and ongoing dispute, including legal costs being incurred in relation to court proceedings regarding the child [Child 1] who was currently living with Mr Cavanagh against Miss Cavanagh’s wishes.  In additional documents sent in by Miss Cavanagh, she also referred to and included additional information related to the costs she is incurring in that dispute as well as existing court orders about the payment of additional historical and ongoing costs for the children which have been a source of dispute between the parties (unrelated to this review).

6. In determining this review the tribunal must restrict itself to whether a ground is established (does [Child 2] have special needs which significantly affect the costs of maintaining the child?) and if so, is it just and equitable and otherwise proper to make a departure determination which provides for an increase to the assessment to the effect that Mr Cavanagh is required to contribute to those costs.  Whilst issues between the parties about child contact, property settlement and even the historical child support process clearly cause concern and distress to parties which they might seek to “air” in each new proceeding, those issues have limited relevance to the issues here in dispute except as referred to below.  Hence, issues raised by Mr Cavanagh in which the hearing of this review should be delayed because he suggested that child contact proceedings/recovery proceedings were related to the issues to be dealt with in this review are not accepted as having any relevance to this case and the tribunal decided to proceed to hear and determine the issue in dispute.

Is a ground established?

1. Miss Cavanagh’s application for a change of assessment refers to [Child 2] having special needs and being academically delayed such that he has been undertaking additional tutoring for a number of years, aimed at bringing his English skills up to those equivalent with his school year level.  The current cost is for two lessons (which have increased from $50 to $54 each), twice a week during school terms.  She is seeking that Mr Cavanagh be required to contribute half of the cost of two lessons per week.  She gave evidence that [Child 2] has responded well to the tutoring and his academic performance has really improved.  She was not sure how long two lessons per week would be necessary, but expected it to continue to the end of the current academic year at the least.

2. The file contains a psychoeducational report provided by [an] Educational and Development Clinic, dated 9 April 2016, related to [Child 2]’s educational development.  The report is extensive and available on page 120 for detailed reference, but in summary, it provides information that [Child 2]’s academic achievement results were extremely below average in reading and writing areas and in numerical operations, and average in reasoning, listening comprehension and well above average in oral expression.  The report notes that [Child 2] meets the criteria for a specific learning disorder with impairments in reading (also known as dyslexia) but not for a general learning disorder.

3. The [report] also confirms Miss Cavanagh’s evidence that [Child 2] had historically received additional specialised services including speech pathology, reading recovery and individualised tutoring for reading and reading comprehension, but has not had any “targeted interventions” for his writing skills.  His grade four report reflected that he was working at class level in maths.

4. As noted, Miss Cavanagh gave evidence that [Child 2] was already having weekly tutoring at the time of the [report].  She suggested that they knew that and that is why they didn’t specifically add it in as a recommendation.  They did make recommendations to the school about how to manage [Child 2]’s special needs.  She has provided an additional letter she had received from [the clinic] after Mr Cavanagh and the Department asserted that the centre didn’t support or recommend tutoring in its’ report.  In that letter, dated 28 August 2017 and completed by a psychology intern, [the] writer confirms the findings generally referred to above and concludes:

   We understand that [Child 2] is currently undertaking private tutoring to address issues relating to his learning difficulties.  The [clinic] recommends tutoring as a key intervention in the management of dyslexia and other Specific Learning Disabilities.  Based on [Child 2]’s assessment dated 9/4/2016, the [clinic] recommends tutoring as a key intervention in assisting [Child 2] to address issues relating to his specific learning profile, as detailed in our assessment.

5. Mr Cavanagh does not accept that the [report] is reliable, claiming that it includes and is based on some assumptions about himself which are not correct.  His evidence was not necessarily consistent on the report or whether [Child 2] has a learning disability.  He told the tribunal that he was not satisfied that [Child 2] has a learning disability, but despite that, he considers that it is possible that he, like “any child” will benefit from tutoring.  The file reflects that he initially argued that because the report doesn’t recommend tutoring specifically, it is discretionary and not a special need.  Further, he has argued that the child’s school doesn’t recommend tutoring for [Child 2] as it was “managing his needs within programs they had developed.” 

