Diprose and Robson (Child support)

[2021] AATA 3356

Diprose and Robson (Child support) [2021] AATA 3356 (1 July 2021)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2021/SC021252

APPLICANT:  Ms Diprose

OTHER PARTIES:  Child Support Registrar

Mr Robson

TRIBUNAL:Member A Ducrou

DECISION DATE:  01 July 2021

DECISION:

The Tribunal sets aside the decision under review and, in substitution, decides that an adjusted taxable income of $51,151 for Mr Robson for the 2019/2020 financial year is to be applied to the administrative assessment of child support for the child support period commencing 1 November 2020.

CATCHWORDS

CHILD SUPPORT – particulars of the administrative assessment – where taxable income has not been assessed – whether the adjusted taxable income declared by the liable parent should be applied to the child support assessment – income declared by parent unlikely to be accurate - 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. Ms Diprose and Mr Robson are the separated parents of three children in respect of whom there is a child support assessment. Mr Robson is the parent liable to pay child support under the administrative assessment. This review is about the income applied for Mr Robson in the administrative assessment of child support for the children.

2. According to records maintained by Services Australia (the Agency), a child support assessment for the children was issued on 29 September 2020. The child support period in respect for which the child support assessment was issued is the period from 1 November 2020 to 31 January 2022. Amongst other particulars, the assessment was based on an adjusted taxable income (provisional income) for Mr Robson for the 2019/2020 financial year of $51,151.

3. On 20 November 2020 Mr Robson advised the Agency that his income for the 2019/2020 financial year was nil. A delegate of the Child Support Registrar (the Registrar) determined that Mr Robson’s adjusted taxable income for the 2019/2020 financial year was $0. On 20 November 2020 a decision was made to amend the particulars of the administrative assessment and an adjusted taxable income of $0 for the 2019/2020 financial year was recorded for Mr Robson and applied in the administrative assessment for child support for the children for the period from 1 November 2020 to 31 January 2022.

4. On 4 December 2020 Ms Diprose lodged an objection to the decision made on 20 November 2020. On 6 April 2021 an objections officer decided to disallow Ms Diprose’s objection.

5. Ms Diprose lodged an application for independent review of the objections officer’s decision with the Social Services and Child Support Division of the Administrative Appeals Tribunal (the tribunal). The application was lodged by telephone on 16 April 2021.

6. The tribunal conducted a hearing on 18 June 2021. Prior to the hearing the tribunal received a request from Mr Robson for permission for his accountant, [Mr A], to represent him at the hearing to make oral and written submissions. The request was made on the basis that Mr Robson has no confidence in his ability to understand fully and to communicate in the English language and that his state of mind is not what it should be to participate in the hearing. The request was sent to Ms Diprose who objected to it. The matter was referred to the presiding member who after considering the information provided by Mr Robson and Ms Diprose and after noting that the tribunal had made arrangements for an accredited interpreter to be engaged for the hearing decided to refuse permission for Mr Robson to be represented by [Mr A] at the hearing.

7. Ms Diprose and Mr Robson participated at the hearing by telephone via Microsoft Teams audio. They gave oral evidence on affirmation and made oral submissions. The Registrar did not participate in the hearing. The tribunal was assisted at the hearing by an interpreter in the Italian and English languages who participated in the hearing via Microsoft Teams audio. Mr Robson confirmed that he understood the interpreter. He did not raise any objection to the interpreter at the hearing. The tribunal had before it documents provided by the Registrar numbered 1 to 68 which were copied to Ms Diprose and Mr Robson prior to the hearing. Mr Robson provided documents to the tribunal (numbered B1 to B7) prior to the hearing. Copies of documents B1 to B7 were provided to Ms Diprose and the Registrar. At the hearing the tribunal invited Mr Robson to provide further information relevant to the review and the tribunal received documents from him after the hearing, being documents numbered B8 to B9. Copies of B8 and B9 were provided to Ms Diprose and to the Registrar. The tribunal made its decision on 1 July 2021.

