Denman and Waldroup (Child support)

Denman and Waldroup (Child support) [2020] AATA 1034 (17 March 2020)

DIVISION:Social Services & Child Support Division
REVIEW NUMBER:  2019/SC017225
APPLICANT:  Mr Denman
OTHER PARTIES:  Child Support Registrar
Ms Waldroup

TRIBUNAL:Member C Breheny
DECISION DATE: 17 March 2020
DECISION:

The decision under review is set aside and a decision substituted that

For the period 22 February 2019 to 30 June 2019 Mr Denman’s adjusted taxable income is set at $83,614 per annum;
For the period 1 July 2019 to 31 December 2020 Mr Denman’s adjusted taxable income is set at $36,420 per annum; and
For the period 1 July 2019 to 31 December 2019 the annual rate of child support payable is increased by $1,387 per annum, and
For the period 1 January 2020 to 31 December 2020 the annual rate of child support payable is increased by $1,391 per annum.

CATCHWORDS

CHILD SUPPORT – departure determination – whether there was a ground for departure – income, property and financial resources of the liable parent - costs of special needs - ground for departure established - 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

Ms Waldroup and Mr Denman are the separated parents of [Child 1], born September 2012, [Child 2], born May 2014 and [Child 3], born December 2015. A child support case has been registered with the Department of Human Services – Child Support (the Department) since 7 May 2018 and registered for collection from 16 November 2018. Child support is payable on the basis that Ms Waldroup has 100% care of the children and Mr Denman was at all relevant times assessed as liable to pay child support to Ms Waldroup.
For the period from 1 August 2018 to 31 October 2019 Mr Denman was assessed to pay child support of $13,650 per annum, based on his 2017/18 adjusted taxable income of $75,623 and Ms Waldroup’s 2017/18 derived income of $2,000.
On 13 December 2018, Ms Waldroup contacted the Department to discuss a possible change of assessment application for additional costs due to [Child 1]’s special needs. She also noted that Mr Denman may leave his employment. On 20 December 2018, Ms Waldroup applied to the Department for a change of assessment on the basis that she incurred expenses for [Child 1]’s special needs and that she has additional childcare costs.
On 7 February 2019, Mr Denman lodged an estimate of “nil” income for the remainder of the 2018/19 financial year and his child support liability reduced to $426 per annum (the minimum annual rate) from 22 February 2019.
On 8 February 2019, Ms Waldroup amended her change of assessment application to include the parties’ income, property, financial resources and earning capacity, stating that Mr Denman voluntarily left his employment to study.
On 7 June 2019, DM Seeber determined that Mr Denman’s financial resources were greater than previously known and that Ms Waldroup had incurred additional costs due to [Child 1]’s special needs and childcare. DM Seeber decided to set the annual rate of child support payable by Mr Denman at $1,300 from 1 April 2019 to 31 July 2019.
On 26 June 2019, Mr Denman objected to the decision and on 3 July 2019, Ms Waldroup also objected to the decision. On 15 August 2019, an objections officer of the Department decided to partly allow the objections. The objections officer decided that for the period 1 August 2019 to 31 December 2020 Mr Denman’s adjusted taxable income is increased by $33,848 per annum and for the period 22 February 2019 to 31 January 2020 the annual rate of child support payable is increased by $2,106 per annum.
On 22 August 2019, Mr Denman applied to the Social Services and Child Support Division of the Administrative Appeals Tribunal (the Tribunal) for an independent review of the Department’s decision. A hearing into the application for review was held on 17 March 2020. Both Ms Waldroup and Mr Denman attended the hearing by conference telephone and gave evidence on affirmation. A representative of the Child Support Registrar (the Registrar) did not attend the hearing.
I had before me the statement and documents provided by the Department pursuant to subsection 37(1) and section 38AA of the Administrative Appeals Tribunal Act 1975, received on 15 October 2019 and 28 February 2020 respectively and numbered 1–1209. I also considered additional documents provided by Mr Denman (marked A1–A622) and Ms Waldroup (marked B1–B526) as a result of written directions issued on 14 January 2020.

