Conabeau and Seabaugh (Child support)
[2025] ARTA 949
•29 April 2025
Conabeau and Seabaugh (Child support) [2025] ARTA 949 (29 April 2025)
Applicant/s: Mr Conabeau
Respondent: Child Support Registrar
Other Parties: Ms Seabaugh
Tribunal Number: 2024/SC028471
Tribunal: Member M Baulch
Place:Sydney
Date:29 April 2025
Decision:The Tribunal sets aside the decision under review and, in substitution, decides that there is not to be a departure from the administrative assessment of child support because it is not just and equitable to do so.
CATCHWORDS
CHILD SUPPORT – departure determination – income, property and financial resources – special needs of the children – specialised tutoring costs – financial resources from businesses – ground for departure – not just and equitable – 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 pursuant to subsection 201(1A) of the Social Security (Administration) Act 1999.
Statement of Reasons
BACKGROUND
This application for review concerns the amount of child support paid by Mr Conabeau to Ms Seabaugh in respect of [Child 1], born in 2009, and [Child 2], born in 2012.
The Child Support (Assessment) Act 1989 (the Act) provides for an administrative assessment of the child support payable by one separated parent to the other. It uses a statutory formula which contains variables such as the parents’ incomes, the number of children, their ages and their percentages of care. Mr Conabeau has been assessed as liable, by Services Australia – Child Support (Child Support), to pay child support to Ms Seabaugh in respect of the two children.
A parent can make an application to Child Support for a change to the administrative assessment based on the statutory formula in the special circumstances of their case – referred to in the Act as a departure determination. Mr Conabeau and Ms Seabaugh both made such an application on 20 February 2024. Those applications relied upon the following grounds for departure:
· That the children had special needs; and
· There are extra costs in caring for, educating or training the children in the way both parents intended.
The application was considered by a Child Support decision maker who decided, on 10 April 2024, that there should be a departure determination, such that for the period 20 February 2024 to 31 December 2024 the annual rate of child support payable by Mr Conabeau was increased by $5,400.
Mr Conabeau objected to that decision and, on 23 August 2024, that objection was partly allowed. The objections officer decided that the annual rate of child support payable by Mr Conabeau was to be increased by $5,130 for the period 20 February 2024 to 31 December 2024 (the decision under review).
On 27 August 2024, Mr Conabeau applied to the Administrative Appeals Tribunal (the AAT) seeking an independent review of Child Support’s decisions. On 14 October 2024, the AAT was abolished and replaced by the Administrative Review Tribunal (the Tribunal), which is now required to determine Mr Conabeau’s application for review.
A hearing into the application for review was held by the Tribunal on 5 March 2025. Mr Conabeau and Ms Seabaugh both participated in the hearing by telephone, and both gave evidence under affirmation during the hearing. Mr Conabeau was represented by [name], who made submissions on his behalf. A representative of the Child Support Registrar (the Registrar) did not participate in the hearing. On 5 March 2025 the Tribunal deferred determining the application for review to allow time for the parents to provide comment on additional evidence that had not been before the parties when the matter was heard.
On 28 April 2025 the Tribunal determined the application for review. The Tribunal had before it relevant documents provided to it by the Registrar pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 and section 25 of the Administrative Review Tribunal Act 2024 (a total of 632 pages). The Tribunal also had regard to additional material provided by Mr Conabeau (labelled folios A1 to A283) and Ms Seabaugh (labelled folios B1 to B160).
ISSUES
The statutory provisions relevant to this review application are found within the child support legislation, in particular, the Act.
Pursuant to section 98C of the Act, a determination to depart from the administrative assessment of child support may be made if the following three requirements are met:
(i) that one, or more than one, of the grounds for departure referred to in subsection [117(2) of the Act] exists; and
(ii) that it would be:
(A) just and equitable as regards the child, the liable parent, and the carer entitled to child support; and
(B) otherwise proper;
to make a particular determination under this Part; …
ADMINISTRATIVE ASSESSMENT
At the date of the parents’ applications for a departure determination, the administrative assessments of child support were as follows:
· From 1 January 2024 to 31 August 2024, Mr Conabeau was assessed as liable to pay child support of $25,683 per annum based upon his adjusted taxable income of $150,615, derived from his 2022–24 taxable income and Ms Seabaugh’s adjusted taxable income of $113,973, an amount set in a previous departure determination decision.
