Clegg and Downey (Child support)

[2018] AATA 540

Clegg and Downey (Child support) [2018] AATA 540 (25 January 2018)

DIVISION:  Social Services & Child Support Division

REVIEW NUMBER:  2017/MC011848

APPLICANT:  Mr Clegg

OTHER PARTIES:  Child Support Registrar

Ms Downey

TRIBUNAL:  Member A Ducrou

DECISION DATE:  25 January 2018

DECISION:

The tribunal sets aside the decision made on 15 March 2017 to record care percentages for [Child 1] of 3% for Mr Clegg and of 97% for Ms Downey and, in substitution, decides that:

• Mr Clegg had a care percentage of 14% for [Child 1] with effect from 28 September 2016;

• Ms Downey had a care percentage of 86% for [Child 1] with effect from 28 September 2016.

CATCHWORDS
Child Support – Percentage of care – Determination of the likely pattern of care according to a care arrangement – Whether interim period applies - Reasonable action not taken for compliance - 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 removed 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 Clegg and Ms Downey are the separated parents of [Child 1] (born September 2003). This review is about the assessment of the percentages of care for Mr Clegg and Ms Downey that apply in relation to the administrative assessment of child support for [Child 1]. A case with the Department of Human Services – Child Support (the Department) for an administrative assessment of child support for [Child 1] was registered from September 2007. The Department's records show that care percentages of 16% for Mr Clegg and 84% for Ms Downey for [Child 1] were recorded with effect from 5 May 2010.

2. The Department's records show that Ms Downey contacted the Department on 28 September 2016 and advised that there had been a change in the care for [Child 1]. The Department was subsequently advised that the Department of Human Services – Family Assistance Office (FAO) had made a determination of the percentages of care for [Child 1]. Under that determination Mr Clegg had a percentage of care of 3% and Ms Downey had a percentage of care of 97% with effect from 28 September 2016. On 15 March 2017 a delegate of the Child Support Registrar (the Registrar) decided to apply those care percentages and to record percentages of care of 3% for Mr Clegg and 97% for Ms Downey in the particulars of the assessment for [Child 1] with effect from 28 September 2016 (the original decision).

3. On 24 March 2017 Mr Clegg lodged an objection. On 27 May 2017 an objections officer of the Department decided to disallow his objection. As a consequence care percentages of 3% for Mr Clegg and 97% for Ms Downey for [Child 1] continued to apply with effect from 28 September 2016. On 6 June 2017 Mr Clegg applied to this tribunal by telephone for independent review of the objections officer's decision.

4. The tribunal conducted a hearing on 22 September 2017. Ms Downey provided documents to the tribunal before the hearing. Mr Clegg and Ms Downey participated at the hearing by conference telephone. They gave oral evidence on affirmation and made oral submissions. The review was deferred to allow time for Mr Clegg and Ms Downey to provide further documents and for the tribunal to undertake legal research. The tribunal received documents from them after the hearing. The tribunal had before it: documents provided by the Registrar and the documents from Mr Clegg and Ms Downey. Copies of the Registrar's documents (numbered 1 to 129) were provided to Mr Clegg and Ms Downey. Copies of relevant documents from Mr Clegg (numbered A1 to A20) and copies of relevant documents from Ms Downey (numbered B1, B3 and B11) were also provided to the parties. The tribunal made its decision on 25 January 2018.

ISSUES

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

2. The issues which arise in this case are:

   ·       What was the pattern of care for [Child 1]; and

   ·       Do new care percentage determinations apply for [Child 1]?

CONSIDERATION

Issue 1 – What was the pattern of care for [Child 1]?

1. The legislation establishes a system for the assessment of the rate of child support payable in a particular child support case. In the majority of cases a statutory formula is applied. The percentage of care for a parent for a child affects the annual rate of child support assessed and payable in each case. A parent's percentage of care is determined under sections 49 or 50 of the Assessment Act. This requires consideration of the actual, or likely, pattern of care that the parent will have in relation to the child. Sections 49 and 50 require a new determination of a parent’s percentage of care for a child to be made in certain circumstances. Prior to making a new percentage of care determination under these provisions it is necessary to determine whether the existing care percentage determination can be revoked.

