Cleveland and Bridge (Child support)

Cleveland and Bridge (Child support) [2022] AATA 2113 (22 May 2022)

DIVISION:Social Services & Child Support Division
REVIEW NUMBER:  2022/MC023214
APPLICANT:  Ms Cleveland
OTHER PARTIES:  Child Support Registrar
Mr Bridge

TRIBUNAL:Senior Member R Ellis
DECISION DATE: 22 May 2022
DECISION:

The Tribunal sets aside the decision under review and, in substitution, decides that the 21 weekly payments of $103.50 each made by Mr Bridge commencing on 8 July 2021 should be refused as prescribed non-agency payments.

CATCHWORDS

CHILD SUPPORT – non-agency payment - whether mortgage payments should be credited as prescribed payments – all conditions to credit are satisfied – discretion to refuse - 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

Ms Cleveland and Mr Bridge are the parents of [Child 1] (born October 2005), [Child 2] (born July 2008) and [Child 3] (born June 2011).
There has been a child support assessment in place since 16 August 2011 with collection by the Child Support Agency from 19 April 2021. Mr Bridge is the parent liable to pay child support under the assessment.
From 14 February 2021 the child support assessment reflected that [Child 1], [Child 2] and [Child 3] were in the 100 per cent care of Ms Cleveland.
On 29 November 2021 Mr Bridge applied to the Child Support Agency for credit of 21 payments made towards the home mortgage totalling $2,173.50 as non-agency payments.
On 29 November 2021 the Child Support Agency made the decision to credit the 21 payments made by Mr Bridge as prescribed non-agency payments.
On 30 November 2021 Ms Cleveland objected to this decision and on 13 January 2022 the Child Support Agency disallowed the objection (the objection decision).
On 1 February 2022 Ms Cleveland applied to the Administrative Appeals Tribunal (the Tribunal) for a review of the objection decision.
The Tribunal conducted a hearing into the application on 12 April 2022. Ms Cleveland and Mr Bridge gave evidence on affirmation by conference telephone. The Child Support Agency provided the Tribunal and the parties with papers relevant to the review (95 pages).

ISSUES

The statutory provisions relevant to this review are contained in the Child Support (Registration and Collection) Act 1988 (the Act).
When a child support liability is registered under the Act for collection, the amount payable is a debt due to the Commonwealth and must be paid to the Child Support Agency not the payee.
In some circumstances the Child Support Agency may credit payments made directly to a payee or to a third party against a child support liability that is registered for collection (sections 71, 71A or 71C of the Act). The Child Support Agency refers to the credits under sections 71 and 71A as non-agency payments. Credits under section 71C are known as prescribed non-agency payments as this section applies to payments of the kind specified in section 19 of the Child Support (Registration and Collection) Regulations 2018 (the Regulations).
Section 71C of the Act provides a mechanism whereby payments made by a liable parent to the payee or to another person for items specified in the Regulations may be taken into account in partial satisfaction of the liable parent’s child support liability. A number of specific criteria must be satisfied for this provision to apply. Even where all the criteria are met, there is still a discretion in section 71D of the Act to refuse to credit amounts that would otherwise be able to be credited against the liability.
The issue which arises in this case is whether or not the payments made by Mr Bridge can be accepted as non-agency payments or prescribed non-agency payments and credited against his child support liability.

