Engleman and Lygon (Child support)

[2023] AATA 3396

Engleman and Lygon (Child support) [2023] AATA 3396 (6 September 2023)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2023/BC025772

APPLICANT:  Ms Engleman

OTHER PARTIES:  Child Support Registrar

Mr Lygon

TRIBUNAL:Deputy President K Synon

DECISION DATE:  6 September 2023

DECISION:

The Tribunal sets aside the decision under review and, in substitution, decides that the payment of $438 that Mr Lygon made to Ms Engleman on 28 October 2022, is not accepted as a non-agency payment.

CATCHWORDS

CHILD SUPPORT – non-agency payment - whether payment made to payee in lieu of child support - 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 omitted 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. Ms Engleman (the mother) and Mr Lygon (the father) are the parents of a child, [Child 1] born [in] May 2015.

2. The child support case was registered with the Child Support Agency (Child Support) on 5 May 2015.  The objection decision records that this was privately managed from 14 May 2019 to 27 October 2022 however it was in fact privately managed from 1 September 2019.[1]

   [1] At folio 69.

3. On 28 October 2022 the mother lodged an application for Child Support collection. Her reasons for the Child Support collection application were that the father was withholding payments and only paid when Child Support contacted him. The parents did not reconcile during the private collect period. This contact records the mother as saying that there was no arrears period and no private payment details were provided to Child Support.

4. On the same day, the father lodged a claim for a non-agency payment (NAP) to Child Support for the period 28 October 2022 to 11 November 2022. Along with the claim, the father submitted a receipt of payment $438 made directly to the mother. The father was advised by the Child Support officer that, for the NAP claim to be accepted, there must be a mutual intent between the parents.

5. On 1 November 2022, Child Support notified the mother that the NAP claimed by the father for $438 would be accepted.

6. On 1 November 2022, Child Support advised the parties that the payment of $438 made by the father on 28 October 2022, had been accepted as a NAP and had been credited in full to the father’s child support liability.

7. On 24 November 2022, 30 November 2022 and 14 December 2022 the mother advised Child Support that the payment of $438 made by the father was for the arrears he owed her from previous period, not for a future period and that it should not have been credited as a NAP.

8. On 14 December 2022 Child Support received the mother’s objection to the father’s claim for NAP made on 28 December 2022. Her reasons for the objection in part stated:

   Payment was received on the 28^th of October and was a late payment from [Mr Lygon] for Child Support that was due to be as a direct transfer from his account into mine on the 27^th October. So was an arrears payment and should of [sic] been reflected as a credit nor future payments that I was asking for CSA to now collect on my behalf. The Customer service officer was aware. [Mr Lygon] said that he was not going to make the payment until I responded to his request for [Child 1] to travel to [Town 1] over Christmas. Intimidating me and now financial abuse by withholding Child Support monies yet again within a 6 week period as to which I had contacted CSA regarding as well. The CSA payment which is used for private school fees which is now overdue and has caused direct financial hardship as the amount of $438 per fortnight also reduces my Centrelink payment.

   I was not aware that this had been lodged as a credit towards future payments as it was well discussed with the customer service officer this was an arrears/late and overdue payment amount I had received…

9. On 11 January 2023, the mother provided Child Support with text messages exchanged between the parents and a [Bank 1] transaction history[2] showing the dates of payments and amounts made by the father between 7 July 2022 to 28 October 2022 as follows:

   [2] At folios 34–25.

   28 Oct 2022      $438

   13 Oct 2022      $438

   3 Oct 2022      $438

   15 Sept 2022    $438

   1 Sept 2022      $460

   18 Aug 2022     $460

   4 Aug 2022     $460

   21 July 2022     $460

   7 July 2022     $460

10. Also, on 11 January 2023 the mother contended that the father made payments every fortnight however missed a fortnightly payment. She did not fully understand his claim for the NAP. As such, it was not her intention to agree that the payment of $438 was to be credited in lieu of his child support as it was owed to her before lodging her application for child support collection on 22 October 2022.