· On 1 September 2024, a new child support period commenced, and Mr Conabeau was assessed as liable to pay child support of $24,885 per annum based upon his adjusted taxable income of $159,617, derived from his 2023–24 taxable income and Ms Seabaugh’s adjusted taxable income of $113,973.
These assessments had regard to earlier departure determination decisions made on 8 May 2023 and 14 December 2023 that had increased Mr Conabeau’s annual rate due to school fees and orthodontic costs and that had varied Ms Seabaugh’s adjusted taxable income.
These, therefore, are the administrative assessments from which I am considering departing.
CONSIDERATION
All the grounds for departing from the administrative assessment of child support are prefaced by the term ‘in the special circumstances of the case’. As noted by the Full Court of the Family Court:1
Whilst it is not possible to define with precision the meaning of that term, 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 Savery's case (at Fam LR 815 FLC 77,897), Kay J, adopting the view in In the Marriage of Philippe (1977) 4 Fam LR 153; [1978] FLC 90-433 at Fam LR 155 FLC 77,202 in a different context, said that "special circumstances" were "facts peculiar to the particular case which set it apart from other cases". The approach to the interpretation and application of the particular grounds in s 117(2) must be guided by that qualification.
My consideration will be guided by this principle.
Is there a ground for departure?
Special needs of the child
Ms Seabaugh’s application for a departure determination relied upon the ground for departure set out in subparagraph 117(2)(b)(ia) of the Act. This provision – commonly referred to as “Reason 2” by Child Support – provides that, in the special circumstances of the case, a ground for a departure from the statutory formula may be established if the costs of maintaining the child are significantly affected “because of the special needs of the child”.
The term special needs is not defined in the Act. In Lightfoot and Hampson,[1] the Full Court of the Family Court of Australia stated that:
‘special needs of the child’ - encompasses a wide range of needs of a child which are seen as ‘special’ in the sense of necessary or at least desirable for that child's welfare but outside the ‘normal’ needs of a child which would be catered for within the formula. This would include such things as unusual medical expenditure, facilities for a handicapped child, etc. If necessary it could include ‘special needs in education.
[1] [1996] FamCA 8.
Ms Seabaugh is seeking Mr Conabeau’s contribution to additional costs she incurs for [Child 1] and [Child 2] to undertake private tutoring. Mr Conabeau submits that he should not have to make such contributions, as [Child 1’s] and [Child 2’s] needs to additional support could be met through the school at no additional cost and he believes private tutoring is being used as back up due to [Child 1’s] and [Child 2’s] frequent absences from school.
Having regard to the evidence, I was not persuaded that the support Mr Conabeau asserts is available through the school is commensurate with, or could be substituted for, private tutoring lessons. In relation to [Child 1’s] and [Child 2’s] absences from school, that is a matter beyond the scope of these proceedings, and it is more appropriate that any issue with school attendance (and I have no view about whether or not there is a problem with school attendance) be addressed by the parents and the school.
I will consider Ms Seabaugh’s application in respect of each child separately.
[Child 1]
A psychometric assessment report completed by clinical psychologist, [Psychologist A], on 16 September 2023, indicates that [Child 1] has a specific learning disorder, being dyslexia, with mild to moderate impairment in reading and mild moderate impairment in writing. One of the interventions recommended by [Psychologist A] is specialised tutoring for children with dyslexia.
I was satisfied that [Child 1] has a special need and requires tutoring services.
[Child 2]
A psychometric assessment report completed by clinical psychologist, [Psychologist B], on 20 December 2023, indicates that [Child 2] has no specific learning disorder. The report notes that [Child 2] has a weakness with his working memory, becomes easily discouraged and displays symptoms of ADHD. One of the recommendations made by [Psychologist B] in her report was that [Child 2] continue with one-to-one tutoring as it would benefit him in relation to reduced distractions and his transition to high school.
