Christie and Mitty (Child support) - [2023] AATA 2138

Christie and Mitty (Child support) [2023] AATA 2138 (15 June 2023)

DIVISION:Social Services & Child Support Division
REVIEW NUMBER:  2023/MC025487
APPLICANT:  Mr Christie
OTHER PARTIES:  Child Support Registrar
Ms Mitty

TRIBUNAL:Member T Hamilton-Noy
DECISION DATE: 15 June 2023
DECISION:

The Tribunal affirms the decision under review.

CATCHWORDS

CHILD SUPPORT – departure determination – costs of orthodontic costs for the child – a ground for departure established – decision under review affirmed

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

Mr Christie and Ms Mitty are the separated parents of [the child]. A case has been registered with Services Australia – Child Support (Child Support) since 3 January 2014 and payments are currently collectable by Child Support. Mr Christie is the payer of child support in this matter and Ms Mitty the payee.
The administrative assessments of child support in place at the relevant time provided for the following:
·For the period 1 August 2022 to 31 August 2022, Mr Christie was to pay $588 per annum in child support, based on his estimate of income of $71,279 and Ms Mitty’s 2020/2021 adjusted taxable income of $105,278.
·For the period 1 September 2022 to 30 June 2023, Mr Christie was to pay $180 per annum in child support, based on his estimate of income of $71,279 and Ms Mitty’s 2021/2022 adjusted taxable income of $113,061.
On 22 June 2022, Ms Mitty made a departure application on the basis of [the child]’s special needs (called “Reason 2” by Child Support); the manner in which [the child] was being educated (called “Reason 3” by Child Support); the transfer of money or goods (called “Reason 5” by Child Support); Mr Christie’s income, property and financial resources (called “Reason 8A” by Child Support); and Mr Christie’s earning capacity (called “Reason 8B” by Child Support).
On 26 September 2022, an employee of Child Support found a ground was established to depart from the administrative assessment of child support and made a departure determination that, for the period 1 August 2022 to 31 March 2023, the amount of child support payable by Mr Christie was increased by $2,463 per annum to reflect [the child]’s orthodontic costs.
On 24 October 2022, Mr Christie objected to this decision.
On 17 January 2023, an objections officer of Child Support disallowed the objection.
On 24 January 2023, Mr Christie made an application to the Administrative Appeals Tribunal for an independent review of Child Support’s decision.
A directions hearing was conducted with the parties on 4 May 2023, in which both parties participated by MS Teams audio. Following the directions hearing the Tribunal issued directions to the parties for the provision of further documents. Both parties provided further documents to the Tribunal in response to the directions issued.
The hearing was held on 15 June 2023, on which date Mr Christie attended the hearing in person and Ms Mitty participated by conference telephone. Both parties gave evidence on affirmation.
At the hearing, the Tribunal had before it documents provided by Child Support (1 to 506), documents provided by Mr Christie (A1 to A42) and documents provided by Ms Mitty (B1 to B24). Copies of all documents were provided to the parties prior to the hearing. Both parties confirmed receipt of all documents.

ISSUES

The statutory provisions relevant to this review are contained in the Child Support (Assessment) Act 1989 (the Assessment Act) and the Child Support (Registration and Collection) Act 1988.
The rate of child support payable by a liable parent is usually based on an administrative assessment under Part 5 of the Assessment Act. The liable parent or carer may apply to the Child Support Registrar for a determination to depart from the child support administrative assessment under Part 6A of the Assessment Act. Section 98C of the Assessment Act provides that the Registrar may make a determination to depart from the formula assessment and establishes a three-step process. The Registrar, and the Tribunal standing in the place of the Registrar, must be satisfied that:
(i)there is a ground to depart from the administrative assessment of child support;
(ii)it is just and equitable to depart; and
(iii)it is otherwise proper to depart.
The grounds for departure from an administrative assessment of child support are those set out in subsection 117(2) of the Assessment Act. Each ground is prefaced by the term “in the special circumstances of the case”. The term “special circumstances” is not defined in the legislation. In Gyselman and Gyselman (1992) FLC 92-279, the Full Family Court indicated that for there to be special circumstances, the facts of the case must establish something which is special or out of the ordinary.
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 Tribunal may make one of the determinations prescribed in section 98S of the Assessment Act.