6. In response to this latter point, Miss Cavanagh read a letter to the tribunal that she had obtained from [Child 2]’s school contradicting Mr Cavanagh’s statement.  She believed that she had sent it in but it was not clear whether she meant to the tribunal or to the Department.  She agreed to send a copy to the tribunal after the hearing, which would be given to Mr Cavanagh.  Mr Cavanagh considered that the evidence in the school letter should be disregarded because it was obtained “too late”.  That letter, from [Ms A], the principal of [School 1] in [Suburb 1] provides as follows: 

   [Child 2] Cavanagh has been a student at [School 1] in [Suburb 1] since Prep in 2011.  He is a friendly boy who presents with learning difficulties, especially in the area of literacy. 

   Our professional judgement is that [Child 2] would benefit significantly from working with a tutor twice a week to support his learning.  A modified program is currently in place for [Child 2] at school, but due to his learning difficulties he has areas in both reading and writing where he has fallen behind standard for his age.  In 2016 [Child 2] had external assessments completed at [a specified] Centre at [a] University which resulted in the (sic) [report] specifically detailing [Child 2]’s challenges.  This report identifies that [Child 2] meets the criteria for a Specific Learning Disorder (also known as dyslexia).  The school supports this finding based on the assessments we have conducted.   

7. Miss Cavanagh has provided evidence of the ongoing costs of tutoring.  The private tutor [has] confirmed that she was tutoring [Child 2] on a weekly basis since October 2016 at $50 per session.  On 1 March 2018, Miss Cavanagh provided a tax invoice from [Tutoring agency 1] dated 1 March 2018 and which outlines term based costs for tutoring for [Child 2] in the period 21 June 2017 to 30 January 2018.  The cost in that period is a total of $3,156 and the cost of lessons has increased to $54 per lesson in term one, 2018.  She also provided updated information from the tutoring company (21 June 2017) after an assessment done at that time reflected that he was two years behind the expected national curriculum standards in vocabulary, punctuation and grammar. The centre manager believes that tutoring should continue at the current level of twice per week. 

8. At hearing, Mr Cavanagh argued that the tutoring company has a vested interest in recommending tutoring, and so their opinion about the need for ongoing tutoring should be disregarded.  The tribunal considers that the [assessment] and letter is the primary reliable source about [Child 2]’s specific learning disorder and supports the need for continued tutoring and that the letter from [Mr B] is reasonable, based on what is established about the child’s learning development history, Miss Cavanagh’s evidence and the school’s confirmation.  

9. At hearing, Mr Cavanagh repeatedly stated that he had “always agreed to pay half of one tutoring lesson per week.”  This had been stated to an officer of the Department also.  This was based, however, on his view that [Child 2] had no learning disorder but would benefit from tutoring “as any child would”.  He has not, however, voluntarily contributed to tutoring at any stage of the child’s schooling despite acknowledging during the hearing that he had been aware of [Child 2] having tutoring even before the [assessment] in 2016.

10. After considering all of the evidence and information available, the tribunal finds that the child [Child 2] has special needs, and that tutoring is an essential tool in addressing his academic progress deficits which have been reliably documented by specialists in child development.  The costs allowed in the administrative assessment are $3,222 for [Child 2] (see page 160).  The tribunal finds that tutoring is indeed a special need and that at a current cost of approximately $1,000 per school term, it is a cost which has solely been met by Miss Cavanagh and which would significantly affect  the costs of maintaining the child, particularly given that it increases those costs by more than 25% and taking into account her low income and the level of child support payable under the administrative assessment. The tribunal finds that there are special circumstances in this case and the ground in subparagraph 117(2)(b)(ia) is established.  

Is it just and equitable to make a departure determination?

1. Having established a ground, the tribunal must consider whether a departure determination is just and equitable.  This requires consideration of the factors in subsection 117(4) of the Act.  The tribunal is considering whether Mr Cavanagh should be required to contribute half of the costs incurred by Miss Cavanagh at a rate of one lesson per week until 21 June 2017 and then two lessons per week from the commencement of term three, 2017. 

