Crowcomb and Broackes (Child support)

[2025] ARTA 623

Crowcomb and Broackes (Child support) [2025] ARTA 623 (17 February 2025)

Applicant/s:  Mr Crowcomb

Respondent:  Child Support Registrar    

Other Parties:       Ms Broackes

Tribunal Number:   2024/MC028162 

Tribunal:  General Member M King

Place:Brisbane

Date:17 February 2025

Decision:The Tribunal sets aside the decision under review and, in substitution, decides to vary Mr Crowcomb’s adjusted taxable income to $122,362 for the period 1 December 2023 to 15 November 2024.

Statement made on 17 February 2025 at 10:10am

CATCHWORDS 

CHILD SUPPORT – change of assessment – special circumstances –administrative assessment unjust and inequitable – a ground for departure established – father’s rate of child support payable is increased – 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 16(2AB) of the Child Support (Registration and Collection) Act 1988.

Statement of Reasons

BACKGROUND

1.Mr Crowcomb and Ms Broackes are the parents of, relevantly, [Child 1], born in 2006. Ms Broackes is recorded as having 100% care of [Child 1].

2.The administrative assessment for the period 1 October 2022 to 30 June 2023 was based on an adjusted taxable income of $54,239 for Mr Crowcomb (a reconciled estimate of income) and an adjusted taxable income of $23,615 for Ms Broackes (a default income for 2021/22). Mr Crowcomb was assessed to pay child support at a rate of $6,251 per annum.

3.The administrative assessment for the period 1 July 2023 to 30 September 2023 was based on an adjusted taxable income of $59,605 for Mr Crowcomb (based on his 2021/22 income) and an adjusted taxable income of $23,615 for Ms Broackes (a default income for 2021/22). Mr Crowcomb was assessed to pay child support at a rate of $7,485 per annum.

4.The administrative assessment for the period 1 October 2023 to 15 November 2024 was based on an adjusted taxable income of $49,414 for Mr Crowcomb (based on his 2022/23 income) and an adjusted taxable income of $25,032 for Ms Broackes (a default income for 2022/23). Mr Crowcomb was assessed to pay child support at a rate of $5,038 per annum.

5.On 14 December 2023, the Child Support Registrar (Child Support) initiated a departure from the administrative assessment of child support, under Part 6A of the Child Support (Assessment) Act 1989 (the Act).

6.On 6 March 2024, Child Support made a decision to vary Mr Crowcomb’s adjusted taxable income to $114,580 from 1 December 2023 until the end of the child support case.   

7.Mr Crowcomb objected to the decision. On 2 June 2024, a Child Support objections officer disallowed the objection. 

8.On 28 June 2024, Mr Crowcomb applied for review of the decision by the Tribunal. The Tribunal hearing was conducted on 11 February 2025. Mr Crowcomb and Ms Broackes attended the hearing by conference telephone and gave sworn evidence. Ms Broackes’s representative, Ms  [A], also attended the hearing.  

9.As well as the evidence and submissions of Mr Crowcomb and Ms Broackes at the hearing, and the submissions of Ms [A] at the hearing, the Tribunal also took into account the evidence of Mr Crowcomb’s wife, Ms [B], who gave sworn evidence at the hearing. The Tribunal also took into account the relevant documents provided by Child Support to the Tribunal prior to hearing: pages 1 to 324 (the hearing papers), additional evidence provided by Mr Crowcomb (marked A1 to A58) and additional evidence provided by Ms Broackes (marked B1 to B18).

CONSIDERATION

10.The rate of child support payable by a liable parent is usually based on an administrative assessment under Part 5 of the Act. A formula is used. It takes into account variables including each parent’s adjusted taxable income, the number of children, and the level of care provided by each parent.

11.Part 6A of the Act allows for a departure from an administrative assessment (a process commonly known as a “change of assessment”). Under subsection 98C(1) of the Act, the Registrar may make such a departure determination if 3 matters are established:

·      one, or more than one, of the grounds for departure referred to in subsection 98C(2) exists (subparagraph 98C(1)(b)(i));

·      a departure is just and equitable as regards the children and each parent (sub‑subparagraph 98C(1)(b)(ii)(A)); and

·      it is otherwise proper to make a departure decision (sub‑subparagraph 98C(1)(b)(ii)(B)).