Ms Seabaugh’s evidence was that [Child 2] had seen a paediatrician, who did not complete their assessment for reasons that are contested and not relevant here, and she is on a waiting list to see a second paediatrician.
After the hearing, Ms Seabaugh provided a letter from a paediatrician, [Paediatrician A] dated 14 June 2024 (folios B130 to B131). In the letter, [Paediatrician A] noted the psychometric assessment that had previously been undertaken by [Psychologist B]. While [Paediatrician A] does not specifically state that there is a diagnosis of ADHD, he does posit starting [Child 2] on Ritalin.
Mr Conabeau submits that [Paediatrician A’s] letter does not constitute evidence of a diagnosis for ADHD and submits that Ms Seabaugh’s ongoing efforts to have a diagnosis formalised suggests that there isn’t currently a diagnosis of ADHD.
I noted that [Paediatrician A’s] letter does not state that [Child 2] does not have ADHD. While [Paediatrician A] does not specifical state in his letter that he is of the opinion that [Child 2] has ADHD, I noted he proposes prescribing Ritalin, a Schedule 8 medication, which would not be prescribed for a child who does not have ADHD.
Having considered the evidence, in particular [Paediatrician A’s] comments on prescribing Ritalin, I was satisfied that it is more likely than not that [Child 2] is affected by ADHD, notwithstanding [Paediatrician A’s] failure to make his opinion clear.
I was satisfied that [Child 2] has a special need and requires tutoring services.
Costs
[Child 1] and [Child 2] are undertaking additional tutoring, initially with [Service 1], and more recently with [Tutor A]. Ms Seabaugh’s evidence was tutoring with [Service 1] ceased in June 2024 for [Child 1] and in May 2024 to [Child 2], but commenced with [Tutor A] on 17 May 2024, there being a slight overlap with tutoring services for [Child 1] due to him having a number of assessments on hand at the time.
Ms Seabaugh has provided documentary evidence of the payments she had made to [Service 1] and [Tutor A]. For the purposes of determining the cost of [Child 1’s] and [Child 2’s] tutoring at [Service 1], I decided that the amount calculated by the objections officer ($6,840) would adequately represent the costs incurred by Ms Seabaugh in relation to [Service 1] until June 2024.
For the purposes of determining the cost of [Child 1’s] and [Child 2’s] tutoring with [Tutor A], I determined that the costs incurred by Ms Seabaugh were $4,800 in 2024 and $1,050 in 2025 to date.
Under the administrative assessment of child support, the costs of the child are approximately $38,000 per annum for both children. Ms Seabaugh is incurring costs of approximately $11,640 per annum for [Child 1’s] and [Child 2’s] tutoring and this represents more than a quarter of the costs of the children used in the administrative assessment. I was satisfied that the costs of tutoring required due to [Child 1’s] and [Child 2’s] special needs significantly affect the costs of maintaining both children.
[Child 1] and [Child 2] each have a special need that requires Ms Seabaugh to bear costs that are not borne by most parents. I was satisfied that this makes this case out-of-the-ordinary and satisfies the requirement for there to be special circumstances.
Conclusion
I was therefore satisfied that the ground for departure set out in subparagraph 117(2)(b)(ia) of the Act is made out in this case.
Having concluded that there is a ground for departure in relation to [Child 1’s] and [Child 2’s] special needs, I will move on to consider what is just and equitable. The other ground raised by Mr Conabeau will be addressed as part of that consideration.
Just and equitable
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. Regard must be had to a variety of factors, set out in subsection 117(4) of the Act, such as the needs of the children, the parents’ necessary commitments and any hardships that would be caused by departing, or not departing, from the statutory formula.
The children
The children are in the primary care of Ms Seabaugh (238 to 313 nights per year) and the regular care of Mr Conabeau (52 to 127 nights per year). In submissions, Ms Seabaugh asserts that Mr Conabeau has missed many care events. I note that if Mr Conabeau’s care falls below 52 nights per year it would have a material affect on the amount of his child support liability. In this matter, I have no jurisdiction to consider the care percentage applying in the child support assessment. If it is a matter about which Ms Seabaugh is concerned, she should direct her concerns to Child Support.
