Coharane and Amachree (Child support) - [2024] AATA 4127

Coharane and Amachree (Child support) [2024] AATA 4127 (20 September 2024)

DIVISION:Social Services & Child Support Division
REVIEW NUMBER:  2024/PC027311
APPLICANT:  Ms Coharane
OTHER PARTIES:  Child Support Registrar
Mr Amachree

TRIBUNAL:Senior Member R Ellis
DECISION DATE: 20 September 2024
DECISION:

The Tribunal sets aside the decision under review and, in substitution, decides that:

for the period from 1 July 2023 to 30 June 2024 the adjusted taxable income of Mr Amachree is varied to $101,520; and
for the period from 1 July 2024 to 31 March 2025 the adjusted taxable income of Mr Amachree is varied to $146,210.

CATCHWORDS
CHILD SUPPORT – change of assessment – a ground for departure established – mental health – whether it is otherwise proper to make a particular departure determination – the determination is otherwise proper – income property and financial resources – father’s adjusted taxable income is varied – 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 theChild Support (Registration and Collection) Act 1988.

REASONS FOR DECISION

BACKGROUND

This review is about whether or not there should be a departure from the administrative assessment of child support.
Ms Coharane and Mr Amachree are the parents of [Child 1] (born August 2022). There has been a child support assessment in place since 1 March 2023 and Mr Amachree is currently the liable parent under the assessment.
The following administrative assessments of child support are under consideration:
·     for the period from 14 June 2023 to 30 June 2023 Mr Amachree is assessed to pay an annual rate of $21,626 based on 2021-22 adjusted taxable income of $188,096 for Mr Amachree and an estimated 2022-23 adjusted taxable income for Ms Coharane of $32,821;
·     for the period from 1 July 2023 to 26 July 2023 Mr Amachree is assessed to pay an annual rate of $1,632 based on an estimated 2023-24 adjusted taxable income of $0 for Mr Amachree and an estimated 2023-24 adjusted taxable income for Ms Coharane of $22,561; and
·     for the period from 27 July 2023 to 30 June 2024 Mr Amachree is assessed to pay an annual rate of $8,079 based on an estimated 2023-24 adjusted taxable income of $78,860 for Mr Amachree and an estimated 2023-24 adjusted taxable income for Ms Coharane of $22,561.
On 14 June 2023 Ms Coharane applied to Services Australia – Child Support (Child Support) for a change to the assessment on the basis of a parent’s income, property and financial resources or earning capacity (the grounds commonly known as Reasons 8A and 8B).
On 13 September 2023 Child Support made the decision to change the assessment so that for the period from 17 July 2023 to 31 October 2024 the adjusted taxable income of Mr Amachree is set at $172,375 (the original decision).
On 9 October 2023 Mr Amachree objected to this decision and on 21 December 2023 Child Support allowed the objection in part and made the decision to change the assessment so that for the period from 14 October 2023 to 31 October 2024 the annual rate of child support payable by Mr Amachree shall be set at $8,079 (the objection decision).
On 7 January 2024 Ms Coharane applied for a review of the objection decision by the Administrative Appeals Tribunal (the Tribunal).
A directions hearing was held on 23 July 2024. Ms Coharane and Mr Amachree attended by Microsoft Teams audio. Prior to the directions hearing, Child Support provided the Tribunal and the parties with a bundle of documents in accordance with section 37 of the Administrative Appeals Tribunal Act 1975 (420 pages).
Ms Coharane and Mr Amachree were directed to provide further information and both complied to the satisfaction of the Tribunal.
A hearing was held on 13 September 2024. Ms Coharane appeared before the Tribunal and gave evidence on affirmation. Mr Amachree gave evidence on affirmation by conference telephone. Prior to the hearing the Tribunal received additional documents folioed A1 to A17 from Ms Coharane and B1 to B101 from Mr Amachree and these were distributed to the parties. Both parents advised these additional documents had not arrived in the post prior to the hearing but nonetheless wanted the Tribunal to proceed and make a decision. Further documents were also received from Child Support (pages 421–466).
At the directions hearing and at the commencement of the hearing the Tribunal sought clarification from Ms Coharane and Mr Amachree as to the reasons for their concerns.
Ms Coharane said the income determined by Child Support for Mr Amachree was incorrect. Ms Coharane added that Mr Amachree had a higher earning capacity. Mr Amachree said he was broadly satisfied with the decision made by Child Support and was seeking a decision from the Tribunal based on his actual income.