LEGISLATIVE FRAMEWORK AND ISSUES

The legislation relevant to this review is contained in the child support law, in particular the Child Support (Assessment) Act 1989 (the Act) and the Child Support (Registration and Collection) Act 1988 (the Registration and Collection Act).
The rate of child support payable by a liable parent is usually based on an administrative assessment under Part 5 of the Act. This requires the application of a statutory formula, which takes into account factors such as the number of children, the level of care provided and the income of each parent. Either the liable parent or the carer entitled to child support may apply to the Registrar for a determination to depart from the child support administrative assessment under Part 6A of the Act (section 98B). Section 98C provides that the Registrar may make a determination to depart from the formula assessment and establishes a three-step process. The Registrar, and the Tribunal standing in place of the Registrar, must be satisfied that a ground for departure exists and that it is just and equitable and otherwise proper to make a departure determination.
The grounds for departure from an administrative assessment of child support are those set out in subsection 117(2) of the Act. 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.
In the legislation, each ground for departure is prefaced by the words, “in the special circumstances of the case”. Therefore, when considering whether one (or more) grounds exists, the Tribunal must be satisfied that there are “special circumstances” in the case. The phrase “special circumstances of the case” is not defined in the Act. The Full Family Court, in the case of Gyselman and Gyselman (1992) FLC 92–279 stated that:
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.
Subsection 98C(3) of the Act provides that subsections 117(4) to (9) of the Act apply and the Tribunal must consider these when deciding whether it would be just and equitable or otherwise proper to make the departure decision.

CONSIDERATION

A ground for departure

Ms Waldroup asked for a change of assessment on the basis that the assessment does not correctly reflect the parties’ respective income, property, financial resources and earning capacity (also known as “Reason 8A and 8B”), that her costs of maintaining the children are significantly affected by [Child 1]’s special needs (also known as “Reason 2”) and that her costs of maintaining the children are significantly affected because of high childcare costs (also known as “Reason 6”).
Mr Denman noted that he incurred significant costs in relation to communicating or spending time with the children (also known as “Reason 1”).

Income, property, financial resources and earning capacity of the parties

Subparagraph 117(2)(c)(ia) of the Act provides that, in the special circumstances of the case, a ground for departure may be established if application of the legislative provisions relating to an administrative assessment results in an “unjust and inequitable determination of the level of financial support to be provided by the liable parent” due to the income, property and financial resources of either parent.