Ms Seabaugh’s evidence was that [Child 1] has had minimal earnings working for her business after school. In the context of a child support assessment, I was satisfied that the children themselves have no income, no property, no earning capacity and no financial resources relevant to my consideration.
The special needs of the children have been discussed in these reasons. On 14 December 2023, an earlier departure determination made by Child Support requires Mr Conabeau to pay an additional $2,137 per annum in child support as a contribution to [Child 2’s] orthodontic treatment. Ms Seabaugh has provided evidence that [Child 1] also requires further orthodontic treatment. My role is to review decisions made by Child Support objections officers. There appears to be no objection officer decision that address future orthodontic treatment for [Child 1], and I do not propose to address that issue through any departure determination that I might make. Ms Seabaugh will need to make a fresh application to Child Support for a fresh departure determination if she would like those costs considered in the context of the child support assessment.
Both children attend a private school. On 8 May 2023, a Child Support decision maker determined that Mr Conabeau was required to pay a higher rate of child support for the period 1 January 2022 to 31 December 2024 in respect of those fees. Mr Conabeau’s objection to that decision was disallowed.
Mr Conabeau’s own application for a departure determination, made on 20 February 2024, sought to have that earlier decision regarding school fees ended or varied. At hearing Mr Conabeau stated that it is unfair that he contributes to school fees when the children have frequent absences from school. He stated that he is paying for something, but not getting his moneys worth. As I noted earlier, the children’s attendance at school is beyond the scope of these proceedings and is a matter for the school and the parents to manage.
It was my view that nothing has changed in relation to costs of attending a private school since the decision of 8 May 2023 was made. Mr Conabeau would prefer public education because, he says, he cannot afford to contribute to a private school for [Child 1] and [Child 2]. Ms Seabaugh has a continued preference for a private education for the children. Mr Conabeau raised the issue of school attendance during the decision-making process in 2023.
I am unable to review the decision of 8 May 2023 (Mr Conabeau did not seek a review of the decision to disallow his objection against that decision by the Administrative Appeals Tribunal within the required time) and, in the absence of evidence that the circumstances have changed since that decision was made, I considered that it was appropriate for the decision of 8 May 2023 to remain in place.
In submissions, Ms Seabaugh raised the issue of other costs she incurs for the children, such as school uniforms and costs that relate to the children’s involvement in extra-curricula sporting activities. All parents incur these types of costs, and in my view, they are nothing out of the ordinary. I am not inclined to take costs associated with uniforms and sport into account in the context of my decision making.
Mr Conabeau
Under the administrative assessment of child support, Mr Conabeau’s liability to pay child support is calculated on his 2022–23 adjusted taxable income of $150,615 and his 2023–24 adjusted taxable income of $159,617. Mr Conabeau is a PAYG employee who salary sacrifices some of his income to superannuation. I noted that calculation of a parent’s adjusted taxable income pursuant to section 43 of the Act requires a number of elements, including a parent’s reportable superannuation contributions, to be added to a parent’s taxable income. While salary sacrificing may reduce Mr Conabeau’s taxable income, it affords him no benefit when it comes to determining his child support liability.
Mr Conabeau also receives commission income, although his evidence was that the regularity of those payments has changed, and he may not continue to receive them. Mr Conabeau advised me that he was aware he could make an income estimate if his income fell below 85% of his adjusted taxable income, but he stated that he preferred to have his future income assessed by the Australian Taxation Office in the usual way.
I have had regard to a Statement of Financial Circumstances (Child support reviews) form completed by Mr Conabeau on 16 September 2024. I was satisfied that Mr Conabeau’s income, property and financial resources are adequately reflected in the adjusted taxable income used in the statutory formula.
I received no submissions that Mr Conabeau had any underutilised earning capacity relevant to my consideration under subsection 117(7B) of the Act.
Under the statutory formula Mr Conabeau has the benefit of a self-support amount of approximately $27,000 per annum to reflect the costs of his necessary self-support. Mr Conabeau made no submissions to the effect that he had any out of the ordinary expenses that would render that amount insufficient.
