Deyes and Deyes (Child support)

[2021] AATA 692

Deyes and Deyes (Child support) [2021] AATA 692 (16 February 2021)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2020/CC018257

APPLICANT:  Mr Deyes

OTHER PARTIES:  Child Support Registrar

Ms Deyes

TRIBUNAL:Member T Bubutievski

DECISION DATE:  16 February 2021

DECISION:

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

a)The objection decision of 9 January 2020 will cease to take effect from 31 January 2021; and

b)The monthly rate of child support payable by Mr Deyes is to be set at $1,750 for the period 1 February 2021 to 30 November 2021.

CATCHWORDS

CHILD SUPPORT – departure determination – income, property and financial resources of the liable parent – benefits derived from business – significant investments – income from trust – 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 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 Deyes and Ms Deyes are the parents of three children aged between 6 and 12. The care of the children is shared between the parents. There has been a child support assessment in place for the children made by Services Australia (Child Support) (the Agency) since 21 March 2017. The Agency has been responsible for collecting the child support pursuant to that assessment since 17 August 2017. This is an application seeking a change to that assessment.

2. On 6 July 2019 Ms Deyes made an application to change the administrative assessment of child support. At the time Ms Deyes made this application Mr Deyes was assessed to pay no child support based on his estimate of income of $0. Until 30 June 2019 Mr Deyes had been assessed to pay the maximum applicable rate of child support pursuant to a previous change of assessment decision. On 10 October 2019 the Agency made a decision to set Mr Deyes’ adjusted taxable income at $85,150 for the period 4 July 2019 to 31 October 2019; and at $74,375 for the period 1 November 2019 until 31 October 2023. The latter amount was to be increased annually by the child support inflation index on 1 July each year commencing from 1 July 2020.

3. Mr Deyes objected to this decision on 28 October 2019, and Ms Deyes objected to the decision on 22 November 2019. On 9 January 2020 an Agency objections officer allowed the objections in part and set Mr Deyes’ adjusted taxable income at $245,000 for the period 1 July 2019 to 31 October 2022. This created an annual rate of child support payable by Mr Deyes of $25,689 and arrears of $8,574.80.

4. On 20 January 2020 Mr Deyes made an application for review by the Social Services and Child Support Division of this Tribunal. The Tribunal held a telephone directions hearing on 15 May 2020 and issued Directions, with which the parties complied.

5. The matter was initially heard by the Tribunal on 10 July 2020. Mr Deyes and Ms Deyes both attended the hearing by telephone and gave sworn evidence. The Child Support Registrar did not seek leave to appear. Following the hearing the Tribunal deferred the matter to allow Ms Deyes to provide further evidence in relation to [a] Bank account she had alleged had been undisclosed by Mr Deyes.

6. The Tribunal did not decide the matter at that time. On 9 November 2020 a delegate of the President of the Tribunal reconstituted the Tribunal in the interest of having the matter completed without delay. A further hearing was conducted by the Tribunal (differently constituted) on 16 December 2020. Prior to conducting this hearing, the Tribunal examined all of the evidence and listened to the recordings of the previous hearings. Both parties and the Tribunal had access to documents numbered 1 to 505 from the Agency, and after all submissions, documents A1 to A446 from Mr Deyes and B1 to B115 from Ms Deyes.

7. Mr Deyes and Ms Deyes both attended the rehearing by telephone and gave sworn evidence. Following the hearing, the Tribunal deferred the matter and issued further written Directions to request Mr Deyes to provide further evidence and to allow Ms Deyes to make written comment on that evidence. In the intervening period, the parents attempted to negotiate a child support agreement which met the needs of both parents and the children. Mr Deyes requested a further deferral of two weeks to allow these negotiations to occur, which the Tribunal granted. He did not provide any of the information required by the Directions.

8. At the conclusion of the additional deferral, Mr Deyes requested a further deferral of eight weeks to allow consent orders to be finalised. Ms Deyes opposed the delay. Consequently, the Tribunal sought details of their agreement from the parties. They each provided a copy of draft consent orders in similar terms, containing a table of child support payments to be made by Mr Deyes between February 2021 and December 2032.

