Darcy and Darcy (Child support)

[2019] AATA 690

Darcy and Darcy (Child support) [2019] AATA 690 (7 March 2019)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2018/MC015247

APPLICANT:  Mr  Darcy

OTHER PARTIES:  Child Support Registrar

Mrs Darcy

TRIBUNAL:Member A Schiwy

DECISION DATE:  7 March 2019

DECISION:

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

·       for the period 21 March 2018 until a terminating event in respect of [Child 1] occurs, Mr Darcy’s adjusted taxable income is varied to $180,000.

CATCHWORDS

Child support - departure determination – financial resources of both parents - period of departure - decision under review set aside and substituted

Names used in all published decisions are pseudonyms. Any references appearing in square brackets indicate that information has been removed from this decision and replaced with generic information so as not to identify involved individuals as required by subsections 16(2AB)-16(2AC) of the Child Support (Registration and Collection) Act 1988.

REASONS FOR DECISION

BACKGROUND

1. Mr Darcy and Mrs Darcy are the separated parents of [Child 2], who turned 18 years old [in] February 2019 and [Child 1], who is 13 years old.  They are also the parents of another child who turned 18 years old in early 2017.

2. The child support case was registered several years ago and this review is about the child support payable by Mr Darcy to Mrs Darcy for the children. 

3. The Department of Human Services (“Child Support”) have determined that the parents have shared care of [Child 1] and that Mrs Darcy has sole care of [Child 2].

4. The following administrative assessment was issued:

   ·       for the period 1 November 2017 to 31 January 2019 Mr Darcy’s annual child support liability was assessed at nil, based on adjusted taxable incomes for 2016-17 of $21,200 for Mr Darcy and $18,906 for Mrs Darcy.

5. On 21 March 2018 Mrs Darcy lodged a departure application with Child Support on the basis that the rate of child support payable under the administrative assessment was unfair because of the income and earning capacity of Mr Darcy; and the high costs of the children (medical costs).  Mr Darcy cross applied on the basis that the rate of child support payable under the administrative assessment was unfair because of his high level of contact costs and Mrs Darcy’s income and earning capacity.

6. On 17 May 2018 a Child Support case officer decided to make a departure determination on the basis that reason 8 had been established.  The following departure determination was made: 

   ·       for the period 21 March 2018 until [Child 1] ceases to become a child of the assessment;  Mr Darcy’s adjusted taxable income is varied to $129,999.

7. On 15 June 2018 Mr Darcy objected to the decision.

8. On 18 September 2018 a Child Support objections officer decided to disallow the objection.

9. On 17 October 2018 Mr Darcy lodged an application with this tribunal for an independent review of the objections officer’s decision.

10. A hearing was held on 7 March 2019.  Both Mr Darcy and Mrs Darcy attended the hearing and gave evidence on affirmation to the tribunal.

11. In considering this matter the tribunal took into account the oral evidence of Mr Darcy and Mrs Darcy; and the relevant documentation provided by the Child Support Registrar (numbered 1 to 644 and 645 to 686); Mr Darcy (numbered A1 to A120); and Mrs Darcy (numbered B1 to B68). Copies of all of the numbered documents were provided to all parties.

ISSUES

1. The statutory provisions relevant to this review are set out in the Child Support (Assessment) Act 1989 (the Assessment Act) and in the Child Support (Registration and Collection) Act 1988.

2. The Assessment Act provides for an administrative assessment of the child support payable. It uses a formula that contains variables including the parents’ adjusted taxable incomes; their percentages of care for the children; and costs of the children. The Assessment Act also makes provision for a departure from the administrative assessment in certain circumstances.

3. The issues which arise in this case are:

   ·       does a ground for departure from the administrative assessment for child support exist? And if so,

   ·       is it just and equitable to make a particular determination? And

   ·       is it otherwise proper to make a particular determination?

CONSIDERATION

Compliance with directions

1. A directions hearing was held on 14 January 2019.  During the hearing the tribunal explained what documents the parties would be directed to provide.  Mr Darcy was advised that failure to comply with the directions could result in an adverse inference being made.  This advice was also contained in the written directions that were issued on the same day.