CONSIDERATION

Issue 1 – Is there a ground established to depart from the administrative assessment of child support?

The Tribunal notes that a number of grounds were raised by Ms Mitty in her departure application to Child Support. The Tribunal first considered the ground relating to [the child]’s orthodontic costs.
Subparagraph 117(2)(b)(ia) of the Assessment Act provides that a ground for departure exists where, in the special circumstances of the case, the costs of maintaining the child are significantly affected because of special needs of the child.
It was not disputed that [the child] has received and completed the orthodontic treatment in question, and that Ms Mitty has paid for this treatment through a series of payments made between August 2022 and March 2023. The Tribunal accepted from the invoices contained in the Child Support documents and from the oral evidence of Ms Mitty at the hearing that the total cost of the treatment was $3,680 and that Ms Mitty received a rebate of $400 for the treatment. The Tribunal finds that out-of-pocket costs for orthodontic treatment undertaken by [the child] were $3,280.
As to whether there are special circumstances in this case due to [the child]’s special needs, the Tribunal noted that the term “special needs” is not defined in the Assessment Act. In Lightfoot and Hampson (1996) 20 Fam LR 69, the Family Court held that:
The broader category in (b) -- "special needs of the child" -- encompasses a wide range of needs of a child which are seen as "special" in the sense of necessary or at least desirable for that child's welfare but outside the "normal" needs of a child which would be catered for within the formula. This would include such things as unusual medical expenditure, facilities for a handicapped child, etc. If necessary it could include "special needs" in education.
In Holman & Child Support Registrar & Ors(SSAT Appeal) (No. 2) [2014] FCCA 2382, the Federal Circuit Court noted that orthodontic treatment that is essential rather than cosmetic may constitute special needs. The Tribunal was guided by these cases when considering the evidence presented by each of the parties.
The Tribunal had regard to a range of documentary evidence before it. This included:
A letter prepared by [Dr A] of [Orthodontics 1] dated 15 February 2022 stating (in relevant part) as follows:
My examination shows that [the child] has the following features:
·Eleven baby teeth present
·Mild crowding of the upper and lower teeth
·Underbite
-    This is due to significant jaw size difference with the lower jaw being larger than the upper jaw
To address these matters, I am recommending the following steps for [the child]:
·A fixed upper Expander appliance in conjunction with reverse pull headgear for approximately 12 months. Excellent compliance is needed with wearing the appliance (at least 10-12 hours per day)
-    As discussed, [the child] has a significant jaw size difference which will likely become more pronounced with growth especially given there is a family history. This means the treatment has a chance of relapsing down the track.
-    [The child] will likely benefit from braces once he has stopped growing. If jaw growth is excessive, then we may need to consider jaw surgery as a young adult.
-    I understand that compliance with wearing the headgear may be an issue and given there are no functional issues with the crossbite, I am happy to monitor [the child]’s bite and growth for now.
A letter prepared by [Dr B] of [Orthodontics 2] dated 16 June 2022 stating:
Today I with your patient, 8 year old [the child] for an orthodontic consultation.
Diagnosis
·    Class III malocclusion
·    Edge to edge occlusion
·    Maxillary & mandibular crowding
·    Narrow maxilla
·    Mandibular midline left of the facial midline
·    Crossbite tendency posterior teeth
·    CO-CR shift forward
·    Mesofacial
·    Straight profile
Treatment Plan
·    A Rapid Palatal Expander (RPE) and Reverse Pull Headgear will be fitted to expand the upper arch and protract the maxilla forwards whilst growth is still present to help normalize the maxillary position
·    Phase 2 orthodontic treatment will be required at the appropriate age. The hope is to prevent orthognathic surgery
A further letter prepared by [Dr B] dated 10 May 2023:
[The child] attended 16/6/22 for a consultation due to a skeletal discrepancy (Class III lower jaw sitting forward of upper jaw).
Treatment was started in July 2022 with an upper palatal expander and protraction headgear to modify jaw growth and hoping to prevent future orthognathic surgery (Letter dated 16/6/22 attached).
Improvement has occurred with completion of Phase 1 treatment scheduled for 26/7/23 after which full photos will be taken. The edge to edge bite has now changed to a positive overjet.
[The child] will be monitored until skeletal growth is complete. For a male this could be 18-20 years old. Then Phase 2 treatment including braces or clear aligners will proceed. Depending on future skeletal growth inclusive of extractions +/- orthognathic surgery may be needed. Unfortunately we cannot predict what will happen but Phase 1 treatment will either prevent or lessen the need or severity of extraction +/- orthognathic surgery. Phase 1 treatment in a growing Class III skeletal child at age 8/9 years is a very important and standard orthodontic treatment due to the well documented benefits. Once a child is older then this treatment is not possible thereby increasing the chances for future need of extraction +/- orthognathic surgery.
Ms Mitty’s written submissions to the Tribunal, citing a report by [Clinic] in 2021 stating the following:
“Left untreated, malocclusion can cause several health problems. Apart from causing dental problems such as decayed teeth, losing teeth or developing gum disease, malocclusion can affect how you chew food or how you speak. It can also damage your tooth enamel or cause problems with your jaw. Just as important, untreated malocclusion can affect your mental health. Researchers have found connections between malocclusion and self-esteem. Some studies show people who have malocclusion avoid social situations and relationships because they feel self-conscious about their appearance.”
Mr Christie submitted to the Tribunal at the hearing that the decision of Child Support is subordinate to the matters finalised in the Federal Circuit Court that outlined that the parties have joint decision making authority and that, where there is disagreement between the parties, [Dr C] ([the child]’s paediatrician) is required to be consulted. Mr Christie submitted that orthodontic treatment was elective and not essential and that it had been impossible for him and [Dr C] to be involved in the decisions around the orthodontic treatment. Ms Mitty had stated that if the procedure was not done, later on it might not be funded because it may be considered elective surgery, which indicates the treatment is not essential. As to whether any documents from [Dr C] had been provided, Mr Christie stated no because Ms Mitty did not consult [Dr C].
The Tribunal took Mr Christie to documents prepared by [the child]’s orthodontist and asked in what way these supported his assertion that the treatment was purely elective. Mr Christie stated in response that an orthodontist had stated they were happy to wait and monitor, and there had been other health consequences caused through the orthodontic treatment such as sleep problems, which is enough to cause doubt about its essential nature. The Tribunal asked Mr Christie to comment, in particular, on the letter stating that surgery may not be possible when [the child] is older, and Mr Christie stated that the question of desirability is subjective and that [the child]’s overbite was not a functional issue. As to where the evidence demonstrated no functional issues, Mr Christie pointed to a letter prepared by [Dr A] in February 2022 who stated they were happy to monitor [the child]’s overbite.
The Tribunal observed that the case law required the Tribunal to consider whether the treatment was necessary or at least desirable and asked Mr Christie to comment on this, and he stated that there was only the opinion of one orthodontist and proper procedure should have been followed. As to the medical evidence referred to in Ms Mitty’s written submissions, Mr Christie stated that a general article was cited and that, given the disagreement between them, the court orders should have been followed which would have allowed them to obtain a medical opinion. As to the costs for the medical treatment, Mr Christie submitted that his care cost is 33% and any reasonable assessment by the Tribunal should reflect this.
Ms Mitty gave evidence to the Tribunal at the hearing that the document prepared by [Dr A] in February 2022 has the comments about monitoring [the child] as a footnote rather than being central to the document. She had been advised at every dentist appointment she had attended that [the child] had an underbite and flat profile and, early last year, was told that it was time to see the orthodontist. She was told that headgear was recommended. As to any risks if orthodontic treatment was not proceeded with, Ms Mitty told the Tribunal that there may be regression as [the child] grows and the best chance to avoid more invasive treatment was to undertake treatment now. Ms Mitty submitted that if treatment is required later, this would involve invasive surgery which is painful and expensive and for which a Medicare rebate would be minimal. [The child]’s jaw structure could impact on their eating and talking in the future. Ms Mitty told the Tribunal that she had obtained a second opinion from [Dr B] who had been Mr Christie’s family’s treating orthodontist.
In making a decision in this matter, the Tribunal placed weight on the medical documentation before it, which states that the intention of having orthodontic treatment at this time is to prevent jaw surgery later in [the child]’s life. The Tribunal is satisfied from the evidence before it that [the child] commenced orthodontic treatment in 2022 due to concerns about his jaw, with the intention of preventing future jaw surgery. An earlier assessment that ongoing monitoring was reasonable was replaced by a subsequent assessment that the time was appropriate for previously discussed orthodontic treatment to commence. The Tribunal finds that the orthodontic treatment is not for purely cosmetic or elective reasons and is treatment that has a function-based objective. The Tribunal finds that the treatment undertaken is unusual or out of the ordinary compared to dental treatment that other children of the same age as [the child] receive. The Tribunal is satisfied from the totality of the evidence before it that the orthodontic treatment that [the child] has undergone establishes special circumstances in this case, given its unusual nature and the additional costs borne for the treatment to occur.
The Tribunal accepts that the total out-of-pocket costs for the treatment have been $3,280, with payments made by Ms Mitty between August 2022 and March 2023. The Tribunal accepts that these costs have significantly affected Ms Mitty’s costs of providing for [the child]. This ground for departure is established.