9. The Tribunal then reconvened in the absence of the parties on 16 February 2021 to make a decision.

ISSUES

1. The rate of child support payable by the liable parent is usually based on an administrative assessment under Part 5 of the Child Support (Assessment) Act 1989 (the Assessment 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, the income of each parent and the costs of the children.

2. The liable parent or a carer may apply to the Child Support Registrar for a determination to depart from the administrative assessment under Part 6A of the Assessment Act. The application for departure is authorised by section 98B of the Assessment Act. Section 98C of the Assessment Act provides that the Registrar may make a determination to depart from the formula assessment and establishes a three step process. In order to depart from the administrative assessment the Registrar, and the Tribunal standing in place of the Registrar, must be satisfied:

   (i)       that one, or more than one, of the grounds for departure referred to in   subsection 117 (2) exists; and

   (ii)that it would be:

   (A)just and equitable as regards the child, the liable parent, and the carer entitled to           child support; and

   (B)otherwise proper;

   to make a particular determination under this Part;

3. The grounds for departure from an administrative assessment of child support are set out in subsection 117(2) of the Assessment Act.

4. 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 Assessment Act. Section 98S permits a range of determinations, including varying the annual rate of child support payable or the adjusted taxable income of the parties.

Issue 1 – Does a ground exist to depart from the administrative assessment?

Does a ground exist to depart from the administrative assessment under Reason 8A?

1. Ms Deyes sought a departure from the administrative assessment on the ground that the administrative assessment of child support does not reflect Mr Deyes’ income, property and financial resources. This is the ground reflected in subparagraph 117(2)(c)(ia) of the Assessment Act. Ms Deyes also argued that Mr Deyes is not exercising his full earning capacity and that the objection decision is fair.

2. Mr Deyes previously operated a business, [Business 1] (“the business”). The business was sold to [Company 2] in 2016 for $10 million, which Mr Deyes shared with his business partner. As part of the sale, Mr Deyes stayed on in the business in a general manager role for three years, with a salary package of over $300,000 per annum. This expired on 30 June 2019, and Mr Deyes ceased employment. Mr Deyes said that it had always been his intention to cease paid employment at this time and that this had been a decision that had been made prior to the sale in 2016, when the parties were still together. He said that he intended to become an investor instead, and that he had subsequently commenced to do so.

3. Mr Deyes also noted that his only experience is in the [specified] industry and his contract with [Company 2] imposed a restraint of trade clause for 12 months following the termination of his employment. He acknowledged that this clause would not have prevented him from seeking work in other industries but said that he would have been unable to earn the same income in another industry. He ultimately chose to do some part-time [work], commencing in April 2020. This work continues and Mr Deyes’s payslips show that he earns $205.64 gross each fortnight, with an annual salary of $5,364.

4. Ms Deyes said that Mr Deyes could have worked in the same industry if he had wished, as long as he had sought and obtained the written permission of [Company 2] first. This is indeed the wording in the relevant clause of the contract, but the Tribunal considers it extremely unlikely that [Company 2] would have granted permission for Mr Deyes to work in the same industry.

5. Mr Deyes operated the business through the medium of the [Trust 1]. The payment for the business was made in stages, with a number of lump sum earn-out payments made. The Tribunal could see that the income tax return for the Trust for 2017 has been frequently amended to reflect these payments, with the most recent amendment, made on 20 April 2020, showing a taxable income for that year of $4,427,624. Mr Deyes said that he has paid the tax bill associated with this of $872,170, but that his accountant is disputing his liability for shortfall interest of $69,293.85.

6. Mr Deyes said that there were no further lump sum earn-out payments to be made, and it had been his intention to wind up the [Trust 1], but he had been unable to do so due to the taxation issue and the fact that the [Trust 1] still owns shares in [Company 3] Pty Ltd (“[Company 3]”), a [deleted]. It will need to stay open for the foreseeable future. The trust deed shows this to be a discretionary trust. Mr Deyes said that the shares in [Company 3] are a long-term strategy and bring no current return.