2. Mr Darcy was directed to provide the following information:

   ·       All bank statements and credit card statements for accounts (including loan accounts) in the party’s name and/or joint names for the period 1 January 2017 to 31 December 2018

   ·       Superannuation statements for the year ended 30 June 2018

   ·       A letter from Dr [A] (cardiologist) providing details of diagnosis and treatment since September 2017 and the impact the condition has on Mr Darcy’s ability to work.

   ·       A statement setting out all financial support provided from Mr Darcy’s current spouse since 1 January 2017; including the date and amount of support provided; how that support was provided and what the support was provided for.

   ·        

3. Mr Darcy provided some bank statements for some of the accounts he held.  He provided no statements for his ‘trust’ account (into which his sole trader income is banked); a joint account he holds with his spouse; his loan with [Company 1]; and one of his credit card accounts.  The statements he did provide appeared to be downloaded data onto an Excel (or similar software) spread sheet.  For most of the accounts the balance was missing which meant that it would have been possible for Mr Darcy to easily delete transactions.  For one of the credit cards accounts, only the front page of the statements was provided and the underlying transactions were missing.  For some of the accounts, only part of the requested time period was provided.  When asked why he didn’t comply, Mr Darcy said he hadn’t noticed the balances were not provided; he thought he had provided all of the statements; and he apologised for not providing the missing accounts.  Mr Darcy said he did not provide statements from [Company 1] as he had not received any yet.  He could not explain why he did not contact [Company 1] to obtain a copy.

4. The missing accounts and statements made it impossible for the tribunal to gain a complete overview of Mr Darcy’s financial situation or perform any reconciliation of the accounts.  The fact that the data was downloaded onto a spread sheet without the balances also made it possible for Mr Darcy to delete information he did not want the tribunal to see.

5. Mr Darcy was advised during the hearing that he could provide further statements by the end of that day but he failed to do so.

6. Mr Darcy did not provide a letter from his cardiologist.  He included a statement in the documents he provided saying that he had an appointment with Dr [A] on 13 February 2019.  On 1 March 2019 he provided a letter from his general practitioner, Dr [B].  When asked why he did not provide a letter from his cardiologist, Mr Darcy said he did have the appointment but the cardiologist advised him to get a letter from his GP instead as his GP would have more information about his condition.

7. Mr Darcy did provide a list of dates and amounts of payments from his spouse however he did not give details of how those payments were made; and for three large payments did not provide details of what the payments were for.  He provided a partial explanation during the hearing but as he had failed to provide bank statements it was not possible to verify what happened with these payments.

8. In summary, Mr Darcy did not comply with the directions to a significant extent; he has not made a full and frank disclosure of his financial situation.

9. In Humphries & Berry (SSAT Appeal) [2008] FMCAfam 409 Slack FM dealt with the issue of the disclosure of financial information in matters before the Tribunal. His Honour stated that the principle of full and frank disclosure applicable to proceedings in the Family Court was also applicable to proceedings before the Social Security Appeals Tribunal. His Honour stated as follows at paragraph 26 and 27 below:

   “Although the SSAT has the power to obtain information (s.103K) and the power to require the Child Support Registrar to exercise powers under the Assessment Act and the Child Support Registration and Collection Act for the purposes of gaining information relevant to a review (s.103L), there nevertheless remains a primary duty and obligation on the parties to the review to make a full and complete disclosure of their financial affairs relevant to the matter before the hearing and a duty to assist the Tribunal to come to its determination in the application. The obligation to disclose information and documents extends to the presentation of that material in a way that the true nature of their financial affairs can be readily understood. The obligation extends not just to providing financial records but also includes presenting the information in a way that can be reasonably and readily understood and examined”.

   His Honour stated as follows at paragraph 30 and 31 below:

   “In circumstances where a party (in this case the appellant) places before the SSAT inconsistent, confusing and incomplete financial information, the fact that the SSAT can and may exercise its powers to obtain further information that might clarify the financial circumstances of a party does not relieve a party of their primary obligation to disclose their financial affairs in a manner that can readily be understood. The extent to which the SSAT should exercise its powers of information gathering and testing of evidence in each case will depend on the circumstances of the matter but the exercise of such power or the failure to exercise such power does not in any way derogate from the immutable obligation and duty of both parties throughout the proceedings before the SSAT to make full, frank and cogent disclosure of all relevant information pertaining to their financial affairs in order that the Tribunal can make a proper assessment of their respective capacities to provide for the needs of their children.

