Clapham and Dimbleby (Child support)

[2023] AATA 2924

Clapham and Dimbleby (Child support) [2023] AATA 2924 (28 July 2023)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2022/HC024992

APPLICANT:  Mr Clapham

OTHER PARTIES:  Child Support Registrar

Ms Dimbleby

TRIBUNAL:Member C Breheny

DECISION DATE:  28 July 2023

The decision under review is set aside and a decision substituted that:

• For the period 1 January 2022 to 31 December 2026 the rate of child support payable by Mr Clapham is set at $5,400 per annum.

CATCHWORDS

CHILD SUPPORT – departure determination – income, property and financial resources of the liable parent – a ground for departure established – decision to depart - 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. Ms Dimbleby and Mr Clapham are the separated parents of [Child 1], born [in] May 2008 and [Child 2], born [in] February 2012. A child support case has been registered with Services Australia – Child Support (Child Support) since 5 December 2012 and registered for collection from 28 April 2014. Since 1 February 2021 child support is payable on the basis that Ms Dimbleby and Mr Clapham have 50% shared care of the children and Mr Clapham is assessed as liable to pay child support to Ms Dimbleby.

2. There have been previous departure determinations in this case. The most recent one was lodged on 24 February 2019 by Ms Dimbleby and ultimately determined by the Social Services and Child Support Division of the Administrative Appeals Tribunal (the Tribunal) in a decision of 23 July 2020. The Tribunal (differently constituted) affirmed the objection decision such that Mr Clapham’s adjusted taxable income was set at $90,400 for the period 24 February 2019 to 31 December 2021 and Ms Dimbleby’s adjusted taxable income was set at $39,959 for the period 24 February 2019 to 31 October 2020.

3. For the period 1 September 2021 to 31 December 2021 Mr Clapham’s child support liability was $2,954 per annum, based on an adjusted taxable income of $90,400 for Mr Clapham (as set by the departure determination) and Ms Dimbleby’s 2020/21 adjusted taxable income of $66,892. From 1 January 2022 to 30 November 2022 the rate of child support payable was $188 per annum based on Mr Clapham’s 2020/21 provisional income of $68,347 and Ms Dimbleby’s 2020/21 adjusted taxable income of $66,892.

4. On 9 November 2021, Ms Dimbleby applied to Child Support for a further change of assessment on the basis that Mr Clapham’s income, property and financial resources were not accurately reflected in the assessment from 1 January 2022. On 28 March 2022, decision maker Clarke decided to change the administrative assessment and determined that for the period 1 January 2022 to 30 September 2023 Mr Clapham’s adjusted taxable income was set at $90,400.

5. On 24 May 2022 Ms Dimbleby objected to the decision. She was granted an extension of time to lodge her objection on 5 July 2022. On 17 October 2022 a Child Support objections officer decided to partly allow the objection. The objections officer decided that for the period 1 January 2022 to 31 December 2025 Mr Clapham’s adjusted taxable income was set at $150,000 per annum.

6. On 8 November 2022, Mr Clapham applied to the Tribunal for an independent review of Child Support’s decision, but on 17 January 2023 he withdrew his application. Ms Dimbleby requested a reinstatement of the application which was granted by the Tribunal (differently constituted) on 15 February 2023. A hearing of the application for review was initially scheduled for 23 May 2023 but Mr Clapham applied for the hearing to be rescheduled. A hearing into the application for review was subsequently held on 4 July 2023. Ms Dimbleby and Mr Clapham attended the hearing by telephone. Ms Dimbleby gave evidence on affirmation and Mr Clapham gave sworn evidence. 

7. I had before me the statement and documents provided by Child Support pursuant to subsection 37(1) and section 38AA of the Administrative Appeals Tribunal Act 1975, received on 5 December 2022 and 4 May 2023 respectively and numbered 1–502. I also considered additional documents provided by Mr Clapham (marked A1–A70) and Ms Dimbleby (marked B1–B17) as a result of written directions issued on 28 March 2023.

8. On 4 July 2023 I deferred making a decision to allow Mr Clapham to submit further evidence (A71–A115). Ms Dimbleby also submitted additional information (B18–B23). The documents were exchanged for comments. Comments were received from Mr Clapham only (A116) and I made my decision once these were received.

