Docherty and Lovatt (Child support)

[2018] AATA 4156

Docherty and Lovatt (Child support) [2018] AATA 4156 (2 October 2018)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2017/MC013031

APPLICANT:  Ms Docherty

OTHER PARTIES:  Child Support Registrar

Mr Lovatt

TRIBUNAL:Member R Anderson

DECISION DATE:  02 October 2018

DECISION:

The decision under review is affirmed.

CATCHWORDS
CHILD SUPPORT – departure determination – income, property, financial resources and earning capacity of the parents – necessary commitments for self-support – costs of education of the children – no ground for departure exists – refusal to make a departure determination – decision under review affirmed

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

REASONS FOR DECISION

BACKGROUND

1. Mr Lovatt and Ms Docherty are the parents of [Child 1] and [Child 2].  [Child 1] ceased to be a child of the assessment following completion of her secondary school education on 24 November 2017.  According to records of the Department of Human Services – Child Support (the Department), the child support assessment whereby Mr Lovatt was the parent responsible for paying child support to Ms Docherty was registered on 5 March 2015. The child support assessment whereby Ms Docherty is the parent responsible for paying child support to Mr Lovatt commenced on 1 July 2016.  The Department has been responsible for the collection of child support from Ms Docherty since 1 July 2016. 

2. At that time, the administrative assessment calculated the child support liability on the basis of the income recorded by each parent on their most recent income tax returns, as lodged with the Australian Taxation Office (ATO), being the 2014/2015 year.  This resulted in child support payable by Ms Docherty of $2,087 per annum.

3. It is open to either parent to lodge an application for a departure from the administrative assessment under Part 6A of the Child Support (Assessment) Act 1989 (the Act) if they consider the administrative assessment results in an unfair amount of child support payable by one parent. Ms Docherty lodged such an application on 4 August 2016 on the basis that the administrative assessment produced an unfair outcome due to the income, property and financial resources available to Mr Lovatt (Reason 8). 

4. On 9 December 2016, a delegate of the child support registrar found that Reason 8 was established. Consequently, the adjusted taxable income of Mr Lovatt was varied to $142,000 for the period 1 September 2016 to 28 February 2018.  On 28 February 2017, a decision was made by the Department to reduce the care attributed to Ms Docherty in respect of [Child 1] from 58% to 42% from 30 September 2016.  These decisions made little difference to the annual rate of child support payable by Ms Docherty, increasing to $2,579. A further increase to $3,962 per annum was as a result of Ms Docherty’s increased income as recorded in her 2015/2016 tax return.

5. Mr Lovatt lodged an objection to the decision of 9 December 2016 on 19 April 2017.  As he did not receive notification of the decision of 9 December 2016 until April 2017, he was granted an extension of time to object to the decision on 5 June 2017. In the meantime, an objections officer decided to allow the objection to the care decision of 28 February 2017 and attributed 50% care of [Child 1] to both Mr Lovatt and Ms Docherty from 5 September 2016. This decision resulted in a decrease in the annual rate of child support payable by Ms Docherty in respect of [Child 1] and [Child 2] to less than $2,000 per annum.

6. Subsequently, on 3 November 2017 an objections officer decided to allow Mr Lovatt’s objection to the 9 December 2016 decision, finding no ground established to warrant a departure from the administrative assessment.  This meant that the administrative assessment remained based on the income recorded by each parent on their most recent income tax returns, as lodged with the ATO. According to a letter from the Department dated 7 November 2017, the net result at that time was an overpayment of child support by Ms Docherty in the amount of $18.20.   

7. A further care decision was made on 17 November 2017, attributing 100% care of [Child 1] to Mr Lovatt from 7 August 2017, the date of effect being 10 September 2017.  It is clear that it is this decision that has had a major impact on Ms Docherty’s past child support liability.  The decision created significant arrears as her annual child support liability. in respect of [Child 1] and [Child 2] increased to over $12,000 in September 2017, reducing to over $7,000 following [Child 1] no longer being a child of the assessment on 24 November 2017. 