12.Subsection 98C(2) provides that the grounds for departure are the same as the grounds set out in subsection 117(2).

13.If satisfied that a ground or grounds exist 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. It permits a range of determinations, including varying the rate of child support payable, the adjusted taxable income or the cost percentage for a child.

Grounds for departure

Income, property and financial resources

14.Subparagraph 117(2)(c)(ia) – commonly referred to as Reason 8 – provides as a ground for departure:

(c) that, in the special circumstances of the case, application in relation to the child of the provisions of this Act relating to administrative assessment of child support would result in an unjust and inequitable determination of the level of financial support to be provided by the liable parent for the child: …

(ia) because of the income, property and financial resources of either parent; …

15.The words “in the special circumstances of the case” are not defined in the legislation. Whilst it is not possible to define with precision the meaning of that term, 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 Tribunal will not interfere with the administrative formula result in the ordinary run of cases. In Gyselman and Gyselman (1992) FLC 92-279, it was held that “special circumstances” were “facts peculiar to the particular case which set it apart from other cases”. The Tribunal’s approach to the interpretation and application of the particular grounds in subsection 117(2) must be guided by that qualification.

Mr Crowcomb

16.Mr Crowcomb told the Tribunal that Child Support assumed the business [BUSINESS 1] was purely his business. However. the business is shared with his wife, who also works for the business. He said the income set for him by Child Support is therefore too high.

17.Mr Crowcomb told the Tribunal that [BUSINESS 1] is a [business]. He is a [occupation] and does all of the [specified work] for the business and his wife does all of the checking of his work. He said all of the work needs to be checked to make sure it is compliant. His wife also does all of the invoicing, banking and bookwork for the business. He said his wife does not have any formal [qualifications], but she has seem him do it for many years.

18.Mr Crowcomb estimated his wife works 12 to15 hours per week in the business. His wife also works elsewhere 4 days per week.

19.Mr Crowcomb said the incomes he and his wife were paid from [BUSINESS 1] in 2023/24 were based on what they thought was right for the business, in conjunction with their accountant.

20.Mr Crowcomb told the Tribunal he believes the company’s profit for 2023/24 was retained in the company to meet future expenses. He said the business operates from his home. He advised that the vehicle which the company owns is the only vehicle he has.

21.Ms [B] told the Tribunal that she does all of the accountants for the business, before they are finalised by an accountant. Mr Crowcomb is the [occupation] and does the [specified] work. She can make some small changes to Mr Crowcomb’s work. She does all of the invoicing and general day-to-day running of the business.  

22.She does most of her work for the business monthly. She estimated she works about 8 hours per week on average for the business. She tends to not do more than 2 hours per day on average for the business.

23.Ms [B] told the Tribunal that she has been unwell recently and has been in and out of hospital for over a month. She usually works 9 days per fortnight outside of the business, although she has been on leave from that employment since November 2024.

24.Ms [B] said the intent in establishing the company was that, in time, she would move from her current full-time employment and take a more hands-on role in the business.

25.She said she was incorrectly not included as a director of the company initially. That was a mistake made by their accountant. She said the business had been a sole trader business. Their accountant recommended changing the business to a company structure if she planned to help more in the business. She said she does a lot of business development.

26.Ms [B] confirmed that she was paid $30,000 by [BUSINESS 1] in 2023/24. She said that was worked out using an hourly rate for her. The accountant looked at how much work she did compared to Mr Crowcomb and based the payments to each of them on that. She said Mr Crowcomb is also paid an hourly rate, adjusted for expenses.

27.Ms [B] said the profit of the company for 2023/24 has been retained by the company. She said they are looking at establishing a full-time office for the business in the next 12 months. They want to find a room in a shared office.

28.Ms [B] said the rent expense recorded for the company is part of the rent for their home, as they had to turn most of the home into business premises. There had previously been an office for the business. She said some of the general expenses of the company relate to client meetings, as they cannot brings clients to their home to do business. She said the rent on their home is currently $750 per week including body corporate fees.

29.Ms [B] said the motor vehicle expense of the company relates to the interest and loan repayments for the car the company bought. The fuel allowance for the car is included in general expenses. She said the depreciation expense of the company relates to the car, computers, an iPad, monitors and the like.

30.At page A48 is a copy of Mr Crowcomb’s 2023/24 income tax return. The return records that Mr Crowcomb received $65,000 in director’s fees and $16 interest income, and claimed motor vehicle deductions of $4,250.

