Dutter and Axup (Child support)

[2020] AATA 1391

Dutter and Axup (Child support) [2020] AATA 1391 (26 February 2020)

DIVISION:   Social Services & Child Support Division

REVIEW NUMBER:  2019/MC018128

APPLICANT:  Mr Dutter

OTHER PARTIES:  Ms Axup

Child Support Registrar

TRIBUNAL:  Member P Sperling

DECISION DATE:  26 February 2020

DECISION

The tribunal affirms the decision under review.

CATCHWORDS

CHILD SUPPORT – particulars of the administrative assessment – determination of income – 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. This review is about what provisional adjusted taxable income should be used to assess Mr Dutter’s child support liability for the period 19 July 2018 to 1 April 2019.

2. Mr Dutter and Ms Axup are the parents of [Child 1] (the child). Currently, Ms Axup is the parent liable to pay child support. The application for child support was registered on 8 August 2019 by the Department of Human Services – Child Support (the Department) to commence from 8 August 2019 and is currently subject to Department collection of child support. Mr Dutter’s care percentage was determined to be 86% and Ms Axup’s care percentage was determined to be 14%.

3. On 27 August 2019, the Department decided to use a provisional adjusted taxable income of $18,211 for Ms Axup to assess child support for the period 8 August 2019 to 7 November 2020. Mr Dutter objected to the decision on 28 September 2019 and the objection was disallowed on 27 November 2019.

4. On 30 December 2019 Mr Dutter applied for a review of this decision by the Administrative Appeals Tribunal (the tribunal). On 26 February 2020 the tribunal conducted a telephone hearing. Mr Dutter and Ms Axup spoke to the tribunal and gave sworn evidence. The Department provided documents to the tribunal and the parties numbered 1 to 64.

CONSIDERATION

1. The law relevant to this review is contained in the Child Support (Assessment) Act 1989 (the Act).

2. The issue which arises in this case is whether the adjusted taxable income used for Ms Axup in the child support assessment from 8 August 2019 is correct.

3. During the hearing Mr Dutter stated that in 2018/19 Ms Axup was working and earning more than what the Department determined to be her provisional income. He said that during the period 7 July 2018 to 25 May 2019 he was living with her and was aware that she was working five days per week at a [workplace] and doing [Occupation 1] jobs for two days per week. He said he thought she was paid in cash.

4. The tribunal notes that this is consistent with Mr Dutter’s previous advice to the Department that he shared a dwelling with Ms Axup and shared care of the child during the 2018/19 financial year and, because of this, he had first-hand knowledge that Ms Axup was working more than 40 hours per week for cash payments in two different jobs: one as a [Occupation 2] in a [workplace] and the other as a [Occupation 1]. Mr Dutter told the tribunal that he is unable to get details or evidence of Ms Axup’s exact income but he said he did see “a lot of cash” at various times while they were living together in 2018/19.

5. In his application to the tribunal Mr Dutter also provided a series of text messages between himself and Ms Axup which he said showed that she was in paid employment during 2018/19 because the text references contain many references by Ms Axup to “work”.

10.During the hearing Ms Axup stated that in 2017 and 2018 she undertook a [Qualification 1] in [Discipline 1] and was on placement for her practical assessment as part of this study at a [workplace]. She said that, after this, she did further unpaid training and assisted in the same [workplace] on an unpaid basis because it was difficult to get paid employment and she liked working at this particular [workplace]. She stated that in 2018/19 she continued working and training at the [workplace], without being paid, until September 2019 when she commenced some paid hours of employment. From 30 December 2019 she said she was given full-time ongoing employment at the [workplace]. This is consistent with Ms Axup’s evidence to the Department during the Department’s review of this matter in October 2019 when Ms Axup advised that she was currently completing her [Qualification 2] and had just started to work 10 hours per week, earning $20.12 per hour and also attended the [workplace] for an additional five hours per day for unpaid experience to keep her skills current.

11.When asked during the hearing whether she had not lodged a tax return in 2018/19 Ms Axup initially told the tribunal that she did lodge a tax return for that year but, on further questioning, she acknowledged that she may not have done so and would rectify this as soon as possible. She then restated that the only income she earned in 2018/19 was $18,211 in Centrelink parenting payments and this is the only income she will be declaring to the Australian Taxation Office on her 2018/19 tax return.

12.When asked by the tribunal about Mr Dutter’s evidence that she was also earning cash doing [Occupation 2] jobs, Ms Axup said that she was never doing any [Occupation 2] jobs and that she only told Mr Dutter that she was because she didn’t want to spend time with him. Mr Dutter refuted this and said he had witnessed Ms Axup putting [equipment] into her car and wearing clothes suitable for a [Occupation 2] job when she was leaving the house on a regular basis.

13.During the hearing Mr Dutter also questioned how Ms Axup was able to afford to pay her living expenses in 2018/19 if her only income was $18,211 from Centrelink, particularly given that she was paying rent of $1,100 per month. Ms Axup said that she was living with someone else during this period and only paying board of $150 per week and not paying for any utility expenses. The tribunal noted that there were significant discrepancies between the evidence provided by the parties regarding where they were living and what their living expenses were at the time in question and that neither party provided any independent evidence of their circumstances at the time.

14.Section 58 of the Act states that the Department must make a new assessment of a parent’s income when a new child support period commences. On 27 August 2019 the Department created a new child support period from 8 August 2019 to 7 November 2020.

15.Ordinarily the Department will use the last relevant year of income, in this instance the 2018/19 income tax assessment for the parents. However, in Ms Axup’s case, there was no income tax assessment available for 2018/19 as Ms Axup had not lodged an income tax return for that income year.

16.If there is no income tax assessment for the last relevant year of income then the year prior to that year, in this case 2017/18, can be used by the Department. However in this case there was no income tax assessment available for 2017/18 either.

17.As there was no income tax assessment available for both 2018/19 and the previous year of 2017/18, the Department was unable to determine Ms Axup’s income for the 2017/18 or 2018/19 income years. Subsection 58(2) allows the Department to determine the income based on information it has in its possession, whether oral or written, if satisfied that the amount is a reasonable approximation of the parent’s income.

18.During the hearing the tribunal explained to Mr Dutter that it was not, in a general sense, an investigative body; it will generally decide its cases on the evidence made available to it by the Child Support Agency and the parties. It is common for parties to come to the tribunal, and indeed the Department, alleging undisclosed sources of income, often alleged to be in cash. Mr Dutter has acknowledged that he cannot provide direct evidence proving that Ms Axup earned income or received cash from employment during 2018/19 and what amount she earned or received.

19.Accordingly, in the absence of corroborating evidence to support Mr Dutter’s claims that Ms Axup earned more than $18,211 in 2018/19, his application cannot succeed as there is no direct evidence of any PAYG income or other “cash in hand income” being received by Ms Axup.

20.At the time of the decision, the Department had information about Centrelink payments made to Ms Axup for the 2018/19 financial year that consisted of her taxable benefit totalling $18,211. There is no independent evidence showing income earned by Ms Axup during 2018/19 other than evidence of the Centrelink payments she received. The tribunal therefore determines that, based on the information available, Ms Axup’s adjusted taxable income for the child support period from 8 August 2019 to 7 November 2020 should be based on the gross income of $18,211 as this is a reasonable approximation of her adjusted taxable income for 2018/19. As this is the same decision as that made by the objections officer, the tribunal affirms the decision under review.

DECISION

The tribunal affirms the decision under review.