2. In certain specified situations, where a care arrangement applies in relation to a child, sections 51 and 52 of the Assessment Act provide for exceptions to the way in which a determination is made under either sections 49 or 50 and a percentage of care determination must be made for an interim period based on the extent of care that a person has, or is to have, under the care arrangement. “Care arrangement” is defined in subsection 5(1) of the Assessment Act and includes a parenting plan for a child and a written agreement between the parents of a child that relates to the care of the child.

3. The term “pattern of care” is not defined in the legislation. In determining the pattern of care the decision-maker must consider the actual care of the child in the care period. The “care period” is the period which the decision-maker considers is appropriate having regard to all the circumstances of the case. The Department's online policy guide, the Child Support Guide (the Guide), version 4.29, at 2.2.1 states that a care period is generally a 12-month period from the day on which the actual care of a child began or changed. The tribunal is not bound by policy. However, in Drake v Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634 the Full Court of the Federal Court held that tribunal decision-making could be informed by government policy which is not inconsistent with the provisions or objects of the legislation. In this case the tribunal accepted that the applicable policy is consistent with the objects of the Act and that there was no inconsistency between the relevant legislative provisions and the policy for making determinations under the legislation in relation to the care that is provided for children.

4. Section 54K of the Assessment Act provides for the alignment of care decisions made under the A New Tax System (Family Assistance) Act 1999 with percentage of care information recorded for the purposes of the Assessment Act. Under section 54K if the Registrar is required to determine a person's percentage of care for a child and the FAO has made a determination of the person's percentage of care under family assistance law, then the determination made by the FAO applies for the purposes of the child support legislation as if it were a determination made under the child support legislation. An affected parent is permitted to apply to either the FAO or the Department for review of a care determination decision. Relevantly, in this case the original determination made by the FAO can be reviewed by an objections officer of the Department and the law that applies is the child support legislation.

5. The tribunal finds that Mr Clegg and Ms Downey are the separated parents of [Child 1]. The tribunal finds based on the Department's records that the Department recorded percentages of care for [Child 1] of 16% for Mr Clegg and 84% for Ms Downey with effect from 5 May 2010. It was common ground between Mr Clegg and Ms Downey that a parenting plan had been made for [Child 1’s] care. They both told the tribunal at the hearing that they had not followed the terms of the parenting plan relating to [Child 1’s] care for several years. It was not at issue that Ms Downey contacted the Department on 28 September 2016. Based on the Department's records of that contact the tribunal finds that Ms Downey advised that for around the last six months [Child 1] had been staying one night per month with Mr Clegg, usually on a Sunday night.

6. Mr Clegg disagreed that the care that he provided for [Child 1] had changed as Ms Downey claimed. He maintained that [Child 1] had stayed with him from one to three nights on weekends during most fortnights and that she also stayed with him for extended periods over the Melbourne Cup period and in the January 2017 school holidays. Mr Clegg contended that if all the nights [Child 1] spent with him were taken into account she spent three nights per fortnight with him on average. Ms Downey disputed this and maintained that Mr Clegg had not had [Child 1] in his care for an entire weekend except for the week she spent with him in the January 2017 school holidays.

7. The claims that Mr Clegg and Ms Downey made about the time [Child 1] spent with them conflicted. Both sets of claims cannot be entirely accurate. Mr Clegg provided copies of Facebook messenger communications in support of his claims. Ms Downey provided copies of SMS messages in support of her claims.  The tribunal noted that plans can change and in light of this the tribunal did not find that the messages, of themselves, were persuasive. Mr Clegg told the tribunal that he had maintained a diary in relation to [Child 1’s] care. However, he did not start it until January 2017. Ms Downey did not maintain diary records. Mr Clegg and Ms Downey provided written statements from other family members. While the tribunal had no reason to doubt the accuracy of the information in the statements the tribunal found that they were of little assistance as they contained contradictory information. The evidence that Mr Clegg and Ms Downey provided contained limited information about the dates of the nights [Child 1] spent with each of them. However, Mr Clegg was able to recall some of the dates when he had [Child 1] in his care. Ms Downey could not recall any dates.