31.At page A54 is a copy of the 2023/24 income tax return for [BUSINESS 1]. The return records $171,261 income, $28,443 rent expense, $6,462 depreciation expense, $4,250 motor vehicle expense and $114,665 other expenses, resulting in a $17,441 profit.

32.A letter from Mr Crowcomb’s accountant dated 13 November 2024, at page A14, states that, for the 2023/24 year, Mr Crowcomb was paid $65,000 by [BUSINESS 1] and Ms [B] was paid $30,000 by [BUSINESS 1].

33.A letter from Mr Crowcomb’s accountant dated 23 February 2024, at page 245 of the hearing papers, states that [BUSINESS 1] bought a car in the 2022/23 year. The letter also states that [BUSINESS 1] was set up incorrectly initially as Ms [B] should have been a director and 50% shareholder of the company.   

34.A copy of a MASCOT search for [BUSINESS 1] conducted on 14 May 2024, at page 255 of the hearing papers, records that the company was registered on 23 January 2023. Mr Crowcomb and Ms [B] were listed as directors of the company and Mr Crowcomb was the sole shareholder of the company.

35.A copy of an ASIC search for [BUSINESS 1] conducted on 8 June 2024, at page A11, records that Mr Crowcomb and Ms [B] each own 50% of the shares in the company.

36.Mr Crowcomb was directed by the Tribunal to provide a copy of bank statements for all accounts to which he is, or was, a signatory for the period 1 December 2023 to 31 October 2024. Mr Crowcomb did not comply with that direction.

37.Mr Crowcomb told the Tribunal he did not provide all of the evidence the Tribunal directed him to provide due to concerns about his and his wife’s privacy. He said the more information he provided the more opportunity there was for Ms Broackes to breach their privacy.

38.It is not disputed that Mr Crowcomb was paid $65,000 by [BUSINESS 1] in 2023/24. [BUSINESS 1]’s income tax return records it made a profit of $17,441 for that year.

39.Whilst the shares in [BUSINESS 1] are now owned equally by Mr Crowcomb and Ms [B], the Tribunal finds that attributing 50% of the profit as being available to each of them would not provide a fair outcome in considering Mr Crowcomb’s capacity to support [Child 1] financially.

40.During the period being considered, it was Mr Crowcomb who earned the income of the business. He is the [occupation] who completes the work clients pay for. Ms [B] performs administrative work for the business, for which she is remunerated by reference to an hourly rate. That is an appropriate way to remunerate a person performing administrative work for a business.

41.The Tribunal finds it would not be fair to also attribute a percentage of the profit of the company to Ms [B]. That would unfairly alienate income earned from Mr Crowcomb’s efforts and attribute it to Ms [B]. Whilst that may be perfectly legitimate for tax and company purposes, it would not provide a fair outcome for child support purposes.

42.Whilst the profit of the company has been retained, the Tribunal is satisfied the profit was available to be accessed by Mr Crowcomb if he had wished to do so. As maintaining [Child 1] takes priority over everything other than Mr Crowcomb’s self-support needs, the Tribunal will proceed on the basis that the company profit was available to Mr Crowcomb to use in supporting [Child 1]. Retaining funds to meet a business’ future needs does not take priority over the duty to meet a child’s current needs.

43.The Tribunal will therefore attribute all of the company profit as being available to Mr Crowcomb for child support purposes.

44.The Tribunal further finds that Mr Crowcomb received significant benefits as [BUSINESS 1] met several expenses which Mr Crowcomb and Ms [B] would otherwise have had to meet personally.

45.Ms [B] advised that the $28,443 rent expense related to the rent on their home, as the business is conducted from the home. She advised that the business had previously operated from an office, but it had to move into their home. Therefore, the rent amount being claimed as a deduction is an expense Mr Crowcomb and Ms [B] would have had to meet privately in any event. Consequently, for child support purposes, the Tribunal finds it fair to exclude that amount as a deduction from the income of the company.

46.Ms [B] also advised that the $4,250 motor vehicle expense relates to repayments on the car the company purchased. Whilst the car was bought in the company’s name, it was confirmed that it is the only vehicle Mr Crowcomb has. Mr Crowcomb therefore uses the car for business and personal purposes.

