Chandra and Child Support Registrar (Child support)

[2020] AATA 2668

Chandra and Child Support Registrar (Child support) [2020] AATA 2668 (10 June 2020)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2020/MC018869

APPLICANT:  Ms Chandra

OTHER PARTIES:  Child Support Registrar

TRIBUNAL:Member M Baulch

DECISION DATE:  10 June 2020

DECISION:

The tribunal set aside the decision under review and, in substitution, decided that it is not possible to consider the revocation of the care percentage determinations, or to make new care percentage determinations, under Division 4 of Part 5 of the Child Support (Assessment) Act 1989, as a binding child support agreement made under Part 6 of the Child Support (Assessment) Act 1989 applies in this case.  

CATCHWORDS

CHILD SUPPORT – percentage of care – whether a percentage of care determination should be made – a binding child support agreement applies – request for variation to the provisional notional assessment was not sought - a new care percentage determination cannot be made - decision under review set aside and substituted

Names used in all published decisions are pseudonyms. Any references appearing in square brackets indicate that information has been omitted from this decision and replaced with generic information so as not to identify involved individuals as required by subsections 16(2AB)-16(2AC) of the Child Support (Registration and Collection) Act 1988.

REASONS FOR DECISION

BACKGROUND

1. This application for review is about the child support assessment applying in respect of [Child 1].

2. Ms Chandra and Mr [A] are the separated parents of [Child 1], who was born in 2005.  Since 2011 Services Australia – Child Support (Child Support), previously known as the Department of Human Services, have made assessments of the child support to be paid by Mr [A] to Ms Chandra in respect of [Child 1].

3. From 1 September 2019 a percentage of care determination made by Centrelink under the family assistance law has recorded Ms Chandra as having 35% care of [Child 1]. 

4. On 25 October 2019, Ms Chandra advised Child Support that the care arrangements for [Child 1] had changed.  That matter was considered by a Child Support employee who decided, on 6 January 2020, that there should be no change to the percentages of care applying in the child support assessment for [Child 1] (the decision under review).

5. Ms Chandra objected to that decision and, on 14 April 2020, that objection was disallowed.  Ms Chandra has now applied to this tribunal for an independent review of Child Support’s decision.

6. A hearing into the application for review was held by the tribunal on 10 June 2020. Ms Chandra participated in the hearing by telephone and gave sworn evidence during the hearing. A representative of the Child Support Registrar (the Registrar) did not participate in the hearing. The tribunal had before it relevant documents provided to it by Child Support pursuant to sections 37 and 38AA of the Administrative Appeals Tribunal Act 1975 (194 pages), copies of which Ms Chandra confirmed she had received prior to the hearing. 

ISSUES

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

2. The issues which arise in this case are:

   ·      Can a new determination of the percentages of care be made in this case; and if so

   ·      What are the care percentages that should apply to the child support assessment in respect of [Child 1]?

CONSIDERATION

1. Part 5 of the Act provides for an administrative assessment of the child support payable by one parent to the other. It uses a statutory formula which contains variables such as the parents’ adjusted taxable incomes, the number of children and their percentages of care.

Can a new determination of the percentages of care be made in this case?

1. Pursuant to Part 6 of the Act parents can take themselves out of the regime of formula assessments by entering into either limited or binding child support agreements. For an agreement to be a binding child support agreement it must satisfy specific requirements (see subsection 80C(2) of the Act). Ms Chandra and Mr [A] entered into a binding child support agreement on 23 January 2013.

2. It appears that the parties applied to the Registrar pursuant to section 88 of the Act for acceptance of the agreement and it was accepted pursuant to section 92 of the Act.   Following acceptance of the agreement the Registrar was required by subsection 94(1) of the Act to immediately take such further action (if any) as was necessary to give effect to the agreement. 

3. The Registrar was required by section 34B of the Act to assess the annual rate of child support for [Child 1] immediately after accepting the agreement and, pursuant to section 95 of the Act, was required in doing this to have regard to the terms in the agreement for the payment of periodic child support.  It appears that under that agreement, as at 25 October 2019, Mr [A]’s child support liability was $484.75 per month. 

4. Section 95 of the Act further provides that the provisions of the agreement specifying the periodic amounts to be paid have effect, for the purpose of Part 5 of the Act, as if they were an order made by consent by a court under Division 4 of Part 7 of the Act. The agreement that applies in this case is therefore, for the purposes of Part 5, taken to be an order made by a court under Division 4 of Part 7 of the Act.