Mr Denman – income, property and financial resources

As noted above, at the time Ms Waldroup lodged her initial application on 20 December 2018 child support liability was $13,650 per annum, based on Mr Denman’s 2017/18 adjusted taxable income of $75,636. Ms Waldroup amended her initial application on 8 February 2019, after Mr Denman lodged a “nil” income estimate on 7 February 2019. Ms Waldroup submitted that Mr Denman had greater financial resources that had not been taken into account in the assessment.
2018/19 financial year
Mr Denman confirmed that he had been [an employee] of the [public service] from 2006 until 28 January 2019, when he transferred from [Department 1] to [Employer 1] (folio A417). He was able to obtain a short-term six-month contract in an administrative capacity (folio 938), before [retiring] from the [public service] on 11 November 2019, with a date of effect of 22 January 2020 (folio A421).
Mr Denman acknowledged that he received a termination payment from the [public service] of $28,872 (gross) on 7 February 2019 (folio 856). Mr Denman’s “Year to Date” earnings from the [public service] to 7 February 2019 were $75,738.68. After work-related deductions, Mr Denman’s taxable income from employment for 2018/19 was $73,246 (folio B68) and I so find.
Mr Denman agreed that he also received payments from the [Employer 1] throughout 2018/19, but these were not taxable income and he did not think that he had to declare these amounts to the Department.
Mr Denman’s payslips from April 2019 to June 2019 (folios B29-B35) show that he received $10,156.07 from [Employer 1] in that period. Mr Denman’s bank statements (folios A140- A151) show that he also received small ongoing payments from [Department 2] from February 2019 onwards. These total $212.56 in 2018/19. I note here that Ms Waldroup submitted additional bank statements for Mr Denman from October 2018 to June 2019 (folios B400-B403), These show [Employer 1] payments for employee [number]. This is not Mr Denman’s employee number ([specified]), I have thus not taken these into account.
Based on the evidence before me I therefore find that Mr Denman’s income and financial resources in the 2018/19 financial year amounted to $83,614.63[1]. Although Mr Denman’s [Employer 1] pay is not taxable income, it is a financial resource available to him, which will need to be considered for child support purposes.
2019/20 financial year
[1] $73,246 (taxable) + $10,156.07 ([Employer 1 payments]) + $212.56 ([Department 2 payments])
Mr Denman stated that he was enrolled to study a [Qualification 1] at [University 1] (folio 330), but he ultimately did not pursue the studies. He commenced a job with [Employer 2] in the 2019/20 financial year. Information provided by this employer confirms that Mr Denman commenced in the position from 29 July 2019 and is employed for 43 hours per fortnight (0.6 EFT) at a rate of $29.92 per hour or $33,450 per annum (folio 1080).
Payslips from [Employer 2] show that as at 7 January 2020 Mr Denman earned $16,231.12 (gross payments, including sick pay) from his employment (folio A170) and he received another payment of $626.48 on 8 January 2010 (folio A169). His total earnings from [Employer 2] to 8 January 2020 were thus $16,857.60 and I so find. I note here that Mr Denman’s hourly rate has increased from December 2019 to $30.56 per hour or $34,166.08 per annum (folio A170).
Mr Denman also received payments of $13.80 per fortnight (folio A330-A343). These are his ongoing [entitlements] (folio A249). He continued to receive payments from the [Employer 1] until October 2019 (folios A239-A246), a total amount of $4,944.84.
On 7 November 2019 Mr Denman’s daughter, [Child 4] was born. Bank accounts show that he received a one-off amount of $1,259.20 (Dad and Partner Pay) from Centrelink on 27 December 2019 (folio 342). On 6 January 2020 Mr Denman advised the Department that [Child 4]’s mother ([Ms A]) had to go to hospital to be with her other daughter, who is seriously ill and he now has 100% care of [Child 4] (folio 1127). Mr Denman stated that since January 2020 he is receiving parental leave pay (PPL) from Centrelink. This payment will be made until 30 March 2020 and the Centrelink statement shows that Mr Denman will receive PPL to a total of $5,115.73 (folio A12).
Mr Denman stated that he is currently in Melbourne to support [Child 4]’s mother. He anticipates that he will probably remain there until the end of this year (2020). Mr Denman is currently negotiating with his employer ([Employer 2]) to see how he can continue with his employment.
At this point Mr Denman’s total income and financial resources for 2019/20 amount to $28,536.17[2]. There are 13 weeks left in the financial year from 30 March 2020 to 30 June 2020. If Mr Denman continues to work for his employer ([Employer 2]) at the rate of 43 hours per fortnight at $30.56 per hour, he would earn an additional $7,884.48[3] in this financial year. This would increase Mr Denman’s total income and financial resources for 2019/20 to $36,420.65 and I so find. I note Mr Denman suggested that his total income/financial resources in 2019/20 could amount to $37,554.45 (folio A14), but given the uncertainty about his employment at this stage, I am of the view that the lesser amount of $36,420.65 might be more reasonable.

Mr Denman – earning capacity

[2] $16,857.60 ([Employer 2]) + $4,944.84 ([Employer 1]) + $5,115.73 (PPL) + $1,259.20 (Dad and Partner) + $358.80 ([Department 2] $13.80 x 26)

[3] 13 weeks, but say six fortnights x 43 hours = 258 hours x $30.56 per hour = $7,884.48