7. Mr Deyes’s 2019 personal income tax return showed total income of $322,610, with salary of $315,829 and interest of $6,781.

8. Since he ceased employment, Mr Deyes has set up a new business structure to act as an investment vehicle. The Deyes Corporate Trustee was registered on 30 July 2019 and holds all the shares in Deyes Pty Ltd. The residual cash amount from the sale of the business has gone into the trust to make investments from which Mr Deyes seeks to derive an income.

9. Mr Deyes and his former business partner have also started a new venture, [Company 4] Pty Ltd (“[Company 4]”). This essentially does the same work as the former business, and Mr Deyes confirmed that it has secured several contracts and hired a number of the same staff. Mr Deyes said that [Company 4] is being operated in a different manner to the former business because 10% of its resources go to supporting worthwhile infrastructure [projects].

10. Mr Deyes said that he does not take any income from this venture. Half the shares are held by the Deyes Corporate Trustee.

11. Ms Deyes alleged that Mr Deyes intends to build this business up and then sell it at a profit, so that even though he is not taking money now, he will do so later. Mr Deyes said that this may well occur at some point. It is clear that this business is in its infancy and the Tribunal can presently have no regard to any future capital gain Mr Deyes may derive from its sale at some unspecified point in the future, although this may turn out to be a factor in future assessments. Nor can the Tribunal have regard to the assets Mr Deyes received from the sale of the former business, as this sale predates the parties’ settlement of property. If Ms Deyes is unhappy about the asset distribution in the light of her current knowledge she can return to the court and seek to have the settlement overturned. The Tribunal has no role in this.

12. The Tribunal accepts that Mr Deyes is undertaking activities designed to generate present and future income even though he is not employed full-time.

13. Mr Deyes has invested most of his money. At the time of the hearing in July 2020 he had incurred significant losses on the share portfolio, but there had been some recovery by December 2020. Mr Deyes provided a list of the investments he had made and their projected returns (at folio A247). The Tribunal examined these investments as disclosed by Mr Deyes below. Mr Deyes is a third-tier investor in the [Company 5], and the returns are not as expected. The investment is unsecured. The returns from [Company 6] are also reduced as is a [project] in Melbourne which had been affected by COVID-19. The investment in [Company 7] was made with a friend and Mr Deyes contributed only $329,000 of the total sum. He is entitled to two thirds of the contract interest sum. The management fees to the accountant are between $10,000 and $15,000 per annum, plus direct management and brokerage fees of between $5,000 and $6,000 per annum. Mr Deyes said that the accountant has advised him not to expect the same level of returns in the future.

14. The Tribunal put to Mr Deyes that if he made no income from his share portfolio, but made projected returns on the other investments, he would have an annual rate of return of around $270,000 although this would not all fall in a single financial year. Mr Deyes acknowledged that to be the case but said that this amount would have to be discounted for risk. He did agree that the estimate of income that he provided of $0 for the 2019/20 financial year was definitely too low.

15. Mr Deyes said that his accountant had advised him never to draw an income of more than $80,000 per annum from the trust due to the increase in his marginal tax rate. He said that returns from the trust above this would be reinvested. He thought that this would be roughly equivalent to the entire earnings of the trust in the 2019/20 financial year. He was not forthcoming in providing information about the extent to which his new partner may be deriving an income from the trust. Ms Deyes said that it had always been their practice during their marriage to income split, and that she was also attributed with an income from Mr Deyes’s business even though she did not work in it.

16. Mr Deyes said that he made a choice not to work full-time based on his financial circumstances at the time, and the impact on the child support assessment was not a factor in this decision. Mr Deyes pays the private school fees for the children in full, private health insurance and 50% of their additional school expenses. He thought that he continued to provide ample child support in addition to this. The decision for him not to work was made years ago, before child support was an issue. He and Ms Deyes decided that he would order his affairs differently once his employment ceased. When the time came to put the decision into practice, he thought that investment income with a few extra earnings would be more than sufficient to meet the needs of the children.

