Downer and Downer (Child support)

[2023] AATA 843

Downer and Downer (Child support) [2023] AATA 843 (20 February 2023)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2022/SC024885

APPLICANT:  Mr Downer

OTHER PARTIES:  Child Support Registrar

Ms Downer

REVIEW NUMBER:  2022/SC024956

APPLICANT:  Ms Downer

OTHER PARTIES:  Child Support Registrar

Mr Downer

TRIBUNAL:Member M Baulch

DECISION DATE:  20 February 2023

DECISION:

The decision made by an objections officer on 12 October 2022 to refuse to credit the amount of $6,514 as a non-agency payment is set aside. In substitution, the tribunal decided that the amount of $6,514 is to be credited pursuant to section 71C of the Child Support (Registration and Collection) Act 1988.

The decision made on 8 July 2022 to credit four payments of $375 each against Mr Downer’s enforceable maintenance liability is affirmed.

CATCHWORDS

CHILD SUPPORT – non-agency payment - prescribed payment for school fees - payment credited - decision under review set aside and substituted

CHILD SUPPORT – non-agency payment – orthodontic costs – payment correctly credited - decision under review affirmed

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

REASONS FOR DECISION

BACKGROUND

1. These applications for review are about whether or not payments made by Mr Downer in relation to school fees and orthodontic treatment for [Child 1] should be credited against Mr Downer’s liability to pay child support to Ms Downer.

2. Mr Downer and Ms Downer are the separated parents of [Child 1].  Since 9 February 2022 Mr Downer has been assessed as liable by Services Australia – Child Support (Child Support) to pay child support to Ms Downer, with Child Support collecting the liability from Mr Downer on Ms Downer’s behalf since 9 February 2022.

3. On 24 February 2022, Mr Downer requested that Child Support credit a payment of $6,514 paid to [Child 1’s] school against his child support liability.  On 12 March 2022, Child Support considered the matter and decided to credit $6,514 against Mr Downer’s liability to pay child support to Ms Downer.

4. On 8 July 2022, Mr Downer reported that he had made six payments of $375 for [Child 1’s] orthodontic treatment and requested that those amounts be credited against his liability to pay child support to Ms Downer.  On 8 July 2022, Child Support considered the matter and decided that four of the payments of $375 would be credited, but that two of the payments would not be credited.

5. Ms Downer objected to the decisions of 12 March 2022 and 8 July 2022.  On 12 October 2022, an objections officer decided to:

   ·      Allowed the objection to the decision of 12 March 2022 and decided that the payment of $6,514 made by Mr Downer to [Child 1’s] school would not be credited against Mr Downer’s child support liability.[1]

   ·      Disallowed the objection to the decision of 8 July 2022 to credit four payments of $375 against Mr Downer’s child support liability.[2]

   [1] 2022/SC024885

   [2] 2022/SC024956

6. Mr Downer and Ms Downer have now both applied to this tribunal seeking an independent review of Child Support’s decisions.

7. A hearing into the applications for review was held by the tribunal on 20 February 2023.  Mr Downer participated in the hearing by video conference and Ms Downer participated by telephone.  Mr Downer and Ms Downer both gave sworn evidence during the hearing.  A representative of the Child Support Registrar (the Registrar) did not participate in the hearing. 

8. The tribunal had before it relevant documents provided to it by Child Support pursuant to sections 37 and 38AA of the Administrative Appeals Tribunal Act 1975 (166 and 104 pages).  The tribunal also had regard to additional information provided by Mr Downer (labelled folios B1 to B8) and Ms Downer (labelled folios A1 to A10).

ISSUES

1. The legislative provisions relevant to these applications for review are contained within the Child Support (Registration and Collection) Act 1988 (the Act).

2. At the commencement of the hearing, Mr Downer advised me that he was not seeking to have the payments of $375 each made to [Health Service 1] on 13 January 2022 and 1 February 2022 credited against the enforceable maintenance liability.

3. Therefore, issues to be determined by me in this review application are whether or not:

   ·      A payment of $6,514 made by Mr Downer on 21 February 2022 to [School 1]; and

   ·      Four payments of $375 each paid by Mr Downer to [Health Service 1] on 1 March 2022, 1 April 2022, 1 May 2022 and 1 June 2022;

   should be credited towards Mr Downer’s enforceable maintenance liability.