2. Mr Cavanagh has a significantly higher income than Miss Cavanagh. According to his Statement of Financial Circumstances, he earns $1,030 per week and his share of the  household personal expenditure is $465.  He refers to tax of $217 per week and child support of $154 per week.  He also included a minimum payment of $250 per week on his credit cards but on a balance of $5,000 this is unlikely to represent a required minimum weekly payment.  The tribunal considers at best it could be allowed as a weekly cost of $62.50.  The tribunal considers a reasonable estimate of Mr Cavanagh’s weekly expenses is approximately $900 per week.  He therefore has a small excess of income over his expenses.  Mr Cavanagh frankly acknowledged at hearing that he could afford to contribute $25 per week towards tutoring expenses.

3. Miss Cavanagh’s Statement of Financial Circumstances reflects that she is reliant on disability support pension, child support and family tax benefit entitlements and her total household income is an average of $892.35.  Her weekly expenses are $295 for herself, and $590 for the children plus $10 minimum credit card payments.  Her expenses are therefore closely related to her income from all sources, including child support. The tribunal is satisfied that Miss Cavanagh is in need of as much support as Mr Cavanagh is able to provide in meeting the costs of [Child 2]’s special needs.

1. Mr Cavanagh has repeatedly asserted a willingness to contribute to the costs of half of one lesson per week.

2. The tribunal accepts that Miss Cavanagh has been incurring costs for tutoring since at least the early part of the 2016 academic year but no evidence is available of those costs and the tribunal notes that a previous change of assessment application decision applies to the period where the annual rate was increased by $550 to take into account quite specific costs including the specialist [report]. 

3. For the purposes of this review, the tribunal accepts Miss Cavanagh’s evidence which is supported by documentary evidence and finds that the special needs costs she has incurred and will incur for tutoring are as follows:

• From October 2016 (term four):  [private] tutor: $50 per week for 11 weeks: $550.

• Private tutor for terms one and two, 2017: $1,100 (15 of a total 16 weeks) $800 + (two lessons for one week[Tutoring agency 1]: $104) = $904

• [Tutoring agency 1] terms three and four 2017:  $2080

• [Tutoring agency 1] term one, 2018: $972.

• Remainder of 2018 academic year @ two lessons per week @ $54 per lesson for terms two, three and four (total of 29 weeks) = $3,132.

1. Miss Cavanagh gave evidence that the child has significantly improved and she is currently “not sure how long” he will have two lessons per week.  The cost has been hard for her to meet, and this may impact on her capacity to maintain them at the current level. For this reason, the tribunal is reticent to make an order past the end of the current academic year,  and considers that the safest determination would take into account a cost of $108 per week for the remainder of the 2018 academic year, but not beyond that at this stage due to the uncertainty about the need for two lessons per week.  Similarly, given the child’s progress to this point, [Child 2]’s need for ongoing tutoring will need to be formally reassessed at some point, (particularly to facilitate the transition to secondary school) and so the tribunal (despite the desire to give parties certainty going forward given their high level of conflict in personal interactions) considers that any departure determination should only include a contribution by Mr Cavanagh to the end of the 2018 academic year.

2. The children are both in school and do not have significant income of their own.  [Child 1] has no special needs, though Mr Cavanagh raised concerns about her mental health and the need for some psychological treatment in future.  No such costs have been proven.  Given the likelihood that a Medicare Mental Health Plan will meet some if not all of such costs if they become necessary, the tribunal did not consider it appropriate to make any change to the assessment taking such costs into account. 

3. The parties both have the ordinary costs of self-support.  The formula makes provision for a base level of self-support and the tribunal did not consider that there was any evidence in this case which suggests that the departure determination should take into account specific “extra” costs of self-support of either party.  Miss Cavanagh’s income is significantly lower than the self-support amount.  Even if she finds some part-time work, her income is unlikely to increase to a level which would make the assessment unfair over the remainder of the assessment period to the end of 2018.  Mr Cavanagh’s income as a full-time worker is also expected to continue and to be reported in the usual manner. The tribunal does not consider there is any reason to vary the income used in the administrative assessment for either party and there is no basis on which either party should be assessed on a capacity to earn income higher than they currently earn. The tribunal also considers that ongoing court costs, which are or might be incurred, are not appropriately taken into account to increase or decrease the level of child support payable for the support of their children.

