Chipp and Chew (Child support)

[2022] AATA 4982

Chipp and Chew (Child support) [2022] AATA 4982 (2 December 2022)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2022/BC024689

APPLICANT:  Mr Chipp

OTHER PARTIES:  Ms Chew

Child Support Registrar

TRIBUNAL:  Member J Nalpantidis    

DECISION DATE:  2 December 2022

DECISION:

The decision under review is set aside and in substitution the tribunal decides that Ms Chew’s application that the fixed annual rate not apply to her is rejected.

CATCHWORDS

CHILD SUPPORT – particulars of the administrative assessment – whether a fixed annual rate of child support should not apply – income exceeds the allowable limit – the application for fixed annual rate not to apply should be refused - 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. Mr Chipp and Ms Chew are the parents of [the child] (aged eight years); a registered child support assessment has been in place between the parents since 14 October 2016.  Where the paying parent has a low taxable income, the child support legislation provides for a fixed rate of child support to apply in certain circumstances.

2. On 3 June 2022, Ms Chew made an application for the fixed annual rate of child support to not apply on the assessment for the period from 21 April 2022 to 20 July 2023.  She reported that she had just returned to Australia from living in [Country] and was earning minimal income at this time. Ms Chew stated that she was receiving $25 per hour for 2 to 3 hours per day for 1 to 2 days per week, earning a maximum of $150 per week.  Ms Chew advised she was living off her savings whilst trying to establish herself in Australia and would be making enquiries regarding her eligibility for Centrelink income support payments.

3. On 3 June 2022, Services Australia – Child Support (the Agency) made the decision to accept Ms Chew’s application for the fixed annual rate of child support to not apply on the assessment for the period from 21 April 2022 to 20 July 2023.

4. On 27 June 2022, Mr Chipp lodged an objection to this decision on the grounds that Ms Chew had moved to Australia and commenced working in Sydney as [an Occupation] on 27 May 2022.

5. On 24 August 2022, Mr Chipp’s objection was disallowed.  The effect of this objection decision was that there was no change in the assessment as a result of the objection decision.

6. On 19 September 2022, Mr Chipp applied to the tribunal for review of that decision.

7. The tribunal hearing took place on 2 December 2022. Mr Chipp and Ms Chew participated at the hearing by telephone via Microsoft Teams audio; they each provided oral evidence on affirmation and made oral submissions at the hearing. The Registrar did not participate in the hearing. The tribunal was assisted by an interpreter in [Language].  The tribunal had before it documents provided by the Registrar numbered 1 to 90 which had been copied to Mr Chipp and Ms Chew before the hearing.

CONSIDERATION

1. The relevant provisions are contained in Part 5, Division 8 of the Child Support (Assessment) Act 1989 (“the Act”). Section 65A of the Act provides for low-income parents who are not in receipt of income support payments to be assessed to pay a fixed annual rate of child support where, as here, the paying parent does not have at least shared care of the child or children.

2. A parent may apply, under section 65B of the Act, for the fixed rate not to apply to the child support case where evidence is provided by that parent to demonstrate:

   a.The parent’s income is less that the pension PP (single) maximum basic amount; and

   b.It would be unjust and inequitable to expect him or her to pay the fixed amount.

10.  Ms Chew must therefore demonstrate, by reference to evidence other than her income tax return, that her income was less than $22,888, being the maximum rate of parenting payment for child support periods that commenced in 2022, and that it would be unjust and inequitable for her to continue to pay the fixed annual rate.

11.  In this case, the Agency made the decision to accept Ms Chew’s application for the fixed annual rate of child support to not apply on the assessment for the period from 21 April 2022 to 20 July 2023, on the basis that Ms Chew’s income was less than the parenting payment (single) maximum basic amount — which is $22,888 for child support periods that commenced in 2022, and that it would be unjust and inequitable for Ms Chew to continue to pay the fixed annual rate.

12.  The Registrar must firstly consider whether the parent's income accurately reflects their real capacity to pay child support, including whether the parent receives goods, services or benefits which mean that their current income is not an accurate representation of their financial position. The Registrar must then decide whether it would not be unjust and inequitable to require the parent to pay the fixed annual rate despite their income being low.