47.The Tribunal is satisfied that Mr Crowcomb would have had to meet the repayments on the car personally if he was not also using the vehicle for business purposes. The Tribunal therefore finds that, for child support purposes, it is fair to exclude that amount as a deduction from the income of the company.

48.Ms [B] advised that the depreciation expense of $6,462 relates to the car and office equipment. The Tribunal is not satisfied that amount represents a cash outlay for the business in the 2023/24 year. The Tribunal therefore finds that, for child support purposes, it is fair to exclude that amount as a deduction from the income of the company.

49.Ms [B] advised that the other expenses of $114,665 included the amounts paid to her and to Mr Crowcomb and other expenses related to the car. If the total amount of $95,000 paid to Mr Crowcomb and Ms [B] is excluded, that leaves an amount of $19,665.

50.In the absence of a full breakdown of the company’s expenses, which the Tribunal had directed Mr Crowcomb to provide, and on the basis of Ms [B]’ evidence, the Tribunal will assume the expenses include registration and insurance expenses for the vehicle. They are expenses which Mr Crowcomb would have had to meet personally if he was not also using the vehicle for business purposes. The Tribunal therefore finds that, for child support purposes, it is fair to exclude those amounts as deductions from the income of the company.

51.In the absence of the full breakdown of the business expenses, the Tribunal is unable to determine if there are other similar expenses which provide Mr Crowcomb with a personal benefit.

52.On balance, the Tribunal finds it would be fair to exclude $5,000 from the other expenses amount, as representing a personal benefit to Mr Crowcomb.

53.Therefore, the effective profit of the company for 2023/24, for child support purposes, was $61,596 ($17,441 + $28,443 + $4,250 + $6,462 + $5,000). If Mr Crowcomb’s personal taxable income for 2023/24 of $60,766 is added to the effective profit of the company, that provides an income of $122,362. The Tribunal finds that is a fair reflection of the income and financial resources available to Mr Crowcomb for the 2023/24 financial year.

54.In the absence of any evidence to the contrary, the Tribunal will assume that income and resources remained available to Mr Crowcomb in the current financial year.

55.Mr Crowcomb was assessed on incomes of $59,605 and $49,414 in the administrative assessment from 1 July 2023.

56.The Tribunal is satisfied that Mr Crowcomb’s income constitutes special circumstances which make the administrative assessment unjust and inequitable.

Just and equitable and otherwise proper: general observations

57.The requirement to consider whether a departure would be just and equitable and otherwise proper directs attention to what is fair to the parents, their children and the community. A decision maker must have regard to a variety of factors such as the needs of the children, the parents’ commitments, any hardship that would be caused by departing or not departing from the formula, and the effect on any income-tested benefits: subsections 117(4) to (9). Parents rather than the community have the primary duty to maintain a child: paragraph 117(5)(a). It is necessary to consider the effect of any departure from the administrative assessment on entitlements to income-tested pensions, allowances and benefits: paragraph 117(5)(b). Relevantly, this requires consideration of the effect on either parent’s entitlement to FTB Part A, which is subject to a maintenance income test.

58.A decision maker must bear in mind the duties of parents and the objects of the Act, set out in sections 3, 4 and 114. These include:

·      The duty of a parent to maintain his or her child has priority over all commitments of the parent other than commitments necessary to enable the parent to support himself or herself and any other child or person that the parent has a duty to maintain.

·      The level of support should be determined in accordance with the costs of the children, and according to the parents’ capacity to provide.

·      Parents should share equitably in the support of the child, and the child should have his or her proper needs met from reasonable and adequate shares in the income, earning capacity, property and financial resources of both parents.

Would departure from the formula assessment be just and equitable?

59.The Tribunal has found there is a ground to depart from the administrative assessment. The Tribunal must also consider, pursuant to subsection 117(4) of the Act, whether it would be just and equitable to make a particular order. The Tribunal has considered the matters set out in subsections 117(4) and (6) to (8). The Tribunal does not propose to explore every matter in detail but will discuss those it regards as pertinent to this application.

Mr Crowcomb

60.Mr Crowcomb’s financial circumstances have been discussed above.

Ms Broackes

61.Ms Broackes said she does not work and she is in receipt of disability support pension (DSP). She has been in receipt of DSP since 2009. Prior to that, she had been a stay-at-home mother for her 3 children. She has also received carer payment and family tax benefit. She told the Tribunal that said the carer allowance is paid to her because 2 of the parents’ children have significant medical needs.