   ----

   In financial proceedings under the Family Law Act, the authorities make it clear that a Court should not be unduly cautious about making findings in favour of the other party if it is not satisfied that proper disclosure has been made (see Chang & Su (2002) FLC93-117)”. Such principles, in my consideration, have similar application to these matters before the SSAT”.

Issue 1 – Does a ground for departure from the administrative assessment for child support exist?

Mr Darcy’s income

1. Mr Darcy is a qualified [Occupation 1] but he stated that he has only worked as a [Occupation 2] [for] several years.  He said he only works part time due to needing time off to care for the children and hassles with property settlement and family court issues. 

2. Mr Darcy’s taxable incomes have been around $21,000 for several years and in 2017-18 it was $25,801.  Mr Darcy listed his spouse’s taxable income in 2016-17 to be $20,000.

3. Mr Darcy stated that he used to own a business [but] he had to close this down due to the divorce.  He commenced a new business known as [Company 2] in 2008. 

4. [Company 2] Pty Ltd was registered in September 2008.  Mr Darcy became director and secretary and shareholder of the company (trustee of [Company 2] Trust) on 12 September 2008 and ceased on 12 March 2009; and again from 30 December 2010 to 29 May 2011.  His sister, Ms [C] was director, secretary and shareholder from 12 March 2009 to 30 December 2010 and since 29 May 2011. 

5. Mr Darcy states that the business ([Company 2]) is now Ms [C]’s and she took it over from Mr Darcy in around 2012 for nil consideration.  There was an ongoing family law case at the time and he said he did not have time to run the business.  He said Ms [C] is a qualified [Occupation 1] and registered [Occupation 3] but not a registered [Occupation 2].

6. Mr Darcy stated that when his sister took over the business he commenced a new business, as a sole [trader].  Some of his clients are from [Company 2] and he and his sister refer clients to each other.  When asked how he advertises his business and what it is called; Mr Darcy stated he trades as ‘Darcy’ and has a website in that name.  He said he gets clients by word of mouth.  When asked why he set up the website he said it was because if a potential client wants to look up the business they will see the website; he does not use it as a marketing tool.  The tribunal googled ‘Darcy’ and ‘Darcy’ and no business websites came up.

7. Mr Darcy said his spouse works for [Company 2].   The tribunal noted that Mr Darcy’s spouse also receives distributions from the [Company 2] trust.

8. Child Support directed Ms [C] to provide bank statements for all accounts held by [Company 2], the [Company 2] trust; and financial statements.  The bank statements show various transfers going to and from Mr Darcy’s account.  He stated that occasionally clients pay him for the [services] provided by [Company 2] and sometimes pay their fees to him to the [Company 2] bank account. 

9. When asked why [Company 2] has his [car] in its depreciation schedule; Mr Darcy said when he tried to buy the car he could not obtain finance so his sister bought it for him.  It was pointed out that this doesn’t explain why the car was claimed as a business expense by [Company 2] and Mr Darcy then said his sister uses it for the business and some of his travel was for [Company 2].  The tribunal does not accept that Mr Darcy was unable to obtain finance to purchase a $19,482 car, particularly as he was able to obtain finance for a home loan of nearly $500,000 and more recently, for $1,500,000 (discussed below).  [Company 2] also has Mr Darcy’s [another car] in the balance sheet however the tribunal did not seek an explanation from Mr Darcy during the hearing about this. 

10. On two loan applications made in 2017 and 2018 Mr Darcy stated he worked for [Company 2] as an [Occupation 1].

11. [Company 2] advertises itself as a business [details deleted].  

12. The tribunal did not accept that Mr Darcy no longer runs [Company 2] or that he merely [works in certain field].  He changed business structures in 2008 when he was going through property settlement and then transferred ownership and control to his sister twice; in 2010 and again in 2011.  His cars are owned by the [Company 2] Trust; there are transfers going from the [Company 2] Trust to Mr Darcy; and he stated on two loan documents that he works for [Company 2].  The tribunal concluded that Mr Darcy is the effective owner and controller of [Company 2].