8. Ms Docherty then lodged an application to this tribunal on 4 December 2017, requesting an independent review of the Department’s decisions.  As no objection decision was in place in respect of the care decision, the tribunal was limited to consideration of the departure decision of 3 November 2017.  The tribunal notes that an objection decision has since been made whereby the care decision of 17 November 2017 was varied such that the change in care and the date of effect for child support purposes was 15 August 2017. Therefore, it is now open to Ms Docherty to seek a review at the AAT in respect of the decision to attribute 100% care of [Child 1] to Mr Lovatt from 15 August 2017.

9. In addition to Reason 8, Ms Docherty also raised what is commonly known as Reason 7.  That is, the assessment is unfair because her costs of self-support have reduced her capacity to provide financial support for [Child 1] and [Child 2]. A change of assessment application on the basis of Reason 7 was lodged with the Department by Ms Docherty on 20 November 2017 and subsequently refused.  Ms Docherty’s objection to have her application heard was granted on 22 February 2018.  The Department awaits the decision of this tribunal in respect of issues relating to Reason 7. 

10. The directions hearing was conducted by telephone with Mr Lovatt. Ms Docherty chose not to participate.   Mr Lovatt requested that the tribunal also consider that [Child 2] is being educated in the manner expected by the parents and that the cost significantly impacts on the overall costs of [Child 2] (commonly known as Reason 3) Following this hearing, directions were made to both parties requiring them to provide further information and documents.

11. The hearing was held on 5 October 2018. Both parties participated by conference telephone and gave oral evidence on affirmation. The tribunal considered information in the documents provided by the Department in accordance with the Administrative Appeals Tribunal Act 1975 numbered 1 to 588, documents lodged by Ms Docherty numbered A1 to A116, documents lodged by Mr Lovatt numbered B1 to B84, further information from the Department numbered C1 to C9 and information from Centrelink numbered D1 to D3.  All of the documents were provided to all parties prior to the hearing.

ISSUES

1. When calculation of the rate of child support is based on the usual administrative formula as discussed above, it also takes into account, relevantly, factors such as the number of children, the level of care provided, the costs of the children, the costs of self-support of each parent and the income of each parent. Section 98C of the Act allows for a decision maker to depart from the usual manner of calculating the rate of child support payable by one parent to the other parent for a child after considering the following issues:

   •      whether a ground exists to depart from the administrative assessment; and if so

   •      whether any proposed departure is fair to Mr Lovatt, Ms Docherty, [Child 1] and [Child 2]; and if so

   •      whether any proposed departure is fair to the public.

CONSIDERATION

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

1. The grounds for departure are set out in subsection 117(2) of the Act. Each ground is prefaced by the words ‘in the special circumstances of the case’. The meaning of this expression is not defined in the Act. However, the tribunal was guided by the courts, which have concluded that the expression relates to the facts peculiar to each case such that those facts are ‘out of the ordinary’ and set the case apart from the usual case (Gyselman and Gyselman (1992) FLC 92–279 (Gyselman) and Philippe and Philippe (1978) FLC 90–433).

Reason 8A and 8B – the earning capacity, income, property and financial resources of each parent

1. Subparagraph 117(2)(c)(ia) of the Act provides a ground for departure exists where, in the special circumstances of the case, use of the administrative assessment would result in an unfair level of child support payable by Ms Docherty because of the available income, property and financial resources available to either parent. The Act goes on to state in subsection 117(7A) that the decision maker must have regard to ‘the capacity of the parent to derive income, including any assets of, under the control of, or held for the benefit of the parent that do not produce, but are capable of producing, income’ and disregard ‘the income, earning capacity, property and financial resources of any person who does not have a duty to maintain the child’.

2. Ms Docherty struggled to remain focused on answering the relevant questions at hearing.  Despite numerous adjournments throughout, she was clearly anxious about the hearing and audibly distressed at the fact that she has little contact with her children.

3. According to Ms Docherty’s written submission she maintains that Mr Lovatt receives a significant benefit through the motor vehicle arrangement with his employer.  She further maintains that he received a payout from his previous employer, which has not been declared in his 2015/2016 tax return.  As such, in her view, the income recorded in Mr Lovatt’s annual income tax returns is not an accurate reflection of the actual financial resources available to him.

