Elkins and Geffen (Child support)

[2020] AATA 1752

Elkins and Geffen (Child support) [2020] AATA 1752 (22 April 2020)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2019/PC017773

APPLICANT:  Mr Elkins

OTHER PARTIES:  Child Support Registrar

Ms Geffen

TRIBUNAL:Member M Martellotta

DECISION DATE:  22 April 2020

DECISION:

The decision under review is affirmed.

CATCHWORDS

CHILD SUPPORT – departure determination – income, property and financial resources of both parents - 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. Mr Elkins and Ms Geffen are the parents of a child[1] who is for the purposes of the administrative assessment of child support, a child subject to this review. Mr Elkins is the parent liable to pay child support.  Ms Geffen is recorded as having 100% care of the child.

   [1] [Name} born [in 2005]

2. On 29 March 2019 Mr Elkins lodged a change of assessment application with the Department of Human Services – Child Support (the Department). His application was on the grounds of Reason 8A. In response Ms Geffen cross applied based on Reasons 2 and 8A.

3. In terms of the grounds to establish 8A the parties are required to demonstrate that the parent’s income, property and financial resources make the administrative assessment unfair. To establish Reason 2 Ms Geffen is required to demonstrate that the costs of maintain the child are significantly affected by his special needs.

4. According to the Department, at the time of Mr Elkins’ change of assessment application, the relevant assessment in place was the result of a previous change of assessment decision[2] whereby:

   ·for the period 21 December 2018 to 31 December 2019 Mr Elkins’ adjusted taxable income (ATI) was varied to $120,222 and Ms Geffen was assessed on a 2017/18 derived income of $22,015. The assessment also was varied so as to increase the annual rate of child support by $2,000 as contribution to the costs of the child’s special needs.[3]

   [2] That decision was dated 31 January 2018

   [3] This resulted in an annual child support liability of $19,480

5. On 28 June 2019 the Department decided that a ground to depart from the administrative assessment had been established (8A) and varied the assessment in the following terms:

   ·     For the period 1 April 2019 to 31 January 2020 Mr Elkins’ ATI was varied to $142,531.

6. On objection lodged by Mr Elkins the Department decided to make a different determination dated 23 October 2019 so that :

   ·For the period 1 July 2019 to 31October 2020 Mr Elkins’ ATI was varied to $135,000.[4]

   [4] On objection Reason 2 was not established

7. Mr Elkins lodged an application seeking independent review by the tribunal. The tribunal convened a telephone directions hearing and issued directions.  On 9 April 2020 Mr Elkins and Ms Geffen participated in a hearing by conference telephone and each gave their evidence under affirmation.  Documents relevant to the issues to be determined had been provided by the Department (358 pages); Mr Elkins (A1–A52) and Ms Geffen (B1–B102).[5] The tribunal deferred making a decision so as to provide Mr Elkins the opportunity to provide some additional information, additional submissions  relating to the child’s special needs were received (A53-A62). Ms Geffen also provided additional information (B103-B109).

ISSUES

[5] At the tribunal’s request Ms [Geffen] provided some documents relating to her son’s NDIS allocation

1. The statutory provisions relevant to this review are contained in the Child Support (Assessment) Act 1989 (the Act).

2. Child support legislation is interpreted by the Department with the aid of the Child Support Guide (the Guide). The tribunal is not bound by law to apply the policy as set out in the Guide but provided the policy is consistent with the legislation, it is required to have regard to it and in the ordinary course follow it.[6]

   [6] See Re Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634

3. The issues for the tribunal to determine in this case are:

   ·     Does a ground for departure exist? if so,

   ·     Would it be just and equitable as regards the children, the liable parent, and the carer entitled to child support to depart from the administrative assessment of child support?

   ·     Is it otherwise proper to make a particular departure determination?

CONSIDERATION

1. The rate of child support payable by a liable parent is usually based on an administrative assessment calculated using the relevant formula under Part 5 of the Act. This involves the application of a statutory formula, which takes into account factors such as the number of children, the age of each child, the level of care provided and the income of each parent. The income used in the calculation has a number of components making up the adjusted taxable income, which is worked out using section 43 of the Act.  The general approach is that the Child Support Registrar (the Registrar) will utilise a parent’s ATI as assessed by the Australian Taxation Office (ATO) for the last relevant year of income.

