Dudfield and Odell (Child support)

[2021] AATA 2744

Dudfield and Odell (Child support) [2021] AATA 2744 (21 May 2021)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2021/MC021021

APPLICANT:  Mr Dudfield

OTHER PARTIES:  Child Support Registrar

Ms Odell

TRIBUNAL:Member P Jensen

DECISION DATE:  21 May 2021

DECISION:

The decision under review is set aside and, in substitution, Mr Dudfield’s estimate of income of $0 from 26 October 2020 is accepted.

CATCHWORDS

CHILD SUPPORT – particulars of the administrative assessment – estimate of income – whether the estimate should have been refused – estimate of income accepted – 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

1. Mr Dudfield and Ms Odell are the parents of two children. A child support case was registered in 2004 with what is commonly called the Child Support Agency or CSA. The Child Support (Assessment) Act 1989 (“the Act”) provides for an administrative assessment of child support payable. It uses a formula which contains variables including the parents’ adjusted taxable incomes. The Act also allows a parent to provide an estimate of income and, if accepted, the administrative assessment is based on that estimate, subject to a possible reassessment once the parent’s adjusted taxable income has been assessed by the Australian Taxation Office.

2. On 29 July 2020, Mr Dudfield estimated that his adjusted taxable income for the remainder of the financial year would be $31,963 per annum. The CSA accepted that estimate. He was assessed to pay $2,008 per annum in child support. Neither parent objected to that decision.

3. On 26 October 2020, Mr Dudfield revoked his first estimate and provided a second estimate. He estimated that his adjusted taxable income for the remainder of the financial year would be $0. The CSA accepted Mr Dudfield’s second estimate, and he was assessed to pay $443 per annum in child support. Ms Odell objected to that decision. An objections officer allowed her objection and refused Mr Dudfield’s estimate. Mr Dudfield applied to the Tribunal for further review. I conducted a hearing on 21 May 2021. Mr Dudfield and Ms Odell gave sworn evidence by conference phone.

4. Mr Dudfield is employed by [Employer 1]. He suffered an injury and was consequently entitled to receive payments from the Transport Accident Commission (“TAC”). There is no dispute that he received taxable income after providing his second estimate of $0. However, the evidence suggests that the quantum of those payments has been relatively small.

5. Mr Dudfield provided payslips for the fortnights ending 14 October 2020 and 12 May 2021 which showed gross year-to-date earnings of $13,929.89 and $16,162.21 respectively. The difference is $2,232.32. At the hearing, Mr Dudfield stated that prior to providing his second estimate he had applied to take unpaid leave from his employment, and the subsequent payments were made in error. In any event, the taxable income that Mr Dudfield has received from his employer since providing his estimate on 26 October 2020 has been relatively small.

6. Mr Dudfield also provided a letter from TAC dated 25 February 2021 which stated that he started receiving “TAC payments” on 15 October 2020 and the payments ceased on 24 December 2020. An attached schedule showed that he had received “TAC payments” totalling $3,023.73 since 26 October 2020. He received some other payments from TAC which he said were reimbursements rather than taxable income, and I accept his evidence on that issue.

7. Mr Dudfield revoked his first estimate pursuant to section 62 of the Act. He provided his second estimate pursuant to section 62A of the Act. He was required to estimate his adjusted taxable income for the remainder of the financial year. Subsection 63AA(3) of the Act granted a discretion to refuse the second estimate if it was likely to be an under-estimate. On 15 October 2020, Mr Dudfield started receiving irregular TAC payments. On balance I find that, as at 26 October 2020, it was likely that Mr Dudfield’s adjusted taxable income for the remainder of 2020-21 would be more than $0. His estimate of $0 was an under-estimate. However, I accept that it was likely that his taxable income for the remainder of the financial year would be very low. The receipt of $2,232.32 and $3,023.73 over approximately seven months equates to approximately $9,000 per annum. The child support self-support amount was $25,575 per annum: see section 45 of the Act and page 74 of the hearing papers. During the hearing, Ms Odell confirmed that she was familiar with the concept of a self-support amount. If a parent’s adjusted taxable income is less than or equal to the self-support amount, they are considered to have a minimal capacity to pay child support. Ordinarily, Mr Dudfield would be required to pay $443 per annum in child support if his adjusted taxable income was $0, or $19,398 per annum, or any other rate of income that was less than or equal to $25,575 per annum. For those reasons, the preferable decision was to not refuse Mr Dudfield’s estimate of income of $0. As noted earlier, and as Ms Odell noted during the hearing, if Mr Dudfield’s 2020-21 adjusted taxable income is significantly higher than his estimates of income, the child support payable will be reassessed in due course.

DECISION

The decision under review is set aside and, in substitution, Mr Dudfield’s estimate of income of $0 from 26 October 2020 is accepted.