ISSUES

The statutory provisions relevant to this review are contained in the Child Support (Assessment) Act 1989 (the Act).
The rate of child support payable by the liable parent is usually based on an administrative assessment under Part 5 of the Act.
Under Part 6A of the Act, the liable parent or the carer of the child or children may apply to the Child Support Registrar for a determination to depart from the administrative assessment (section 98B).
Section 98C provides that the Registrar may make a determination to depart from the administrative assessment and establishes a three-step process, such that the issues for determination by this Tribunal are:
·     whether or not a ground is established to depart from the administrative assessment of child support; and if so,
·     whether or not it is just and equitable to make a particular departure determination; and if so,
·     whether or not it is otherwise proper to make a particular departure determination.
The grounds for departure from an administrative assessment of child support are set out in subsection 117(2) of the Act.
Each ground is prefaced by the words “in the special circumstances of the case”. The meaning of this expression is not defined in the Act, but the Family Court in Gyselman and Gyselman [1991] FamCA 93 has held that:
as a generality 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.
In Philippe and Philippe (1978) FLC 90-433 the court held that “special circumstances” are “facts peculiar to the particular case which set it apart from other cases”.
If satisfied that a ground exists 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.
The range of determinations which can be made includes variations to the annual rate of child support payable; or to the adjusted taxable incomes of the parents and/or carer; or to other components of the statutory formula used to calculate child support.

CONSIDERATION

Issue 1 – Is there a ground for departure?