LEGISLATIVE FRAMEWORK AND ISSUES

1. The legislation relevant to this review is contained in the child support law, in particular the Child Support (Assessment) Act 1989 (the Act) and the Child Support (Registration and Collection) Act 1988.

2. The rate of child support payable by a liable parent is usually based on an administrative assessment under Part 5 of the Act. This requires the application of a statutory formula, which takes into account factors such as the number of children, the level of care provided and the income of each parent. Either the liable parent or the carer entitled to child support may apply to the Registrar for a determination to depart from the child support administrative assessment under Part 6A of the Act (section 98B). Section 98C 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 place of the Registrar, must be satisfied that a ground for departure exists and that it is just and equitable and otherwise proper to make a departure determination.

3. The grounds for departure from an administrative assessment of child support are those set out in subsection 117(2) of the Act. 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 Act.

4. In the legislation, each ground for departure is prefaced by the words “in the special circumstances of the case”. Therefore, when considering whether one (or more) ground exists, the Tribunal must be satisfied that there are “special circumstances” in the case. The phrase “special circumstances of the case” is not defined in the Act. The Full Family Court, in the case of Gyselman and Gyselman (1992) FLC 92–279 stated that:

   It is intended to emphasise that the facts of the case must establish something which is special or out of the ordinary. That is, the intention of the Legislature is that the court will not interfere with the administrative formula result in the ordinary run of cases.

5. Subsection 98C(3) of the Act provides that subsections 117(4) to (9) of the Act apply and the Tribunal must consider these when deciding whether it would be just and equitable or otherwise proper to make the departure decision.

CONSIDERATION

A ground for departure

1. Ms Dimbleby asked for a departure from the administrative assessment on the basis that the assessment does not correctly reflect the parties’ respective income, property and financial resources (also known as “Reason 8A”).

2. Neither party submitted that the other had greater earning capacity for the purposes of this review and I have thus not considered this issue further.

Income, property, financial resources and earning capacity of both parties

1. Subparagraph 117(2)(c)(ia) of the Act provides that, in the special circumstances of the case, a ground for departure may be established if application of the legislative provisions relating to an administrative assessment results in an “unjust and inequitable determination of the level of financial support to be provided by the liable parent” due to the income, property and financial resources of either parent.

Mr Clapham – income, property and financial resources

1. At the time Ms Dimbleby lodged her application on 9 November 2021 child support liability was $2,954 per annum, based on Mr Clapham’s adjusted taxable income of $90,400 set by a previous departure determination. The determination ended on 31 December 2021 and from 1 January 2022 the annual rate of child support reduced to $188 based on Mr Clapham’s provisional taxable income of $68,347.

2. Ms Dimbleby submitted that Mr Clapham was involved in a business and had access to greater financial resources. His lifestyle (frequent holidays, expensive cars and the ability to pay high legal fees) did not match an income of about $65,000.

Business ownership/control

1. Ms Dimbleby asserted that Mr Clapham has access to the financial resources of two businesses, [Business 1] and [Business 2] with the associated [Trust 1]. She said that [Business 1] was established in November 2007 by Mr Clapham as a “sole trader” business and she used to manage the company’s accounts at the time. Ms Dimbleby acknowledged that [Business 1] underwent many changes since then but she asserted that Mr Clapham continues to be involved in [Business 1] and has access to its financial resources. Ms Dimbleby provided a copy of a “LinkedIn” page which continues to identify Mr Clapham as “Managing Director” of [Business 1] (folio 129) and copies of emails (dated 22 November 2022 and 23 June 2023) sent by Mr Clapham in which he is identified as “Director, [Business 1]” (folios B19–B22).

2. Mr Clapham agreed that he was a director of [Business 1] in the past but this changed in 2017 when the company went into voluntary administration. Mr Clapham further submitted that his involvement with [Business 1] had been thoroughly examined in previous decisions by the Tribunal and there should be no need to examine this issue again.

3. I note that in the decision of 19 September 2017 the Tribunal (differently constituted) made the following findings of fact:

   ·that Mr Clapham is a director and 50% shareholder of [Business 1];

   ·that an administrator ([named]) was appointed on 21 April 2017 and that [Business 1] was in a difficult financial state at that time;

   ·that [Partner A] was appointed as general manager of [Business 1] in 2014;

   ·that Mr Clapham continued to derive a financial benefit from [Business 1] by way of his position as director and major shareholder of [Business 1].

