Dawkins and Rainforth (Child support)

[2023] AATA 2923

Dawkins and Rainforth (Child support) [2023] AATA 2923 (26 July 2023)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2023/AC025867

APPLICANT:  Mr Dawkins

OTHER PARTIES:  Child Support Registrar

Ms Rainforth

TRIBUNAL:Member F Staden

DECISION DATE:  26 July 2023

DECISION:

The decision under review is affirmed.

CATCHWORDS

CHILD SUPPORT – particulars of the administrative assessment – whether post separation costs should be excluded from the adjusted taxable income for the last relevant year – additional income was earned not in the ordinary course after separation – an amount should be excluded - decision under review affirmed

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

REASONS FOR DECISION

BACKGROUND

1. Mr Dawkins and Ms Rainforth are the separated parents of two children, born 2012 and 2015 (the children). The administrative assessment for this case began on 16 June 2022.

2. Mr Dawkins’ 8 November 2022 application for the exclusion of post-separation income was accepted by Services Australia – Child Support (Child Support) on 10 November 2022. Thus, for that part of the 1 August 2022 to 31 October 2023 child support period beginning on 8 November 2022, Mr Dawkins’ 2021–22 adjusted taxable income of $137,448 was reduced by $14,334 to $123,114 to exclude his post-separation income.

3. On 11 November 2022, Ms Rainforth lodged an application for $25,562 in post-separation income to be excluded from her 2021–22 adjusted taxable income of $85,207. She stated that in February 2021 she began working four days a week, rather than her usual three, plus doing some overtime because she needed money to set herself up post-separation. Ms Rainforth began working five days a week in November 2021.

4. On 8 December 2022, Child Support decided to accept Ms Rainforth’s application.

5. On 14 December 2022, Mr Dawkins lodged an objection to this decision.

6. Ms Rainforth lodged a response to Mr Dawkins’ objection on 23 February 2023.

7. On 24 March 2023, an objections officer disallowed Mr Dawkins’ objection.

8. On 28 March 2023, Mr Dawkins applied to the Social Services and Child Support Division of the Administrative Appeals Tribunal (the tribunal) for review of the objections officer’s decision.

9. A hearing was held on 26 July 2023. Mr Dawkins and Ms Rainforth gave sworn evidence by MS Teams video. The tribunal also had before it papers provided by Child Support (94 pages), copies of which were provided to the parents prior to the hearing.

10. Relevant aspects of the evidence are referred to in the consideration below.

ISSUES

1. The statutory provisions most relevant to this review are in section 44 of the Child Support (Assessment) Act 1989.

2. For post-separation income to be excluded, it is necessary for certain requirements to be met. These include the requirements in subsection 44(1):

   ·     The parents lived together on a genuine domestic basis for at least six months (paragraph 44(1)(a));

   ·     The separation following that six-month period occurred within the last three years and before the child support assessment application was made (paragraph 44(1)(b));

   ·     The parents remained separated at the time the application for exclusion of post-separation income was made (paragraph 44(1)(c)); and

   ·     In the last relevant year of income, the applicant earned, derived or received income:

   ·     in accordance with a pattern of earnings, derivation or receipt that was established after separation; and

   ·     that income “is of a kind that it is reasonable to expect would not have been earned, derived or received in the ordinary course of events” (paragraph 44(1)(d)).

3. The first three of these requirements are met in this case:

   ·     Mr Dawkins and Ms Rainforth partnered in 2010 and separated in January 2021 and so lived together on a genuine domestic basis for more than six months;

   ·     Ms Rainforth’s 11 November 2022 application for post-separation income to be excluded was made within three years of the 25 January 2021 separation and that separation took place before an administrative assessment application was made on 16 June 2022; and

   ·     The parents remained separated at 11 November 2022, the date of Ms Rainforth’s application for post-separation income to be excluded.

4. The key issue which arises here therefore is whether Ms Rainforth meets the final requirement in paragraph 44(1)(d) about the characteristics of the post-separation income she wishes to have excluded, that is in this case, did Ms Rainforth establish a pattern of earnings after separation which could not have been reasonably expected in the ordinary course of events?

CONSIDERATION

1. There are two distinct changes to Ms Rainforth’s work pattern after she separated from Mr Dawkins in late January 2021. The first occurred in February 2021 when Ms Rainforth increased her working days from three days a week to four days a week. The second occurred in November 2021 when Ms Rainforth increased her working days from four days a week to five days a week. Mr Dawkins said that he accepted that Ms Rainforth’s additional working day from November 2021 was prompted by a need to earn more money to meet post-separation expenses. Therefore, the tribunal did not consider this increase further.

2. Mr Dawkins’ view was that Ms Rainforth’s February 2021 increase in working days from three days a week to four days a week was not part of a pattern of earnings established after separation. He argued that he and Ms Rainforth had always planned that she would work a day extra a week once their younger child started school in February 2021. Mr Dawkins observed that the timing of Ms Rainforth’s February 2021 increase in days of work coincided with their younger child starting school as had been planned. Therefore, Mr Dawkins believes that the February 2021 increase in Ms Rainforth’s working days from three days a week to four days a week would have occurred in the ordinary course of events.

3. Ms Rainforth stated that although there may have been discussion about her doing extra work once their younger child was at school, nothing was decided and no timeline was set. She said that by December 2020 her relationship with Mr Dawkins had broken down. She started to look for rental accommodation to accommodate herself and the children and realised that it would be much more expensive than she could afford on her then salary. This prompted her to ask her employer to employ her for the extra day a week and her employer agreed to do so. There was no change to her employment conditions; she was simply working more hours to get more money. Ms Rainforth said that the February 2021 timing was coincidental, had their younger child not started school, she would have arranged an additional day of child care.

4. The tribunal accepted that the possibility of Ms Rainforth working more after her younger child began school existed before the cessation of her relationship with Mr Dawkins. However, the tribunal found that it was the need to earn enough money to pay rental expenses and meet other post-separation costs which prompted her to actually seek and do additional work from early February 2021. The tribunal therefore found that Ms Rainforth established a pattern of earnings after separation which could not have been reasonably expected in the ordinary course of events.

5. A consideration of Ms Rainforth’s available payslips shows that her 2021/22 earnings were increased by at least $25,562 in post-separation income generated by her additional work days. The tribunal found that, under subsection 44(3), $25,562, being 30% of Ms Rainforth’s 2021/22 adjusted taxable income of $85,207, is the maximum amount of post-separation income which can be excluded from her 2021/22 adjusted taxable income. The tribunal further found that Ms Rainforth’s reduced adjusted taxable income was properly applied to the assessment from 11 November 2022, the date of her application for post-separation costs to be excluded.

DECISION

The decision under review is affirmed.