A ground for departure exists where, in the special circumstances of the case, application of the administrative assessment of child support would result in an unjust and inequitable determination of child support to be provided by the liable parent in respect of the child because of the income, property and financial resources of either parent (subparagraph 117(2)(c)(ia) of the Act).
Ms Coharane told the Tribunal she was currently employed as a part-time [occupation] and had been so since returning to work following the birth of [Child 1]. Ms Coharane said she expected her income from employment to remain stable until March 2025 when she would be taking maternity leave again for approximately 12 months. Ms Coharane pointed out that as she had re-partnered she was no longer in receipt of parenting payment single.
In response to directions Ms Coharane provided the Tribunal with a copy of her tax return summary for 2023-24. It shows total income of $40,937 comprised of income from employment of $21,854, parenting payment single of $17,926, rental income of $1,017 and interest totalling $140. After allowing for work-related and other deductions Ms Coharane had an adjusted taxable income of $40,529 in 2023-24. The Tribunal notes in evidence from Child Support that Ms Coharane had an adjusted taxable income of $40,589 in 2022-23.
Ms Coharane said the rental income was derived from a one-bedroom granny flat at her home and this was all declared in her individual tax return. Ms Coharane added that she was planning to stop renting the granny flat from around November this year.
Ms Coharane also provided the Tribunal with a Statement of Financial Circumstances received on 23 January 2024. Ms Coharane lists total weekly household expenditure of $1,220 including her mortgage of $400 and $103 for medical expenses which she said was for an ongoing condition. She has total personal expenditure of $210 per week. Ms Coharane declares total assets valued at approximately $1,333,317 including her home valued at $1,070,000, equity in an offset account of $159,959, a [motor] vehicle worth $8,000 and household contents. Her liabilities, comprised of a home loan and HECS debt, total approximately $775,141. Ms Coharane has superannuation of $52,556.
At the time of her application for a change of assessment Ms Coharane was being assessed on an estimated 2022-23 adjusted taxable income of $32,821. This was subsequently reconciled using her actual adjusted taxable income for the 2022-23 financial year of $40,589. From 1 July 2023 Ms Coharane was then assessed on an estimated 2023-24 adjusted taxable income of $22,561. This was subsequently reconciled using her actual adjusted taxable income for the 2023-24 financial year of $40,529. The Tribunal is satisfied that Ms Coharane is fairly assessed under the usual administrative process.
The Tribunal also considered the income, property and financial resources of Mr Amachree.
Mr Amachree told the Tribunal he was a [occupation] and operated his own business called [Company 1] Pty Ltd ([Company 1]). Mr Amachree explained that it took him several months to set up [Company 1] and the business began trading around the beginning of June 2024. Mr Amachree said he was the sole shareholder of [Company 1].
Mr Amachree said [Company 1] currently generated revenue from a contract with a single client and he invoiced the client monthly. Mr Amachree said at this stage the contract was due to end in December 2024. Mr Amachree pointed out that he was still building a relationship with the client and proving that he could meet the requirements of the contract so he was uncertain if it would be renewed. Mr Amachree added that, at this time, he was not looking for other clients as he wanted to ensure he was capable of delivering on his existing contract as well as achieving an appropriate work-life balance.
In response to directions Mr Amachree provided the Tribunal with a copy of invoices for project consulting services dated 30 July 2024 and 30 August 2024 for an amount of $26,373.60 (plus GST) each. Mr Amachree said this was the monthly revenue of the business. This equates to approximately $316,483 on an annualised basis.
Mr Amachree informed the Tribunal he had taken on an independent contractor to assist him at [Company 1] and paid them $70 per hour. Mr Amachree said the contractor worked about 20 hours a week. Mr Amachree said apart from purchasing equipment to keep up with changes in technology the business had no out of the ordinary expenses. Mr Amachree added that set-up costs for the business, including the purchase of a [vehicle], were primarily met in the 2022-23 financial year. He said the business was run from his home. Mr Amachree said he did use the motor vehicle for private use but otherwise the business provided him with no significant personal benefits.
In response to directions Mr Amachree also provided the Tribunal with a copy of the company tax return and financial statements for [Company 1] for 2023-24. The tax return shows total revenue of $18,648 and total expenses of $20,745 leaving a net loss of $2,097. The profit and loss statement indicates that of total expenses more than half are comprised of depreciation (motor vehicle depreciation of $10,122 and plant depreciation of $3,745).
Mr Amachree told the Tribunal that prior to establishing [Company 1] he had been working as an employee of [a] company [Company 2]. Mr Amachree said he started at [Company 2] on 17 July 2023 but left after a few months due to concerns over his mental health. Mr Amachree said after finishing at [Company 2] he did not work until [Company 1] started operating. Mr Amachree added that he had survived on income from three rental properties but sold one of these properties in 2022-23.
The Tribunal notes in evidence from Child Support a letter to Mr Amachree from his employer dated 12 October 2023. It confirms his last day of employment at [Company 2] was 13 October 2023.
In response to directions Mr Amachree provided the Tribunal with a copy of his individual tax return for 2023-24. It shows he received total income of $74,382 comprised of income from [Company 2] of $47,189, personal services income from [Company 3] of $12,238, a net capital gain of $35,844 and interest of $18 less net rental losses of $20,907. After allowing for work-related deductions of $1,794, Mr Amachree had a taxable income of $72,588 in 2023-24. The rental property schedule shows a property in [Suburb 1] made a net rental loss of $11,438, a property in [Suburb 2] made a net rental loss of $1,015 and a property in [Suburb 3] made a net rental loss of $8,454.