Ms Waldroup contended that Mr Denman had greater earning capacity than he was currently exercising and that he left his full-time employment with the [public service] in January 2019 to affect the rate of child support payable.
The relevant legislative provisions for consideration of a parent’s earning capacity are provided for in subparagraph 117(2)(c)(ib) and also in subsection 117(7B) of the Act. Essentially the provision restricts the circumstances in which a person’s earning capacity can be used as a basis to depart from a formula assessment.
There are three essential matters to be considered in determining whether the administrative assessment should be departed from on the grounds of earning capacity. In simple terms they can be explained as follows:
·did the parent not work despite ample opportunity to do so, reduce their hours of work or change their occupation, industry or working pattern; and
·was the parent’s decision not to work despite ample opportunity to do so or to reduce their hours of work or change their occupation, industry or working pattern not justified because of caring responsibilities or their state of health; and
·the parent has not demonstrated that it was not a major purpose of their decision not to work despite ample opportunity to do so or to reduce their hours of work or change their occupation, industry or working pattern to affect the administrative assessment of child support.
All three of the above criteria must be met before a change of assessment can be made to take into account whether the parent has a greater earning capacity.
In this case there is no dispute that Mr Denman left the [public service] and transferred to the [Employer 1] on 28 January 2019. He has been working in a part-time capacity since then. Mr Denman [has retired] in November 2019.
Evidence before me indicates that Mr Denman was assessed under [a specified legislation] in February 2017 and attained an impairment rating of 25 points for conditions affecting his [body part] and mental health (folio 182). I note his contract for [Employer 1] indicates that Mr Denman’s “medical restrictions are known and he will be employed within these restrictions” (folio 942). Further information from the [Employer 1] indicates that Mr Denman has been working an average of 22.8 hours per fortnight since 28 January 2019 (folio 824).
Mr Denman provided a letter from [Dr B] dated 17 October 2019 (folio 1081) stating that Mr Denman’s work capacity is restricted to 25 hours per week “on modified duties” and [documents dated] 26 September 2019 notes that “there is sufficient evidence that [Mr Denman] is not employable or deployable” (folio A417).
Mr Denman submits that his reduction in working hours was justified by his state of health, whereas Ms Waldroup argues that Mr Denman continued to serve in the [public service] after 2017, when his impairments were first assessed and only changed his employment once the current change of assessment process was underway.
Mr Denman also stated that he took into consideration that his new posting from January 2019 onwards would have been to Canberra. This would have taken him further away from Ms Waldroup and the children and thus further reduced any chance he may have had keeping in contact with his children on a regular basis. Mr Denman said that he did not think much about the impact of his decision (to leave his employment with the [public service]) on Ms Waldroup’s child support payments. He thought that her family tax benefit payments would probably increase, once his payments decreased and therefore the financial impact would not have been too great.
[Documents] dated 11 July 2018 (folio 349) indicates that Mr Denman was to [work] from [Canberra] from 21 January 2019.
I have carefully considered the evidence before me. I have insufficient medical evidence before me to find that Mr Denman’s reduction in working hours is justified by the state of his health in January 2019. There is more substantial medical evidence in relation to his health and earning capacity later in 2019 and I have concluded that Mr Denman’s health played some role in his decision to change his working hours.
I am however persuaded that affecting the child support assessment was not a major purpose in his decision to reduce his working hours. Mr Denman knew in July 2018 that he was to [work from] Canberra in January 2019, which would make it more difficult for him to see his children. I note that Mr Denman has been seeking access to the children in the Courts and final parenting orders were made on 11 February 2020. I have therefore concluded that keeping ongoing and regular contact with his children was the most significant reason for Mr Denman’s decision to leave his employment with the [public service].
This means paragraph 117(7B)(c) of the Act is not satisfied in this case. As all three criteria provided for in subsection 117(7B) of the Act are therefore not met, I cannot consider Mr Denman’s earning capacity further.

Ms Waldroup – income, property and financial resources

Ms Waldroup has been relying on Centrelink payments for many years. She provided Centrelink income information (folio B433), which shows that she is currently receiving carer payment, carer allowance and family tax benefit payments. She is also receiving pensioner education supplement, as she is studying part-time. She had also had 100% care of the children[4].
[4] I note the parenting orders of 11 February 2020 provide for Mr Denman to have some care; at present this is about 13% per year. This however does not change the cost percentage on which child support liability is calculated.
Departmental records show that Ms Waldroup’s 2018/19 Centrelink income was $22,313 (folio 1006).
There is no evidence that Ms Waldroup has any other source of income and I am therefore satisfied that Ms Waldroup’s income, property and financial resources amount to Centrelink payments only.

Ms Waldroup – earning capacity

Mr Denman submitted that Ms Waldroup has greater earning capacity than she currently exercised and that she could return to work, earning about $50,000 per year.