8. It was evident from the accounts of Mr Clegg and Ms Downey that there have been variations in the care they have provided for [Child 1]. The evidence presented by Mr Clegg and Ms Downey coincided in two respects. They agreed that [Child 1] spent at least one night per month with Mr Clegg from 28 September 2016 until the original decision was made on 15 March 2017. Mr Clegg and Ms Downey also agreed that [Child 1] spent one week with Mr Clegg in January 2017. That level of care corresponds with [Child 1] spending 13 nights with Mr Clegg from 28 September 2016 to 15 March 2017. However, after having regard to Mr Clegg’s description of the nights when he had [Child 1] in his care which was given on affirmation at the hearing the tribunal was persuaded, on balance, that [Child 1] spent more than 13 nights in the care of  Mr Clegg from 28 September 2016 to 15 March 2017. The tribunal was satisfied that the evidence was consistent with [Child 1] generally spending two nights per fortnight with Mr Clegg from 28 September 2016 to 15 March 2017. This corresponds with Mr Clegg having [Child 1] in his care for 14% of the time. While Ms Downey claimed that the care that Mr Clegg provided for [Child 1] had reduced prior to September 2016 the tribunal was not satisfied from the limited evidence before it that there had been a change in [Child 1]’s care prior to 28 September 2016.

9. The tribunal was satisfied that the appropriate care period in this case was the 12-month care period that commenced on 28 September 2016 (being the 12-month period from the commencement of the date identified as the change of care date when Ms Downey notified the Department of the change in [Child 1’s] care). The tribunal concluded that for the care period that commenced on 28 September 2016 Mr Clegg had, or was likely to have a pattern of care for [Child 1] of two nights per fortnight and that Ms Downey had, or was likely to have a pattern of care for [Child 1] where [Child 1] was in her care for the rest of the time. This equates to a percentage of care of 14% for Mr Clegg and a percentage of care of 86% for Ms Downey for the care period that commenced on 28 September 2016.

Issue 2 – Do new care percentage determinations apply for [Child 1]?

1. Section 54F of the Assessment Act provides for the mandatory revocation of an existing care percentage determination if there is a change to a person’s cost percentage as a result of a change in care notified to the Department. The requirements that must be met in order for an existing care percentage determination to be revoked under section 54F are set out in paragraphs 54F(1)(a) to (e). All of the requirements must be satisfied in order for an existing care percentage determination to be revoked under section 54F.

2. The tribunal has found that there were existing determinations of the percentages of care for Mr Clegg and Ms Downey for [Child 1] from 5 May 2010. Those care percentages were 16% for Mr Clegg and 84% for Ms Downey. The tribunal has also found that the percentage of care determinations were made under section 50 of the Assessment Act. Based on the available information the tribunal was satisfied that sections 51 and 52 of the Assessment Act did not apply in relation to the existing determinations. The tribunal has found that Ms Downey notified the Department on 28 September 2016 that there had been a change in the care of [Child 1] and that for the care period that commenced on 28 September 2016 Mr Clegg had [Child 1] in his care for 14% of the time and that Ms Downey had [Child 1] in her care for 86% of the time. This did not correspond with the existing percentages of care of 16% for Mr Clegg and 84% for Ms Downey. Based on the above findings the tribunal was satisfied that the requirements of paragraphs (a) to (c) of subsection 54F(1) were met.

3. Paragraph 54F(1)(d) of the Assessment Act requires the tribunal to consider whether each person's cost percentage would change if a new percentage of care determination were made under section 49 or under section 50 of the Assessment Act. The table at section 55C of the Assessment Act explains how to work out a person's cost percentage based on their care percentage for a child. Under that table the existing care percentages of 16% for Mr Clegg and 84% for Ms Downey equated to a cost percentage of 24% for Mr Clegg and of 76% for Ms Downey. Under the table a cost percentage of 24% would be attributed to Mr Clegg for the new care percentage of 14% and a cost percentage of 76% would be attributed to Ms Downey for the new care percentage of 84%. Therefore, their cost percentages if the new percentages of care were made would not change. As there would be no change in the cost percentages the requirements of paragraph 54F(1)(d) were not satisfied. Therefore, the existing determination of care percentages cannot be revoked under section 54F.