Issue 2 – Is it just and equitable to make a departure determination?

As the Tribunal is satisfied that there is a ground to depart from the administrative assessment of child support, the next step is to consider whether it is just and equitable as regards the child, the liable parent and the carer entitled to child support to make a particular determination in accordance with sub-subparagraph 98C(1)(b)(ii)(A) of the Assessment Act. This in turn requires the Tribunal to consider a range of factors, set out in subsection 117(4) of the Assessment Act. In addition to the orthodontic costs of [the child], already considered in some detail above, the Tribunal also took the following matters into consideration:

The nature of the duty of a parent to maintain a child and the income, earning capacity, property and financial resources of the child

There was no evidence before the Tribunal that [the child] has access to any other income, property or financial resources from which to support themself and the Tribunal finds accordingly. The Tribunal finds that [the child] is entirely reliant on their parents to meet all of their needs.

The proper needs of [the child]

Subsection 117(6) of the Assessment Act states that in having regard to the proper needs of the child, the court must have regard to the manner in which the child is being, and in which the parents expected the child to be, cared for, educated or trained; and any special needs of the child.
The orthodontic costs of [the child] have been discussed in some detail above.
The Tribunal accepted from the evidence given by Ms Mitty that [the child] has been diagnosed with attention deficit hyperactivity disorder and autism spectrum disorder and identifies as non-binary. The Tribunal accepted that [the child] has an NDIS package which provides them non-physical therapies including counselling and that there are no out-of-pocket costs for these medical needs.
The Tribunal noted that Ms Mitty’s departure application made to Child Support requested that costs relating to [the child]’s participation in [Activities 1 and 2] lessons also be considered. Ms Mitty told the Tribunal that Mr Christie had paid for these lessons for a number of years and she has been covering these expenses more recently. Ms Mitty told the Tribunal that [the child] is attending a government school. [The child] has difficulties with their fine motor skills and has undergone an assessment at school and [Activity 1] has been found to be therapeutic. Ms Mitty stated that she could probably obtain an assessment from an occupational therapist and obtain funding for these lessons, but Child Support had told her to put in everything to be considered. She stated that Mr Christie had contributed to [Activity 1] costs until Term 1 in 2022 and she has covered these costs since then.
The Tribunal finds that the normal range of extracurricular expenses are intended to be covered by the usual child support formula, on the basis that the care percentages attributed to parents are intended to reflect the proportion of care being provided by each parent for a child, and to reflect costs each parent is incurring during their time with the child, including taking them to extracurricular activities (see: Child Support Guide at 2.2.1). The Tribunal has also placed weight on Mr Christie’s contribution to these expenses over a number of years, prior to Ms Mitty taking over the costs some 12 months ago, in addition to Ms Mitty’s option of seeking the costs be covered through [the child]’s existing NDIS package. In weighing up all of these factors, the Tribunal considered that it would not be appropriate to increase child support payable to reflect [the child]’s extracurricular activities.

Ms Mitty also stated during the hearing that she is incurring health insurance and phone costs (which had been raised as a separate ground for departure with Child Support). Ms Mitty stated that the parents agreed that [the child] could have a phone. The Tribunal also considered that these costs form part of the usual costs for a child of [the child]’s age and are able to be recognised in the usual child support formula.