4. It was undisputed that Mr Lovatt ceased employment with [Company 1] in 2016 and commenced almost immediately in a similar role as [Occupation 1] with [Company 2].  The tribunal had before it copies of Mr Lovatt’s 2015/2016, 2016/2017 and 2017/2018 income tax returns.  Also before the tribunal were copies of Mr Lovatt’s PAYG summaries in respect of the 2015/2016, 2016/2017 and 2017/2018 years and his most recent payslips.  The 2015/2016 PAYG summary from [Company 1] is consistent with Mr Lovatt’s oral evidence that the only payout he received was unpaid annual leave, which is fully taxable and declared on his tax return.

5. Ms Docherty was insistent that the tribunal did not have sufficient evidence in respect of Mr Lovatt’s payout in the 2015/2016 year and demanded further investigation such as requesting an Employer Separation Certificate. As discussed with the parties, the role of the tribunal is not to conduct a forensic audit (Podmore & Pillai [2011] FMCAfam 952 and Frost and Frost [2011] FMCAfam 1311). In any event, the tribunal is well satisfied that the payout received by Mr Lovatt is appropriately recorded on his 2015/2016 PAYG summary and subsequently recorded as part of gross wages in his 2015/2016 tax return. Payouts such as redundancy are recorded on the PAYG summary, despite not being recorded on the income tax return. No such payment is evident. Furthermore, unless Mr Lovatt was making an application to Centrelink, there is no reason why his employer would provide an Employer Separation Certificate.

6. In respect of the motor vehicle, Mr Lovatt’s 2014 [motor vehicle] is held in his name, as was the corresponding finance [contract], taken out in 2015. Mr Lovatt gave oral evidence that he increased the monthly payments over recent times to enable him to eradicate the balloon payment due at expiry of the contract in May 2018. It was evident from the documents provided that Mr Lovatt received a taxable motor vehicle allowance from [Company 1], as he does from [Company 2].  As such, expenses he incurs in respect of business use of the [motor vehicle] are legitimately claimed as expenses against his taxable income. 

7. Mr Lovatt claims 80% of his motor vehicle expenses as business use. Given his position, the tribunal finds this to be reasonable.   The tribunal notes that Mr Lovatt has the benefit of a fuel card, which also meets his 20% private use outside of vacation time.  Other than the fuel card, there is clearly no pre-tax benefit provided to Mr Lovatt, unlike cases where novated leases are in place. While the tribunal acknowledges that such a benefit is not reflected on Mr Lovatt’s tax return, even if it were $2,000 per annum, the impact on the child support liability would be approximately $45 per annum.  This does not make the child support assessment unfair. Furthermore, his tax deductions are limited to only the depreciation and interest components of his monthly repayments. Consequently, Mr Lovatt is incurring greater costs in respect of his vehicle than he is able to claim.   In addition, any excess motor vehicle allowance payment is also fully taxable. The tribunal found the remaining expenses to be unremarkable for [Occupation 1].

8. Going forward, Mr Lovatt has no expectation of a substantial change to his current employment terms.  In regard to his motor vehicle, if he chooses to take the option of a company car, the reportable fringe benefit will be included in his tax return.  While not taxable, it is added back for child support purposes under the administrative assessment.  In the alternative, if he chooses to retain his current vehicle and receive a motor vehicle allowance, it will remain fully taxable and the business use proportion of related expenses will be tax deductible, as has been the case for the last few years. In both cases, the tribunal is satisfied that there is no significant undisclosed benefit that would not be accounted for in the administrative assessment.

9. According to his Statement of Financial Circumstances, Mr Lovatt is the sole owner of his residence, valued at $515,000.  He shares his residence with [Child 1] and [Child 2], his fiancé also visits on a regular basis.  Based on the statements provided, the corresponding fixed and variable mortgages at 31 March 2018 approximate $442,000.   Mr Lovatt’s additional assets consist of funds in the bank of $1,000, his [motor vehicle] valued at around $16,500 and household contents of $20,000.  As noted above, the finance on the [motor vehicle] is now fully paid.  Mr Lovatt has two credit cards, one which he pays in full each month, while the second is currently at around $10,500.  He told the tribunal that this has accumulated over time due to unforeseen expenses such as ducted heating repairs and veterinary costs, in addition to school fees.  Mr Lovatt submitted that he also owes his parents $41,000, resulting from two separate cash transfers made to assist him to purchase his home.  While the tribunal accepts his oral evidence that this money is to be repaid, legal enforcement of such a repayment is unlikely.  A similar scenario exists with Ms Docherty, which is discussed below and is not an uncommon event. Therefore, the tribunal calculates that Mr Lovatt currently holds a net asset base of approximately $100,000 and finds accordingly. 