4. Section 54G of the Assessment Act provides for the revocation of an earlier determination in specified situations where a person (in this case Mr Clegg) was to have at least regular care of the child under the earlier determination but they have no actual care or less than regular care. Subsection 5(2) of the Assessment Act defines regular care as a care percentage of at least 14% but less than 35%. The tribunal has found that from 28 September 2016 Mr Clegg had a pattern of care for [Child 1] that equated to a care percentage of 14%. As this constitutes the minimum care percentage for regular care the requirements of section 54G were not met. Therefore, the existing determination of care percentages cannot be revoked under that section.

5. Section 54H of the Assessment Act provides that the decision-maker has the discretion to revoke an existing care determination in circumstances where sections 54F and 54G do not apply and the requirements in paragraphs (a) to (c) of subsection 54F(1) are met provided that, if a new percentage of care determination were to be made under section 49 or under section 50 of the Assessment Act, the percentage of care for a person would not be the same as their existing percentage of care. The tribunal has found the requirements of paragraphs (a) to (c) of subsection 54F(1) were satisfied. As already discussed the tribunal was satisfied that if a new determination of the percentages of care for [Child 1] were made under section 50 of the Assessment Act the new percentage of care for [Child 1] for Mr Clegg of 14% and the new percentage of care for [Child 1] for Ms Downey of 86% would be different to their percentages of care under the existing care determination. Therefore, it is open to the tribunal to revoke the existing care determination under section 54H of the Assessment Act.

6. According to the Explanatory Memorandum for the Child Support and Family Assistance Legislation Amendment (Budget and Other Measures) Bill 2010, the purpose of the discretion set out in section 54H was to allow the Registrar to maintain accurate records of changes in care and to assist in keeping accurate records for family tax benefit and child support purposes. The decrease in the care percentage attributable to Mr Clegg to 14% does not alter his cost percentage and, therefore, does not affect his child support liability for [Child 1]. Similarly the increase in Ms Downey’s care percentage to 86% does not alter her cost percentage or the child support that Mr Clegg is required to pay her for [Child 1]. The tribunal noted that the attribution of a care percentage of 14% to Mr Clegg for [Child 1] is well below the required 35% that confers eligibility for any family tax benefit. However, after taking into account the purpose for which section 54H was enacted, being the promotion of accuracy of records concerning changes of care and consistency in the alignment of accurate records at the Department and the FAO, the tribunal has determined that in this case it is appropriate to revoke the existing percentages of care under section 54H of the Assessment Act.

7. Subsection 54H(2) of the Assessment Act sets out when the revocation of the existing determinations of care percentages takes effect. The date of effect of the revocation depends on the time when the Department was notified of the care change. The tribunal has found that the change in care took place on 28 September 2016 and that Ms Downey notified the Department of the care change on that date. As the Department was notified within 28 days after the care change occurred, in accordance with paragraph 54H(2)(a) of the Assessment Act the revocation of the existing determinations of percentages of care take effect at the end of 27 September 2016 which was the end of the day before the care change.

8. Under subsection 50(3) of the Assessment Act the tribunal is required to make new determinations of the percentages of care unless sections 51 and 52 apply. Section 51 of the Assessment Act applies in situations where a care arrangement applies in relation to a child and where the decision-maker is required to determine a responsible person's percentage of care for the child care period if the decision-maker is satisfied that the actual care of the child that the responsible person has had, or is likely to have, during the care period does not comply with the extent of the care that they should have had, or are to have, under the care arrangement during that period. For section 51 to apply all of the requirements set out in paragraphs 51(1)(a) to (d) must be satisfied. Paragraph 51(1)(d) directs the tribunal's attention to whether the person who has reduced care of the child has taken reasonable action to ensure that there is compliance with the care arrangement. Section 2.2.4 of the Guide sets out examples of the types of actions that a parent may take to ensure compliance. The Guide notes that the list of examples is not exhaustive and that other forms of action may be considered reasonable, according to the circumstances of the parents and the child.