13.  Mr Chipp objected to the Agency decision on the basis that Ms Chew was working 7 days per week as [an Occupation] and earning 'cash-in-hand'.  Mr Chipp stated:

Ms Chew is working as [an Occupation] for cash in hand 7 days per week. Ms Chew has not seen / or lived with [our child] since 28 May 2022. [The child] lives with me and stays fortnightly with Ms Chew's mum. I believed that Ms Chew was to finish the [Occupation] position in December 2021, but it was extended.

14.  In response to Mr Chipp’s objection, Ms Chew stated she returned to Australia on 10 March 2022, and worked part time as [an Occupation] for friends, during April and the first week of May. She stated that the total income earned in that time was approximately $1,000 in cash and excluding that cash income, she is living on her savings. Ms Chew lodged a written response to Mr Chipp’s objection as follows:

Firstly, I want to mention that Mr Chipp and I have a binding agreement made in [City] Court [Country] called Mediation Records and the official power is equal to a verdict made in [Country]. He promised that he will pay everything for [the child] by himself in order to be [the child]`s primary carer, and I only need to afford the expenses when it`s my turn to take care of [the child] both in [Country] and Australia. Please see the Record of Mediation, which I had highlighted for you in content paragraph 4 and Annexure(13).

Secondly, I just came back to Australia on March 10th this year. With many things to arrange, finding a job is not my priority, so I chose to be a part time [Occupation] for friends, which means I only worked 4-6 hours a day, none, one or two days a week in the hours rate 25 dollars during April and the first week of May. I don`t remember the accurate days, so roughly there would be 40 hours in total and the total income is about 1000 in cash.

Excluding the cash income, I basically am living on my saving. So far, I don`t have an official job. Please see the bank statement from March 10th as you asked.

15.  In support of her claim, Ms Chew submitted a record of mediation dated 16 February 2022 (translated from [Language] – stamped 9 March 2022) and [bank] statements from 10 March 2022 to 1 July 2022.

16.  In considering whether Ms Chew’s current income (being her income in the 12-month period from the date of her application for the fixed annual rate not to apply) is no more than the current relevant parenting payment (single) maximum basic amount of $22,888, the Agency reviewed her bank account statements for the period 10 March 2022 to 1 July 2022.  The Agency found no evidence of ongoing and regular deposits to indicate Ms Chew was employed or earning regular income when she lodged her application for the fixed annual rate of child support to not apply on the assessment.  The Agency noted Ms Chew’s statements showed a small balance of savings, which Ms Chew appeared to be utilising for her day to day living expenses. 

17.  The Agency also conducted a search of Centrelink records and there was no information to indicate that Ms Chew was in receipt of an income support payment.  A search of the Australian Taxation Office records did not reveal any alternate income sources for Ms Chew.

18.  Based on the available evidence the Agency was satisfied that Ms Chew was not in receipt of income support and her current income was genuinely low, and below the parenting payment (single) maximum rate.  On this basis of the evidence provided by Ms Chew, the Agency was satisfied it was unjust and inequitable to continue to pay the fixed annual rate of child support.

19.  During the hearing Mr Chipp submitted the evidence provided by Ms Chew was very limited and may not be truthful.  He told the tribunal that Ms Chew has not had care of the child since May 2022 and the child is in his 100% care.  He told the tribunal Ms Chew informed the child that the reason for this was that she was working.  In these circumstances he submitted it was unfair that Ms Chew did not pay the fixed annual rate.

20.  Ms Chew gave evidence she spent eight years in [Country] with the child and then came to Australia this year.  She had an agreement with Mr Chipp through mediation in [Country], in relation to care for the child and child support.  It was agreed the child would come to Australia for schooling (when she turned seven or eight years) and the father would pay for the child’s expenses while in Australia and she would not have to pay anything.  Ms Chew told the tribunal that it was planned she would have care of the child once per fortnight but it has not occurred yet.

21.  In response to the tribunal’s question, Ms Chew stated she did not have a job when she arrived in Australia so she did [Occupation] work with friends.  She earned $25 per hour and her hours were variable , sometimes only for a few hours.  She gave evidence this work was stable from April to May 2022 and she earned $1,000 over a three-week period from mid-April to mid-May 2022.  The Agency asked her to estimate her income and she provided this estimate of earning approximately $1,000 over three weeks.  Her friends then asked her to stay on and continue providing [Occupation] and she had to estimate her income for a longer term.  She plans to study to obtain a certificate to improve her job prospects.  Ms Chew gave evidence that she may not have worked the whole time; she and her friends kept each other company and she contributed to the housework over a few months.  Between May 2022 and December 2022, she was paid in cash.  She would need to talk to her accountant about her income in the period from May 2022.  She will need to work out her tax and how to start a new life working in Australia, including obtaining a tax file number and keeping a record of her earnings.