10. The tribunal accepts the oral and written evidence of Mr Lovatt that he held a balance in his [superannuation] account at 6 September 2018 of $153,770. The tribunal is satisfied that Mr Lovatt has made no voluntary contributions to his superannuation account during the relevant period.

11. The tribunal is satisfied that the income recorded on Mr Lovatt’s tax returns is an accurate reflection of his available financial resources and finds that it does not result in the administrative assessment producing an unfair outcome.

12. The tribunal then turned to the financial circumstances of Ms Docherty. She has been employed as [Occupation 2] for over seven years with [two places]. In the period to 30 June 2018 Ms Docherty was employed on a full-time basis. Based on her tax returns, her taxable income reduced from $73,224 in the 2015/2016 year to $67,883 in the 2016/2017 year, of which $6,416 related to a fall in gross wages. According to her payslips in the 2017/2018 year, the annual gross wages of Ms Docherty are $75,000. It is possible that she received one more weekly wage payment in the 2017/2018 year equating to a further $1,442. Ms Docherty was unable to confirm such details at hearing. Regardless, the difference has little impact on the overall child support liability, nor does the increase in claimed expenses in the 2016/2017 year.

13. Mr Lovatt raised the issue of various businesses being operated by Ms Docherty.  Ms Docherty told the tribunal that together with her parents and some friends she is trying to establish a business of selling [items], having reactivated her sole trader ABN in May 2018.  She provided a profit and loss statement recording losses in excess of $14,000.  In response to a question from the tribunal, Ms Docherty stated that her parents have assisted her to meet these costs in a bid to try and encourage her to find a purpose through her difficult emotional circumstances.  The tribunal notes that any sole trader losses are required to be deferred and will therefore not impact on the child support assessment until such time as the business turns a profit.

14. According to her Statement of Financial Circumstances, completed on 13 December 2017, Ms Docherty shares equal ownership of her home with her parents, her one third value approximating $262,333.  However, Ms Docherty states that she is liable for a corresponding mortgage of $306,436.  Ms Docherty refused to answer questions in respect of the arrangement with her parents.  Her written submission on 13 December 2017 states that she pays 100% of the household bills as a means of slowly repaying a loan from her parents. In addition, Ms Docherty owns a [motor] vehicle valued at $25,000, purchased through a $20,000 personal bank loan.   Ms Docherty estimates her household contents at $10,000.

15. Based on the [two] credit card statements in early August 2018, Ms Docherty has outstanding balances on her credit cards of $5,050 and $4,612 respectively.  Furthermore, Ms Docherty has a family tax benefit debt of around $1,000 as a result of the latest care decisions and according to Departmental records her child support arrears currently exceed $7,000. This may or may not change, pending the outcome of a possible review of the objections officer’s care decision of 28 February 2018.

16. Based on a spread sheet produced by Ms Docherty she also owes her parents over $55,000 through use of their offset facility to meet unforeseen medical costs, legal fees, dental costs, credit cards and car-related costs.  The tribunal received no evidence as to what asset the offset facility is related to. However, as with Mr Lovatt, while the tribunal accepts that Ms Docherty is expected to repay her parents at some time in the future, no written agreement exists and legal enforcement of such a repayment is unlikely.  The tribunal calculates that Ms Docherty has a negative asset base and finds accordingly.

17. The tribunal accepts the written evidence of Ms Docherty that she held a balance in her Australian super account at 16 November 2017 of $141,480. The tribunal is satisfied that Ms Docherty has made no voluntary contributions to her superannuation account during the relevant period.