1. The tribunal has found that a parenting plan, being a care arrangement as defined in subsection 5(1) of the Assessment Act, applied in relation to [Child 1]. The tribunal was satisfied based on the descriptions provided by Mr Clegg and Ms Downey of the terms of the parenting plan that the actual care that Mr Clegg had, or was likely to have, during the care period that commenced on 28 September 2016 did not comply with the extent of care that he should have had, or was to have, under the care arrangement during that period. However, based on Mr Clegg’s oral evidence the tribunal was satisfied that Mr Clegg, being the person who had reduced care of the child, did not take reasonable action to ensure compliance with the parenting plan. Therefore, the tribunal was satisfied that the requirement in paragraph 51(1)(d) was not met in the circumstances of this case. The tribunal concluded that section 51 of the Assessment Act did not apply.

2. Section 52 of the Assessment Act also applies in situations where a care arrangement applies in relation to a child and where the decision-maker is required to determine a responsible person's percentage of care for the child for the care period if the decision-maker is satisfied that the actual care of the child that the responsible person has had, or is likely to have, during the care period does not comply with the extent of the care that they should have had, or are to have, under the care arrangement during that period. For section 52 to apply all of the requirements set out in paragraphs 52(1)(a) to (f) must be satisfied. Paragraph 52(1)(d) directs the tribunal's attention to whether the person who has reduced care of the child has taken reasonable action to make another care arrangement in relation to the child if they have not taken reasonable action to ensure compliance with the current care arrangement. Based on Mr Clegg’s oral evidence the tribunal was satisfied that Mr Clegg, being the person with reduced care of [Child 1], did not take reasonable action to make another care arrangement in relation to [Child 1]. The tribunal was satisfied the requirement in paragraph 52(1)(d) was not met in the circumstances of this case. Therefore, the tribunal concluded that section 52 of the Assessment Act did not apply.

3. In accordance with subsection 50(3) of the Assessment Act the tribunal is required to make a new determination of the percentages of care for [Child 1] that corresponds with the actual care of [Child 1] that Mr Clegg and Ms Downey have had, or are likely to have, during the care period. Based on the available evidence and the tribunal's findings the tribunal was satisfied that during the care period that commenced on 28 September 2016 Mr Clegg had, and was likely to have, a pattern of care for [Child 1] that corresponded with a care percentage of 14% and that Ms Downey had, and was likely to have, a pattern of care for [Child 1] that corresponded with a care percentage of 86%. Therefore, in accordance with subsection 50(3) of the Assessment Act the tribunal is required to make a new determination of the percentage of care for Mr Clegg for [Child 1] of 14% and to make a new determination of the percentage of care for Ms Downey for [Child 1] of 86% for the care period that commenced on 28 September 2016. The date of effect of the new care percentage determinations is worked out in accordance with subsection 54B of the Assessment Act. In this case under subparagraph 54B(2)(c)(ii) the new determinations applied from 28 September 2017 which was the date that began immediately after the date when the previous determination was revoked.

4. The tribunal observed that it is open to Mr Clegg and Ms Downey to notify the Department of subsequent changes in care that they believe have occurred after the original decision was made. The legislative scheme deals with any subsequent change of care by requiring further notification to the Department so that a new care percentage decision can be considered and made, if appropriate. Such a decision is a separate determination which is not the subject of this review.

5. The tribunal also noted that Mr Clegg was aggrieved about how the Department had dealt with this matter by not making contact with him before applying the care percentages determined by the FAO. The objections officer acknowledged that the prescribed procedures had not been followed. Mr Clegg emphasised that he believed that this had resulted in unfairness towards him. The matters raised by Mr Clegg are important concerns. However, as the tribunal advised at the commencement of the hearing the tribunal is bound to apply the applicable law in this review.

DECISION

The tribunal sets aside the decision made on 15 March 2017 to record care percentages for [Child 1] of 3% for Mr Clegg and of 97% for Ms Downey and, in substitution, decides that:

• Mr Clegg had a care percentage of 14% for [Child 1] with effect from 28 September 2016;

• Ms Downey had a care percentage of 86% for [Child 1] with effect from 28 September 2016.