The income, property and financial resources of Mr Christie

The Tribunal accepts that Mr Christie is a PAYG employee who does not have any self-employment or company interests. Mr Christie gave evidence to the Tribunal, which the Tribunal accepted, that he was previously employed with [Employer 1] and that his employment commenced in July 2020. He worked for [Employer 1] for some 18 months, during which time his salary was $40,000 and he salary packaged $18,000. During this time, he worked 20 hours per week with [Employer 1], with some occasional extra shifts and relatively regular income. He was stood down without pay for three months, ceasing work in December 2021 and his employment income ceased in March 2022. In August 2022, he received a termination payment which was taxed. The Tribunal was provided a copy of the documents relating to the termination payment and accepted that a settlement agreement was reached between Mr Christie and his former employer following proceedings commenced at the Fair Work Commission. The settlement reached was for an employment termination payment of $16,781.80 less tax. The Tribunal accepted from Mr Christie’s evidence that the termination payment was paid to him in August 2022.
The Tribunal accepted that Mr Christie has held a second employment position with [Employer 2] since March 2019. He gave evidence that his employment arrangements in this position varied during the COVID-19 pandemic and increased when he had three months away from [Employer 1]. Since he left [Employer 1], he has worked 4.5 days per week, acting in a higher position for a brief period at the start of 2022 and again more recently in late 2022 to early 2023. He has an ongoing position with [Employer 2] and also receives salary packaging in this position in the amount of $18,000 plus a novated lease.
Mr Christie provided a copy of his 2021/2022 income tax return to the Tribunal. The income tax return indicated that Mr Christie had three employers in that financial year (earning $27,859, $23,097 and $972). He received an employment termination payment with a taxable component of $1,858 and gross interest of $716. Following work-related expenses and gifts or donations, his taxable income was $49,611. The income tax return also declared total reportable fringe benefits of $69,981. The Tribunal asked about the three employers reflected in the tax return and Mr Christie stated that the third related to a weekend of work for the election. The Tribunal accepted that the amount declared from a third employer was consistent with ad hoc work as claimed.
Mr Christie submitted to the Tribunal that the use of a 2021/2022 adjusted taxable income of $119,592 was unfair because Child Support had multiplied the fringe benefits by 1.88 – for example, an amount of $16,500 from salary packaging would be taken off his taxable income and added on as fringe benefit x 1.88. Mr Christie submitted that this reasoning is applied by the ATO regardless of an individual’s level of income and that his salary packaging from two employers made this approach particularly unfair.
As discussed with Mr Christie at the hearing, section 43 of the Assessment Act states that a parent’s adjusted taxable income for a child for a day in a child support period is the total of a number of components including a parent’s taxable income for the last relevant year of income (paragraph 43(1)(a) of the Assessment Act) and a parent’s reportable fringe benefits total for that year of income (paragraph 43(1)(b) of the Assessment Act).
The Tribunal finds that Mr Christie’s taxable income for 2021/2022 was $49,611 and that his reportable fringe benefits for 2021/2022 were $69,981. As both of these amounts are components of his adjusted taxable income for child support purposes, the Tribunal does not see any error in Child Support using an adjusted taxable income of $119,592 for the 2021/2022 financial year, even in circumstances where the fringe benefits have arisen from arrangements with two employers.
As to any other income, property or financial resources, Mr Christie’s Statement of Financial Circumstances stated that he has 50% ownership in his home and the estimated value of this is $369,840, a small amount of savings (under $400), a motor vehicle valued at $10,000, and household contents totalling $8,000. None of these items provides a financial resource that makes the use of Mr Christie’s PAYG income inappropriate in the child support assessment. The Tribunal accepted from Mr Christie’s evidence that he received an inheritance several years ago that was put towards his current home. The Tribunal also considered that this does not provide a current financial resource that makes the use of Mr Christie’s adjusted taxable income unfair.