Mr Amachree explained that the income from [Company 3] related to his employment as a contractor which ended prior to him starting at [Company 2]. He said it was the property in [Suburb 2] he initially sold and this was in September 2023. Mr Amachree said he had since sold the property in [Suburb 1] in August 2024 and any net capital gain would be reflected in his 2024-25 individual tax return. Mr Amachree said the property in [Suburb 3] was his home where he had been renting a one-bedroom granny flat through Airbnb. Mr Amachree said he had stopped renting the granny flat in January 2024 as his family was currently living with him. Mr Amachree said at one point he was also renting a bedroom at his [Suburb 3] home but no longer did so.
Mr Amachree also provided the Tribunal with a Statement of Financial Circumstances received on 15 February 2024. Mr Amachree lists total weekly household expenditure of $3,159 including mortgage payments of $1,969, food of $300 and total motor vehicle expenses of $137. Mr Amachree acknowledged his mortgage payments had reduced with the sale of his second investment property. His total personal expenditure is approximately $261 per week including child support of $155. Mr Amachree declares total assets valued at $1,681,567 including his home in [Suburb 3] valued at $1,125,000 and his investment property – since sold – in [Suburb 1] valued at $500,000. Mr Amachree includes in his assets two motor vehicles valued at $28,000 in total which he said had since been sold. He lists total liabilities of $1,259,897 being primarily the mortgage on his family home of $851,065 and the mortgage on his [Suburb 1] property of $405,865. Mr Amachree has superannuation in a single fund of $165,133.
Mr Amachree had a taxable income of $72,588 in 2023-24. Total net investment losses form part of a parent’s adjusted taxable income for the purposes of child support. In this case an amount of $20,907 is added back to his taxable income such that the Tribunal finds Mr Amachree had an adjusted taxable income of $93,495 in 2023-24.
The Tribunal is not satisfied, however, that Mr Amachree’s true income and financial resources are accurately reflected in his taxable income alone. There are certain advantages in being self-employed which are not generally available to salary and wage earners. The Family Court has held that in circumstances where a parent is self-employed it can be appropriate to look behind their taxable income. For example, in Voss & Child Support Registrar & Anor (SSAT Appeal) [2009] FMCAfam 1296, the Court commented on the common situation of a self-employed person’s taxable income not corresponding with his or her income or financial resources for child support purposes:
There is a body of cases where simple reference to a person’s tax return does not provide an appropriate quantification of their capacity to provide financial support. Most commonly this occurs in cases involving the self-employed, where it is well accepted that legal structures and arrangements may generate taxable income that doesn’t properly reflect the realistic capacity of the person to provide financial support for their children.
In such cases, assessing child support on the basis of taxable income only can result in an unjust and inequitable level of child support.
Mr Amachree is self-employed and runs his own [business] called [Company 1] which commenced operating in June 2024. The business made a loss in 2023-24, however, the loss arose in large part due to depreciation expenses on a motor vehicle as well as plant and equipment. Although depreciation is a legitimate expense for taxation purposes it is not an actual expense incurred until such time as the equipment depreciated is replaced. It is for this reason that depreciation can be considered a resource available to business owners. That is not to suggest in any way that Mr Amachree has done anything wrong or incorrectly claimed depreciation as an expense in his taxation return.
Adding back the amount of $10,122 for motor vehicle depreciation would, in effect, see [Company 1] make a profit of $8,025 in 2023-24. Mr Amachree has advised he is required to update equipment on a regular basis to keep pace with technology. The Tribunal accepts this to be the case and will not consider the expense for depreciation on plant and equipment.
The Tribunal finds that Mr Amachree would be more fairly assessed as if he had access to income, property and financial resources of approximately $101,520 in 2023-24. This includes his adjusted taxable income of $93,495 plus the profit for his business after accounting for depreciation.
[Company 1] is currently generating revenue of $316,483 on an annualised basis from one contract although, as Mr Amachree has pointed out, this contract ends in December 2024. It is difficult to determine with any certainty what profit [Company 1] will make in 2024-25 as business expenses remain largely unknown and the contract may not be renewed. Nonetheless the Tribunal must make a determination based on the information available.
In relation to business expenses Mr Amachree has said he employs a contractor for about 20 hours a week at a rate of $70 per hour to assist him in the business. This is equal to approximately $72,800 on an annualised basis. After allowing for this and other business expenses of 40 per cent, which the Tribunal considers reasonable in light of the nature of his work, [Company 1] would make a gross profit of approximately $146,210 in the current financial year.
The Tribunal is satisfied, based on the evidence provided, that Mr Amachree would be more fairly assessed as if he had access to income, property and financial resources of approximately $146,210 in 2024-25. The Tribunal acknowledges there is no certainty this income will continue beyond 31 December 2024. The Tribunal is also conscious, however, that Mr Amachree will likely benefit from a capital gain from the sale of his property in [Suburb 1] in the 2024-25 financial year. The Tribunal will take these matters into consideration when making a just and equitable determination.