18. Going forward it is difficult to predict the financial position of Ms Docherty.  She told the tribunal that she has recently ceased employment with [both workplaces], as she was no longer able to cope emotionally.  There is no evidence before the tribunal of her ceasing employment.  In response to a question from the tribunal Ms Docherty stated that she has not yet sought assistance from Centrelink. Departmental records detail a discussion with Ms Docherty on 4 September 2019 in relation to an incomplete lodgement of an estimate of her income.   At this time she advised she had ceased employment three months earlier. No finalisation of an estimate was recorded in the documents before the tribunal and Ms Docherty was unable to confirm as such.  The Department noted the likelihood of a fixed annual rate of child support being applied to Ms Docherty, based on her circumstances at that time. 

1. Regardless of what has or has not occurred in respect of lodgement of an estimate or whether or not Ms Docherty returns to work in the near future, the tribunal is satisfied that the administrative assessment will produce a fair outcome.  If Ms Docherty returns to work, her income will be recorded on the annual income tax returns which are used as the basis for the administrative assessment.  In the alternative, if an estimate of $0 is applied, the administrative assessment allows for a reconciliation process to take place following lodgement of the relevant income tax return. 

2. After consideration of the income, property and financial resources of both parties, the tribunal is satisfied that there are no special circumstances to establish the ground for a departure under subparagraph 117(2)(c)(ia) of the Act.  The tribunal could not be satisfied that an administrative assessment based on the incomes recorded on the income tax returns of the parties as lodged with the ATO, or estimates accepted by the Department, would lead to an unjust and inequitable determination of the level of financial support to be provided by Ms Docherty.

3. As Mr Lovatt continues to work full-time in the same occupation, consideration of an earning capacity determination in accordance with sub-paragraph 117(2)(c)(ib) of the Act is not relevant. As there is no concrete evidence before the tribunal that Ms Docherty has permanently ceased employment, nor is it open to the tribunal to consider an earning capacity determination in respect of Ms Docherty at this time.

Reason 3 — Costs related to the child’s care, training or education in the manner expected by the child’s parents

1. Subparagraph 117(2)(b)(ii) of the Act provides a ground for departure exists where, in the special circumstances of the case, the costs of maintaining the child are significantly affected because the child is being cared for, educated or trained in the manner that was expected by his or her parents. 

2. In this case there is no dispute that both parents expected the children would have a private Catholic education. However, Ms Docherty told the tribunal that the expectation was always for [Child 2] to leave school after Year 10 and commence a trade.  In contrast, Mr Lovatt was adamant that while the expectation was for [Child 2] to go into a trade, it was always expected that he would complete Year 12.  Regardless of when [Child 2] completes his schooling, the tribunal is satisfied that it was the expectation of both parents that he obtains a private Catholic education.

3. It was also common ground that the tuition fees for both [Child 1] and [Child 2] have been shared equally by the parents until the end of the 2017 school year.  Ms Docherty gave oral evidence that due to her unforeseen expenses during the latter half of the 2017 year, as discussed later in these reasons for decision, she was unable to pay her full share of the 2017 fees in a timely manner.  At hearing she confirmed that the outstanding amount in March 2018 of $1,229 has since been paid.  Consequently, it is only appropriate to consider [Child 2’s] ongoing tuition fees, in respect of the 2018 and 2019 school years.

4. Evidence before the tribunal from [the school] records the tuition fees for Year 11 and Year 12 in the 2018 and 2019 years at $4,140 and $4,280 respectively.  Mr Lovatt requested consideration of the VET subject fees also.  As discussed at hearing, such costs relate to students completing those subjects whether or not they attend a private or public school.  The tribunal does not consider that ‘special circumstances’ exist due to a student studying a VET subject.  Therefore, the tribunal considers it appropriate to only consider the tuition fees in this case.

