Cowden and Cowden (Child support)

[2020] AATA 4296

Cowden and Cowden (Child support) [2020] AATA 4296 (1 September 2020)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2020/PC019434

APPLICANT:  Mrs Cowden

OTHER PARTIES:  Child Support Registrar

Mr Cowden

TRIBUNAL:Member W Budiselik

DECISION DATE:  1 September 2020

DECISION:

The decision under review is affirmed.

CATCHWORDS

CHILD SUPPORT – non-agency payment – prescribed payment for payees share of home loan – payment correctly credited – decision under review affirmed

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. Mrs Cowden (the applicant/mother) and Mr Cowden (the father) are the parents of children who are subjects of a child support assessment. The father pays the mother child support.

2. On 24 June 2020, a Services Australia (the agency) objections officer set aside a decision by an officer of the agency and allowed the father’s objection to the decision such that an amount of $5,778 is to be credited against his child support liability as a prescribed non-agency payment.

3. On 9 July 2020, the mother lodged an application for a review of the agency’s decision with the Administrative Appeals Tribunal (the tribunal). On 31 August 2020, the tribunal conducted a hearing into the application for review. The parents participated in the hearing via conference phone. Prior to hearing, the agency provided a bundle of papers from its files relevant to the case (folios 1 – 92). The mother provided a pre-hearing submission (folios A1 – A159), which was provided to the father prior to the hearing and has since been provided to the agency. Following the hearing, at the tribunal’s request, the father provided additional documents (folios B1 – B37), which have been provided to the mother and to the agency.

ISSUES

1. The legislative provisions relevant to this Decision are contained within the Child Support (Registration and Collection) Act 1988 (the Act).

2. The issue that arises in this case is whether or not payments made by the father should be credited against his child support liability.

CONSIDERATION

Issue: Should payments made by the father be credited against his child support liability?

1. Section 71C of the Act provides for payments of the kind prescribed by regulation to be credited against the amount payable under the enforceable liability for a payment period, up to a maximum of 30% of the amount payable.  The payment must be a payment of the kind specified in regulation 19 of the Child Support (Registration and Collection) Regulations 2018 (the Regulations) (paragraph 71C(1)(b) of the Act).  Regulation 19 states that specified payments are payments of the following kind:

   ·       …

   ·       The payee’s share of repayments on a loan that financed the payee’s home; and

2. Paragraph 71C(1)(d) of the Act provides that the payment will not be credited if the liable parent has at least regular care of any of the child or children to whom the child support assessment relates.  Subsection 4(1) of the Act defines regular care to have the meaning given by subsection 5(2) of the Child Support (Assessment) Act 1989, which defines it to mean the carer has at least 14% but less than 35% care of a child. It is not in dispute that the father has less than 14% care of the children.

3. At the heart of this matter are loan repayments for loans taken out to purchase the parents’ house located at [(the property)]. The mother and children live at the property.

4. The amounts paid by the father against the loans are not in dispute. The mother argued that the father’s request that the loan repayments should be credited as non-agency payments should be denied because they had not yet affected their property settlement and in the final settlement he might be awarded the property; that there was no mutual intention the payments should be credited against the father’s child support liability; that one of the loans was a business loan; and, that the father might redraw against the loan.

5. The tribunal decided it was not relevant to its consideration how the property was finally distributed. It is evident that the property is jointly owned by the parents and that the mother and the children reside at the property.

6. The tribunal finds section 71C of the Act does not require there to be mutual intention that mortgage repayments be in lieu of child support.

7. Following hearing the father provided documentation which demonstrated the three loans from the [Bank 1] which are in the parents’ names were approved on 28 April 2015 and each loan is secured against the property (see folios B13, B23 and B33).

8. The mother’s concern that one of the loans appears in the father’s business’ balance sheet under the heading Non-Current Liabilities does not negate the fact that the loan is secured against the property that is jointly owned by the parents and therefore satisfies the criterion that the payment of the due amount satisfies the Regulations.

9. In her submission to the tribunal the mother set out her strong belief that the father is misleading the tribunal and the Australian Taxation Office. She concluded part of her argument:

   If this hearing were to accept that those payments were for a mortgage on [the property], then the claim of that account as a tax deduction is a fraud, and this hearing should refer Mr Cowden to the ATO and Police for investigation and prosecution.

   For clarity, the tribunal does not intend to act on the mother’s wishes. If she has information she wishes to place before another authority, that is for her to do.

10. There is no evidence provided the father had redrawn against the loan. The father explained immediately after separation the mother had withdrawn money from one of the loan accounts and from that time the loan accounts have been frozen such that neither parent could withdraw against the loan.

11. The tribunal being satisfied the payments are correctly credited under section 71C of the Act affirmed the agency’s decision.

DECISION

The decision under review is affirmed.