5. As noted above, Part 5 of the Act provides for the application of a statutory formula, that includes the making of a determination as to a percentage of care for each parent in respect of their child. Division 4 of Part 5 addresses circumstances where existing determinations as to percentages of care can be revoked and new determinations made, depending on the specifics of each case. It was these provisions that the Registrar’s delegate has applied in the decision under review and, in doing so, refused to revoke existing percentage of care determinations.

6. However, the application of Part 5 of the Act is limited by section 35C, which states that:

   This Part applies in relation to the assessment of child support payable by a parent for a child, subject to:

   (a)any determination made by the Registrar under Part 6A (departure determinations); and

   (b)any order made by a court under Division 4 of Part 7 (departure orders); and

   (c)any provisions of a child support agreement that have effect, for the purposes of this Part, as if they were such an order made by consent.

7. It was my view that because there is a binding child support agreement applying in this case that is taken to be an order made by a court pursuant to Division 4 of Part 7 (noted at paragraph (b), above) then, pursuant to section 35C of the Act, Part 5 of the Act is subject to the terms of that agreement. This means that there is no legislative basis for Child Support to consider:

   ·      The revoking of any care percentage determinations that applied in this case prior to the parents entering the binding child support agreement;

   ·      The revoking of any percentage of care determination that has been made by Centrelink under the family assistance law since the parents entered into the binding child support agreement; nor

   ·      The making of new care percentage determinations. 

8. The only circumstance where percentage of care determinations may be relevant, when a binding child support agreement applies, is if a provisional notional assessment is made under section 146B of the Act.  The notional assessment specifies the amount of child support that would have otherwise been payable, had the binding child support agreement not applied. 

9. Where a provisional notional assessment is made, the Registrar must serve a notice specifying that assessment on the parents.  Pursuant to section 146E of the Act, a provisional notional assessment becomes a notional assessment on a specific date (usually 14 days after notice of the provisional notional assessment is received by all parties). 

10. A new provisional notional assessment must be made by the third anniversary of the most recent notional assessment (section 146F of the Act).  Once a provisional notional assessment has been made, a parent has 14 days from being notified of that provisional notional assessment to seek a variation by, amongst other things, notifying the Registrar of a change to a percentage of care for a child (paragraph 146C(1)(a) of the Act).

11. There is no evidence of a recent provisional notional assessment being made, when Ms Chandra contacted Child Support on 25 October 2019.  Nor is there any evidence to suggest that Ms Chandra contacted Child Support within 14 days of being notified of a provisional notional assessment.  I consequently found that Ms Chandra could not be taken to be seeking a variation to a provisional notional assessment on 25 October 2019.

12. So, it is my decision in this matter that since a binding child support agreement applies and Ms Chandra was not seeking a variation to a recent provisional notional assessment, then Part 5 of the Act has no application in this case. As a consequence, it was not open to Child Support to consider, and subsequently refuse to revoke, the care percentage determinations made by Centrelink that have applied under the family assistance law since 1 September 2019.

13. I noted that to all practical purposes, the outcome of my decision is the same as that of Child Support’s decision; the care percentage determinations applied by Centrelink from 1 September 2019 remain unchallenged.  However, Child Support misapplied the law in its decision and, for that reason, I decided to set aside the decision under review and substitute my own decision in accordance with these reasons. 

14. Having found it is not possible to consider making a new percentage of care determination in this case, I concluded that it was not necessary for me to proceed to consider the second issue identified above, being what the care percentages applying to the child support assessment in respect of [Child 1] should be.

15. Ms Chandra spoke about the impact of the Child Support’s decision on her family tax benefit entitlement.  If the care arrangements for [Child 1] change in the future, Ms Chandra might like to discuss those care arrangements with Centrelink as to whether or not new care determinations need to be made under the family assistance law, given my view that they cannot be made under the child support law.

DECISION

The tribunal set aside the decision under review and, in substitution, decided that it is not possible to consider the revocation of the care percentage determinations, or to make new care percentage determinations, under Division 4 of Part 5 of the Child Support (Assessment) Act 1989, as a binding child support agreement made under Part 6 of the Child Support (Assessment) Act 1989 applies in this case.