4. The tribunal considers that Miss Cavanagh has had the larger historical care of the children and therefore borne the greater proportion of the day-to-day costs of care, despite a significantly lower income than Mr Cavanagh.  There have been previous changes of assessment which have increased the assessment. This suggests that to ensure an equitable contribution from Mr Cavanagh towards the special needs costs (at the very least of half of the costs) a departure determination is required. 

5. The tribunal notes that historically, Mr Cavanagh has been in a stronger financial position than Miss Cavanagh, who relies on government benefits for her self-support.  The tribunal considered whether, on that basis, it was reasonable to “allocate” the special needs costs in proportion with the percentage of child support income was appropriate.  In this case, that would lead to a determination that Mr Cavanagh pay 100% of the special needs costs.  The tribunal considers that this would cause more hardship to Mr Cavanagh than is equitable in this review and noted that Miss Cavanagh has only ever sought half of the special needs costs and not a greater proportion than that, despite the hardship that meeting even half of that cost has caused and will cause her.  The tribunal decided that it was just and equitable in all of the circumstances of this case to require Mr Cavanagh to contribute half of the costs incurred and not a heavier proportion, despite his higher income and capacity to do so in the particular circumstances of this case.

6. The tribunal notes that at the time of Miss Cavanagh’s application, the previous change of assessment decision was set to continue until 17 May 2017 but took into account other expenses (the cost of report and ipad) related to [Child 2]’s special needs.  Theoretically, the tribunal could backdate the term of its’ decision a maximum of 18 months from the date of Miss Cavanagh’s application.  However, the tribunal was not minded to backdate the terms of its’ order in this case further than the commencement of the 2017 academic hear, given that the parties had previously “litigated” their dispute over [Child 2]’s special needs and the former change of assessment specifically addressed other special needs costs.  For that reason, the tribunal decided it would be appropriate to make any change to the assessment from the start of the 2017 calendar year.  Although the costs are only incurred during school terms, the tribunal considered that a departure determination should appropriately calculate how much was or would be paid over a calendar year and then require an increase to the assessment over that year to take into account the costs incurred.  This will give Mr Cavanagh the opportunity to spread the cost over the full year and makes for a more manageable determination. 

7. After considering all of the factors in subsection 117(4) of the Act, the tribunal considers that it is just and equitable to make a departure determination increasing the annual rate for the 2017 year by 50% of the total cost of $2,984 ($1,592) and the 2018 year by 50% of the total cost of $4,104 – ($2,052).  This will therefore increase the rate of child support payable by Mr Cavanagh from 1 January 2017 by $30 per week and from 1 January 2018 by $40 per week.

8. The tribunal’s decision will create arrears but in light of the costs incurred historically by Miss Cavanagh in meeting this need (which Mr Cavanagh has not contributed to during 2016) and also Mr Cavanagh’s awareness that tutoring costs have been incurred since 2016, the tribunal does not consider that making a determination of this nature is unreasonable or will cause Mr Cavanagh particular unwarranted hardship. The tribunal concluded that it is just and equitable to make a departure determination in the terms proposed.   

Is such a determination otherwise proper?

1. Mr Cavanagh works and Miss Cavanagh receives government benefits.  A determination in the terms above will have a very limited effect on the public purse though it might slightly reduce the amount of family tax benefit payable to Miss Cavanagh in some circumstances.  Given that it is based on the tribunal’s findings of the parties’ respective duty to meet the necessary costs of their children based on their capacity to do so, the tribunal finds that the tribunal’s proposed determination is otherwise proper.

DECISION

The Tribunal sets aside the decision under review and, in substitution, decides that a departure determination is made in the following terms:

• For the period 1 January 2017 to 31 December 2017, the annual rate of child support payable by Mr Cavanagh is increased by $1,492; and

• For the period 1 January 2018 to 31 December 2018, the annual rate of child support payable by Mr Cavanagh is increased by $2,052.