17. Mr Deyes said that this decision about his work arrangements means that he is more available for the children in the shared care arrangement. He said that if he was to return to work, he would prefer to work part time to be available to the children, as Ms Deyes does. He disputed that he could return to his previous level of income.

18. Mr Deyes said that he was using his capital to fund his personal expenses, and that he is not living a lavish lifestyle, but that he is also not going without. He was hoping to rely on his share portfolio for dividend income, but this has not really come to fruition due to the pandemic-related financial downturn.

19. At the hearing on 16 December 2020 Mr Deyes confirmed that his investments have performed more poorly than expected. Several investments have been wound up and there was about $700,000 sitting in the trust for reinvestment. He had not received all the payments from [Company 6] as they had not been able to proceed with their build. The return from [Company 5] had reduced to 10% or below. The investment in [Company 7] went as predicted and has been repaid. Some of the other payments are not yet due and it is unclear how the investments will perform.

20. Mr Deyes said that his 2019/20 taxable income was $86,480. He said that this was in part due to a payment of almost $70,000 from [Company 2] made in July 2019 which appeared in this return. He said that his honest assessment was that his outgoings were “north of” $100,000 per annum. The Tribunal noted that Mr Deyes’s credit card statements showed that he expended just over $115,000 in the 2019/20 financial year, which would be equivalent to a gross income of $169,000. The Tribunal indicated that it could have regard to Mr Deyes’s actual expenditure from his credit card statements to determine his available resources. Mr Deyes said that he would be ‘perplexed’ by that methodology.

21. Nonetheless, it is clear from Mr Deyes’s 2019/20 income tax return and his investment income that the estimate of income of $0 he provided, and on which the child support assessment proceeded from 1 July 2019, was not reflective of his actual income. It is also clear that he exercises control over the amount of income he will take from the trust on the advice of his accountant, and so his taxable income is likely never to be reflective of the income and financial resources at his disposal, regardless of what may occur in relation to his other business ventures.

22. In cases such as these, it is not the Tribunal’s role to conduct a forensic accountancy examination. The Tribunal only needs to be broadly satisfied that the person has income or financial resources equivalent to a particular amount or that are sufficient to pay a particular amount of child support. While the Tribunal accepts that Mr Deyes may now be choosing to organise his working life in a different manner to the way he has in the past, the support of his children is his paramount duty under the law. Mr Deyes clearly makes significant provision to meet the needs of his children by caring for them; and by paying private school fees, private health insurance and additional costs. He must also be prepared to make a contribution in the form of child support.

23. The term “special circumstances” is not defined in the Assessment Act. In Gyselman and Gyselman [1991] FamCA 93 the Full Family Court indicated that for there to be special circumstances, the facts of the case must establish something which is special or out of the ordinary. The Tribunal is satisfied that difference between the annual rate of child support payable by Mr Deyes on the basis of his estimate of $0 and the annual rate of child support which would be suggested based on his available financial resources amount to a special circumstance. The Tribunal finds this ground established. As a ground is established, the Tribunal must also consider whether it is just and equitable, and otherwise proper, to change the assessment. This involves a consideration of all the circumstances of the parents and the children.

Issue 2 – Would departure from the administrative assessment be just and equitable?

1. As the Tribunal is satisfied that a ground has been established to depart from the administrative assessment of child support, the next step is to consider whether it is just and equitable to depart from the assessment. In deciding whether it is just and equitable, the Tribunal must have regard to the following matters set out in subsection 117(4) of the Assessment Act:

   (a)the nature of the duty of a parent to maintain a child (as stated in section 3); and

   (b)the proper needs of the child; and

   (c)the income, earning capacity, property and financial resources of the   child; and

   (d)the income, property and financial resources of each parent who is a   party to the proceeding; and

   (da)the earning capacity of each parent who is a party to the proceeding;   and

   (e)the commitments of each parent who is a party to the proceeding that   are necessary to enable the parent to support:

   (i)himself or herself; or

   (ii)any other child or another person that the person has a duty to   maintain; and

   (f)the direct and indirect costs incurred by the carer entitled to child   support in providing care for the child; and

   (g)any hardship that would be caused:

   (i)to:

   (A)the child; or

   (B)the carer entitled to child support;

   by the making of, or the refusal to make, the order; and

   (ii)to:

   (A)the liable parent; or

   (B)any other child or another person that the liable parent   has a duty to support;

   by the making of, or the refusal to make, the order; and

   (iii)  to any resident child of the parent (see subsection (10)) by the making of, or the refusal to make, the order.