As noted above, Ms Waldroup has been relying on Centrelink payments for a number of years. She confirmed that she last worked in 2012 prior to [Child 1] being born and that she has been a “stay at home” mother and carer since then.
As such I am not persuaded that Ms Waldroup is not working “despite ample opportunity to do so” and this means paragraph 117(7B)(a) of the Act is not satisfied in this case. As all three criteria provided for in subsection 117(7B) of the Act are therefore not met, I cannot consider Ms Waldroup’s earning capacity further.
I will note here that Ms Waldroup has 100% care of the children thus her income has limited effect on the calculation of Mr Denman’s child support liability. For example, at the time of the change of assessment application Mr Denman’s child support liability was $13,650 per annum, based on his 2017/18 taxable income of $75,623 and Ms Waldroup’s 2017/18 derived income of $2,000. Even if Ms Waldroup’s income were to be assessed at $50,000 per annum (based on historical earnings), Mr Denman’s child support liability would only be reduced by $138 per year (or about $2.65 per week), which is not significant.

Conclusion – income, property, financial resources and earning capacity of both parties

When Ms Waldroup lodged her initial departure application on 20 December 2018 (in the 2018/19 financial year), the rate of child support was based on Mr Denman’s 2017/18 adjusted taxable income of $75,623 and Ms Waldroup’s 2017/18 derived income of $2,000, resulting in a child support liability of $13,650.
I have examined the financial information provided by Mr Denman in some detail and I have concluded that Mr Denman’s actual income and financial resources in the 2018/19 financial year amounted to $83,614.63.
I have estimated that Mr Denman’s child support liability for the children, if calculated on the basis of his financial resources of $83,614 for 2018/19 and Ms Waldroup’s 2018/19 Centrelink income of $22,313, would be $15,729 per year at the time Ms Waldroup lodged her application. Whilst the difference between this annual rate and the previous annual rate of child support, is not very significant, about $2,029 per year (or about $40 per week), I note that this rate changed about seven weeks later, when Mr Denman lodged in his income estimate of “nil”, resulting in a child support liability of $427 per annum. I consider the difference between that amount (the minimum annual rate) and child support liability of $15,729 per annum calculated on an income of $83,614 to be so great that they give rise to special circumstances in this particular case. I am therefore satisfied that the ground for departure set out in subparagraph 117(2)(c)(ia) of the Act has been made out in respect of Mr Denman’s income, property and financial resources.
Subparagraph 98C(1)(b)(i) of the Act is satisfied if “one, or more than one” of the grounds for departure are established. Having found one ground for departure established, I deem it not necessary to determine whether any of the other grounds relied upon by the parties have been met. The issues raised by the parties in respect of the other grounds will be considered when determining whether it would be just and equitable to make a departure determination.

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. To do so I must have regard to a number of factors set out in subsection 117(4) of the Act, such as the needs of the children, the parents’ commitments and any hardships that would be caused by departing, or not departing, from the statutory formula.