The administrative assessment in place at the time Ms Coharane made her application for a change on 14 June 2023 was based on a 2021-22 adjusted taxable income of $188,096 for Mr Amachree. From 1 July 2023, however, Mr Amachree was assessed on his estimated 2023-24 adjusted taxable income of $0 and then from 27 July 2023 he was assessed on a revised estimated 2023-24 adjusted taxable income of $78,860.[1]
[1] During the same period Ms Coharane was assessed on an estimated 2023-24 adjusted taxable income of $22,561. This was subsequently reconciled against her actual 2023-24 adjusted taxable income of $40,529.
The Tribunal has found that Mr Amachree would be more fairly assessed as if he had an adjusted taxable income of approximately $101,520 in 2023-24. When this amount is applied in the child support formula, the annual rate of child support payable by Mr Amachree would be approximately $11,689.
The Tribunal finds this to be significantly more than his liability under the administrative assessment. The Tribunal is satisfied that special circumstances exist and the application of the administrative assessment of child support would result in an unjust and inequitable determination of child support to be provided by Mr Amachree.
On this basis the Tribunal finds there is a ground for departure from the administrative assessment.

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

As the Tribunal finds there is a ground to depart from the administrative assessment of child support, the next step is to consider whether or not it is just and equitable as regards the children, 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 Act. This in turn requires the Tribunal to consider the matters discussed below,[2] which are as set out in subsection 117(4) of the Act:
[2] The Tribunal is required to give “overt consideration” to relevant factors listed in subsection 117(4) of the Act: Tyagi & Meares(SSAT Appeal) [2008] FMCAfam 886.
(4)In determining whether it would be just and equitable as regards the child, the carer entitled to child support and the liable parent to make a particular order under this Division, the court must have regard to:
(a)the nature of the duty of a parent to maintain a child (as stated in section 3); and
(b)the proper needs of the child; and
(c)the income, earning capacity, property and financial resources of the child; and
(d)the income, property and financial resources of each parent who is a party to the proceeding; and
(da)the earning capacity of each parent who is a party to the proceeding; and
(e)the commitments of each parent who is a party to the proceeding that are necessary to enable the parent to support:
(i)     himself or herself; or
(ii)    any other child or another person that the person has a duty to maintain; and
(f)the direct and indirect costs incurred by the carer entitled to child support in providing care for the child; and
(g)any hardship that would be caused:
(i)     to:
(A)the child; or
(B)the carer entitled to child support;
by the making of, or the refusal to make, the order; and
(ii)    to:
(A)the liable parent; or
(B)any other child or another person that the liable parent has a duty to support;
by the making of, or the refusal to make, the order; and
(iii)    to any resident child of the parent (see subsection (10)) by the making of, or the refusal to make, the order.

The nature of the duty of a parent to maintain a child (as stated in section 3 of the Act)

Section 3 of the Act states that it is the primary duty of a parent to maintain the child and this has priority over nearly all other commitments. In this case the parents have a duty to support [Child 1].
The Tribunal was not made aware that either parent has a legal responsibility to any other child or person.

The proper needs of the child

In relation to the proper needs of the child, regard must be had 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 (subsection 117(6) of the Act).
The Tribunal was not made aware that the parents expected [Child 1] to be cared for, educated or trained in a particular way or that he had any special needs. The Tribunal is satisfied it is therefore appropriate to calculate the costs of his needs by reference to the Costs of the Children Table (provided for in Schedule 1 to the Act).

The income, earning capacity, property and financial resources of the child

The Tribunal is satisfied [Child 1] has no income, earning capacity, property and financial resources that should be taken into account for the purpose of child support.