13. The tribunal then considered what income Mr Darcy derives from the business.  In 2016-17 (the latest financial accounts are not available); [Company 2] grossed $137,741 and made a net profit of only $33,068.  Mr Darcy’s individual tax return for 2017 shows net income of $21,200.  In his 2017-18 income tax return he declares sole trader gross income of $36,442 and net income of $25,801.

14. The tribunal asked Mr Darcy if he receives cash income from clients and he said he never receives any cash.

15. Mr Darcy has maintained a home loan on his residence of around $450,000 for several years.  It is not clear how he has managed this given his and his spouse’s very low incomes (around $42,000 combined in 2017).  His monthly payments were around $1,500.  In addition to having to meet these repayments, Mrs Darcy alleged that Mr Darcy had demolished his residence and was currently renting a property near his office [Property 1][for] $440 per week.  (According to the Domain website the property was rented out from April 2018 for $440 per week).  At hearing Mr Darcy agreed that he was renting out the property.

16. On 21 April 2017 Mr Darcy signed a loan application made to [Bank 1].  He applied for an increase to his existing home loan of $50,000 to enable him to undertaken renovations (primarily to his bathroom and kitchen).  On the loan he valued his home [at] $1,250,000.  He said his employer for the last seven years was [Company 2].  He said his PAYG base salary was $129,999.  He stated his monthly living expenses were $1,600.  The loan was approved and he made various drawdowns over the next few months, increasing the loan balance to $484,000.  His monthly repayments were around $1,700.  Mr Darcy stated to Child Support that he lied about his income.

17. On 17 April 2018 Mr Darcy signed a loan application made to [Company 1].  He applied to borrow $1,500,000 and the purpose was to demolish the existing house [and] build two townhouses with the view to either selling both or living in one and selling one; or rent them out.  (Child Support obtained information from the Victorian Government showing that Mr Darcy made a development application relating to his residence in 2017 and a permit was issued in November 2017.  New plans were submitted on 18 December 2017 and approval given in January 2018.)

18. Mr Darcy stated on the loan application that he worked for [Company 2] full time from October 2008.  He said his taxable income in 2016 was $143,719 and in 2017 it was $180,000.  He stated he was not aware of any changes that may adversely affect his ability to meet his current and future financial obligations.  The chosen monthly payments were $9,112.  He declared his living expenses to be $2,900 per month.  The mortgage broker’s note to [Company 1] stated “I have used the income of $180,000 for servicing as per the accountant’s letter from him.  With regards to further income he is expecting to be able to rent out the townhouse for $750 per week comfortably.”  When asked by the tribunal if he had made another false declaration about his income, Mr Darcy said he did not want to comment on that.  When asked how he proposed to service the loan he said he is not making any repayments on the loan; [Company 1] does not require him to make any repayments.  

19. Mr Darcy stated his spouse sold her property [around] 18 months ago and provided some of her sale proceeds to [Company 1] as they would not approve the loan without this support.  He did not know how much she sold the property for or if she owed anything on the property.  The tribunal noted that according to realestate.com the property was sold in August 2017 for $640,000.  Mr Darcy stated that his spouse gave him $100,000, $45,000 and $43,410 in August and September 2018.  He could not be clear about how these payments were applied but thought one or more was paid to [Company 1].  A payment of $82,500 was made to the [Bank 1] loan before it was paid out in late 2018 and Mr Darcy said this would have been a payment from his spouse. 

20. When asked about where he lived Mr Darcy stated that he was living with his sister (and her husband and child).  He said he and his wife only rent out the [Property 1] as sometimes it is more convenient to stay there when he is picking up the children; they just sleep there occasionally.  Mr Darcy denied that he lives in the property and has therefore provided evidence that he and his spouse expend $440 per week to keep a house for the occasional sleepover because it is convenient.

21. Mr Darcy’s reported income, and that of his spouse, has been very low for many years.  According to Mr Darcy he could not afford his home loan and yet he applied for a loan of $1,500,000 when he was apparently still suffering from the effects of a heart condition (see below).  He states he lied about his income to [Bank 1] and he won’t comment about the declaration he made to [Company 1].  The tribunal concluded that Mr Darcy’s income is significantly higher than what is reported through [Company 2] and his sole trader account.  It is more likely than not that Mr Darcy is failing to report all of this income and is also claiming expenditure that is not legitimate business expenditure.