4. In a decision of 23 July 2020 the Tribunal (differently constituted) made the following findings:

   ·that Mr Clapham was no longer director/secretary of [Business 1], but his partner, [Partner A], was the sole director/secretary;

   ·that Mr Clapham and [Partner A] are joint directors/secretaries of [Business 2] and jointly own the shares in [Business 2];

   ·that there are 200 shares in [Business 1], and that Mr Clapham’s father owns 75 shares, a third party owns 25 shares and [Business 2] owns 100 shares;

   ·that through Mr Clapham’s joint directorship and joint shareholding (with [Partner A]) in [Business 2], they are the controlling shareholders of [Business 1], albeit only if they exercise their shareholder’s rights in unison;

   ·that Mr Clapham is an employee of [Business 1] and receives a salary.

5. Mr Clapham provided a letter from [Partner A], dated 14 July 2023 (folio A72), in which she states that she is the “sole company director” and makes “all business decisions relating to the overall financial and operation affairs of [Business 1]”. She notes that she was appointed as director of [Business 1] in 2017, following a period of voluntary administration, and that neither Mr Clapham nor any of the other shareholders had any input into or control of her appointment as director.

6. Information from ASIC obtained by Child Support on 1 July 2022 (folio 201) indicates that Mr Clapham ceased being a “director” and “secretary” of [Business 1] on 18 August 2017. It also indicates that he became “director/secretary” of [Business 2] on 7 April 2017 together with [Partner A] and both hold 50% each of the shares of this company.

7. Child Support documents further indicate that [Business 1] issued 200 shares, 25 of which are held by a third party and 75 by Mr Clapham’s father. Mr Clapham used to hold the remaining 100 shares but these have since been transferred to [Business 2] and are now owned 50% each by [Partner A] and Mr Clapham (folios 385–386).

8. Mr Clapham said that this arrangement had recently changed and he is no longer a director of [Business 2]. He said that the change occurred in late 2022. Mr Clapham was invited to produce evidence to this effect but he did not. I thus find that he remains a 25% shareholder of [Business 1] via [Business 2]. I will accept however that he does not have significant decision-making power or control in terms of the general operations of [Business 1]. This lies with his life partner, [Partner A].

Business income

1. Mr Clapham was asked to provide financial statements and bank accounts for [Business 1] and [Business 2] but he did not do so. Information from [Bank 1] (folio 230) indicates that he is a joint signatory to the [Business 1] business account (xxxx6875). He is also joint signatory to several [Bank 2] accounts and sole signatory to the [Business 2] business accounts (folios 144–145).

2. Mr Clapham submitted that “the Director of both [[Business 1] and [Business 2]]” determined that the financial information relating to the business entities was “commercial in confidence” and would not be released to the Tribunal and Ms Dimbleby (folio A11). I do not accept Mr Clapham’s submissions in this regard. At the very least, he is also a director of [Business 2] and would thus have access to the information from that business entity and as noted above, he is signatory to all relevant accounts and would have been able to access these should he have chosen to do so.

3. The objections officer noted that the last available tax return for [Business 1], being for the 2019/20 financial year, indicated company income of $3,585,676 and a company taxable income of $383,160 (folio 12). The objections officer considered that Mr Clapham should be entitled to about 50% of this income (about $191,500) in addition to the salary he is being paid. Mr Clapham argued that he should only be considered a 25% shareholder, as 50% of [Business 1] shares are held by [Business 2] which is jointly owned by him and [Partner A] (folio 390). This approach would therefore suggest that about $95,000 should be added to Mr Clapham’s salary, being his 25% share of company profits.

4. As noted above, Mr Clapham did not provide more recent financial information about [Business 1]. Child Support obtained business bank statements (xxxx6875) for the period 15 March 2021 to 15 March 2022. The bank statements indicate total credits to the [Business 1] business account of $4,997,561.79 in that period (folio 344). While the bank statements do not cover the entire 2021/22 financial year, it appears that [Business 1] business income has been increasing since 2019/20 and there appears to be no reason why current business profit should not be (at least) in the vicinity of $380,000.