Taking into account the above matters, the Tribunal finds that the use of Mr Christie’s adjusted taxable income appropriately and properly reflects the level of income, property and financial resources available to him from his employment arrangements. While the administrative assessments of child support used Mr Christie’s estimate of income of $71,279, the Tribunal noted that, by the time the Tribunal had proceeded to make its decision, Mr Christie’s 2021/2022 adjusted taxable income was being used for assessments issued to the parties on 2 May 2023.
The Tribunal also noted that, in the supplementary documents provided by Child Support, a reconciled income of $180,561 for Mr Christie had been used for the period 23 March 2022 to 30 June 2022. Mr Christie submitted to the Tribunal that the use of this amount was unfair and not representative of his actual level of income. The Child Support documents before the Tribunal indicated that this had been calculated based on Mr Christie’s income estimate of $17,121 for that period, which was significantly below what Child Support calculated Mr Christie had earned, being $49,469. The Tribunal asked Mr Christie about the estimate he had provided to Child Support in March 2022 and he gave evidence that he had provided Child Support with his payslips and they had calculated his income from these. In response to the Tribunal’s observation that he had actually earned $49,469 in that period, Mr Christie stated that it wasn’t his income, it was the reportable amount. When asked whether he had realised the fringe benefits formed part of his income for child support purposes, Mr Christie stated, “I did”, but stated that he had an issue with financial resources and had to sort out a deposit for his mortgage and needed to have that money available. The Tribunal asked Mr Christie to clarify that he knew that his estimate of $17,121 wasn’t accurate when he provided it to Child Support and he stated in response that the additional amount wasn’t just for the remainder of that financial year, and that he had showed Child Support the payslips and they didn’t take this into account. The Tribunal observed that Mr Christie had already earned over $70,000 at that point in the financial year when he put the estimate of income in, and observed that he knew the reconciled fringe benefits would be taken into account and therefore knew the information he had provided to Child Support would not be accurate, to which he stated that they knew how much he was earning. The Tribunal observed that Mr Christie had relied on Child Support not realising he was receiving fringe benefits, to which he stated that “they had worked out the amount”. The Tribunal asked whether this had been done because Mr Christie needed additional money to buy a house, and he stated in response that “pretty much everyone in community services does”.
The Tribunal observed that the Assessment Act requires reconciliation for a period in which an estimate has been provided. Mr Christie submitted that he had no intention to deceive Child Support. As to whether a penalty had been imposed for significant under-declaration of his income, Mr Christie stated he could not remember (Ms Mitty submitted that there had been). Mr Christie then stated that he had explained to Child Support the variable nature of his income and this had been removed. The Tribunal observed that this appeared to have been a generous interpretation of the circumstances described to the Tribunal. As to whether he had objected to the income reconciliation, Mr Christie stated he was going to but thought there would be no point as the matter was before the Tribunal.
The Tribunal finds that the reconciled estimate used by Child Support was calculated in accordance with subsection 64(4) of the Assessment Act and the Tribunal could find no error in the approach by Child Support. The evidence given by Mr Christie suggested to the Tribunal that he was aware he was not providing an accurate estimate to Child Support as of March 2022, as he was aware his income would eventually be reconciled to take into account his fringe benefits, but that he was more concerned about having funds available to him for the purchase of a house. As the high income attributed to him arises directly from his misrepresentation to Child Support about his actual level of income for child support purposes, and as the reconciliation is in accordance with the legislation, the Tribunal did not consider that any unfairness arises from the use of the reconciled estimate for a short period. Further, the Tribunal considers that it would be more appropriate for Child Support to consider any objection to the reconciliation as a separate avenue of objection available to Mr Christie, which would also allow Child Support to revisit questions arising under section 64AF of the Assessment Act, given the evidence given by Mr Christie to the Tribunal about the circumstances in which he lodged the estimate of income with Child Support.
The Tribunal finds that the adjusted taxable incomes used in the administrative assessments, as of the time the Tribunal is making this decision, appropriately reflect Mr Christie’s level of income, property and financial resources.