1. It is difficult to know what his actual income is but the fact that he was servicing a $470,000 bank loan and then obtained finance for $1,500,000 and rented out a property for $440 per week indicates he is on a relatively high income.  His statement that he and his spouse rent a property for $440 per week so that they can stay there every now and then for convenience only further supports a finding that he is on a high income.

2. Mr Darcy has failed to provide the tribunal with complete bank statements for some accounts and no statements at all for others.  This supports a finding that he was hiding information from the tribunal about his income.

3. Although Mr Darcy may have lied about his income to the banks, he still has to service the debt.  The tribunal therefore decided that the figure he declared to [Company 1], $180,000 per annum, was a reasonable income figure to adopt.  It would cover his stated repayments and living expenses.

4. The tribunal therefore found that as at March 2018, Mr Darcy was earning $180,000 per annum.

5. Mr Darcy is currently assessed to pay nil child support.  The tribunal has decided that he has an income of $180,000 per annum.  The child support payable based on this income is approximately $29,193.  The tribunal was therefore satisfied that there are special circumstances in this case and finds that the ground for departure in subparagraph 117(2)(c)(ia) does exist in relation to the income and financial resources of Mr Darcy. 

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

1. As the tribunal is satisfied that a ground to depart from the administrative assessment exists the tribunal must consider whether it is just and equitable as regards the children, the liable parent and the carer entitled to child support to make a particular determination (subparagraph 98C(1)(b)(ii) of the Assessment Act). Subsection 117(4) of the Assessment Act sets out a variety of factors that must be considered in deciding whether it would be “just and equitable” to make a particular determination. These factors include the proper needs and costs of the children, the parents’ commitments and any hardship that would be caused by departing or not departing from the formula.

2. Section 3 of the Assessment Act makes it clear that the parents have the primary duty to maintain their children and that this duty has priority over all commitments of the parents, other than commitments necessary for self-support or for the support of another person they have a duty to maintain. In this case Mr Darcy and Mrs Darcy have the primary duty to support their child.

Mr Darcy

1. Mr Darcy’s current income has been discussed and the tribunal has found that he earns $180,000 per annum.

Heart condition

1. Mr Darcy has stated his income and future capacity to earn has been impacted by a heart condition.

2. Mr Darcy stated that he has suffered from heart problems for many years.  In a written statement to Child Support he stated he had a relapse in 2017.  He said his condition could not be diagnosed in Australia and he had to go to [Country 1] for treatment.  ([Country 1] is where is wife is from and he went there with his wife in September/October 2017)  He said he attended three hospitals and was bedridden in between.  He said he was diagnosed with [a medical condition] and “I was on medication for 5 months and restricted to either time in bed or on the couch.  I have had relapses and have been prescribed rest and since last year have been on medication and strict anti-inflammatory diet.”  In a statement to the tribunal Mr Darcy states “I am unable to work more that 3-4 hours per day due to my health.  ...  From October to February I did not work, In June I could not work and other times I could barely work as mentioned”.  At hearing Mr Darcy stated he may have earned a little bit over the period October 2017 to February 2018. 

3. Mr Darcy provided evidence that he was admitted to hospital and it would appear that this was around 26 September 2017.  A medical report was completed on 5 October 2017 to clear Mr Darcy for travel.  His return flight had been booked for 12 October 2017. The report stated that no ambulance was required and no special requirements were needed on the flight.

4. On 1 March 2019 Mr Darcy provided a letter from a general practitioner, Dr [B]l.  Dr [B]l stated he had been Mr Darcy’s doctor for several years and confirmed he suffered [a medical condition] in 2017.  He then went on to say Mr Darcy also suffers from sleep apnoea and snoring and the medical conditions have likely impacted on his ability to work.  Dr [B]l provided no information about treatment since October 2017 or how the condition actually impacts on Mr Darcy’s ability to work.  Dr [B] does not specifically state that the heart condition has any impact. 

