Edgard and Edgard (Child support)

[2021] AATA 1757

Edgard and Edgard (Child support) [2021] AATA 1757 (10 March 2021)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2020/AC020104; 2020/AC020136

APPLICANT:  Mr Edgard

OTHER PARTIES:  Child Support Registrar

Ms Edgard

TRIBUNAL:Member S Letch

DECISION DATE:  10 March 2021

DECISION:

The decisions under review are affirmed.

CATCHWORDS

CHILD SUPPORT – particulars of the administrative assessment – estimate reconciliation – reconciliation accurate – decision affirmed

CHILD SUPPORT – particulars of the administrative assessment – whether the adjusted taxable income was applied accurately – 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. This matter concerns two decisions by the Child Support Agency (CSA):

   ·a decision dated 15 July 2020 to reconcile Mr Edgard’s estimated 2019/20 adjusted taxable income for the period 1 September 2019 to 30 June 2020

   ·a decision dated 15 July 2020 to apply to the child support assessment a 2019/20 “deemed income” for Ms Edgard with effect from 1 August 2020, later superseded by a decision on 18 July 2020, to apply Ms Edgard’s actual adjusted taxable income of $97,014.

2. Mr Edgard objected to both decisions; on 23 October 2020, an objections officer disallowed both of Mr Edgard’s objections.

3. Mr Edgard applied for further review by the Tribunal on 26 October 2020; he participated in the Tribunal’s hearing by conference telephone. Ms Edgard did not answer the Tribunal’s calls at, and around, the time of the scheduled hearing, which proceeded in her absence.

4. Mr Edgard raised some historical matters during the hearing; he suggested there had been a “change of assessment” made in 2019 which he suggested the CSA, and the Tribunal, had “completely ignored”. That is not correct; on 24 September 2020 (Tribunal reference 2019/AC017675), Member Webb made a decision reviewing an objection decision of 18 October 2019 in respect of a “change of assessment” application made by Mr Edgard in February 2019.

5. The Tribunal observes Mr Edgard made another application to the Tribunal on 6 January 2020 against a decision about an “overpayment” he identified as having been made on 6 January 2020 (2020/AC018166); that application was properly dismissed on 16 January 2020 as the identified decision was not one provided for in section 89 of the Child Support (Registration and Collection) Act 1988 giving the Tribunal jurisdiction to conduct a review. 

6. Mr Edgard says he is “being stung on two fronts”. When his income is higher – and the only reason that was so because he unexpectedly received a coronavirus supplement – he is assessed on the higher income; Ms Edgard’s income was $7,000 higher than the income applied by the CSA. He said he tried in 2019 to have the CSA record Ms Edgard’s income “correctly”; he said that “every time, they have disallowed it”. Mr Edgard raised a number of issues about the CSA and what he says is their defective administration; he said he is “being raped financially and that it is just as well I haven’t been raped as we know how the government likes to cover that up”.

The estimate reconciliation

1. The estimate regime in the child support formula arrangements effectively creates a “strict liability”. In the ordinary course, a child support assessment is based in a “rolling assessment” of the person’s most recently completed tax year; where there has been a reduction in income, and certain criteria are satisfied, a person is able to access and benefit from the estimate provisions under the formula arrangements.

2. However – and this is perhaps not always well understood by those who access the estimate regime despite the clear explanation in CSA correspondence – at the end of the financial year, actual adjusted taxable income is compared to the estimate. If actual income is higher, the higher sum is retrospectively applied to the estimate period: section 64 of the Child Support (Assessment) Act 1989. This applies regardless of the reasons adjusted taxable income is higher than estimated; there is no discretion to exclude particular amounts in the particular circumstances of a case. The provision operates strictly.

3. Mr Edgard raised no particular issue with the arithmetic applied by the CSA in the reconciliation process. Here, the Tribunal is satisfied the CSA has properly reconciled Mr Edgard’s estimated income. It is not a relevant factor that he could not have foreseen the supplement and a higher income come the end of the financial year.

4. As the Tribunal has reached the same conclusion as the objections officer, the “estimate reconciliation” decision will be affirmed.

Ms Edgard’s adjusted taxable income

1. It appeared to the Tribunal that Mr Edgard holds a fundamental misunderstanding of the way the child support formula works. In the ordinary course, as already observed, the income applied to the assessment (often in a range from around August to October of each year) is the most recently completed income tax year. Under those practical “rolling arrangements”, there is no “reconciliation process” where there was been an increase in income in a particular financial year; the rationale is that the increase will ultimately be captured under the formula when it is applied on that rolling basis after the end of the particular year. The exception to that under the formula arrangements is where a person decides they do not wish their most recently completed tax year to apply to the assessment, and elects to provide a reduced estimated income – as discussed earlier, this effectively creates a strict liability and activates a reconciliation process where actual income exceeds an estimate. [1]

   [1] Another exception is to seek a departure from the formula by a “change of assessment”; that is not relevant to the decision to apply Ms Edgard’s 2019/20 adjusted taxable income of $97,014 from 1 August 2020 as her income was being assessed under the formula arrangements.

2. The crux of Mr Edgard’s argument appears to be that Ms Edgard’s 2019/20 adjusted taxable income was $97,014; during that financial year (beginning on 1 July 2019), under the rolling formula arrangements, her income was assessed on prior income tax years, which were lower. He effectively seeks a similar “reconciliation process” to that applied to him under the estimate regime.

3. As already observed, the child support formula does not work the way Mr Edgard would prefer. The assessment of Ms Edgard’s adjusted taxable income has been applied to the formula in the way intended by child support law.

4. The Tribunal finds that, pursuant to section 58 of the Child Support (Assessment) Act 1989, the CSA has correctly applied Ms Edgard’s 2019/20 adjusted taxable income of $97,014 from 1 August 2020. There is no formula provision which would permit this income to be “backdated”.

5. As the Tribunal has also reached the same conclusion as the objections officer, this decision will also be affirmed.

DECISION

The decisions under review are affirmed.