Personal income

1. Mr Clapham said that he is employed by [Business 1] as a sales representative and he receives a regular wage from the company. Mr Clapham said that his wages have always been about $65,000 per year and nothing much has changed in this regard. Child Support records indicate that his 2017/18 taxable income was $63,040 and his 2018/19 taxable income was $64,846 (folio 427).

2. Mr Clapham said that he “was not aware” that he had not lodged a tax return since 2019 and he has now provided his tax returns for 2021/22 (folios A79–A93) and 2022/23 (folios A99‍–‍A113). Both were prepared on 18 July 2023. The 2021/22 tax return indicates a taxable income of $69,689, comprising of wages of $69,998 plus $1 interest minus $310 deductions. The 2022/23 tax return indicates a taxable income of $64,722, comprising of $65,000 wages, plus $32 interest, minus $310 deductions.

3. Payslips provided by Mr Clapham for the period 23 December 2021 to 12 January 2022 indicate a gross weekly income of $1,249.82 (folios 209–211) which would amount to an annual wage of about $65,000. It would appear that Mr Clapham was also paid a “Living Away from Home” allowance of $10,150 (identified on his payslips as “wages”). This then would amount to a taxable income of $75,191 in 2021/22 ($75,000 wages, plus $1 interest, minus $310 deductions).

4. Payslips provided by Mr Clapham for the period 24 November 2022 to 29 March 2023 (folios A12–A29) show a gross payment of $1,650 per week ($1,250 wages plus $400 allowance) or $85,500 per year. This would result in a 2022/23 taxable income of $85,222 ($85,500 wages, plus $32 interest, minus $310 deductions).

5. I note that these payslips indicate a net income of $1,401 per week (based on gross wages of $1,650 per week). Mr Clapham’s (and [Partner A’s]) wages are deposited into account number xxxx3091. Account statements for the period September 2021 to December 2021 (folios 156–187) show that net wages of $1,401 were deposited from 14 October 2021 (folio 171), thus Mr Clapham must have received a gross weekly income of $1,650 since that time.

6. I further note that Mr Clapham applied for a personal loan with [Bank 2] on 17 March 2020. In his application he provided evidence that his monthly salary was $8,547 or about $102,564 per annum (folio 193). Mr Clapham said in the hearing that he could not recall the loan application but probably “increased his salary” to obtain the loan. He later submitted that the wages provided to the bank in his loan application dated back to 2020 and had “no relevance in determining his income from 1 January 2022” (folio A71).

7. Mr Clapham’s income in the 2019/20 financial year was subject to a previous change of assessment application and was ultimately reviewed by the Tribunal (differently constituted). I note that Mr Clapham told the Child Support objections officer in November 2019 (folio 43) that his salary was $65,000, plus a living away from home allowance of $10,400 per year ($75,400 per year), and he made the same statement to the Tribunal during their review in July 2020.

8. Based on the evidence before me I find that Mr Clapham’s submissions about his personal income lack credibility. The information contained in his tax returns does not correspond to the information shown on his payslips and the information contained in some of the payslips does not correspond to the net wages deposited into his bank account. He also appears to be able to “vary” his wages to suit his purpose. I am therefore not persuaded that Mr Clapham’s payslips and recent tax returns represent an adequate reflection of his personal income.

Additional financial resources

1. Ms Dimbleby submitted that Mr Clapham had access to other financial resources, such as a car, phone and credit card paid for by [Business 1]. Mr Clapham agreed that he had access to a company car and mobile phone and estimated the value for private use of these to be about $202 per week or $10,504 per year (folio A3). Mr Clapham noted in the hearing that his private use of the company car had probably reduced now as he works on a “week about” basis in both [two different states] (seven days in each state). He said he would fly to [one state] for work only and would not need a car for private purposes during that time.

2. Bank accounts before me (for the period September to December 2021) indicate that leases for two vehicles (identified as “[Business 1 Vehicle 1]” and “[Vehicle 2]”) are paid from the [Business 2] account (xxxx4095) with funds transferred from [Business 1] (e.g. folios 153–154). The [Business 1] account statements (xxxx6875) before me indicate that from March 2021 to March 2022 about $60,230 was transferred to [Business 2]. Most of the funds in account xxxx4095 were used to pay vehicle leases and for purchases from “[Business 3]”.