1. Section 3 of the Assessment Act states that it is the duty of both parents to financially support their children. All children should receive a proper amount of financial support from their parents in accordance with their capacity to contribute. The Tribunal only has to consider the factors set out in subsection 117(4) of the Assessment Act to the extent they are relevant in any particular case (see Gyselman).

2. Ms Deyes is self employed as a [Occupation 1], having left the [previous employment] following the separation of the parties. Ms Deyes explained that during the last eight years of her marriage to Mr Deyes she worked two days per week. After the separation she had difficulty managing the caring needs for the children with the need to do 12-hour shifts, especially overnight, so she left her employment. She had previously been getting help from her mother, but her father had a stroke and her mother could no longer help her. She said that she had [training in Occupation 1 field] for many years, and it had been in her mind for some time to become a [Occupation 1]. She denied that affecting the child support assessment was a reason why she changed jobs and said that it was due to being unable to find suitable care, particularly for overnight shifts. She said that she had hoped to earn at least $20,000 per annum from [Occupation 1] to supplement her interest income, although she acknowledged that she does rely on child support to meet her expenses. She did use some of the money she got in the property settlement to set up her [business] and modify the home for [Occupation 1 work].

3. Prior to separation Ms Deyes was only employed part-time. She said that for the last eight years of her marriage she only worked two days per week. She was not full-time and did not generate a significant income.

4. Ms Deyes has been considering other options for [Occupation 1 work]. She was hopeful of increasing her income but said that she was limited to [working] four [times] per week due to [an] [injury]. Mr Deyes has the children on Wednesday and Thursday nights while she [works].

5. As Ms Deyes argues in the case of Mr Deyes, Mr Deyes argues that Ms Deyes has an unexercised earning capacity which should be considered in the assessment. He says that she should be able to work in the public service at a level which would earn her $60,000 per annum. Both parents acknowledged that they have a preference to work part-time so that they are available to care for the children. The care of the children is shared almost equally between them and their youngest child is six. Mr Deyes said that he felt that Ms Deyes’ decision to become a [Occupation 1] was part of a “longstanding attempt to get a free ride” from him. He said that Ms Deyes is ordering her affairs on the assumption that she will get a large amount of child support from him and her business model is not sustainable.

6. For a period of time in mid-2020 Ms Deyes was not working at all due to COVID-19. She was sending out one video each week. She said that she had sought other [work] but was told that her skills were no longer current. She said that the available roles in her industry are also all full-time, which does not suit her care of the children.

7. Ms Deyes received money in the parties’ settlement of property, which took place in 2017. She has invested this conservatively. Mr Deyes was of the view that the Tribunal should take into account a higher rate of return. The Tribunal does not agree. As a matter of law, in these circumstances it cannot consider what Mr Deyes thinks Ms Deyes should have done with her money, only what she has done. It also cannot have regard to the principal sum as this was apportioned to Ms Deyes as part of the property settlement and the Tribunal has no role in undermining or changing the decisions of the court. Ms Deyes has invested $500,000 in a term deposit at 3.2%. She now receives her interest monthly due to cash flow problems. As it turns out, this is actually now a very good interest rate due to the economic issues flowing from the pandemic.

8. For an earning capacity decision to be made in respect of either parent the Tribunal must be satisfied that three criteria are met:

   a)   The parent is either:

   i.not working despite ample opportunity to do so; or

   ii.has reduced his or her weekly hours of work to below full-time work; or

   iii.has changed his or her occupation, industry or working pattern.

