Charman and Charman (Child support)

[2021] AATA 1983

Charman and Charman (Child support) [2021] AATA 1983 (25 May 2021)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2021/SC021094

APPLICANT:  Mr Charman

OTHER PARTIES:  Child Support Registrar

Ms Charman

TRIBUNAL:Member P Jensen

DECISION DATE:  25 May 2021

DECISION:

The decision under review is set aside and, in substitution, Mr Charman’s estimate of income of $94,974 per annum from 5 August 2020 is accepted.

CATCHWORDS

CHILD SUPPORT – particulars of the administrative assessment – estimate of income - whether the estimate should have been refused - estimate of income accepted - 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

1. A child support case is registered with Services Australia - Child Support (“the CSA”) in respect of Mr Charman and Ms Charman’s three children. The Child Support (Assessment) Act 1989 (“the Act”) provides for an administrative assessment of child support payable which is based, in part, on the parents’ adjusted taxable incomes. The Act allows a parent to provide an estimate of income and, if accepted, the administrative assessment is based on that estimate, subject to a possible reassessment once the parent’s adjusted taxable income has been determined by the Australian Taxation Office.

2. On 5 August 2020, Mr Charman provided an estimate of income of $94,974 per annum for the remainder of the financial year. The CSA decided to accept the estimate. Ms Charman objected to that decision. An objections officer allowed her objection and refused the estimate. Mr Charman applied to the Tribunal for further review. I heard the matter on 25 May 2021. Mr Charman and Ms Charman gave sworn evidence by conference phone.

3. Mr Charman was unemployed during July 2019. He commenced employment in August 2019. He was paid a wage of $8,333 per month and a car allowance of $1,250 per month, which equates to $114,996 per annum, and he was still receiving those payments when he lodged his estimate. The objections officer refused Mr Charman’s estimate because his wages and car allowance significantly exceeded his estimate. However, Mr Charman was required to estimate his adjusted taxable income: subsection 60(3) of the Act. An adjusted taxable income is the sum of a number of components but, in Mr Charman’s case, the only relevant component was his taxable income. He explained that his employment requires him to incur significant tax-deductible expenses. During the hearing I asked him to locate his 2019-20 tax return and state his declared income and tax-deductible expenses. He said he received wages of $91,025 and a car allowance of $13,653, and he incurred car expenses of $15,581, travel expenses of $1,456, “other” expenses of $2,625, tax agent fees of $230 and a uniform expense of $150. That evidence accords generally with the fact that his 2019-20 adjusted taxable income was $85,072: page 191 of the hearing papers.

4. Mr Charman stated that the circumstances surrounding his employment had not changed since August 2019. Ms Charman did not dispute Mr Charman’s evidence and I accept it as correct. The effect of Mr Charman’s evidence was that as at 5 August 2020 his 2020‑21 adjusted taxable income was likely to be $114,996 - ($15,581 + $1,456 + $2,625) / 11 x 12 - $230 - $150 = $93,166. Section 63AA of the Act relevantly provides that Mr Charman’s estimate could be rejected if it was likely to be an under-estimate. For the reasons just stated, it was not likely to be an under-estimate. The original decision to accept his estimate of income was the correct decision.

DECISION

The decision under review is set aside and, in substitution, Mr Charman’s estimate of income of $94,974 per annum from 5 August 2020 is accepted.