2. Part 6A of the Act allows for a departure from an administrative assessment (a process commonly known as a change of assessment). The liable parent or a carer may apply to the Registrar for a determination to depart from the child support administrative assessment under Part 6A of the Act (section 98B).  Section 98C of the Act provides that the Registrar may make a determination to depart from the formula assessment and as noted, establishes a three step process.

3. The grounds for departure from the administrative assessment are set out in subsection 117(2) of the Act.  Only one ground is required in the special circumstances of the case to depart from the administrative assessment and thereby satisfy the requirements of subsection 117(2) of the Act.[7]  In this matter the tribunal first considered whether a ground for departure is established pursuant to Reason 8A.

   [7] The phrase “special circumstances of the case” is not defined in the Act. However the Family Court has held that “it is intended to emphasise that the facts of the case must establish something special or out of the ordinary” (Gyselman and Gyselman (1992) FLC92-279). Likewise, in Phillippe and Phillippe (1978) FLC 90-433 the Court held that “special circumstances” are “facts peculiar to the particular case which set it apart from other cases” 

4. Subparagraph 117(2)(c)(ia) of the Act provides a ground for departure exists where, in the special circumstances of the case, application of the provisions of the Act relating to the administrative assessment of child support would result in an unjust and inequitable determination of the level of financial support to be provided by the liable parent for the child because of the income, property and financial resources of either parent.

5. At hearing the following evidence is not in dispute and the tribunal finds that:

   a)    Mr Elkins is a qualified [occupation 1]. He earns his income from employment in this occupation and from rental income received from two investment properties.

   b)    Mr Elkins’ employment with [Business 1] was terminated [in] March 2019. Shortly after this he lodged a change of assessment application.  He obtained new employment with another company [Business 2] [in] May 2019 where his position is that of senior [occupation 1].  He has since taken up a new role with another company.

   c)    Ms Geffen operates a business through the structure of a company – [Business 3].  She is the trustee of a trust which is a registered charity; its purpose being to raise and meet the costs of an assistance dog for her son. She otherwise receives social security payments.

Mr Elkins

1. Mr Elkins told the tribunal that he agreed with the decision to vary his income to $135,000. He said that his main issue with the Department’s decision was its failure to properly consider Ms Geffen’s income from her business.

2. In terms of Mr Elkins’ financial circumstances he provided the following evidence:

   a)He has been an [occupation 1] for 25 years.  He ceased employment with [Business 2] [in] March 2020 in order to take up a new contract which offered better conditions.

   b)He is now on a six month contract which will involve fly in and fly out.  He is currently working from home five days a week.  When the fly in fly out component commences in May 2020, he will work [number] days a month.

   c)Under his current conditions he is paid $1000 gross per day.  This means that he is currently earning $5,000 per week and this will be the case until the end of May 2020 when he will earn $16,000 per month to the end of the six-month contract.

   d)He is employed through a labour hire company and they pay him his salary on a PAYE basis. Whatever income he receives in the current financial year will be reflected in his 2019/20 personal tax return.

   e)He rents out two properties.  One is a granny flat which is situated behind what was his principal place of residence in South Australia. The second property he rents out is also located in South Australia.

   f)The principal home is currently vacant as he has moved to [another city] and is renting a property.  He does not rent out the vacant property as it contains furniture and personal items and he prefers to keep it available for when he and the family return to South Australia.

   g)He does not charge his tenants who live in the granny flat utilities as he pays for these himself.  He has an arrangement whereby they can use some of the amenities of the vacant front property and they provide some maintenance of the garden in his absence.

   h)In December 2019 he purchased a [Car 1] which he paid for in full ($50,000) he drew down on the equity of his home to make that purchase.

   i)Mr Elkins confirmed that he has been able to pay down a significant proportion of his mortgage in recent years due to his employment and management of his income.