Mr Denman

Mr Denman’s income, property and financial resources have been discussed in some detail above. I have found that at the time Ms Waldroup lodged her application for a change of assessment (in the 2018/19 financial year) Mr Denman’s income, property and financial resources amounted to $83,614 and for the current (2019/20) financial year they are likely to be $36,420.
Mr Denman’s Statement of Financial Circumstances (folios A1–A10) indicates weekly income consisting of Centrelink payment (PPL and family tax benefit) and [Department 2] payments. These amount to $619[5] per week. He listed expenses of $648 per week (excluding child support, but including taxation). Mr Denman noted that he also tries to pay $300 per fortnight off his legal bill and $60 per fortnight on a personal loan. He indicated “rent” expenses of $200 per week. Mr Denman explained that he shares accommodation with [Ms A] ([Child 4]’s mother). The house is in her name only, but his name is on the mortgage. He is not contributing to mortgage payments or any other household bills, but instead pays $200 per week board (or rent) to [Ms A].
[5] $174.16 FTB + $438.13 PPL ($876.26 p/ft) + 6.80 [Department 2]
I also note that Mr Denman indicated an amount of $111 per week ($222 per fortnight) for income tax. This amount is generally payable on employment income of about $1,590 per fortnight (or $41,236 per year)[6]. At this point in time however Mr Denman only earned $16,857.60 from employment with [Employer 2] and I have estimated that he could earn an additional $7,884.48 this financial year, bringing his total employment income to $24,742.08 or $952 per fortnight in 2019/20. Such income is only taxed at a rate of $58 per fortnight (or $29 per week). This would mean his expenses amount to about $566 per week (excluding child support, legal fees and loan repayments).
[6] Australian Taxation Office Fortnightly Tax Table
Mr Denman said that he is currently living in Melbourne and the children reside in the north of the state. A recent parenting order made on 11 February 2020 meant that he now has one night, increasing to two nights care of the children per month, plus seven extra nights during each of the school holiday periods (about 48 nights or 13% per year, which is less than regular care). This means he has to travel to see his children and he incurs extra costs.
Mr Denman submitted that he travels by car and a round trip is about 400 km. He believes he would travel about 10,400 km per year. Mr Denman said he would stay with his parents, if possible, but submitted evidence of previous accommodation costs (March 2019 to October 2019) totalling $946.27.
Mr Denman noted that the objections officer estimated his travel costs to be $2,729, including accommodation costs and travel by car per year. Mr Denman agreed that he probably did not meet the requirements of having travel costs considered in the previous financial year, given his income, but suggested that these costs might now have a more significant impact on his budget.
I note travel costs are considered over a child support period. The current child support period commenced on 1 August 2019 and ends on 31 October 2020. I have evidence of accommodation costs of $131.75 in August 2019 and $282.10 in October 2019. In accordance with the parenting orders Mr Denman has seen the children on two further occasions in February and March 2020. I have no evidence of actual fuel (or other) costs related to these trips and it is therefore not possible to accurately determine Mr Denman’s costs in relation to this travel. I will thus not consider this issue further at this time.
I have previously concluded that Mr Denman’s income and financial resources amount to about $700 per week[7] and his necessary expenses are about $566 per week (excluding child support, legal fees and loan repayments). I therefore find that Mr Denman is able to meet his current expenses.
[7] Based on a 2019/20 projected income of $36,420

Ms Waldroup