ISSUES

1. The statutory provisions relevant to this review are contained in the Child Support (Assessment) Act 1989 (the Assessment Act).

2. The issue which arises in this case is:

   ·      Should an adjusted taxable income of $0 for Mr Robson for the 2019/2020 financial year be applied in the administrative assessment for child support for the children for the period from 1 November 2020 to 31 January 2022?

CONSIDERATION

Issue – Should an adjusted taxable income of $0 for Mr Robson for the 2019/2020 financial year be applied in the administrative assessment for child support for the children for the period from 1 November 2020 to 31 January 2022?

1. Subsection 58(1) of the Assessment Act permits the Registrar to determine the adjusted taxable income of a parent who is to be assessed in respect of the cost of a child in relation to a child support period if the parent’s taxable income for the last relevant year of income in relation to the period has not be assessed under an Income Tax Assessment Act or the Registrar is unable to ascertain whether or not the parent’s taxable income for that year has been so assessed.

2. Subsection 58(2) of the Assessment Act provides that the Registrar may make a determination of the parent’s adjusted taxable income for the last relevant year of income if the Registrar or the Commissioner of Taxation has information (either oral or written) or a document in their possession in circumstances where an amount is specified in that information or document as the parent’s adjusted taxable income for the last relevant year of income or that information or document allows the amount of the parent’s adjusted taxable income for the last relevant year of income to be worked out. Under paragraph 58(2)(c) of the Assessment Act the Registrar must be satisfied that the specified amount, or the amount so worked out, is a reasonable approximation of the parent’s adjustable taxable income for that year.

3. Under section 5 of the Assessment Act “last relevant year of income” in relation to a child support period means the last year of income that ended before the start of the period. “Year of income” is also defined in section 5 to mean a year of income (within the meaning of the Income Tax Assessment Act 1936) or an income year (within the meaning of the Income Tax Assessment Act 1997).

4. Based on the Agency’s records, the tribunal finds that the last relevant year of income for the child support period commencing on 1 November 2020 is the 2019/2020 financial year. Based on the oral and documentary evidence, the tribunal is satisfied that when the Registrar made the determination to amend the particulars of the assessment to apply an adjusted taxable income of $0 for Mr Robson for the 2019/2020 financial year, Mr Robson’s taxable income for the 2019/2020 financial year (being the last relevant year of income) had not been assessed under an Income Tax Assessment Act.

5. It is common ground that on 20 November 2020 Mr Robson lodged an Income Tax Declaration (ITD) for the 2019/2020 financial year, declaring a taxable income of $0. The Registrar made the determination of an adjusted taxable income of $0 for Mr Robson for the 2019/2020 financial year based on the ITD information.

6. Ms Diprose made her application for review on the basis that the determination of Mr Robson’s adjusted taxable income of $0 for the 2019/2020 financial year is not correct. Ms Diprose acknowledged that she did not have documentary or other proof substantiating that Mr Robson’s taxable income for 2019/2020 was not $0. However, she pointed to aspects of Mr Robson’s lifestyle indicating that his taxable income exceeded $0. Ms Diprose queried why Mr Robson was not able to work and why he had the need to engage an accountant if his taxable income was $0. Ms Diprose noted that the statutory declarations that Mr Robson provided about financial support he received from his family did not state how much financial support they provided.

7. Mr Robson told the tribunal that he does not work and he is not self-employed. He has not worked since prior to his separation from Ms Diprose. He was injured at work and received payments but they ceased several years ago and he has not received any income or income support payments since then. In 2014 when he and Ms Diprose divorced, he moved to his mother’s home where he has lived since. Mr Robson told the tribunal that his mother and his brother are his sole source of financial support. They provide for him financially on a day-to-day basis and share with him financially by providing his accommodation, food and other living expenses. He seldom goes out but when he does, they give him a small amount of money. The financial support that he receives from his family is not recorded. The way his family works is that they help each other and share everything. What they do for each other is done through generosity and they do not keep accounts .The tribunal invited Mr Robson to provide evidence demonstrating that his family members have the financial capacity to provide him with a level of financial support sufficient to meet all of his daily living expenses. Mr Robson declined to do so on the basis that this is private financial information. Mr Robson told the tribunal that he needed to engage an accountant because the Agency told him that he needed an ITD and he thought that the ITD needed to be prepared by an accountant.