3. According to Mr Elkins’ 2017/18 income tax return he had adjusted taxable income of $112,013. His 2018/19 tax return reports an adjusted taxable income of $137,985.

Ms Geffen

1. Ms Geffen did not make any specific submissions in relation to Mr Elkins’ income, financial resources or property other than to state that she has been told that he has rented out his former principal place of residence. In terms of her own financial circumstances she provided the following evidence:

   a)She is a full-time carer for their son.  She receives carer payment and carer allowance. This is her main source of income.

   b)She otherwise operates a [business] through a private company [Business 3].  She is the sole director and shareholder of that company.

   c)She operates the business by undertaking consultations in rooms that she rents as required.  She perhaps operates about 5 hours a month seeing clients and dispensing products.

   d)She established a charity and private trust in order to collect donations to pay for her son’s assistance dog.

2. In response to questions asked by the tribunal Ms Geffen stated that certain expenses claimed in the company financial statements as business deductions related to personal expenses.

3. The 2018/19 profit and loss statement for the company included an amount of $15,269 described as ‘maintenance.’ Ms Geffen stated that this related to part cost of repairs to her home. She said that her house needed plumbing and roof repairs. She believed that as she operates a home office then this was a legitimate expense to put through as a business deduction. In this regard the tribunal notes that there is also a line item for home office deductions of $7,499.

4. Ms Geffen otherwise agreed that other business claimed expenses related to her personal use.  For example, motor vehicle expenses of $2,223 related to her personal use of a car. The tribunal also noted expenses for electricity and a line item for rates. The quantum of these amounts or deductions appears inconsistent with her evidence that she only occasionally subleased rooms on a ‘needs basis’ and that she has very limited clientele.

5. Financial information provided by Ms Geffen was incomplete.  Whilst the tribunal sought disclosure of relevant company tax returns and financial statements, only partial extracts were provided.  This made it difficult to obtain a clear view of her circumstances.

6. Financial statements provided by Ms Geffen appear to relate to the private trust ‘[named]’.  This was apparently established as part of a charity established to meet certain costs relating to her son’s special needs.  The trust derives income from donations and gifts and funds contributed by Ms Geffen. Expenses include flights, accommodation, vet bills, meals which Ms Geffen said were necessary to maintain an assistance dog.  The trust documents report a loss of $5,132 in the year end June 2018.

Conclusions

1. The question for the tribunal is whether a ground for departure is established.  As noted at the time of Mr Elkins’ application for departure the Department was utilising a previous change of assessment amount of $120,222 for Mr Elkins and a derived 2017/18 figure of $22,015 for Ms Geffen.

2. Mr Elkins’ 2017/18 assessed ATI was $112, 013. His employment situation changed in the 2018/19 financial year in that one employment ceased and another commenced.  Mr Elkins’ 2018/19 assessed ATI of $137,985 reflects income inclusive of rental, termination payments and deductions. As noted, Mr Elkins says that he agrees that the amount of $135,000 is appropriate as it more accurately reflects his income for the relevant child support period. The tribunal notes that according to the Department it will utilise his 2018/19 ATO assessment as from 1 November 2020.

3. Ms Geffen’s financial arrangements are not so clear.  It is apparent that her main source of income is payments she receives in the form of carer payment and carer allowance.  However, she also operates a business and it is apparent from the documents provided that she has claimed as business deductions, expenses which are for her personal benefit.

4. As noted in the context of the 2018/19 financial year whilst the company reports a loss, a large proportion of this is due to Ms Geffen deducting the cost of roof repairs to her home (an amount which was claimed in addition to her home office expenses).

5. It is a long established principle of law that when a person conducts their business or profession through an intermediary such as a company it is proper to lift the corporate veil to determine the value of the entity to that person.[8] These principles have been affirmed by the Family Court,[9] with regard to the determination of a parent’s income for child support purposes and in these cases, effective control of the businesses was found to rest with the person conducting the business and generating the income and not the intermediary.

   [8] See in particular Stein (1986) FLC 91-779 and Ashton (1986) FLC 91-777. In Ashton, the Court stated that “this Court is not bound by formalities designed to obtain advantages and protection for the husband who stands in reality in the position of the owner.”