CONSIDERATION

Ms Cleveland told the Tribunal all the payments under review were made by Mr Bridge towards the mortgage on the home in which she and the children were living. Ms Cleveland said she did not dispute the payments were made by Mr Bridge and confirmed there were 21 payments of $103.50 each. She said the payments were for her half of the mortgage.
Ms Cleveland said Mr Bridge had agreed to make the mortgage payments in addition to child support in keeping with an agreement between the parents. Ms Cleveland explained this agreement was set out in a letter from a legal firm acting on behalf of Mr Bridge.
The Tribunal notes in evidence from the Child Support Agency that Mr Bridge claimed 21 payments towards the home mortgage of $103.50 each with the first being made on 8 July 2021 and the last being made on 25 November 2021. The payments are made on a weekly basis.
Ms Cleveland told the Tribunal there was never any suggestion the mortgage payments made by Mr Bridge were to be considered in lieu of child support. She said Mr Bridge had agreed to make the payments until the family home was sold. Ms Cleveland said the parents were still trying to resolve various matters so the sale could proceed. Ms Cleveland said there was no time limit placed on their agreement and added that, in her view, Mr Bridge was deliberately delaying sale of the property because he did not want to finalise property settlement.
The Tribunal notes in evidence correspondence from legal firm [acting] on behalf of Mr Bridge addressed to [a firm] acting on behalf of Ms Cleveland. The letter is dated 22 April 2021 and states, relevantly, that Mr Bridge agrees to make payments towards the housing loan of $902 per month and “will continue these payments until completion of the sale of the house”. The letter goes on to state that Mr Bridge is prepared to sell the former matrimonial home “on terms agreed” with Ms Cleveland.
Mr Bridge told the Tribunal he did not deny proposing the arrangement set out in the letter from his lawyer. Mr Bridge said he initially agreed to paying child support in addition to making the mortgage payments on the family home as he wanted the children to have a roof over their heads. Mr Bridge said he only did so because he thought the property would be sold quickly.
Mr Bridge acknowledged there was no discussion of an end date to the arrangement. Mr Bridge said he did not think it was fair for him to continue paying child support and meeting the costs of the mortgage on the family home while Ms Cleveland was living in the house and delaying the sale. He said he was now in financial difficulty as a result.
Mr Bridge said while he was not technically required to make the payments towards the mortgage he continued to do so. He said his child support payments were being garnished from his wages.
It is not in contention and the Tribunal finds that Mr Bridge made 21 payments of $103.50 each on a weekly basis commencing on 8 July 2021 towards the mortgage on the family home.
Section 71A of the Act provides for payments made by the payer of an enforceable maintenance liability to a third party to be credited against the amount payable under the child support liability. The amount paid by the payer to the third party must partially or completely satisfy a debt owed by the payee, the payer or both the payer and the payee (paragraph 71A(1)(a)). It must be the intention of both parties that the amount paid, or part of the amount paid, be credited against the payer’s enforceable child support liability in relation to the child support enforcement period (paragraph 71A(1)(c)).
The Tribunal is satisfied the 21 payments made by Mr Bridge towards the mortgage on the family home were not intended by both parents to be in lieu of child support and credited against the enforceable child support liability. The Tribunal finds the payments made by Mr Bridge cannot, therefore, be considered as non-agency payments under section 71A of the Act.
Where such payments cannot be credited under section 71A of the Act, they may be credited under section 71C even if there is no mutual intention between the parents. Section 71C was introduced to give payers more choice regarding the form in which child support is paid. It provides, subject to section 71D, for an amount to be credited against a payer’s child support liability regardless of the intention of the parents at the time the payment was made. Under subsection 71C(1) of the Act the Child Support Agency must credit an amount when all the conditions set out in paragraphs 71C(1)(a) to 71C(1)(d) are met.
The payments to be credited must be payments of the kind specified in section 19 of the Regulations. This section states that for the purposes of paragraph 71C(1)(b) of the Act, specified payments are payments of the following kinds in relation to an enforceable maintenance liability:
a)   child care costs for the child who is the subject of the enforceable maintenance liability;
b)   fees charged by a school or preschool for that child;
c)   amounts payable for uniforms and books required by a school or preschool for that child;
d)   fees for essential medical and dental services for that child;
e)   the payee’s share of amounts payable for rent or a security bond for the payee’s home;
f)    the payee’s share of amounts payable for utilities, rates or body corporate charges for the payee’s home;
g)   the payee’s share of repayments on a loan that financed the payee’s home;
h)   costs to the payee of obtaining and running a motor vehicle, including repairs and standing costs.
The Tribunal finds the 21 payments of $103.50 each made towards the mortgage on the family home in which Ms Cleveland was living are payments of the kind specified in the Regulations.
The condition in paragraph 71C(1)(a) of the Act is that the payer of an enforceable maintenance liability in relation to a payment period or initial period has made one or more payments to the payee, or to another person. The Tribunal is satisfied this is the case.
The condition in paragraph 71C(1)(ba) is that at the time the payment is made, the payer does not have at least regular care of any of the children to whom the relevant administrative assessment relates. It is also a condition that the payer does not have at least regular care of any of the children at the time at which the Registrar applies section 71C (paragraph 71C(1)(d)). The Tribunal is satisfied that at the time the payments were made, Mr Bridge had less than 14 per cent care, or regular care, of the children.
Where the conditions in subsection 71C(1) are met, the Registrar must credit any amount that has not already been credited against the amount payable under the payer’s liability for the period, up to a maximum of 30 per cent of the amount payable for that period.
In this case the Tribunal finds the 21 payments made by Mr Bridge of $103.50 each towards the mortgage on the family home meet all the conditions set out under the Act and must, therefore, be credited under section 71C.
Even where all the criteria under section 71C are met, there is still a discretion in section 71D of the Act to refuse to credit amounts that would otherwise be able to be credited against the liability. Section 71D of the Act states that the Registrar “may refuse to credit an amount under section 71, 71A or 71C if satisfied that, in the circumstances of the particular case, the amount ought not to be credited”. The title of section 71D is “Registrar may refuse to credit amounts in special circumstances”.
Chapter 5.3.1 of the Child Support Guide contains a non-exhaustive list of circumstances in which the discretion to refuse to credit an amount may be exercised. These include:
·     the payee’s agreement to credit an amount paid to a third party or payment made as a transfer of property was obtained through coercion or harassment;
·     the payer is claiming a credit under section 71C for an expense they regularly meet that was taken into account in a change of assessment decision;
·     the payer is claiming credit under section 71C for an expense which they have undertaken to pay in addition to their liability as specified in an agreement between the parents (this does not have to be a child support agreement);
·     the payer is claiming credit under section 71C for an expense that they are responsible to pay under the terms of a court order;
·     the payer is claiming credit under section 71C for expenses for the child for which they are separately responsible. For example, the payer claims credit for child care costs for the days when the child resides with the payer; and
·     the payer is claiming credit under section 71C for loan repayments and they have a history of regularly withdrawing funds from the loan account using its redraw facility.
Although not bound by policy as set out in the Child Support Guide, the Federal Court has held that a tribunal should take into account relevant government policy which is not inconsistent with the provisions or objects of the legislation.
The parents agree that Mr Bridge is making the payments towards the mortgage on the family home in addition to child support as part of a written arrangement. While both parents argue it is the other who is delaying the sale of the property there is no time limit to the arrangement reached between the parents.
After taking into account the circumstances of this case, the Tribunal is satisfied they are sufficiently special and that the 21 payments of $103.50 each made by Mr Bridge towards the mortgage on the family home totalling $2,173.50 should be refused as prescribed non-agency payments under section 71D of the Act.

DECISION

[2022] AATA 2113

22 May 2022

Key Legal Topics

Areas of Law

Family Law

Administrative Law

Legal Concepts

Statutory Construction

Judicial Review

Remedies

Jurisdiction