5. The tribunal totalled the income receipts to the [Company 2]’s bank account from 1 July 2018 to 31 December 2018 and they were around $80,000.  Given the gross income in 2017 was reported at $139,000, there does not appear to have been any drop in income.  Mr Darcy has also failed to provide evidence of his diagnosis, treatment and functional impact from his cardiologist.

6. Mr Darcy states that he was very unwell and yet he was able to submit a revised plan to the council about his development application and proceed to obtain finance for a $1,500,000 loan despite having apparent serious concerns about his ability to work.

7. The tribunal notes that the [medical condition} is by definition a condition that has a sudden onset.

8. In summary, the tribunal does not accept that Mr Darcy had to travel to [Country 1] to have a health condition diagnosed.  He suffered [a medical condition] while on holiday with his spouse in [Country 1] and was deemed well enough to travel back to Australia, with no assistance, in a few days.  It is more than likely that he was only unwell for a few weeks.  The tribunal therefore found that Mr Darcy’s current and future earning capacity has not been impacted by a medical condition.

Assets, liabilities and expenses

1. Mr Darcy owns a property on[a certain location].  As discussed he is currently building two townhouses on the property which he has estimated to [Company 1] will be worth $2,650,000.  His loan for the development is $1,500,000.  This gives equity of over $1,000,000 once completed although given the current housing market in Victoria it may well be reduced.

2. Mr Darcy listed his weekly household expenses as $448 for himself and his youngest child.  This does not include half of the rent he is paying on the [Property 1] of $440 per week.  He told [Company 1] that his monthly expenses were $2,900 (for his entire family) and he could make repayments of $9,100.  If this is correct his costs would be around $144,000 per year leaving around $36,000 to pay child support.  Mr Darcy has the added advantage of paying little or no income tax.

3. Mr Darcy provided no evidence about significant costs of contact with the children.  His sister’s residence is around 35 km from Mrs Darcy and the rental property is less than 10 km.

4. Mr Darcy stated that he owed around $21,000 on his credit cards.  As at 7 February 2019 Mr Darcy owed nearly $18,000 in child support.  Since May 2018 he has made two payments of $197 and $203.  Given the equity in his home and income as found by the tribunal, the tribunal was satisfied that Mr Darcy would have no difficulty making child support payments based on an income of $180,000 or meeting his credit card and child support liabilities.  His child support liability will increase by around $8,000 if his income is varied to $180,000 from March 2018.

Mrs Darcy

1. Mrs Darcy used to work as a [Occupation 4].  She ceased working when she had the children and was unemployed when she and Mr Darcy separated in around 2006.  In 2008 she commenced working part time for her [brother]; she was able to work from home.  In 2016 her employer required her to attend the office [and] she found the travel was too much.  She obtained casual work at a [Workplace 1] and is currently earning around $300 to $400 per week.  She also [works in another workplace] every three weeks for $75 per time. 

2. Mr Darcy has submitted that Mrs Darcy is able to earn a lot more.  She has tertiary qualifications and is a trained [Occupation 4].  Mrs Darcy stated that she has a diploma [but] has not worked as a [Occupation 4] for many years.  She is making around the same amount per hour in the [Workplace 1] working casually. 

3. Mrs Darcy has now obtained a Certificate III in [a specified field] and would also like to work in that area.

4. The tribunal noted that Mrs Darcy was not working when she and Mr Darcy separated but is now taking on part time work.  Her qualifications and experience as a [Occupation 4] are old and it is more than likely that she would have difficulty obtaining work in this area. 

5. Mr Darcy submitted that Mrs Darcy has been overspending and this is why she has a credit card debt (she owes around $15,000).  He did not submit that she was earning any undisclosed income.

6. The tribunal was satisfied that Mrs Darcy’s taxable income adequately reflects her actual income and she currently has no further earning capacity.

7. Mrs Darcy received around $160,000 from the property settlement.  She placed this in the bank and it has been used up on legal fees and living costs.  She moved into a house owned by her parents and has remained there.  She does not pay any rent.  Her parents have been very generous over the years helping her out from time to time and providing the property rent free.  This has caused some friction with her other siblings. 