22.  In response to the tribunal’s question, Ms Chew stated she worked from home [doing Occupation] in the period September to November 2022 and earned $300 per day for six days per week; she confirmed this means she earns $1,800 per week and this has been the case from September to November.  Ms Chew told the tribunal that she may have earned $8,000 from September to November 2022. Based on Ms Chew’s direct evidence, the tribunal calculated over the three-month period from September to November 2022, Ms Chew earned $21,600 ($1,800 x 12 weeks).

23.  Ms Chew told the tribunal she stayed with friends when she arrived in Australia and provided [Occupation] to the family she stayed with.  She helped the family where she could and did not pay for accommodation or food.  She is unsure how much she spent, but it may have been a few thousand dollars.  For example, she sometimes paid for lunch and paid the costs of her car. 

24.  Ms Chew told the tribunal that she took a long holiday at the end of May until the end of August 2022 and stayed with friends “to help build myself again”.  She looked after a couple’s young baby at the time in September 2022 and then returned to Brisbane because she plans to have care of [the child] in the school holidays for eight weeks and will not work during this period because she is planning to undertake study.  She rents a small room and has low expenses because she keeps them to a minimum, estimating her expenses at $200 per week.  She told the tribunal that initially she did not claim Centrelink payments because she thought other people may need Centrelink payments more than she does, but she may now contact Centrelink to ask about claiming payments.

25.  Ms Chew stated she is not working currently and is meeting her expenses from her savings.  Ms Chew told the tribunal that she may have earned between $15,000 and $20,000 through the year and she has approximately $24,000 in bank savings. 

26.  Mr Chipp questioned the level of Ms Chew’s savings and referred the tribunal to entries in Ms Chew’s bank statements which show she had $59,000 in a management fund account which has not been disclosed.  Mr Chipp referred to an entry dated 19 May 2022 showing $50,000 was transferred out of Ms Chew’s account, and a further $8,000 was transferred on 30 May 2022.  He submitted this demonstrates that Ms Chew’s actual income is unclear.  The tribunal asked Ms Chew to respond and she told the tribunal she transferred these funds to get a higher rate of interest.  Ms Chew told the tribunal that her total savings at this time are (approximately) $73,000 contained in two accounts, one has $22,800 and the other $50,211.

27.  The direct evidence provided by Ms Chew to the tribunal shows she has earnings greater than $1,000; there was also evidence that Ms Chew was essentially provided with board and lodging for [Occupation] services she provided to the family she stayed with when she arrived in Australia.  Ms Chew also gave evidence that she was paid $300 for six days per week in the period September to November 2022, which represents approximately $21,600 over this three-month period.  There is evidence that she had earnings in other periods as well, including $1,000 in the April to May 2022 period.  The tribunal has found that the parenting payment (single) maximum basic amount for Ms Chew in the relevant period was $22,888.  Even if the tribunal accepts that Ms Chew had cash income of $21,600 plus $1,000, when considered in combination, the tribunal is satisfied that with Ms Chew’s earnings and receipt of goods, services, or benefits, in the form of board and lodgings, her income is more than $22,888.  Ms Chew also gave evidence of having some $73,000 in savings currently, an increase in her savings from earlier, which demonstrates a greater financial capacity than that reflected in the Agency’s findings.  The tribunal noted following the Agency’s investigations of Ms Chew’s financial circumstances, it found she had a small savings balance.  The tribunal has found Ms Chew has savings of around $73,000, which it does not consider a ‘small savings balance’.   

28. The tribunal is satisfied that the requirements of section 65B of the Act are not satisfied in Ms Chew’s case.

CONCLUSION

29.  The tribunal is satisfied that based on its findings about Ms Chew’s income and her overall financial position, including having savings of around $73,000, it would not be unjust and inequitable for the fixed rate to apply in relation to child support for the child.

30.  The tribunal is therefore satisfied that Ms Chew’s application that the fixed annual rate of child support not be applied to her case should not be accepted.

DECISION

The decision under review is set aside and in substitution the tribunal decides that Ms Chew’s application that the fixed annual rate not apply to her is rejected.