CONSIDERATION

1. Where a parent has applied to Child Support for an assessment of child support, they may also apply to have that liability entered into the Register and be collected on their behalf from the liable parent by Child Support.  Once this occurs, the liability is then “enforceable” by Child Support against the liable parent and, pursuant to section 30 of the Act, the liability becomes a debt due to the Commonwealth owed by the liable parent.

2. Section 71C of the Act provides for payments of the kind prescribed by regulation to be credited against the amount payable under the enforceable liability for a payment period, up to a maximum of 30% of the amount payable. The payment must be a payment of the kind specified in regulation 19 of the Child Support (Registration and Collection) Regulations 2018 (paragraph 71C(1)(b) of the Act).  Regulation 19 states that specified payments are payments of the following kinds:

   ·      Child care costs for the child who is the subject of the enforceable maintenance liability;

   ·      Fees charged by a school or pre-school for that child;

   ·      Amounts payable for uniforms and books prescribed by a school or pre-school for that child;

   ·      Fees for essential medical and dental services for that child;

   ·      The payee’s share of amounts payable for rent or a security bond for the payee’s home;

   ·      The payee’s share of amounts payable for utilities, rates or body corporate charges for the payee’s home;

   ·      The payee’s share of repayments on a loan that financed the payee’s home; and

   ·      Costs to the payee of obtaining and running a motor vehicle, including repairs and standing costs.

   Paragraph 71C(1)(d) of the Act provides that the payment will not be credited if the liable parent has at least regular care of the child, or any of the children, to whom the child support assessment relates.  Subsection 4(1) of the Act defines regular care to have the meaning given by subsection 5(2) of the Child Support (Assessment) Act 1989 and means care of at least 14% but less than 35%.

3. Section 71D of the Act gives the Registrar, and therefore me, the discretion to refuse to credit payments under section 71C of the Act if satisfied that, in the circumstances of the particular case, the amount ought not to be credited even if the payment meets all the requirements discussed above.

Payment to [School 1]

1. A bank statement discloses that Mr Downer paid $6,514 to [School 1] on 21 February 2022.  A fee invoice issued by [School 1] on 6 February 2022 indicates that Mr Downer and Ms Downer were charged $13,028 for school fees for [Child 1] as the first instalment for 2022.  Mr Downer’s payment would appear to represent half of this amount.

2. I was satisfied, and so found, that Mr Downer paid $6,514 for school fees on 21 February 2022 and the payment was one of the types specified by regulation 19.

3. I was further satisfied that at the time the payment was made, Mr Downer was required to pay child support to Ms Downer under an enforceable maintenance liability and that Mr Downer has, at all material times, had less than 14% care of [Child 1]. 

4. The payment is thus one to which section 71C of the Act applies.

Payments to [Health Service 1]

1. A receipt shows that Mr Downer paid four payments of $375 each for orthodontic treatment for [Child 1] on 1 March 2022, 1 April 2022, 1 May 2022 and 1 June 2022. 

2. There is no dispute that the payments are for essential dental treatment.  I was therefore satisfied that the payments are of a type specified in regulation 19. 

3. I was further satisfied that at the time the payments were made, Mr Downer was required to pay child support to Ms Downer under an enforceable maintenance liability and that Mr Downer has, at all material times, had less than 14% care of [Child 1]. 

4. I therefore found that four payments of $375 each made on 1 March 2022, 1 April 2022, 1 May 2022 and 1 June 2022 are payments to which section 71C of the Act applies.

Discretion to refuse to credit an amount

1. I then considered section 71D of the Act, which provides the discretion to refuse to credit the payments to which section 71C of the Act applies. I considered Australian Government policy on when this discretion should be exercised and had regard to the Child Support Guide at 5.3.1, which states, in part:[3]

   [3] Guides to Social Policy Law, Child Support Guide, Department of Social Services, version 4.69, can be found at align="left">Discretion to refuse to credit an amount

   The Registrar can refuse to credit a non-agency payment claimed under CSRC Act sections 71, 71A or 71C if the Registrar is satisfied that, in the circumstances of the particular case, the amount ought not to be credited (CSRC Act section 71D).

   The Registrar may refuse to credit an amount in certain circumstances, including, but not limited to, the following:

   ·The payee's agreement to credit an amount paid to a third party or payment made as a transfer of property was obtained through coercion or harassment. (However, where the Registrar is informed about this after the payment has been credited, it will be necessary for the payee to object to the Registrar 's decision to credit the amount.)