Mr Conabeau has three other dependent children and under the statutory formula has the benefit of a relevant dependent amount to recognise his duty to support those three children. Mr Conabeau has provided evidence that one of those children has recently been diagnosed with ADHD but stated that he had no out-of-the-ordinary costs in relation to those children that rendered the relevant dependent amount used in the formula as inadequate.
Through the decision-making processes of Child Support, Mr Conabeau had claimed he cannot afford to contribute more towards [Child 1’s] and [Child 2’s] support. Mr Conabeau’s bank statements disclose some discretionary spending. His Statement of Financial Circumstances (Child support reviews) form indicates his income is more than sufficient to meet the necessary costs of his own self support, the costs of maintaining his three dependent children and his child support liability with ample funds to spare.
I was satisfied that Mr Conabeau would not suffer financial hardship if I were to make a departure determination that increased the amount of his child support liability.
Ms Seabaugh
Under the administrative assessment of child support, Mr Conabeau’s liability to pay child support is calculated based upon Ms Seabaugh’s adjusted taxable income of $113,973 per annum, determined in an earlier departure determination dated 14 December 2023. The adjusted taxable income of $113,973 per annum determined by this earlier departure determination applied until 31 December 2024, and increased to $116,822 per annum from 1 January 2025.
Ms Seabaugh operates a number of businesses through companies and a family trust, [Business 1], [Business 2], [Business 3] and [Family Trust 1]. Ms Seabaugh draws a wage from the businesses and submitted that any profits or funds held within the businesses are the companies’, and not hers.
It is a long-established principle of law that when a person conducts their business through an intermediary, such as a company or trust, that it is proper to lift the corporate veil to determine the value of the company or trust to that person. In the context of child support assessments, the Federal Magistrates Court said in Shearer & Benson & Anor (SSAT Appeal)[2] (Shearer & Benson):
...when a person conducts their business through an intermediary company or trust, it is proper to lift the corporate veil to that person with regard to the determination of a parent’s income for child support purposes...
[2] [2011] FMCAfam 623
In Costa & Fairbank (SSAT Appeal)[3], the Federal Magistrates Court said about the interpretation of the term “financial resources”:
“Financial resource" refers to something which is not property but from which financial benefit is or may be gained. In light of the objects of the Act, the term should be broadly defined and would refer to any financial benefit that would enhance the capacity of parents to provide a proper level of financial support for their children.
[3] [2010] FMCAfam 39
Regarding the extent of the examination required by a Tribunal, the Federal Magistrates Court has referred to the Tribunal’s obligation to pursue the objective of providing a mechanism of review that it fair, just, economical, informal and quick. The Court has observed that the Tribunal is accordingly not required to undertake a “forensic audit” or major investigation of the financial circumstances of a party. Rather, it must be satisfied on the balance of probabilities as to the party’s income, property and financial resources (see for example, Morse & Potts (SSAT Appeal)[4] and Shearer & Benson). I took this case law into account in reaching my conclusions.
[4] [2010] FMCAfam 1305
Ms Seabaugh’s evidence was that she draws a wage from the companies when they can afford it, previously $66,000 per annum when she was working full time. She has reduced her hours and she hopes she will pay herself $55,000 per annum. The evidence was that her current partner works for the companies as [an occupation 1], doing 45 to 50 hours per week and is paid $145,000 per annum.
In relation to the businesses, the financial statements disclose the following:
2022-23 Profit/Loss*
2023-24 Profit/Loss*
[Business 1]
-$392
-$46.00
[Business 2]
$341,349
$253,041
[Business 3]
$573,884
$125,555
[Family Trust 1]
$139,534
$103,958
TOTAL
$1,054,375
$482,535
* Profits are noted above are before trust distributions, dividends or tax.
Ms Seabaugh claimed that the businesses would run at a loss for 2024–25 as profits have reduced due to her health issues.
Having regard to Ms Seabaugh’s businesses’ total profit for 2022–23, it is clear that her income, property and financial resources were significantly under assessed in the departure determination decision made on 14 December 2023. Yet, that decision was not the subject of an objection by either parent. It would be inappropriate for me to conduct a review of that decision, as I have no jurisdiction to do so.