   [9] In cases such as Carey (1994) FLC 92-489

6. As noted in the Guide:[10]

   A parent may be involved in a business as a sole trader in the person's name or under a registered business name. A parent who operates a business as a sole trader is personally liable for all business debts and entitled to all business profits, is required to declare all income from the business in their personal tax return, and is responsible for any tax payable on the business income. A sole trader may or may not pay themselves a wage from the business. Alternatively, they may take drawings whereby goods or money are withdrawn from the business profit for personal purposes.

   A business may be able to deduct certain expenses from income for tax purposes and as a result legitimately may have a reduced income or may even run at a loss. These deductible expenses can result in a child support assessment that does not take into account the full financial resources available to the parent. In these cases, assessing child support on the basis of taxable income can result in an unjust and inequitable level of child support.

   Expenses partly for business purposes & partly for private purposes

   Where an expense is partly business and partly private the expenses must be apportioned for taxation purposes. Parents who are self-employed or who operate a business might claim expenses that may otherwise be considered private as a legitimate income tax deduction. Examples include the fixed-costs component of telephone expenses such as the rental and connection fees, home office expenses or motor vehicle expenses. These deductions are generally not available to parents who derive income solely from salary and wages.

   [10] 2.6.14

7. According to Department records Ms Geffen in 2017/18 had an ATO assessed ATI of $22,015 and in 2018/19 an ATO assessed ATI of $22,520. However, in Ms Geffen’s case there is evidence that she has derived a personal benefit from expenses claimed as deductions by her company. Utilising her ATO assessed ATI in the assessment would not therefore reflect the income and financial resources available to her.

8. At a minimum there is evidence that Ms Geffen has derived a personal benefit from business claimed expenses for her motor car, electricity and more recently home repairs. On balance and on the basis of the provided information, the tribunal concluded that in 2017/18 it is reasonable to conclude that Ms Geffen derived a personal benefit of $10,000[11] whilst in 2018/19 (based on the profit and loss statement) she derived a personal benefit of about $17,000.Including these amounts to the ATI utilised by the Department would result in Ms Geffen having a 2017/18 income of $32,015 and $39,520 in 2018/19.

   [11] As noted the profit and loss statement for 2018/19 show deductions for items such as motor vehicle, electricity and home repairs which given the level of income appear incongruent

9. In this matter, utilising a 2017/18 income of $135,000 for Mr Elkins and a 2017/18  income of $32,015 for Ms Geffen results in an annual child support liability of $20,725 or $397 per week. The assessment in place at the time utilising the income of $120,222 and $22,015 resulted in an annual liability of $19,480 or $373 week.  This is a difference of only $20. That assessment however concluded on 31 December 2019 at which point the formula assessment would revert to utilising Mr Elkins’ 2017/18 ATO assessed ATI of $112, 013 utilising that figure would result in a further decrease in Mr Elkins’ liability to $342 per week a difference of about $50 per week ($17,869 per annum).

10. On balance the tribunal is satisfied that this change in the particular circumstances of this case establishes that a ground of departure exists because in the special circumstances of the case, application of the provisions of the Act relating to the administrative assessment of child support would result in an unjust and inequitable determination of the level of financial support to be provided by the liable parent for the children.

Issue 2 – Is it just and equitable to make a particular departure determination?

1. As the tribunal is satisfied that there is a ground to depart from the assessment of child support as set out above, the next step for the tribunal is to consider whether it is just and equitable as regards the children and the parental parties to make a particular determination in accordance with sub-subparagraph 98C(1)(b)(ii)(A) of the Act.  This in turn requires the tribunal to consider the matters set out in subsection 117(4) of the Act: which is discussed in the following paragraphs.[12]

   [12] The tribunal notes the Federal Magistrates Court case of Tyagi & Meares [2008] FMCAfam 886 which directs that in considering the matters set out in subsection 117(4) the section need not be ‘slavishly followed, each of the relevant factors listed in … should be considered’

Proper needs of the children

1. In determining the proper needs of the children it is necessary to have regard at a broad level to the manner in which the children are being, and in which the parents expect the children to be, cared for, educated or trained, and also any other needs of the children.  This was a major point of contention raised by the parties at hearing.