Ms Waldroup is reliant on Centrelink payments and child support from Mr Denman. She indicated on her Statement of Financial Circumstances (folio B1–B9) that her Centrelink payments amount to about $909 per week (excluding child support from Mr Denman).
Ms Waldroup noted total expenses of $1035 per week for her and the children. This includes $133 per week ($6,916 per year) for childcare costs and children’s activities ([Activity 1] and [Activity 2]) due to [Child 1]’s special needs. Ms Waldroup has no credit cards or loans to repay and she pays private rent of $380 per week. On this basis, Ms Waldroup’s expenses exceed her income by about $126 per week.
Ms Waldroup submitted that [Child 1] has special needs. He has been diagnosed with autism spectrum disorder and moderate to severe intellectual disability (folio 77). Ms Waldroup stated that she has additional expenses for [Child 1] in relation to medical costs and his activities ([Activity 2] and [Activity 1]), which are not covered by [Child 1]’s NDIS Plan. These expenses are:
Medical costs
Paediatrician twice per year, approximately $119 out of pocket costs = $238 per year (folio B430);
Medication: [Medication 1] $281, [Medication 2] $300 and [Medication 3] $598 per year, total cost about $1,179 per year (folio B449).
[Activity 1]
Private lessons, approximately $1,216 in 2020 ($30.40 per lesson over 40 weeks) and $1,208 in 2019 ($30.20 per lesson) (folio B452).
[Activity 2]
Cost in 2018 $145, in 2019 $149, about $150-$200 in 2020 (folio B457).
These additional expenses amount to about $2,774[8] in 2019 per year and $2,783[9] in 2020.
[8] $238 + $1,179 (medical) + $1,208 (swimming) + $149 (horse riding)
[9] $238 + $1,179 (medical) + $1,216 (swimming) + $150 (horse riding)
Ms Waldroup submitted that Mr Denman ought to pay about half of these expenses.
Ms Waldroup stated that the younger children attend an early learning centre (long childcare) three days per week and have done so since 2017. She stated that the cost was about $6,350 in 2019, but will be reduced to about $3,250 in 2020 as only [Child 3] will now attend childcare.
Ms Waldroup confirmed that the objections officer only considered one day childcare per week as a necessary expense and she accepted that view. She therefore submitted that one third of the 2020 costs, about $1,083 should be paid by Mr Denman.
Ms Waldroup provided a complete account statement for [an early learning] centre from January 2018 to December 2019 (folios B505-B526). It indicates that whilst she did pay for childcare in 2018, she did not have any out of pocket expenses in 2019, as all fees were paid via additional childcare subsidy (ACCS).
Since 13 January 2020 Ms Waldroup has been paying about $22 per day for [Child 3]’s childcare (folios B462/B463). This would amount to about $3,234[10] per year for care of three days and $1,078 for one care day per week.
[10] $22 x 3 days x 49 weeks remaining in 2020, excluding the Christmas period
Mr Denman agreed that [Child 1] has special needs and that he (Mr Denman) should pay for half of the medical costs. He did not agree that he should be paying for [Activity 1] and [Activity 2] lessons, as these could be paid for through [Child 1]’s NDIS Plan. Ms Waldroup noted that she tried to have these activities included in the Plan, but was not successful. [Child 1]’s NDIS Plan could not be re-negotiated until the end of this year and all of the current funding had been allocated and a significant amount had already been spent.
Mr Denman also submitted that Ms Waldroup would probably be getting ACCS payments this year and this would mean that she would have no out of pocket childcare costs. Ms Waldroup said that her childcare provider had to apply for ACCS on her behalf and it was not certain that they would do so or that the application would be successful.
I note Ms Waldroup has included these additional costs for the children in her expenses (folio B8) of $1,035 per week, which means that her expenses exceed her income by about $126 per week.