11. In response to the mother’s objection, the father asserted that he made payments every fortnight on Thursday and the fortnightly payments were made in advance. Due to child support collection monthly the first child support amount was prorated with the payment of $438 made on 28 October 2022 taken into account. In his view, there were no arrears owed to the mother.

12. On 8 February 2023 Child Support advised the mother that she was required to apply for an extension of time (EOT) application as her objection lodged on 14 December 2022 was outside the 28 days’ prescribed time limit. The mother provided the reason for not lodging the objection in a timely manner was due to health issues following a number of surgeries she had in July, August, September and October 2022. Child Support accepted her extension of time application on the basis that she did not rest on her rights, the merits of her objection and the decision does not have a foreseeable prejudice to the general public.

13. As the mother’s EOT application was allowed, subsequently Child Support disallowed her objection on 21 February 202, meaning that her request to have the $438 paid on 28 October 2022 reversed was refused. Child Support made its decision on the basis that:

    ·      The evidence shows the father’s payments directly to the mother were consistent each fortnight from 21 July 2022 to 28 October 2022.

    ·      After reviewing the call recording of 28 October 2022 with the mother, Child Support noted the mother had confirmed receipt of a notification from [Bank 1] that a payment of $438 has been made to her by the father, however, she wished to have Child Support to collect payments

14. On 13 March 2023 the mother lodged a review application with the Administrative Appeals Tribunal (the Tribunal).

15. The Tribunal conducted a hearing into the application via MS Teams telephone conference on 26 July 2023. Both parents gave sworn evidence. The Child Support Registrar elected not to appear. In reaching its decision the Tribunal has considered the sworn evidence of the mother and the father, the papers provided by Child Support (folios 1–72), and evidence provided after the hearing by the mother (folios A1–A240) and the father (folios B1–B7).

ISSUES

1. The statutory provisions relevant to this review are contained in the Child Support (Registration and Collection) Act 1988 (the Act).

2. The issue to be considered by the Tribunal is whether or not the payment of $438 made by the father on 28 October 2022 can be accepted as a NAP and credited against his child support liability.

The hearing evidence and post hearing submissions:

1. The mother’s testimony is that the payment the father made of $438 on 28 October 2022 was not a NAP because he was supposed to pay that amount for the period 13 October 2022 to 27 October 2022 but did not so. When she applied for child support collection on 28 October 2022, his payment received on 28 October was taken to be a NAP and credited to his child support liability whereas it was for a previous period. The mother said that child support payments had been privately collected on and off the majority of the time.  The mother confirmed the payments were for the child’s school fees. She did not receive payment from the father from 13 October 2022 until after the next child support collection which was 6 weeks later despite the child support collection being due monthly. This missed payment had impacted their child and caused the mother extreme financial hardship.

2. The mother accepted that, at the time of her child support collection application, her interpretation of the word “arrears” was not accurate. However, given the evidence of transaction records (at folio 35) she provided Child Support should have taken that into consideration. The mother concluded her oral evidence by commenting on the way Child Support calculates payments, saying they were a “nightmare” and that payments vary too frequently.

3. The father’s testimony is that his payment made on 28 October 2022 was intended for child support and confirmed the payment he made of $438 was due on 27 October 2022. However, it was a manual payment, so this is why it was one day late. He contended that the fortnightly payments of $438 x 26 (fortnights in a year) is equivalent to $11,388 which was close to his annual child support liability of $11,444. However, his child support payments varied, he thinks, from $440 to $460 and then $438 depending on the child support assessment reconciliations. He essentially followed the child support calculations and paid accordingly.

4. The Tribunal concluded the hearing by inviting the following evidence from the mother and father by 2 August 2023:

   ·     The mother to provide written statement and evidence to show payment transactions during the private collection period from 14 May 2019 to 27 October 2022.

   ·     The father to provide bank statements showing child support payments made from 14 May 2019 to 27 October 2022 and his child support annual assessment reconciliations.