2. Ms Geffen says that their son has special needs arising from his diagnosis of [condition 1] and that she incurs out of pocket expenses not covered by his NDIS plan and her private health insurance.  Mr Elkins stated that the mother’s claims of special needs were greatly exaggerated and that whilst it was correct that their son [has condition 1], he described this as ‘high functioning’ and that many of the costs and treatments claimed by the mother were simply not required. Mr Elkins referred to school reports he submitted which show that [Child 1] is performing well academically.

3. The evidence presented by the mother, included medical reports or statements which confirm that [Child 1] has been diagnosed with [condition 1]. [13]

   [13] Letters of [Practitioner A] consultant paediatrician general medicine dated4 December 2017 and 11 November 2019. Letter of [Doctor A] dated 13 June 2019

4. The medical evidence  provided by the mother notes that as a result of his condition the child experiences difficulties with social skills and sleeping.  One report notes that the child finds ‘social skills very challenging and this is quite anxiety provoking for him…’[14]  and  that [Child 1] would benefit from extra support in the area of social skills such as engaging with activities such as [specified sports] or scouts. Another report notes the benefits in [Child 1] receiving ongoing occupational therapy, speech therapy, psychological and additional education support and that he also relies upon his dog for comfort, company and friendship.[15]

   [14] B59

   [15] B62

5. A further report prepared by a paediatric physiotherapy service[16] notes that the therapist had been providing services to the child for several years and that [Child 1] would benefit from ongoing treatment and support.

   [16] B65

6. The medical reports and letters appear to have been prepared specifically in support of funding applications to the NDIS. Ms Geffen stated that she had successfully appealed an initial NDIS grant decision and was able to obtain an increase in funding of support as a result.

7. Mr Elkins stated that little weight should be attached to this evidence.  It was his view that the authors had been unduly influenced by the mother and that their opinions over exaggerated the child’s condition and required supports.  Post hearing Mr Elkins provided a further medical report from [Practitioner A] dated 11 November 2019.  That report noted that [Child 1’s] general health was good and that issues with his sleeping had improved. The child was still experiencing stress in relation to social interactions and was on the waitlist for relevant social skill programs and that he ‘clearly has toe walking, although relatively subtle.’[17]

   [17] A60

8. The tribunal is satisfied that the child has special needs arising from his medical diagnosis.[18] The question however arises whether the tribunal is satisfied that the special needs involve costs that would otherwise be expected to be met from the assessment of child support. In this regard there also needs to be evidence that Ms Geffen is incurring relevant out of pocket expenses that make it appropriate to amend the assessment.

   [18] Special needs can be because of a physical, mental or learning disability or because of a special talent or ability of the child (Lightfoot v Hampson [1996] FLC 92-663)

9. It was difficult for the tribunal to obtain a clear understanding of Ms Geffen’s evidence in relation to quantifying out of pocket expenses that she had incurred and also which were directly related to [Child 1’s] special needs. She provided a number of receipts some of which clearly indicate that payments are being met through the child’s NDIS plan.  There were also receipts referring to [sport] lessons, purchase of medicines, enrolment of the child to attend a youth group event, as well as receipts for items such as bed socks, shoelaces and [other sport] lessons.  Ms Geffen was not able to provide a summary of what expenses she incurs which were not met by the increased NDIS funding allocated to [Child 1] or from her private health insurance.