8. Mr Robson’s documents include three statutory declarations. The statutory declarations are made by Mr Robson, Mr Robson’s brother and Mr Robson’s mother. They were all made on 5 March 2021 in the presence of [Mr A]. Mr Robson’s statutory declarations states that he resides with his mother and other family members (the address is identified) and goes on to state that since his separation and divorce he has relied on his mother and his brother for living expenses. The first part of the statutory declarations from Mr Robson’s mother and brother explain the family relationship between the author and Mr Robson. The remaining parts of the statutory declarations are written in identical terms, stating that Mr Robson lives with the author and other family members at the identified address and that the author assists Mr Robson “ … financially to the extent of providing assistance for his basic living costs.” The tribunal asked Mr Robson whether he or another person suggested the wording for the statutory declarations. Mr Robson told the tribunal that the wording had not been suggested.

9. The objections officer noted that Mr Robson’s taxation records had been searched but they contained no income information for the 2019/2020 financial year. According to Centrelink’s records, Mr Robson was not in receipt of income support payments during the 2019/2020 financial year. The Agency’s documents include a letter dated 11 February 2021 from [Company 1], signed by [Mr A]. The letter states that as Mr Robson’s accountant and tax agent, [Company 1] confirms that the information submitted to the Australian Taxation Office by [Company 1] for the 2019/2020 financial year is correct. The letter also states that Mr Robson is not employed, he does not receive any payments from Centrelink and his only substantial asset is the one-half share of the former matrimonial home where Ms Diprose and the children reside. The letter states further that Mr Robson holds one bank account with a current credit balance of $28.75, he does not own a credit card and relies on financial support from his family. The letter notes that [Company 1] is not aware of the nature of the funds provided by Mr Robson’s family, that is, if the funds that are provided are gifts or a loan. The letter from [Company 1] was provided to the Agency in response to Ms Diprose’s objection. It is evident from the Agency’s documents that the statutory declarations were also received by the Agency.

10. The oral evidence of Mr Robson, the letter from [Company 1] and the statutory declarations are consistent with Mr Robson being in receipt of financial assistance from his family for his living expenses. However, the information before the tribunal regarding the nature of the financial support that Mr Robson receives is limited and, the tribunal is not satisfied that it provides a satisfactory explanation of how Mr Robson is able to manage financially in the absence of further income and/or financial resources. The tribunal found that the evidence that Mr Robson gave at the hearing was vague and evasive. While the tribunal appreciates that information regarding the financial affairs of his family is private and sensitive, the tribunal finds it surprising, given the importance and relevance to this review of demonstrating that his family have a financial capacity commensurate with the ability to provide for his living expenses, that Mr Robson was not able to provide, at least general information about his family’s financial situation and resources.

11. Having regard to the oral and documentary evidence, the tribunal is not satisfied that the available evidence demonstrates that Mr Robson’s adjusted taxable income for the 2019/2020 financial year was likely to be $0 and that $0 is a reasonable approximation of Mr Robson’s adjusted taxable income for the 2019/2020 financial year. The tribunal, therefore, concludes that the requirements of subsection 58(2) of the Assessment Act are not satisfied. It follows that an adjusted taxable income of $0 for the 2019/2020 financial year for Mr Robson should not be recorded in the particulars of the assessment and should not be applied in the administrative assessment for child support for the children for the period from 1 November 2020 to 31 January 2022. Accordingly, the adjusted taxable income (provisional income) that should be recorded and applied for Mr Robson for the 2019/2020 financial year in the administrative assessment for the period from 1 November 2020 to 31 January 2022 is $51,151.

DECISION

The Tribunal sets aside the decision under review and, in substitution, decides that an adjusted taxable income of $51,151 for Mr Robson for the 2019/2020 financial year is to be applied to the administrative assessment of child support for the child support period commencing 1 November 2020.