1. On 27 July 2023, the father submitted the following evidence which is numbered B1–B7:

   ·    The child support assessment for the period 7 July 2022 to 6 July 2022 for a total amount of $1,447;

   ·    An extract from his [Bank 2] transaction history for the period 28 October 2021 to 28 October 2021 recording 27 payments of either $438 (4) or $460 (23) payments to the mother.

2. On 9 August 2023, the mother submitted the following evidence which is numbered A1–A240:

   ·     240 pages of [Bank 1] bank transitions for the period 11 April 2019 to 11 October 2022.

3. On 10 August 2023 this information was exchanged between the parties and each was provided until 18 August 2023 to make any comments. No comments were received from either the mother or father.

4. The Tribunal notes that the father did not provide the totality of evidence requested as he did not provide any transition history for the period 14 May 2019 to 27 October 2021.

CONSIDERATION

1. The statutory provisions relevant to this review are contained in the Child Support (Registration and Collection) Act 1988 (the Act).

2. In some circumstances Child Support may credit payments made directly to a payee or to a third party against a child support liability that is registered for collection (sections 71, 71A or 71C of the Act).

3. Child Support refers to the credits under sections 71 and 71A as NAPs. Paragraph 71A(1)(c) of the Act also requires that the amount is “intended by both the payer and payee to be paid in complete or partial satisfaction” of the child support liability”.

4. Section 71C of the Act provides a mechanism whereby payments made by a liable parent to the payee or to another person for items specified in the Regulations[3] may be taken into account in partial satisfaction of the liable parent’s child support liability. A number of specific criteria must be satisfied for this provision to apply. Even where all the criteria are met, there is still a discretion in section 71D of the Act to refuse to credit amounts that would otherwise be able to be credited against the liability.

   [3] The Child Support (Registration and Collection) Regulations 2018.

5. Even where all the criteria are met, there is still a discretion in section 71D of the Act to refuse to credit amounts that would otherwise be able to be credited against the liability; specifically, and relevantly to this matter, that the Registrar (or the Tribunal) may refuse to credit an amount under section 71, 71A or 71C if satisfied that, in the circumstances of the particular case, the amount ought not to be credited.

6. Firstly, the Tribunal is satisfied that the payment in question for $438 was intended by both parties to be paid in complete or partial satisfaction of the father’s child support liability.

7. The mother asserts that the payment of $438 made by the father on 28 October 2022 should not be accepted as a NAP because this payment related to a previous period and therefore was paid in arrears. During the hearing she asserted that this was for the period 13 October 2022 to 27 October 2022 but an examination of both the mother’s and father’s transaction records confirm that the father transferred $438 to the mother on 13 October 2022.

8. The issue appears rather to be whether, when the private collection period commenced on 1 September 2019,[4] payments were made by the father in advance or arrears. As noted above the father did not provide his bank transactions period for the period 14 May 2019 to 27 October 2021. Turning therefore to the mother’s more complete [Bank 1] transaction records the Tribunal notes that these records confirm that the father made fortnightly payments to the mother from 5 September 2019 through to 27 October 2022. The Tribunal cannot identify any missed payment during this period and the mother did not identify where on the bank statements this could be located. However, looking further back, it appears the father missed a fortnightly payment on 16 May 2019 when there was no payment made from 6 May 2019 until 30 May 2019.[5] This suggests that the father was paying in arrears when the private collection period started on 1 September 2019.

   [4] Note this date is confirmed at folio 69. The private collection period did not commence on 14 May 2019 as stated in the Objection Decision at folio 6.

   [5] At folio A11.

9. On this basis, the Tribunal does not accept that the payment the father made on 28 October 2022 should be accepted as a NAP in relation to the collection period which commenced on that date, as it appears to be the final payment due in the private collection period which commenced on 1 September 2019 and concluded on 27 October 2022.

DECISION

The Tribunal sets aside the decision under review and, in substitution, decides that the payment of $438 Mr Lygon made to Ms Engleman on 28 October 2022, is not accepted as a non-agency payment.