Ms Seabaugh stated that the businesses profits needed to remain in the businesses to pay wages and the businesses’ debts. Ultimately, Ms Seabaugh may manage her businesses how she sees fit, but the evidence shows that Ms Seabaugh has taken additional funds from the businesses when she has needed them, for example to fund medical treatment. The businesses are a financial resource which are available to her and need to be considered in the context of my decision making.
The 2023–24 total business profit is also significantly higher than the adjusted taxable incomes applying under the administrative assessment for Ms Seabaugh. I noted that if Ms Seabaugh’s adjusted taxable income were set at approximately $330,000 per annum or more, as of February 2024, Mr Conabeau’s liability to pay child support would be reduced by approximately $12,000 per annum. Once Ms Seabaugh’s adjusted taxable income exceeds approximately $330,000 per annum, Mr Conabeau’s liability would only consist of his contributions to school fees and orthodontic treatment in accordance with earlier departure determinations.
Having regard to the financial statements for Ms Seabaugh’s business and her Statement of Financial Circumstances (Child support reviews), which is undated, I was satisfied that Ms Seabaugh’s income, property and financial resources are not adequately reflected in the adjusted taxable income used in the statutory formula.
Ms Seabaugh has reduced her employment from full time to part time while she undergoes medical treatment. Mr Conabeau did not dispute that this reduction in hours was justified due to the state of Ms Seabaugh’s health, and I was satisfied that Ms Seabaugh does not have any underutilised earning capacity relevant to my consideration under subsection 117(7B) of the Act.
Under the statutory formula Ms Seabaugh has the benefit of a self-support amount of approximately $27,000 to reflect the costs of her necessary self-support. Ms Seabaugh’s evidence was that she had incurred costs of $58,000 for medical treatment, but she was disinclined to provide any evidence to this effect. In the absence of any evidence of out of the ordinary costs, I concluded that the self-support amount of approximately $27,000 per annum for Ms Seabaugh is sufficient.
Ms Seabaugh has another dependent child in her care, other than [Child 1] and [Child 2]. Under the statutory formula she has the benefit of a relevant dependent amount to recognise her duty to support this child. Ms Seabaugh did not dispute that the self-support amount used in the statutory formula is sufficient for her to satisfy her duty to support this child.
The documentary evidence shows that Ms Seabaugh had significant funds in her bank account as of the date she made her application for a departure determination. In submissions, she stated that those funds are now in the businesses. However, the evidence also shows that the businesses have loans owed to Ms Seabaugh and that she has, at times, drawn on these loans to meet her living costs. In the circumstances, I was satisfied that Ms Seabaugh would not suffer financial hardship if I were to decline to make a departure determination that increased the amount of child support she receives.
Conclusion
I have found that there is a ground for departure from the administrative assessment of child support that relates to [Child 1’s] and [Child 2’s] special needs. Ms Seabaugh incurred costs of approximately $11,400 in 2024 in meeting those needs.
Having considered the matters set out in subsection 117(4) of the Act, I have concluded that the administrative assessment advantages Ms Seabaugh by approximately $12,000 per annum because, when she made her application for a departure determination, her income, property and financial resources were not adequately reflected in the administrative assessment.
I consequently decided that it would not be fair, or just and equitable, to make a departure determination that requires Mr Conabeau to contribute more by way of child support because of [Child 1] and [Child 2’s] special needs. In forming that view, I do not intend to disturb the earlier departure determinations dated 8 May 2023 and 14 December 2023 that applied under the administrative assessment.
I was satisfied that neither parent would be caused to suffer from financial hardship by my refusal to make a departure determination. I also note that Ms Seabaugh did not dispute that she would not suffer financial hardship if my decision resulted in her having incurred an overpayment of child support.
Therefore, and for these reasons, I decided to set aside the decision under review and substitute my own decision.
DECISION
The Tribunal sets aside the decision under review and, in substitution, decides that there is not to be a departure from the administrative assessment of child support because it is not just and equitable to do so.
| Date(s) of hearing: | Wednesday, 5 March 2025 |
| Representative for the Applicant: | [Deleted.] |
| Representative for the Other party: | Unrepresented |
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