10. Post hearing Ms Geffen (at the tribunal’s request)[19] provided some screen shots of her sons NDIS funding portal which shows that her son has been allocated a total support package of $51,715 to cover the areas of:

    ·Core supports – self managed

    ·Core supports – transport

    ·Capacity building – self managed (improved daily living)

    ·Capital supports – self managed (assistive technology); (orthoses) and home modifications

    [19] The mother at hearing initially resisted questions asking that she identify the amounts received through NDIS as she did not want the father to be privy to that information

11. The NDIS plan notes that it is due for review in August 2020 but at hearing Ms Geffen stated that due to the Covid-19 pandemic the plans were being extended beyond that date.  The tribunal referred to the NDIS website in order to obtain a clearer understanding of what is covered by the terminology of core supports, capacity building and capital supports[20]:

    a)Core supports include assistance with daily activities, purchase of consumables of everyday items, purchase of social , community and civic participation (such as a support worker) and transport costs.

    b)Capacity building includes assistance to meet the costs of improving living arrangements, to purchase development and training to increase skills to allow for increased social, civic and community participation, to assist in developing positive behaviours and interactions with others, exercise and diet to improve health and wellbeing, assistance with improved learning, and improved daily living (such as assessments, training or therapy).

    c)Capital supports includes purchase of assisted technologies and home modifications.

    [20] >

    As noted elsewhere in this decision, Ms Geffen has also established a charitable trust to meet the costs of the assistance dog. However, she says that those costs are also not fully met. The tribunal was not satisfied on the presented evidence that the dog is a relevant special need cost that is specific to the child’s diagnosis.

12. It appears to the tribunal that the costs  associated with the special needs identified by Ms Geffen are covered by the items identified in the child’s NDIS plan. As noted at hearing  Ms Geffen was unable to explain  her out of pocket expenses that are not met by the NDIS plan.  In this regard, the tribunal noted that in her Statement of Financial Circumstances Ms Geffen has identified weekly costs for various social and physical activities for the child, including  scouts, [sports] and the assistance dog.  These total $254 per week or $13,208 per year.  She also estimates about $350 per week  for other expenses such as occupational therapy, speech therapy (a total of about $18,200 per annum). Accepting that some of these relate to the  child’s special needs the amounts annual costs as identified by the mother come to a  total  of $31,408 which is  below the amounts allocated in the NDIS plan.

13. The tribunal is satisfied and finds that the child has been allocated $51,715 to meet those special needs through his NDIS plan.  The tribunal is not satisfied on the presented evidence however that there are any specified out of pocket expenses being met by the mother that are not met by either the NDIS plan or through her private health insurance.  For this reason, the tribunal concludes that there is no basis for any adjustment pursuant to this consideration.

Income, earning capacity, property and financial resources of the children

1. In having regard to the income, earning capacity, property and financial resources of the child the tribunal must disregard any entitlement of the child or the carer entitled to child support to an income tested pension, allowance or benefit (subparagraph 117(7)(b)(ii) of the Act).

2. There was no evidence presented to the tribunal that the child has any income or unused earning capacity that needs to be taken into account in the child support assessment and as such the tribunal concludes that there is no basis for any adjustment pursuant to this consideration.

Other party receiving money, goods and property for the benefit of the children

1. Neither party made submissions in this regard. As such the tribunal concludes there is no basis for any adjustment pursuant to this consideration.

The income, property and financial resources of each parent who is a party to the proceeding

1. In this matter the tribunal has concluded that in 2017/18 Mr Elkins had income of $135,000 and Ms Geffen had income and financial resources of $32,015.

2. Mr Elkins’ Statement of Financial Circumstances states that he owns two properties with a combined value of about $700,000 subject to mortgages of about $280,000. He has superannuation he values at $50,000. Whilst not disclosed in the statement, at hearing he confirmed that he has used the equity in the properties to purchase a $50,000 [Car 1] in late 2019.

3. Mr Elkins’ list of average weekly expenditure includes significant amounts being utility costs – as the tribunal understands his evidence these amounts are high because he covers the utility expenses incurred by the tenants who lease the property behind one of his houses. He also includes significant mortgage costs which include costs associated with the rental properties for which he can claim loan costs as a relevant deduction. Taking into account relevant adjustments the tribunal concluded that Mr Elkins’ personal average weekly expenses are about $1,000 per week.[21]

   [21] He suggests $1,850

4. Ms Geffen Statement of Financial Circumstances states that she owns a property valued about $320,000 subject to a mortgage of $179,000. She identifies several credit card and other loans totalling about $26,000. From her evidence, the tribunal understands that these are loans she took out to undertake house repairs on her property (which she has also in part claimed as a business expense). In terms of her weekly household expenditure (excluding amounts that she has separately identified as relating to the child’s special needs) the tribunal concludes that this amount comes to about $1,100 per week.