1. Evidence obtained by Child Support (folio 144) shows that Mr Clapham is the only signatory to the [Business 2] account (xxxx4095) and he was asked to provide more recent account statements for the purposes of this review. Mr Clapham did not provide this evidence or any documentation to indicate that he was no longer a signatory to this account.

2. Mr Clapham noted on his Statement of Financial Circumstances that he has a “[Finance Company 1]” credit card. I note that the [Business 1] account statements indicate that between March 2021 and March 2022 a total amount of about $309,200 was transferred to “[Finance Company 1]” (e.g. folios 235, 239, 242). This is a considerable sum and I will infer that most of these transfers relate to business expenses. I note however that even if only 5% of credit card payments related to personal expenses, it would provide an additional financial resource of about $15,500 per year for Mr Clapham. Mr Clapham was asked to provide credit card statements for “[Finance Company 1]” for the purposes of this review but he did not do so.

Summary

1. Ms Dimbleby submitted that Mr Clapham had access to far greater financial resources than the income of about $65,000 per annum he declares. She alleged that Mr Clapham was using the company structures to minimise his income for child support purposes by stepping away from being a company director and placing “everything in [Partner A’s] name”.

2. Mr Clapham stated that [Business 1] went into voluntary administration and the administrator appointed [Partner A] as “director”. He had “no say” in that decision. Mr Clapham noted that he was not interested in running a company anymore and was content to be “an employee” only. He wanted to spend a lot of time with his children, particularly since early 2021 when he was able to have 50% shared care of the children.

3. I have considered the available evidence before me. Much of my analysis is based on financial information from 2021 which was obtained by Child Support. As noted several times above, Mr Clapham was asked to provide updated financial information in the form of business financial statements and bank account statements for the purposes of this review, but he did not do so. Even if he did not have access to business financial statements for [Business 1], because he is no longer a director, he remains a shareholder of [Business 2] and a signatory to all relevant bank accounts and I see no reason why these should not have been provided.

4. I have significant concerns that the limited information provided by Mr Clapham does not give an accurate picture of his financial situation. Mr Clapham has an obligation to make full and frank disclosure of his financial affairs to assist me to come to the correct or preferable decision.[1]  The onus is on Mr Clapham to present his financial affairs and records in a manner that is both transparent and readily understandable.[2]

   [1] Humphries & Berry [2008] FMCAfam 409

   [2] Morse & Potts [2010] FMCAfam 1305

5. The evidence that Mr Clapham did provide (payslips and tax returns) is inconsistent, as the tax returns do not reflect the information on his payslips. Similarly, I note that Mr Clapham has maintained since (at least) 2019 that his income has not changed and has always been about $65,000 per annum, yet he was able to confirm to [Bank 2] for the purposes of obtaining a personal loan in March 2020 that his income was about $102,500 per annum.

6. It is extremely difficult under these circumstances to make a finding of Mr Clapham’s income and financial resources but I am persuaded that these would amount to (at least) $111,222 per annum[3] from (at least) 1 January 2022.

Ms Dimbleby – income, property and financial resources

[3] $85,222 wages (incl. allowance) based on most recent payslips and bank account statements + $10,500 private use of car/phone + $15,500 estimated private use credit card

1. Ms Dimbleby is employed by [Agency 1] as [an occupation 1]. She provided payslips (folios B9–B17) indicating that she earns $2,246.79 (gross) per fortnight or about $58,416 per year. Her net pay is $1,747.33 per fortnight (about $874 per week).

2. Ms Dimbleby’s 2021/22 income tax return indicates a taxable income of $60,753, as well as reportable fringe benefits of $16,999 (folios B6–B7). The fringe benefit amount is added back for child support purposes for an adjusted taxable income of $77,752. This amount has been used in the child support assessment from 1 December 2022 (folio 419).

3. Records indicate that Ms Dimbleby’s 2020/21 adjusted taxable income was $66,892 and her 2019/20 adjusted taxable income was $46,004 (folio 429).

4. I have no evidence that Ms Dimbleby has any other source of income, and I am therefore satisfied that Ms Dimbleby’s income, property and financial resources are adequately represented by her annual income tax returns.