The income, property and financial resources of Ms Mitty

The Tribunal accepted that Ms Mitty is a PAYG employee and that she has been with her current employer for four years. Ms Mitty told the Tribunal that she does not receive any benefits through her employment arrangements, does not salary sacrifice and does not have any shares, rental property or any other investments. The Tribunal accepted this evidence as correct.
Ms Mitty’s Statement of Financial Circumstances indicates that she has equity in an uncompleted home in the amount of $65,000, savings of $42,000, a motor vehicle valued at $7,500 and household contents totalling $6,000. The Tribunal also accepted this evidence as correct. While Ms Mitty has significant savings, the Tribunal accepts that she has significantly less equity in her home in comparison to Mr Christie and that further funds will be required to complete her home. Any interest paid to Ms Mitty will be reflected in her income tax return and will form part of her adjusted taxable income.
The Tribunal accepted that Ms Mitty’s 2020/2021 adjusted taxable income of $105,278 and 2021/2022 adjusted taxable income of $113,061 accurately reflect her level of income, property and financial resources, used in the assessments issued to the parties on 2 May 2023. Ms Mitty stated in her Statement of Financial Circumstances that her current income is $2,200 per week gross ($114,400 per annum). The Tribunal considers that this is consistent with her earnings over the past two financial years and will be appropriately reflected in the assessments of child support at the time Ms Mitty lodges her next income tax return.
Mr Christie submitted in his evidence to the Tribunal that Ms Mitty receives carer payment for [the child]. As noted at the hearing, paragraph 117(7A)(b) of the Assessment Act requires the Tribunal to disregard any entitlement of a carer entitled to child support to an income tested pension, allowance or benefit when considering the parent’s income, property and financial resources. Ms Mitty’s receipt of carer payment has therefore not been considered by the Tribunal as an additional resource, when assessing her level of income, property and financial resources.
Mr Christie also submitted that Ms Mitty is making payments to [the child]’s extracurricular activities out of [a] Bank account, as evidenced in the Child Support papers. The Tribunal is satisfied on the evidence before it that Ms Mitty is a PAYG employee who derives her income and financial resources entirely from her employment income. The Tribunal did not accept Mr Christie’s submissions that the existence of this bank account (not referred to in Ms Mitty’s Statement of Financial Circumstances) demonstrates that Ms Mitty has access to any other income, property or financial resources that would make the use of her adjusted taxable income inappropriate.

The earning capacity of Mr Christie

Subsection 117(7B) of the Assessment Act requires the Tribunal to consider the following matters in determining whether a parent’s earning capacity is greater than is reflected in their income used in the administrative assessment:
·   Whether the parent:
oIs not working despite ample opportunity to do so (subparagraph 117(7B)(a)(i)); and/or
ohas reduced their weekly hours of work to below full-time work (subparagraph 117(7B)(a)(ii)); and/or
ohas changed their occupation, industry or working pattern (subparagraph 117(7B)(a)(iii)); and
·   If the parent’s decision about their work arrangements is not justified by either their caring responsibilities (subparagraph 117(7B)(b)(i)) or their state of health (subparagraph 117(7B)(b)(ii)); and
·   If the parent has not demonstrated that it was not a major purpose of their decision not to work despite ample opportunity to do so or to stop working, reduce their hours of work or change their occupation, industry or working pattern to affect the administrative assessment of child support (paragraph 117(7B)(c)).
The Tribunal accepted that Mr Christie’s working pattern changed during 2022 when he ceased working for [Employer 1] and increased his work with [Employer 2]. The Tribunal finds that this was due to Mr Christie being made redundant from [Employer 1] and was not purposefully done to affect the administrative assessment of child support. The Tribunal finds that it is not open to make an earning capacity determination in respect of Mr Christie’s circumstances.

The earning capacity of Ms Mitty

The Tribunal accepted that Ms Mitty is currently working full-time and has been with her current employer for four years. She has therefore not ceased working, reduced her weekly hours of work to below full-time work, or changed her occupation, industry or working pattern. The Tribunal finds that it is not open to make an earning capacity determination in respect of Ms Mitty’s circumstances.