5. According to his Statement of Financial Circumstances, Mr Lovatt estimated the average weekly expenses in respect of [Child 1] and [Child 2] at $1,058. This includes discretionary costs in respect of gym membership, archery, entertainment, holidays, gifts, books and magazines of $230 per week.  It also included private education costs in respect of [Child 2] of $146 per week and a proportion of private health insurance premiums of $37, both of which the tribunal consider to be discretionary costs.  As Ms Docherty currently has little contact with [Child 1] or [Child 2], despite her clear desire to have contact with them, her costs are limited to the child support assessment.  Therefore, the tribunal calculates the ‘necessary’ costs of [Child 1] and [Child 2] incurred by Mr Lovatt to approximate $711 per week, or approximately $36,972 per annum. Mr Lovatt gave oral evidence that the household and general expenses are equally shared between [Child 1] and [Child 2], the remainder of the costs being largely for [Child 2]. Therefore, the tribunal calculates that approximately $366 per week of ‘necessary’ expenses, or $19,032 per annum, applies to [Child 2]. Mr Lovatt gave oral evidence that he has no entitlement to family tax benefit in respect of the children.

6. In considering the proper needs of the children, the tribunal may also have regard to published guidelines as to the needs and the costs of children as used in the administrative assessment (Eades and Cadell (SSAT appeal) [2009] FMCAfam 275). The tribunal turned to the Costs of Children Table. The administrative formula calculates the maximum cost for two children 13 years and over with a combined child support income of $145,970 (based on the combined total incomes of the parents in the vicinity of $194,000, as recorded on the parents’ 2016/2017 income tax returns), to approximate $37,000 per annum. This is closely aligned to Mr Lovatt’s estimated ‘necessary’ costs of the children. Based on similar incomes in the 2017/2018 year, the estimated cost for one child over 13 years approximates $24,400 per annum. This is somewhat higher than Mr Lovatt’s estimated ‘necessary’ costs for [Child 2].

1. The tribunal notes that even after adding 100% of the education costs to [Child 2’s] ‘necessary’ expenses ($4,140 + $19,032), the total remains at less than the amount estimated by the costs of children table. It is also noteworthy that [Child 2’s] tuition fees represent less than 5% of Mr Lovatt’s annual after-tax income and 35% of the estimated total discretionary costs in relation to [Child 2]. Consequently, the tribunal is satisfied that overall, the tuition fees in respect of [Child 2] do not significantly affect the costs of maintaining him and the ground for departure in subparagraph 117(2)(b)(ii) of the Act has not been established.

Reason 7 - the necessary expenses of self-support

1. Sub-subparagraph 117(2)(a)(iii)(A) of the Act provides a ground for departure exists where, in the special circumstances of the case, the capacity of either parent to provide financial support for the child is significantly reduced because of commitments of the parent necessary to enable the parent to support himself or herself.  This is commonly referred to as Reason 7.

2. The interpretation of this ground and in particular what are commitments necessary for self-support has been considered by the Full Family Court in Gyselman v Gyselman [1992] FLC 92–279 . The Court set out some important principles which the tribunal must take into consideration when determining whether the ground exists in this case:

• The term ‘commitments of the parent necessary to enable the parent to support’ herself means commitments which are reasonably needed for that purpose.

• The use of the word ‘necessary’ is not intended to produce an unrealistically low standard of living for the non-custodian parent.

• It is a matter of the balancing of the competing values, namely the obligation of the absent parent to continue to support the children with, on the other hand, the need for that parent to continue to maintain herself at a reasonable level.

• The obligation of the non-custodian to pay off debts may amount to a commitment necessary for self-support. Whether a particular obligation to pay off a debt should or should not be included within paragraph (a)(iii) depends upon the circumstances of the individual case. It is a matter of judgement and degree in the individual case, bearing in mind in particular that ultimately it is a matter of competing priorities.

1. Ms Docherty gave oral and written submissions in respect of the various unforeseen and urgent costs she incurred during 2017/2018 year.  She emphasised her desire to contribute to the costs of the children.  However, given her additional costs, she maintains that she simply cannot afford to pay child support at more than around $3,000 per annum.  She further submitted that she is only able to meet the most basic of her own needs.