8. Apart from around $33,000 in superannuation, Mrs Darcy has no significant assets.

9. Mrs Darcy lives with her eldest daughter, who is studying, and the two other children ([Child 1] for 50% of the time).  She lists her weekly expenses to be $490 plus $57 medical insurance.  This does not appear high enough; for example she has only listed $100 per week for food.  It also includes $140 per week for education costs discussed further below.  Mrs Darcy said her parents pay for the utilities including telephone.  The tribunal concluded that her actual costs are probably higher but it is doubtful that she is financing any significant discretional expenditure such as gifts and holidays.

10. The tribunal noted that Mrs Darcy would be suffering significant financial hardship if it was not for the support of her family.

The children

1. Mrs Darcy stated that [Child 2] is earning around $100 per week in a casual job and is using this to finance her car.  There is no evidence to suggest that the children have any other income or significant financial resources of their own.

2. The children all attended a catholic primary school.  When the eldest daughter, [Child 3], was to attend high school there was a dispute about where she, and the younger children, would attend.  The court decided that they should attend [School 1] and that Mrs Darcy was to pay the fees.  [Child 3] has now left school and [Child 1] is in year 12 at the same private school.  The youngest is at a public school as Mrs Darcy said she could not afford the fees.

3. Mrs Darcy submitted that she incurs extraordinary expenditure caring for the children as [Child 2] suffers from [a medical condition] and also required treatment for an injury.  She provided costs of treatment as $790.  Her listed weekly expenses do not indicate any current, out of the ordinary expenditure.

4. [Child 2] had braces several years ago and [Child 1] may need braces but to date there has been no orthodontic costs for [Child 1].

5. Apart from the school fees, there was no evidence presented to the tribunal that the children have anything other than the usual expenses and needs for their age, expenses that are dealt with in the administrative assessment and addressed in the Costs of the Children Table.

Summary – just and equitable

1. Mr Darcy is on significantly more income than Mrs Darcy and will be for the foreseeable future.  His assets, in particular his residential property, are also much more valuable. 

2. After taking all of the above into account the tribunal decided that it would be just and equitable to assess Mr Darcy and Mrs Darcy on their incomes as found by the tribunal from 2018.

Issue 3 – Is it otherwise proper to make a particular determination?

1. The requirement to consider whether a departure would be otherwise proper directs attention to what is fair to the community.  It is necessary to consider the effect of any departure from the administrative assessment on entitlements to income-tested pensions, allowances and benefits.  Parents, rather than the community have the primary duty to maintain their children.  Mrs Darcy is in receipt of family tax benefit.  Any increase or decrease in child support payments from Mr Darcy will have an impact on government payments.

Conclusion

1. It is open to the tribunal to vary the annual rate of child support payable, adjusted taxable income or the other variables such as costs of self-support used in the statutory administrative assessment formula. 

2. The tribunal has taken all of the factors set out above into account and proposes to make a departure determination that varies Mr Darcy’s adjusted taxable income to $180,000.

3. The tribunal then considered what an appropriate start date for the departure determination would be, noting the maximum allowable is 18 months prior to the application being lodged.  Mrs Darcy applied for a departure determination on 21 March 2018 and has requested that a departure determination be backdated.  There have been previous departure determinations with the last one ending in 2011.  Mrs Darcy said the reason she did not apply earlier was due to her sister and mother becoming ill and subsequently passing away; and being very busy looking after them and the children.  She said it was not until she found out Mr Darcy was building the townhouses that she was prompted to make the application.

4. The tribunal did not consider it would be fair, in the circumstances, to backdate a departure determination.  Mrs Darcy was well aware of the process and was not prevented from making an application.  The tribunal therefore decided on a start date of 21 March 2018.

5. The tribunal then considered what an appropriate end date for the departure determination would be.  Mr Darcy’s income is not likely to change significantly and if Mrs Darcy is able to increase her hours or obtain higher paid employment her income will be reflected in her taxable income.  Given that the youngest child will turn 18 years old in around four years the tribunal decided that the departure determination should be until the child support case for [Child 1] ends.

6. If the parents’ circumstances change significantly it is open to both of them to lodge a further departure determination application.

DECISION

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

·       for the period 21 March 2018 until a terminating event in respect of [Child 1] occurs, Mr Darcy’s adjusted taxable income is varied to $180,000.