Conclusion – income, property and financial resources of both parties

1. When Ms Dimbleby lodged her departure application on 9 November 2021 (the 2021/22 financial year), the rate of child support was $2,954 per annum based on Mr Clapham’s adjusted taxable income of $90,400 (set by a previous departure determination) and Ms Dimbleby’s 2020/21 adjusted taxable income of $66,892. Child Support liability reduced to $188 per annum from 1 January 2022, as the departure determination ended and the assessment was based on Mr Clapham’s provisional income of $68,347.

2. I have found that Mr Clapham’s actual income and financial resources from January 2022 onwards amounted to about $111,222 per annum and I have estimated that Mr Clapham’s child support liability for the children, if calculated on the basis of his actual financial resources, would be $5,430 per year from 1 January 2022. This amount reduces by about $27 per week if Ms Dimbleby’s 2021/22 taxable income is used in the assessment, which I do not consider significant.

3. I find that the difference between an annual child support liability of $5,430 and the annual rate of child support ($188) based on Mr Clapham’s 2021/22 provisional income is so great that it gives rise to special circumstances in this particular case.

4. I am therefore satisfied that the ground for departure set out in subparagraph 117(2)(c)(ia) of the Act has been made out in respect of Mr Clapham’s income, property and financial resources only.

5. Subparagraph 98C(1)(b)(i) of the Act is satisfied if “one, or more than one” of the grounds for departure is established. Having found one ground for departure established, I will now consider whether it is just and equitable to make a departure determination.

Just and equitable

1. The requirement to consider whether a departure would be just and equitable directs that my attention is turned to what is fair to the parents and their children. To do so I must have regard to a number of factors set out in subsection 117(4) of the Act, such as the needs of the children, the parents’ commitments and any hardships that would be caused by departing, or not departing, from the statutory formula.

Mr Clapham

1. Mr Clapham provided a Statement of Financial Circumstances (folios A1–A9) in which he indicated a current income from employment of $1,452 per week (about $75,505 per year). I note that Mr Clapham indicated that [Partner A’s] income was $1,903.85 per week (about $99,000 per annum) while he stated in his 2022/23 income tax return that her income was $134,634 or about $2,589 per week (folio A104).

2. Mr Clapham listed taxation, credit card and private health insurance expenses of $374.50 per week. He apportioned all household expenses equally between himself, [Partner A] and the children. Household expenses for himself and the children amount to $1,095 per week and include $200 per week for entertainment, holidays and gifts, which are considered non-essential expenses.[4] Thus Mr Clapham’s stated expenses amount to $1,269.50 per week. This leaves a surplus of about $182.50 per week.

   [4] The Family Court (in Mee and Ferguson (1986) FLC 91-716) has been prescriptive about the types of expenses that can be considered “necessary” expenses and that there are only a few expenses which can be considered to take priority over the parents’ primary duty to support their children. This includes expenses such as a reasonable amount for rent or mortgage payments, food, utilities, and some loans.

3. I note that Mr Clapham’s recent payslips show that his net income is $1,401 per week (e.g. folio A14) and I am not persuaded that he pays his credit card from this income. Private health insurance and essential household expenses amount to $990.50 per week and this would result in a weekly surplus of $410.50 based on Mr Clapham’s net income (as shown on payslips).

4. Mr Clapham said that he and [Partner A] recently purchased a home and they now have a mortgage. Mortgage payments are about $400–$500 per week. He also has two personal loans with [Bank 2]. Minimum repayments for loan account xxxx2820 are $241 per month (folio A30) and $900 per month for loan account xxxx6354 (folio A66). It is not clear how these loans are being repaid and Mr Clapham noted that [Partner A] was “helping him” pay these.

5. Mr Clapham was provided with the opportunity to submit an updated Statement of Financial Circumstances to include any additional expenses that he may have, but he did not do so. Based on the evidence before me I therefore find that Mr Clapham is able to meet all of his financial commitments.

Ms Dimbleby

1. Ms Dimbleby indicated on her Statement of Financial Circumstances (folios B1–B5) that her income (excluding child support) is about $790 per week. Her payslips indicate a fortnightly net income of $1,747.33 or about $873 per week (folio B17). She noted that her partner earns about $1,100 per week (folio B2).

2. Ms Dimbleby listed essential household expenses for her and the children of $750 per week (folio B4). She did not apportion all household expenses between herself, her partner and the children but listed only expenses for food, clothing, activities and gifts for the children. These amounted to $175 per week, of which $75 would be considered non-essential expenses.