   And

   b)   The parent’s decision about his or her work arrangements is not justified by either:

   i.his or her caring responsibilities; or

   ii.his or her state of health.

   And

   c)   The parent has failed to show that the decision about his or her work arrangements was not substantially motivated by the effect this would have on the child support assessment.

9. Ms Deyes has changed her occupation, but the Tribunal notes that she was employed part-time both before and after separation. Her decision to change her employment does appear to have been justified by her caring responsibilities at the time. The need to work overnight shifts with three young children and the loss of her mother’s assistance provides a reasonable justification for this decision. There is no basis on which the Tribunal could make an earning capacity decision in respect of Ms Deyes.

10. Mr Deyes is involved in a number of complicated financial structures intended to return him an income. He clearly has an entrepreneurial mindset and has started another business along similar lines to his previous business, [Company 4]. He said that it commenced in August 2020 so that he did not breach his non-competition clause with [Company 2]. Their first contract was for $156,000, with a cost of sales of $148,000. They have since received three other contracts of “several hundred thousand dollars each”. It is not clear what profit would be available to shareholders, but it seems likely that there would be some. The trust holds 50% of the shares in the new business. Mr Deyes said that there are new directors getting ready to step up for the business as he wants to take a more “hands off” role. He has not been working directly in the business itself.

11. Like Ms Deyes, Mr Deyes has changed his work hours and type of employment. There is no indication that this was because of his caring responsibilities or state of health, although the change has allowed him to spend more time with the children. Both Mr Deyes and Ms Deyes acknowledge that the decision that Mr Deyes would cease work when his contract finished with [Company 2] and do something else with his life was made when they were together, long before child support became an issue. The Tribunal cannot find that criterion three is established in relation to Mr Deyes and it also can see no justification to make an earning capacity decision for Mr Deyes. Essentially, both parents have requested to be treated in the same manner – to have their decisions about their individual futures respected. The Tribunal finds that both parents need to be assessed on the basis of their actual income and financial resources, not their capacities to earn.

12. At the hearing of 16 December 2020, the Tribunal issued further Directions, which required Mr Deyes to provide the following:

    a)    Personal tax return, including any schedules, for the 2019/20 financial year;

    b)    Three recent payslips showing year to date earnings;

    c)    The 2019/20 tax return for the [Trust 1] and financial records of the [Trust 1], including balance sheets, profit and loss statements;

    d)    The 2019/20 tax return for The Deyes Family Trust and financial records of The Deyes Family Trust, including balance sheets, profit and loss statements;

    e)    The 2019/20 tax returns for Deyes Pty Ltd and the Deyes Pty Ltd (if separate financial statements have been completed);

    f)     Historical profit and loss statement and all BAS lodged for [Company 4] Pty Ltd.

13. Mr Deyes did not provide any of the requested information, preferring instead to seek a negotiated outcome. While the Tribunal can use this non-compliance as a reason to infer that there is something in these documents that Mr Deyes does not want the Tribunal to see, it did not make an adverse finding as the parents were genuinely engaging in seeking a mutually acceptable outcome. At the hearing, Ms Deyes said that she required child support of at least $20,000 per annum from Mr Deyes in addition to the other payments he makes for the benefit of the children, and that she was of the opinion that he could afford to pay it. In addition to providing for the needs of the children when they are in his care (44% of the time) Mr Deyes also pays the full cost of private school fees, amounting to around $20,000 per annum and private health insurance covering the children.

14. The Tribunal noted that the Agency’s file shows that Mr Deyes is not behind in his child support payments and has demonstrated a capacity to meet the assessment set by the objections officer. The Tribunal accepts that it is likely that Mr Deyes has been eroding his capital in order to make these payments. The evidence that it does have about his income and financial resources does not indicate that he is presently earning $245,000 per annum although his available resources are clearly much more than his taxable income.

15. Mr Deyes said that he has married again and that his wife is unable to work due to a medical condition. He said that he would be making an application seeking her to be added to the assessment as a dependent. She was working part-time until the pandemic. She and Mr Deyes married at about that same time. Mr Deyes said that her departure from her employment had been mutually agreed between herself and her employer, but that as of the hearing on 16 December 2020 she had been unable to secure an employment separation certificate. Ms Deyes said that Mr Deyes had always wanted her to be at home during their marriage and that in her opinion this is why his wife is not working, not that she is incapable.

