Earle and Markovic (Child support)

[2020] AATA 5115

Earle and Markovic (Child support) [2020] AATA 5115 (24 September 2020)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2020/BC019448

APPLICANT:  Mr Earle

OTHER PARTIES:  Ms Markovic

Child Support Registrar

TRIBUNAL:Member P Jensen

DECISION DATE:  24 September 2020

DECISION:

The decision under review is affirmed.

CATCHWORDS

CHILD SUPPORT – particulars of the administrative assessment – estimate of income – whether the estimated income is less than the amount likely to be the actual income – estimate of income correctly refused - 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

1. Mr Earle and Ms Markovic are the parents of two children. A child support case was registered in 2006 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 the child support payable. It uses a formula which contains variables such as the parents’ adjusted taxable incomes. The Act also allows a parent to provide an estimate of their adjusted taxable income and, if accepted, that estimate will be used to calculate the amount of child support payable, subject to a possible reassessment once the parent’s adjusted taxable income has been assessed by the Australian Taxation Office.

2. On 13 March 2020, Mr Earle provided an estimate of income. The CSA decided to accept an estimate of income on the basis that Mr Earle had estimated that he had earned $50,000 during the 2019‑20 financial year to date, and he would earn an average of $400 per week during the remaining 114 days of the financial year, which equates to a sum of $6,514 and a rate of $20,857 per annum. The CSA decided to accept an estimate of income of $20,857 per annum with effect from 9 [sic] March 2020.

3. Ms Markovic objected to that decision. An objections officer allowed her objection and decided to refuse to accept Mr Earle’s estimate of income. Mr Earle applied to the Tribunal for further review. I heard the matter on 18 September 2020. Mr Earle and Ms Markovic gave sworn evidence by conference phone. After the hearing I directed Mr Earle to provide certain documentation and I arranged for the CSA to provide audio recordings of its conversations with Mr Earle on 9 March 2020 and 13 March 2020.

4. On Monday, 9 March 2020, Mr Earle contacted the CSA. I have listened to the audio recording of that conversation. The CSA explained that Mr Earle could lodge an estimate of income but he would need to provide certain information including his year-to-date earnings. He said he would phone again “on Friday” with the information that the CSA required.

5. On 13 March 2020, Mr Earle contacted the CSA again. I have listened to the audio recording of that conversation. Mr Earle explained that he was no longer receiving an income from his usual employer, [Employer 1], because he had become ill and he had taken all his leave entitlements. He said he had recently started casual employment. He said he had earned a total of $50,000 during the financial year to date.

6. The CSA employee asked Mr Earle to state his current income. He said it was about $850 net per week, or about $1,100 or $1,150 gross per week. He added that he might only earn that income for the next few weeks. The employee said that if his income changed at a later date, he could provide another estimate of income, “or you could do an average.” Later, the employee stated: “I’m dubious about putting $1,100.” The employee explained that if Mr Earle expected to earn a high income one week and no income the following week, he could average his weeks’ earnings for the purpose of providing an estimate of his future income. She asked: “What about if we bring it down to about $500 per week?” Mr Earle replied: “I’d go even lower.” He estimated an average of $400 per week, adding: “I think I’ll only get this current work for another week, or two at best.”

7. At the hearing, Mr Earle said he had not estimated that he would earn an average of $400 per week for the remainder of the financial year. He said he had estimated that he would earn $20,000 for the remainder of the financial year and the CSA employee had apparently misunderstood what he had said. I told him that I would obtain a copy of the audio tape of the conversation. He then added that “$400 per week had also been discussed.”

8. Estimates of income are lodged pursuant to section 60 of Act. An estimate of future income can be for a whole financial year or the remaining part of a financial year. Mr Earle’s estimate of future income was for the remaining part of 2019-20. He was therefore required to estimate his adjusted taxable income from the start of the financial year to the day before he lodged his estimate of income, i.e. the period from 1 July 2020 to 12 March 2020: paragraph 60(3)(b) of the Act. He was also required to estimate his adjusted taxable income for the remainder of the financial year, i.e. 13 March 2020 to 30 June 2020: paragraph 60(3)(a) of the Act.

9. Subsection 63AA(2) of the Act provides that an estimate of income may be refused if the year-to-date estimate is likely to be too high or the estimate of income for the remainder of the financial year is likely to be too low.

10. After the hearing, Mr Earle provided evidence of his year-to-date earnings to 12 March 2020. He provided a 2019-20 payment summary from [Employer 1]. He said that in about October 2019 he took the last of his leave entitlements and he ceased receiving any income from [Employer 1]. He received gross taxable payments of $31,342 and he made voluntary superannuation contributions of $1,890. He also provided payslips from [Employer 2], which was the employer with whom he started employment shortly before contacting the CSA in March 2020. His year-to-date earnings as at 12 March 2020 were $2,993. That evidence indicates that his total year-to-date earnings were $36,225. His estimate of $50,000 was likely to be too high, and given the magnitude of that discrepancy, the preferable decision was to refuse his estimate of income.

11. Mr Earle’s [Employer 2] payslip for the week ending 12 March 2020 shows earnings of $1,385 for that week. He provided payslips to the end of April 2020. He earned between $925 and $1,345 week to 30 April 2020. As at 12 June 2020, his year-to-date earnings from [Employer 2] were $17,639. It appears that he earned that income over about 15 weeks, which equates to average earnings during those 15 or so weeks of about $1,175 per week.

12. Mr Earle told the CSA that he believed he would “only get this current work for another week, or two at best”, but he has not provided any evidence that would have justified such a belief. The ultimate issue is not whether he did in fact continue to earn approximately $1,100 per week — what is likely does not always transpire — but the fact that he did continue to earn that income, coupled with the absence of any evidence that would have justified a belief that “I’ll only get this current work for another week, or two at best”, suggests that it was likely, at the time, that his estimate of his future income was too low, and the preferable decision was to refuse his estimate of income. That conclusion is reinforced by the fact that the CSA wrote to him on 13 March 2020 and enclosed a notice that informed him that he was required to notify it within 14 days “of any event or change in circumstances which will affect your estimate of adjusted taxable income”, and that failure to do so might result in “imprisonment for a period not exceeding 6 months.” Mr Earle did not contact the CSA and provide an amended estimate when he continued to earn more than twice his original estimate of income. For those reasons, the decision under review will be affirmed.

13. For the sake of completeness I note that the Act only allows the CSA, and in turn this Tribunal, to accept or refuse an estimate of income. There is no discretion to “accept” an estimate of income that should have been provided, but was not provided.

DECISION

The decision under review is affirmed.