   ·The payer is claiming a credit under CSRC Act section 71C for an expense they regularly meet that was taken into account in a change of assessment decision. For example, the Registrar or a court has reduced the annual rate (or refused to increase it) because the payer usually pays school fees, medical expenses for the child, mortgage or rent payments or any other prescribed payments.

   ·The payer is claiming credit under CSRC Act section 71C for an expense which they have undertaken to pay in addition to their liability as specified in an agreement between the parents (this does not have to be a child support agreement).

   ·The payer is claiming credit under CSRC Act section 71C for an expense that they are responsible to pay under the terms of a court order.

   ·The payer is claiming credit under CSRC Act section 71C for expenses for the child for which they are separately responsible. ….. If the payer claims credit for a payment for which they and the payee are jointly responsible, and the amount does not relate to the payee's home, the Registrar has no basis of apportioning the payment and must credit the full amount. However, if there is evidence that the parents have explicitly agreed about how much each party will pay, the Registrar will apportion responsibility according to their agreement.

   ·The payer is claiming a credit under CSRC Act section 71C for loan repayments and they have a history of regularly withdrawing funds from the loan account using its redraw facility.

   I am not bound by policy, such as that set out in the Child Support Guide.  However, in Drake v Minister for Immigration and Ethnic Affairs (1979) 2 ALD 60, the Full Federal Court held that a tribunal should take into account relevant government policy which is not inconsistent with the provisions or objects of the legislation. In this instance, I accepted that the policy is unobjectionable and, in the interests of consistency of decision-making under the Act, considered that the policy should be applied.

2. The evidence shows that [Child 1] was enrolled at [School 1] on 26 November 2019, which was before the parents separated.  The evidence at hearing was that [Child 1] commenced attending [School 1] in 2022, which was after the parents separated.  Ms Downer advised me that when [Child 1] was enrolled at [School 1], it was always her understanding that Mr Downer would be paying the school fees, as she did not have an income and could not afford to contribute. 

3. The evidence shows that Mr Downer signed an agreement to pay for orthodontic treatment on 26 March 2021, which was before the parents separated.  Treatment commenced prior to separation and continued after separation and is still progressing.  Ms Downer advised me that when treatment commenced, it was always her understanding that Mr Downer would be paying for the orthodontic treatment, as she did not have an income and could not afford to contribute. 

4. I noted that Ms Downer did not suggest that Mr Downer paid “his half” of the school fees on 21 February 2022, and that the other half of the fees that were unpaid were attributable to her.  I noted that in about May or June 2022, the parents entered into an agreement that the school fees would be paid from a controlled monies account held by a legal firm. 

5. I identified no evidence that, prior to this agreement, there was any agreement between Mr Downer and Ms Downer about how school fees and orthodontic costs would be met after separation had occurred.  There is no court order that deals with the costs of school fees or orthodontic treatment.  While I acknowledged the concerns expressed by Ms Downer about her capacity to be able to afford to contribute towards school fees and orthodontic treatment, that is not a factor that the policy detailed above suggests needs to be considered.  Ms Downer may like to consider contacting Child Support for advice on that matter as it relates to the child support liability.

6. I identified no basis to suggest that it is appropriate to exercise the discretion provided for in section 71D of the Act to refuse to credit any of the amounts considered against the enforceable maintenance liability.

7. I therefore decided that:

   ·      the payment of $6,514 made on 21 February 2022 for school fees,

   ·      the payment of $375 made on 1 March 2022 for orthodontic treatment,

   ·      the payment of $375 made on 1 April 2022 for orthodontic treatment,

   ·      the payment of $375 made on 1 May 2022 for orthodontic treatment, and

   ·      the payment of $375 made on 1 June 2022 for orthodontic treatment

   are all to be credited against Mr Downer’s liability to pay child support to Ms Downer pursuant to section 71C of the Act.

8. Therefore, and for these reasons, I set aside the decision made by an objections officer on 12 October 2022 to refuse to credit $6,514, but I affirmed the decision made on 8 July 2022 to credit four payments of $375 each.

DECISION

The decision made by an objections officer on 12 October 2022 to refuse to credit the amount of $6,514 as a non-agency payment is set aside. In substitution, the tribunal decided that the amount of $6,514 is to be credited pursuant to section 71C of the Child Support (Registration and Collection) Act 1988.

The decision made on 8 July 2022 to credit four payments of $375 each against Mr Downer’s enforceable maintenance liability is affirmed.