The necessary commitments of Mr Christie

Mr Christie provided a Statement of Financial Circumstances to the Tribunal, in which he estimated household expenses of $1,614 per week. Of this amount, Mr Christie estimates he is paying $221 per week for [the child]’s costs; $111 per week of which was towards non-essential costs for entertainment, hobbies and holidays. The Tribunal accepted that the total estimated household costs are intended to reflect costs for Mr Christie, [the child] and Mr Christie’s wife.
The Tribunal observed that, of the regular weekly costs, the household was spending an estimated $200 per week on holidays and that this indicated a level of flexibility in the family’s finances. Mr Christie stated in response that this related to a trip to [Country 1] and [Country 2], in part for his wedding, and that this is not reflective of costs in other years for travel. He stated that the trip had cost $10,000 for himself, his wife and [the child]. Of the entertainment costs of $115 per week, he estimated that half would relate to [the child]’s activities and that the children’s activities of $20 per week related to [the child]’s [Activity 3] lessons.
As discussed with Mr Christie at the hearing, the Tribunal considered that the family’s expenses indicated a level of financial flexibility. The Statement of Financial Circumstances indicated the family is spending a reasonable proportion of its income on non-essential expenditure. The Tribunal was satisfied that Mr Christie’s estimated ongoing income of $1,826 per week was sufficient to cover his and [the child]’s necessary self-support expenses.

The necessary commitments of Ms Mitty

The Tribunal accepted that Ms Mitty’s household consists of herself, her partner, [the child] and her partner’s son who lives with them 50% of the time. Ms Mitty estimated weekly household expenses of $1,734, a proportion of which also relate to entertainment and holiday costs. The Tribunal finds that Ms Mitty is reliant on her partner’s income and on child support received to meet the total household costs.

The direct and indirect costs incurred by Ms Mitty in providing care for [the child]

The legislation requires the Tribunal to consider any direct and indirect costs incurred by the carer entitled to child support in providing care for the child. The Tribunal finds that, as Ms Mitty is in full-time employment, she is not foregoing any income from employment at present to provide care to [the child].

Hardship

Paragraph 117(4)(g) of the Assessment Act requires the Tribunal to consider any hardship that would be caused to Mr Christie or Ms Mitty, or to [the child], or to any child or other person that the parties have a duty to support, by the making of, or the refusal to make, a departure determination.
Mr Christie told the Tribunal that his partner is suffering an unknown medical condition and has had time away from work. Mr Christie stated that she has been off work for three weeks and it is unclear when she will return to work.
Ms MItty told the Tribunal that she is unable to afford to take [the child] to the activities that Mr Christie is able to enjoy with him.
The Tribunal considered that both households demonstrate a level of financial flexibility in their household expenditure. The Tribunal was not persuaded that Mr Christie would face a significant level of financial hardship if a departure determination is made by the Tribunal on reasonable terms.

What is the proposed departure determination in this case?

The Tribunal finds that the costs incurred by Ms Mitty for [the child]’s orthodontic treatment are significant and are necessary. The Tribunal considers that both parents should contribute equally to these costs. The objections officer from Child Support found that it was appropriate to increase child support payable by $2,463 for the period 1 August 2022 to 31 March 2023, as a result of which Mr Christie would contribute $1,640, or half, of the orthodontic costs incurred for [the child]. The Tribunal considered this an appropriate approach that fairly represents each parent contributing an equal amount to [the child]’s significant orthodontic costs.
For the reasons set out above, the Tribunal does not intend to vary either parent’s adjusted taxable income in making its decision in this matter or to increase child support to reflect [Activity 1], [Activity 2], phone or private health insurance costs Ms Mitty is currently meeting.
For the above reasons, the Tribunal has reached the same conclusions as Child Support, that it is appropriate to increase the amount of child support payable by Mr Christie for a period of time so that equal contribution can be made towards [the child]’s orthodontic costs, but not otherwise vary the child support assessment. The Tribunal finds that the decision to increase child support by $2,463 per annum for the period 1 August 2022 to 31 March 2023 is the correct and preferable decision in this matter, taking into account all of the above evidence and findings of the Tribunal.

Issue 3 – Is it otherwise proper to make a departure determination?

The third step is to consider whether it would be otherwise proper to make a particular departure determination in accordance with sub-subparagraph 98C(1)(b)(ii)(B) of the Assessment Act. Ms Mitty stated that she does not currently receive family tax benefit and the Tribunal decided that any departure determination made by the Tribunal is unlikely to have any impact on the public purse. The Tribunal therefore concluded that it is also otherwise proper to make the proposed departure determination and has affirmed the decision under review.

DECISION

The Tribunal affirms the decision under review.