The children

Ms Waldroup did not differentiate between general expenses for herself and expenses for the children. She indicated a total of $133 per week is spent on childcare and activities ([Activity 1] and [Activity 2]). This leaves $902 per week for other expenses. If they are equally divided between Ms Waldroup and each of the three children, total expenses for the children would amount to $809.50 per week[11] or $42,094 per year.
[11] $902/4 x 3 children = $676.50 + $133 childcare and activities
The children are seven, five and four years old and have no income, property or financial resources relevant to my determination.

Otherwise proper

The requirement to consider whether it is “otherwise proper” to depart from the administrative assessment 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 or benefits (subsection 117(5) of the Act).
It is a prime objective of the child support legislation that parents should be obliged to support their own children to the extent of their real capacity, and that that obligation should not be unnecessarily abrogated to the public welfare system when the parents themselves have the capacity to maintain their children.
Ms Waldroup is in receipt of family assistance payments from Centrelink, which are affected by maintenance payments such as child support. Any increase or decrease to child support payable would result in an appropriate increase or decrease in these payments. Such a result would be otherwise proper.

Conclusion

Section 98S of the Act describes the determinations that the Registrar, and the Tribunal standing in the shoes of the Registrar, may make if it decides to depart from the administrative assessment. It is open to the Tribunal to set a rate of child support payable or set some of the variables used in the administrative assessment formula (for example, vary one or both parents’ adjusted taxable income).
When Ms Waldroup lodged her initial departure application on 20 December 2018, the rate of child support was based on Mr Denman’s 17/18 adjusted taxable income at $75,623 and Ms Waldroup’s 2017/18 derived income of $2,000, resulting in a child support liability of $13,650 per annum payable by Mr Denman to Ms Waldroup. This however changed on 7 February 2019, when Mr Denman lodged an income estimate of “nil”.
As noted, Mr Denman was a full-time [employee] of the [public service] until 28 January 2019, when he asked to be transferred to the [Employer 1]. [Employer 1] payments are not taxable, thus his taxable income reduced to $0 and Mr Denman lodged the corresponding income estimate. His child support liability was reduced from 22 February 2019 (folios 1036-1039).
Ms Waldroup was aware of this change and lodged her amended departure application on 8 February 2019. Ms Waldroup argued that Mr Denman’s [Employer 1] earnings should be considered for child support purposes and that Mr Denman should also be making additional payments for costs she incurred due to [Child 1]’s special needs.
From about November 2019 Mr Denman has been paying $250 per fortnight to meet his currently assessed child support liability, but as at 25 February 2020 his child support payments were $3,074.05 in arrears (folio 1205). Since early February 2020 he has been making additional payments to reduce his arrears.
I have discussed the parties’ financial circumstances in detail elsewhere in these Reasons and I have found that Mr Denman’s actual income and financial resources amounted to $83,614 in the 2018/19 financial year. I have also found that Mr Denman’s current income and financial resources are much reduced and are likely to amount to $36,420 in the 2019/20 financial year.
I have accepted that Mr Denman’s health concerns played a significant role in leaving his full-time employment with the [public service], but I was persuaded that his major reason for doing so was the ability to see his children on a regular basis. Mr Denman faced being posted to another state in January 2019, which would have significantly reduced his contact with his children. Mr Denman has recently been granted overnight care of his children through final Parenting Orders made in February 2020.
I also accept that Ms Waldroup incurred significant additional costs in relation to [Child 1]’s care, which amounted to a total of $2,774 in 2019 and $2,783 in 2020. Her childcare costs were covered by the Additional Child Care Subsidy in 2019 and she had no expenditure in this regard. She is currently paying childcare costs of about $3,250 per year, as only [Child 3] now attends childcare three days per week.
I note the objections officer decided to increase Mr Denman’s adjusted taxable income by $33,848 per annum from 1 August 2019 to 31 December 2020. I do not have any evidence to support such a decision. There is no evidence that Mr Denman continues to receive substantial payments from [Employer 1] or from any other source. He did find employment with a non-government agency, but he is currently on parental leave pay, caring for his young daughter.
I am cognisant that Mr Denman’s income was significantly higher in the 2018/19 financial year and I will apply this income from 22 February 2019 (the date child support liability reduced) to 30 June 2019. I have estimated that this will increase Mr Denman’s child support liability to about $15,729 per year for that period and generate arrears. I have therefore decided not to increase Mr Denman’s child support liability by additional costs for [Child 1]’s special needs.
From 1 July 2019 Mr Denman’s income and financial resources reduced to $36,420 per annum and I will apply this income until the end of 2020. I do so because Mr Denman’s employment situation is uncertain at this point and this will hopefully give him enough time to secure his future.
I will add additional amounts for [Child 1]’s special needs however from July 2019. I will add $1,387 per annum from 1 July 2019 to 31 December 2019, representing half of the costs for medical expenses and activities ([Activity 1] and [Activity 2]). For the period 1 January 2020 to 31 December 2020 I will add an amount of $1,391 per annum, being for the same costs (medical and activities).
I have not added any additional costs for childcare. As noted, Ms Waldroup did not actually incur childcare costs in 2019, as she was granted ACCS. At present (in 2020) Ms Waldroup is paying for [Child 3]’s attendance at childcare, but it is possible that she may once again qualify for ACCS funding.
I am also aware that the current world health crisis in relation to COVID-19 may mean that a lot of activities ([Activity 1] or [Activity 2]) do not actually take place and this Ms Waldroup will not incur all of these costs. I am of the view however that some additional monies should be paid, so that Ms Waldroup has resources available to her to meet costs already incurred and any possible future expenses.
I have estimated that my decision will decrease Mr Denman’s outstanding child support arrears significantly, mainly because a much lower annual rate will now apply from 1 July 2019. His ongoing liability should be approximately $180 per fortnight, which would assist Ms Waldroup in meeting her current expenditure for the children.
I am satisfied that Mr Denman has the capacity to pay such an amount, as he has been paying a much higher rate of child support in the past and he noted on 12 December 2019, in a discussion with the Department, that he could afford to pay $250 per fortnight (folio 1126).
I have reached a different conclusion to that of the objections officer and I therefore set aside their decision.

DECISION

The decision under review is set aside and a decision substituted that

For the period 22 February 2019 to 30 June 2019 Mr Denman’s adjusted taxable income is set at $83,614 per annum;
For the period 1 July 2019 to 31 December 2020 Mr Denman’s adjusted taxable income is set at $36,420 per annum; and
For the period 1 July 2019 to 31 December 2019 the annual rate of child support payable is increased by $1,387 per annum, and
For the period 1 January 2020 to 31 December 2020 the annual rate of child support payable is increased by $1,391 per annum.

[2020] AATA 1034

17 March 2020

Key Legal Topics

Areas of Law

Family Law

Administrative Law

Legal Concepts

Jurisdiction

Statutory Construction

Remedies

Judicial Review