Earning capacity

1. A ground for departure exists if, in the special circumstances of the case, the administrative assessment of child support would result in an unjust and inequitable determination of the level of financial support to be provided by the liable parent for the child because of the earning capacity of either parent (subparagraph 117(2)(c)(ib)).  No submissions were made in this regard.

The commitments of each parent who is a party to the proceeding that are necessary to enable the parent to support himself or herself, or any other child or another person that the person has a duty to maintain

1. The tribunal is satisfied considering the relevant costs of self-support utilised in the assessments and based upon evidence provided at hearing that neither party has extraordinary costs of self-support that are relevant to the assessment.

Any hardship that would be caused

1. As noted, the tribunal can vary the rate of child support payable or it can vary some of the variables that are used in the administrative formula. Mr Elkins says that the assessment needs to reflect what he considers to be additional financial resources available to Ms Geffen due to the operation of her business.  Ms Geffen says that she is the person primarily supporting the child, she has a limited income.

2. As noted, the tribunal is not satisfied that any departure should include an adjustment in relation to the child’s special needs.  On the presented evidence it appears that those costs are being met by the child’s NDIS plan.

3. In terms of Ms Geffen the tribunal has concluded that she had derived some personal benefit from claiming certain costs as business expenses. However, it is also clear that any income generated by the business is minimal and that ultimately her main source of income is that she derives by means of social security payments. By comparison Mr Elkins is in paid employment receiving by comparison significant remuneration.  There is evidence that he has been able to pay down a significant amount on his mortgages and has been able to recently access the equity in his properties to purchase a [Car 1].

4. In terms of Ms Geffen, even if the tribunal were to substitute an ATI which reflects those additional benefits which are claimed as costs in her business (as found by the tribunal), with the ATI utilised in the assessment based upon her last relevant tax return the outcome would not result in any significant change in the liability of child support payable by Mr Elkins, it would result in a difference of about $20 per week.[22]  Given Mr Elkins’ overall financial position and also noting that he has demonstrated the ability to move into contract work that is more financially lucrative, the tribunal is not satisfied that it would be just or equitable to adjust the assessment to reflect the personal benefits Ms Geffen may currently derive from the business.

   [22] Utilising $135,000 and $39,500 as the relevant ATI = $386, utilising an ATI of $22,500 =$405

5. For these reasons the tribunal concluded that a departure determination in the same terms as determined by the Department on objection namely that for the period 1 July 2019 to 31October 2020 Mr Elkins’ ATI is varied to $135,000 is just and equitable in the special circumstances of this case.  Thereafter  the tribunal is otherwise satisfied that going forward the assessment should otherwise utilise the ATO assessed ATI of both parties. As noted, Mr Elkins’ evidence is that whilst he has again changed employment he is on a six month contract earning income as a PAYE and any increase in his income will be reflected in his future tax returns.  As noted, the general approach is that the Registrar will utilise a parent’s ATI as assessed by the ATO for the last relevant year of income.  If there is any significant change in the party’s circumstances it is open to them to utilise the change of assessment processes to address such changes.

Issue 3 – Would it otherwise be proper to make a particular departure determination?

1. The final step is for the tribunal to determine whether it is ‘otherwise proper’ to make a particular departure determination.  Subsection 117(5) requires the tribunal to take into account whether the proposed departure is proper in the context of public interest and welfare expenditure of the community.  A prime objective of the legislation is that parents are obliged to support their own children to the extent of their real capacity and such obligation should be unnecessarily abrogated to the public welfare system.

2. The proposed departure from the administrative assessment may reduce Ms Geffen’s entitlement to government assistance.[23]  In this case the tribunal finds that the requirements under paragraph 117(5)(a) of the Act are met.  The tribunal concludes that it is otherwise proper to depart from the administrative assessment.

   [23] Such as family tax benefit

DECISION

The decision under review is affirmed.