3. Ms Dimbleby did not indicate any additional “out of the ordinary” expenses for the children and based on the evidence before me it appears that she is able to meet the children’s expenses. The children are 11 and 15 years old and have no income, property or financial resources relevant to my determination.

Otherwise proper  

1. The requirement to consider whether it is “otherwise proper” to depart from the administrative assessment directs attention to what is fair to the community. It is necessary to consider the effect of any departure from the administrative assessment on entitlements to income-tested pensions, allowances or benefits (subsection 117(5) of the Act).

2. It is a prime objective of the child support legislation that parents should be obliged to support their own children to the extent of their real capacity, and that that obligation should not be unnecessarily abrogated to the public welfare system when the parents themselves have the capacity to maintain their children.

3. Ms Dimbleby does not appear to be in receipt of government payments, which are affected by maintenance payments such as child support. Any increase or decrease in child support payments would thus not affect the extent to which the community is supporting the children. I find that such a result is proper in these circumstances.

Conclusion

1. Section 98S of the Act describes the determinations that the Registrar, and the Tribunal standing in the shoes of the Registrar, may make if it decides to depart from the administrative assessment. It is open to the Tribunal to set a rate of child support payable or set some of the variables used in the administrative assessment formula (for example, vary one or both parents’ adjusted taxable income).

2. In this case there have been a number of departure applications lodged by Ms Dimbleby in the past. The most recent one ended on 31 December 2021 and Ms Dimbleby lodged a further application on 9 November 2021 for the period commencing 1 January 2022. Ms Dimbleby submitted that Mr Clapham has access to greater financial resources from the business, [Business 1], and he is able to decide his own wages.

3. Mr Clapham submitted that he was only an employee of [Business 1]. The business was managed by his life partner, [Partner A], and he had no control over business decisions. He was paid an annual wage of $65,000 and this had not changed for a number of years. He strongly denied that he earned $150,000 per annum, as determined by the objections officer, and he could not afford to pay the increased amount of child support.

4. I note that Mr Clapham owed child support arrears of $6,117.56 as of 31 December 2022, but since then the arrears have reduced to $2,961.96 as of 30 April 2023 (folio 497). A recent child support assessment issued on 9 January 2023 (folio 486) also indicates that Mr Clapham’s child support liability will reduce to $644 per annum from 1 October 2023 based on Ms Dimbleby’s 2021/22 adjusted taxable income of $77,752 and Mr Clapham’s provisional income of $82,874. I am not certain why this assessment was issued as the objections officer set Mr Clapham’s income amount of $150,000 until 31 December 2025 (folio 10).

5. I have found that Mr Clapham’s income and financial resources from January 2022 amounted to about $111,222 per annum. This would result in a child support liability of approximately $5,430 per annum or about $104 per week, less than the amount of $156 per week that Mr Clapham is assessed to pay under the current departure determination (folio 483).

6. I am cognisant that Mr Clapham provided very limited evidence in relation to his financial circumstances and the information he did provide contained numerous inconsistencies. It is difficult to set an income amount under those circumstances.

7. I have therefore decided to set a rate of child support payable. I will set the rate of child support payable at $5,400 per annum for the period 1 January 2022 to 31 December 2026. This decision will most likely reduce all of Mr Clapham’s arrears and his liability is likely to be in credit. The decision however will give certainty to both parties until the child support liability for the oldest child ends.

8. This decision also means that the rate of child support payable is not affected by any increases or decreases in either party’s taxable incomes, as I have little doubt that Ms Dimbleby will continue to lodge departure applications if Mr Clapham’s child support liability is assessed on a lower income amount and Mr Clapham is likely to provide only very limited evidence in relation to his financial circumstances.

9. I am not persuaded that my decision will cause either Mr Clapham or Ms Dimbleby to be in financial hardship and the regular child support payments should assist Ms Dimbleby to meet her expenses for the children.

10. I have reached a different conclusion than the objections officer and I therefore set aside their decision.

DECISION

The decision under review is set aside and a decision substituted that:

• For the period 1 January 2022 to 31 December 2026 the rate of child support payable by Mr Clapham is set at $5,400 per annum.