2. Based on invoices provided to the tribunal, the unforeseen costs included over $8,000 in relation to surgery due to complications with her breast implants and urgent dental treatment, which to date has cost a little over $4,000 with a further $3,000 to $4,000 of crowns yet to be completed.  Ms Docherty gave oral evidence that she has recently been forced to cease her private health insurance and has an appointment at the public dental clinic at the [hospital] tomorrow.  There is no medical evidence before the tribunal to confirm that the surgery was urgent and ‘necessary’.  However, the tribunal accepts that the costs were incurred.  In addition, Ms Docherty stated that in September 2017 her car was in dire need of repair and she needed a reliable car for work.  As such, she committed to a loan requiring monthly payments of $483. Ms Docherty told the tribunal that she was working full-time in a permanent and secure position and had no expectation of the increase in child support liability that resulted from the care decision in November 2017 when she took on this expense. Ms Docherty also submitted that she was unable to continue her psychologist appointments at $40 out-of-pocket per consultation.

3. Ms Docherty provided a statement of expenses met by her parents, which in November 2017 totalled in excess of $55,000.  It was evident that it was Ms Docherty’s parents who paid for her surgery and her credit card (over $25,000) which included much of her dental costs, in addition to $7,000 towards her car expenses, plus house repairs, legal fees and $1,000 towards a car for [Child 1].  Ms Docherty submitted that her parents continue to assist her in meeting her financial commitments, in particular given her oral evidence that she is no longer working.

4. Regardless of whether or not the unforeseen costs were ‘necessary’ for Ms Docherty’s self-support, it is apparent that it is not Ms Docherty who has met the majority of her unforeseen medical and dental costs, it is her parents.  As discussed above, while the tribunal accepts the oral evidence of Ms Docherty that she must repay the debt to her parents, she also confirmed that there is no legal written agreement in this regard and legal enforcement is unlikely.  As such, it is difficult to establish that her commitment to repaying the loan from her parents should be prioritised over Ms Docherty’s child support obligations.

5. According to her Statement of Financial Circumstances, Ms Docherty estimated her average weekly expenses in mid-December 2017 to be $869, or $45,188 per annum.   This includes her car loan repayments of $111 per week and minimal discretionary expenses of $5 per week.  Additional costs included $28 for private health insurance premiums (since cancelled). As Ms Docherty was in receipt of a gross annual salary of $75,000, or after-tax income of around $60,000 during the time she was incurring these expenses, it is also difficult to be satisfied that she did not have the capacity to meet a reasonable amount of her additional medical and dental costs by prioritising them over paying 100% of the utility costs of the entire household.

6. On balance, the tribunal is not satisfied that the unforeseen costs that were met by Ms Docherty rather than her parents are such that they impact on her capacity to provide financial support for the children.  Accordingly, the tribunal finds that the ground under sub-subparagraph 117(2)(a)(iii)(A) of the Act is not met.

7. The tribunal acknowledges that Ms Docherty’s current circumstances appear to be significantly different.  However, again, the costs have already been met largely by her parents and the remaining dental work required will likely be completed through the public dental system.  Furthermore, if Ms Docherty does not return to work, she will likely be eligible for government assistance and her child support liability will also reduce significantly.  Without specific knowledge as to Ms Docherty’s financial position going forward, the tribunal is unable to consider it any further.

8. Section 3 of the Act makes it clear that the parents of a child have the primary duty to maintain the child, and that this duty has priority over all commitments of the parents other than commitments necessary for self-support (Ashcroft and Ashcroft (SSAT Appeal) [2008] FMCAfam 1250). Clearly Ms Docherty and Mr Lovatt have the primary duty to financially support the children. While the tribunal sympathises with Ms Docherty and acknowledges her struggle with the current situation in relation to her lack of contact with [Child 1] and [Child 2], Mr Lovatt has been meeting the majority of the costs of the children, both ‘necessary’ and ‘discretionary’, including the continued support of [Child 1] beyond 24 November 2017 when she ceased being a child of the assessment and including 100% of [Child 2’s] tuition fees in the 2018 year. He deserves a contribution from Ms Docherty in accordance with her capacity. She is obviously struggling to cope with her life in general at this time. Ms Docherty also expressed her desire to contribute to the costs of the children on numerous occasions throughout her written and oral submissions.

9. As the tribunal is not satisfied that a ground is established to depart from the administrative assessment of child support, there is no requirement for it to go on and consider issues two and three.

DECISION

The decision under review is affirmed.