The income, property, financial resources and earning capacity of each parent

The Tribunal has already considered in detail the income, property and financial resources of both parents.
Ms Coharane also raised the earning capacity of Mr Amachree. Ms Coharane submitted that Mr Amachree had resigned from paid employment simply because he wanted to reduce his child support liability. Ms Coharane said this decision could not be justified on the basis of his state of health as Mr Amachree had always planned to work less as evidenced by text messages he had sent her. Ms Coharane added that someone with the skills and experience of Mr Amachree should be earning a far higher income.
The Tribunal notes in evidence a text message to Ms Coharane from Mr Amachree dated 23 March 2023 in which he states, “I believe I will be paying child support way more than I should just because of income and not cause of the lifestyle he lives when he is with me”. In a further text message dated 8 August 2023 Mr Amachree states, “You know my plan is to work less so I can be with [Child 1] and I still have this mindset”.
Ms Coharane said this indicated that Mr Amachree was always motivated by a desire to reduce his child support.
Mr Amachree told the Tribunal he resigned from his role at [Company 2] due to concerns about his mental health. Mr Amachree said it was a stressful period in his life following separation and the need to attend court. Mr Amachree added that his role at [Company 2] was too demanding and he needed to leave and achieve a better work-life balance. Mr Amachree said it was no secret he wanted to spend more time with [Child 1] and felt the best way to do so was to work less hours. Mr Amachree pointed out that after leaving [Company 2] he established his own business to give him the flexibility to work and care for [Child 1]. He said this was another reason why he had taken on a contractor at [Company 1] so he could focus more on his time with [Child 1].
The Tribunal notes in evidence an undated letter of resignation from Mr Amachree to his employer. It states, relevantly, “Over the past few months, I have been experiencing increasing stress and challenges with my mental health, facing a situational crisis with the recent relationship breakdown” and “I have consulted with medical professionals who have recommended that I take a step back from my current responsibilities to focus on my recovery and self-care”.
The Tribunal further notes in evidence a letter from Dr [A] dated 4 October 2023. Dr [A] states:
I find Mr Amachree to be having low moods, hard to concentrate and insomnia and I have referred him to see a psychologist. He should primarily focus on his mental health, attend his family matter and if no action is taken it could be detrimental to himself. He should be able to work when these two concerning matters are resolved.
Mr Amachree said although he did not attend a psychologist he had used the time away from work to help his recovery. Mr Amachree reiterated he no longer wished to work five days a week and wanted to see more of [Child 1].
In order to establish that Mr Amachree’s earning capacity might be greater than that reflected in the child support assessment and render the assessment unfair, all three compulsory criteria set out in subsection 117(7B) of the Act must be satisfied. Those three criteria are:
(a)    one or more of the following applies:
·the parent does not work despite ample opportunity to do so (subparagraph 117(7B)(a)(i));
·the parent has reduced the number of hours per week of their employment or other work below the normal number of hours per week that constitutes full-time work for the occupation or industry in which the parent is employed or otherwise engaged (subparagraph 117(7B)(a)(ii));
·the parent has changed their occupation, industry or working pattern (subparagraph 117(7B)(a)(iii)); and
(b)    the parent’s decision not to work, to reduce the number of hours, or to change their occupation, industry or working pattern is not justified on the basis of:
·the parent’s caring responsibilities (subparagraph 117(7B)(b)(i)); or
·the parent’s state of health (subparagraph 117(7B)(b)(ii)); and
(c)    the parent has not demonstrated that it was not a major purpose of that decision to affect the administrative assessment of child support in relation to the child (paragraph 117(7B)(c)).
Mr Amachree resigned from employment at [Company 2]. Mr Amachree did not work again for a period of approximately eight months until establishing [Company 1] and has said he no longer wishes to work full-time. As he has changed his work pattern and reduced his hours of work to below full-time employment the first criterion is, therefore, met.
Mr Amachree has explained that he was struggling with his mental health and needed time away from what he has described as a demanding role. Mr Amachree has also said that part of the reason he established [Company 1] and became self-employed was to have the flexibility to spend more time with [Child 1]. The Tribunal notes that his care of [Child 1] increased from 13 February 2024. Mr Amachree said he was now having care of one night a week and every second Saturday night.
The Tribunal finds, based on the evidence provided, that the decision made by Mr Amachree to leave [Company 2] can be justified on the basis of his state of health. He has since established his own business and it appears his income will be similar to that which he was earning prior to leaving full-time employment.
As all three criteria must be satisfied, it follows that if one is not satisfied, then this ground cannot be considered. The Tribunal finds that the earning capacity criteria (set out in subsection 117(7B) of the Act) are not met for Mr Amachree in this case.
The Tribunal is also satisfied the earning capacity criteria are not met in relation to Ms Coharane.