62.Mr Crowcomb submitted that Ms Broackes’s lifestyle was not consistent with her declared income. He referred to Ms Broackes buying new vehicles and paying for catered parties. He said there are ABNs listed under Ms Broackes’s name.

63.Ms Broackes said she has not had a current ABN since 2003. She checked the ABN Lookup site and there was no ABN current for her name. Mr Crowcomb submitted there is a current ABN for Ms Broackes which was registered in 2013. He said there were also previous ABNs registered for Ms Broackes. Ms Broackes said she has no knowledge of that.

64.Mr Crowcomb said Ms [B] often sees Ms Broackes in the area where Ms [B] works. He submitted that Ms Broackes attends a salon near Ms [B]’ work every week.  

65.Ms Broackes said she has no idea where Ms [B] works. The catered party Mr Crowcomb referred to may have been for the children’s 18th or 21st birthday parties. She said she budgets tightly. She sold her car in January 2025, and she has no car registered in her name.

66.At page B12 is a copy of a 2023/24 Centrelink payment summary for Ms Broackes. The summary records that during that year Ms Broackes received $25,701 in DSP. She also received $8,426 in DSP for the period 1 July 2024 to 7 October 2024.

67.At page B13 is a copy of a Centrelink income statement for Ms Broackes, dated 19 November 2024. The statement records that Ms Broackes is paid $1,144.40 per fortnight for disability support pension and $307 per fortnight for carer allowance.

68.During the period under review, Ms Broackes has been in receipt of DSP. The Tribunal is satisfied that Ms Broackes’s DSP income is fairly reflected by the incomes used for her in the administrative assessment.

69.Carer allowance is not an income support payment. It is intended to assist with meeting additional costs a person incurs in caring for another person. The carer allowance Ms Broackes receives should not be included as income for child support purposes.

70.The Act specifically excludes FTB from being included as income for child support purposes.  

71.A search of the ABN Lookup website indicates that Ms Broackes registered an ABN on 3 July 2000. The ABN was cancelled on 23 November 2007. There is no evidence that Ms Broackes has access to any other income.

[Child 1]

72.There is no evidence that [Child 1] has any income or financial resources which should affect the rate of child support payable.

Further consideration

73.Ms [A] submitted that the departure decision should be backdated 18 months from when Child Support commenced the departure process.

74.Mr Crowcomb submitted that the decision should not be backdated.

75.Child Support commenced the departure process in December 2023. The Tribunal finds it fair to start the departure decision from 1 December 2023, being the start of the month in which the departure process was commenced.

76.If Ms Broackes believed the administrative assessment was unfair, she could have made a departure application at an earlier time.

77.Using an income of $122,362 for Mr Crowcomb will provide for Mr Crowcomb to pay child support at a rate of about $20,048 per annum from 1 December 2023.

78.The effect of such a decision will be to increase the child support liability, and therefore the child support arrears owed by Mr Crowcomb, by about $900 for the period 1 December 2023 to 15 November 2024, when the child support case ended.

79.The Tribunal is satisfied such an outcome is just and equitable.

Is a departure otherwise proper?

80.In considering whether a departure is otherwise proper, the Tribunal must take into account subsection 117(5) of the Act, which provides as follows:

(5) In determining whether it would be otherwise proper 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, in particular, the fact that it is the parents of a child themselves who have the primary duty to maintain the child; and

(b) the effect that the making of the order would have on:

(i) any entitlement of the child, or the carer entitled to child support, to an income tested pension, allowance or benefit; or

(ii) the rate of any income tested pension, allowance or benefit payable to the child or the carer entitled to child support.

81.The child support law recognises that each parent has a primary duty to maintain their child. For the reasons outlined above, the Tribunal is satisfied it is appropriate to depart from the administrative assessment.

82.The Tribunal is satisfied the decision appropriately reflects both parents’ capacities to support [Child 1] during the departure period and the decision is otherwise proper. The decision provides for an increase to the child support liability compared to the original administrative assessment.

DECISION

The Tribunal sets aside the decision under review and, in substitution, decides to vary Mr Crowcomb’s adjusted taxable income to $122,362 for the period 1 December 2023 to 15 November 2024.

Date(s) of hearing:	Tuesday, 11 February 2025
Representative for the Other party:	Ms  [A]