16. Mr Deyes also said that he would like his wife’s son to be considered as a dependent but confirmed that she does receive child support from his father.

17. The Tribunal has no medical or employment evidence in relation to Mr Deyes’s spouse to consider this issue in this application. It will not do so. It notes that it is difficult for another adult to be found to be a dependent for child support purposes, and that in the absence of a legal duty to support his wife’s son (not just a moral one) it would not be possible for him to be a dependent of Mr Deyes.

18. After the second hearing, the parents each supplied the Tribunal with draft consent orders in relation to parenting. These go into parenting matters and care percentages which are not before the Tribunal and extend until December 2032. The Tribunal gave consideration to making a determination which reflects the consent orders, but determined that the orders proposed have too many variables in relation to potential changes of care and increases in child support over time to try and offset inflation and the changing needs of the children to be properly reflected in a decision by the Tribunal over such a long time period.

19. Ms Deyes indicated that the parents had agreed to some care changes from Term 1, 2025. The Tribunal considered whether it should make a decision extending until then, in the terms agreed by the parents, but decided that any unexpected care changes that may occur in the period of the determination would not be able to be reflected accurately, which may require the parents to go back through this process. It appears that there remains some residual dispute about the care arrangements and it would not be appropriate for a disagreement about a care percentage to result in such an invasive process.

20. The draft consent orders contain the following table setting out the child support to be paid by Mr Deyes:

21. The highlighted months are those in which one of the children turns 13 years of age, at which time the parents have agreed that the annual rate of child support payable for that child should increase by $2,000. Between February and November 2021, it is agreed that Mr Deyes should pay child support of $1,750 per month. Taking account of the additional expenses being incurred by Mr Deyes for the benefit of the children, the care arrangements, and the financial circumstances of the parties, this does seem a reasonable level of child support to be paid by Mr Deyes during that period. The parties have then agreed on various changes to this over time.

22. The Tribunal decided that the best and most practical decision it can make at this time is to set the rate of child support payable by Mr Deyes at $1,750 per month from 1 February 2021 to 30 November 2021. This has been agreed between the parents and is consistent with their relative circumstances. It is much higher than the rate of child support which would be required based on Mr Deyes’s taxable income. This gives the parents time to complete the negotiations of the consent orders without undue pressure and to have them considered by the court. The orders can then take effect to replace the administrative assessment for the life of the case.

23. Of course, if orders cannot be agreed upon and accepted by the court, the administrative assessment of child support will continue and either party can make a further application for departure.

24. The Tribunal is satisfied that it would be appropriate to make this change as long as it is otherwise proper to do so.

Issue 3 – Is it otherwise proper to depart from the administrative assessment?

1. The final step for the Tribunal is to determine whether it is “otherwise proper” to depart from the administrative assessment. Subsection 117(5) of the Assessment Act requires the Tribunal to take into consideration the nature of the duty of a parent to maintain a child, and the effect that any change to the assessment would have on the rate of any Centrelink benefits being received by the parties or the children.

2. The child support law recognises that each parent has a primary duty to maintain their children. In the case that they cannot, the government may assist in the form of family assistance payments. This decision will slightly increase the amount of family assistance Ms Deyes receives from the rate payable to her under the objection decision, but significantly reduce it from the rate which would have been payable under the administrative assessment. The Tribunal is satisfied that a departure from the assessment will better reflect the financial resources that have been available to both parents and ensure that the level of financial support provided by the parties for the children is determined according to their capacity to provide that support. It is therefore otherwise proper to depart from the administrative assessment in this matter. 

DECISION

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

a)The objection decision of 9 January 2020 will cease to take effect from 31 January 2021; and

b)The monthly rate of child support payable by Mr Deyes is to be set at $1,750 for the period 1 February 2021 to 30 November 2021.