Any hardship that would be caused

The Tribunal has found that Mr Amachree would be more fairly assessed as if he had an adjusted taxable income of approximately $101,520 in 2023-24. Mr Amachree is now self-employed and this amount will rise to approximately $146,210 from 1 July 2024 in line with expectations of the gross profit generated by his business.
Mr Amachree lists total estimated household expenditure of approximately $164,268 per annum, however, this includes mortgage costs of approximately $102,388 which will reduce significantly with the sale of his investment property. Otherwise he has no unusual or out of the ordinary expenses. Mr Amachree has annual personal expenditure amounting to $13,609 although the Tribunal notes this includes no income tax.
Mr Amachree said he led a simple lifestyle and helped fund his living costs while he was not working with the proceeds from the sale of his [Suburb 2] investment property. Mr Amachree reiterated there was some uncertainty about the contract [Company 1] held and no guarantee he would have an income past the end of 2024.
Ms Coharane is working part-time and her adjusted taxable income was $40,529 in 2023-24. Ms Coharane has pointed out that in March 2025 she will be taking maternity leave and her income will decline. Ms Coharane has previously lodged estimates of her income and is able to use this provision again in circumstances when her income may change. Her total estimated household expenditure is $63,440 and her personal expenditure is $10,920. Ms Coharane said she relied on child support from Mr Amachree to help meet [Child 1]’s expenses and was able to draw down on the equity in her mortgage offset account.
Ms Coharane applied for a change of assessment on 14 June 2023. The Tribunal finds it just and equitable, in the circumstances of this case, to commence its determination from 1 July 2023 and not an earlier date. This is when the $0 estimate of income lodged by Mr Amachree became effective in the assessment. Although there was a period of a few weeks when Mr Amachree was not earning an income he nonetheless had access to income, property and financial resources of approximately $101,520 in 2023-24.
Having considered the interest of both parents the Tribunal proposes to make the following determination:
· for the period from 1 July 2023 to 30 June 2024 the adjusted taxable income of Mr Amachree is varied to $101,520; and
· for the period from 1 July 2024 to 31 March 2025 the adjusted taxable income of Mr Amachree is varied to $146,210.

The Tribunal has varied the adjusted taxable income of Mr Amachree until 31 March 2025. In doing so the Tribunal acknowledges the contract [Company 1] holds with its client may not continue beyond the end of 2024. Balanced against this is the unknown gain Mr Amachree has available to him from the sale of his [Suburb 1] investment property which the Tribunal has not taken into account when determining the financial resources available to him.
Should the contract [Company 1] holds not be renewed and Mr Amachree find himself without income he would be entitled to apply for a new change of assessment. After 31 March 2025 the child support will be assessed under the usual administrative processes.
In accordance with the decision of the Tribunal, as previously calculated, the annual rate of child support payable by Mr Amachree will be approximately $11,689 from 1 July 2023. This will fall to approximately $8,390 from 13 February 2024 when taking account of the change in care for [Child 1] as recorded by Child Support. From 1 July 2024 the annual rate of child support payable by Mr Amachree will rise to approximately $12,527 as a result of the change to his income as determined by the Tribunal. As previously noted from 1 April 2025 the ordinary formula provisions will apply to the assessment.
While the decision of the Tribunal will result in additional child support payable by Mr Amachree when compared to the administrative assessment the Tribunal is satisfied he has the financial resources available to him to meet this obligation.
The Tribunal finds the proposed determination will not cause hardship to Mr Amachree, Ms Coharane or [Child 1] and is just and equitable.

Issue 3 – Is it otherwise proper to make a particular 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 Act. Subsection 117(5) sets out the matters that must be considered when deciding whether it would be otherwise proper to make a departure determination. It focuses on the balance of support carried between the parents on one hand and the taxpayer on the other. It is appropriate for the children to be primarily supported by their parents rather than by government assistance. The Tribunal must consider whether the level of a benefit, in particular family tax benefit, received by the party caring for the children may be affected by the level of child support.
Ms Coharane is not in receipt of family tax benefit for [Child 1]. The Tribunal is satisfied that its determination will result in an appropriate apportionment of financial responsibility between the parents and the community and would be otherwise proper.

DECISION

The Tribunal sets aside the decision under review and, in substitution, decides that:

for the period from 1 July 2023 to 30 June 2024 the adjusted taxable income of Mr Amachree is varied to $101,520; and
for the period from 1 July 2024 to 31 March 2025 the adjusted taxable income of Mr Amachree is varied to $146,210.