Ethington and Hardwick (Child support)

[2022] AATA 3076

Ethington and Hardwick (Child support) [2022] AATA 3076 (5 July 2022)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2022/SC023783

APPLICANT:  Mr Ethington

OTHER PARTIES:  Child Support Registrar

Ms Hardwick

TRIBUNAL:Member P Jensen

DECISION DATE:  5 July 2022

DECISION:

The decision to accept Ms Hardwick’s (non-existent) estimate of income of $0 from 21 March 2021 is set aside and, in substitution, a decision is made to not accept Ms Hardwick’s (non-existent) estimate of income from 21 March 2021.

CATCHWORDS

CHILD SUPPORT – particulars of the administrative assessment – estimate of income - whether the estimate should have been accepted - estimate of income non-existent - 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

Introduction

1. Mr Ethington and Ms Hardwick are the parents of [Child 1]. In 2009, Ms Hardwick applied to the Child Support Agency (“the CSA”) for an “administrative assessment of child support” for [Child 1] pursuant to section 30 of the Child Support (Assessment) Act 1989 (“the Act”). The CSA granted her application.

2. The administrative assessment of child support is based on a formula which contains variables such as the parents’ adjusted taxable incomes and their percentages of care for the child. The Act allows a parent to provide an estimate of income and, if accepted, the administrative assessment is based on that estimate, subject to a possible reassessment once the parent’s adjusted taxable income has been ascertained.

3. Ms Hardwick did not provide an estimate of income from 21 March 2021. Nevertheless, on 3 November 2021 the CSA decided to “accept” her estimate of income of $0 from 21 March 2021. Mr Ethington promptly objected to that decision. An objections officer disallowed the objection. Mr Ethington promptly applied to the Tribunal for further review. I conducted a hearing on 5 July 2022. Mr Ethington gave sworn evidence via MS Teams. Ms Hardwick did not participate in the hearing

4. To make sense of the CSA’s and the objections officer’s obviously incorrect decisions, it is necessary to traverse a number of matters.

5. The CSA’s computer system not does not reflect the current legislative scheme. The computer system creates a “case” when the administrative assessment of child support is first registered, and that case records the payer and payee of child support. If the roles of payer and payee are subsequently reversed, the computer system creates a second case. However, the creation of two cases is apparently the result of a limitation of the computer system (as is its inability to record each parent as providing 50% care for a child, notwithstanding that common scenario). As a matter of law, there has only been one administrative assessment of child support for [Child 1], regardless of which parent was the payer or payee of child support from time to time.

6. On 13 August 2020, Ms Hardwick provided, and the CSA accepted, an estimate of income of $0 for the remainder of the financial year. At that time, Mr Ethington was the payee and Ms Hardwick was the payer of child support.

7. On 31 March 2021 the CSA was advised of a change in the care of [Child 1]. In the course of investigating that matter, Ms Hardwick informed the CSA that she needed to update her estimate of income because she had commenced work. However, she did not provide an updated estimate of income.

8. On 8 April 2021 the CSA decided to record Mr Ethington as providing 0% care and Ms Hardwick as providing 100% care for [Child 1] with effect from 21 March 2021. Mr Ethington consequently became the payer and Ms Hardwick became the payee of child support, with effect from 21 March 2021. That change activated the reverse case in the CSA’s computer system, which should have also used Ms Hardwick’s estimate of income of $0 from 13 August 2020. That did not occur and the administrative assessment from 21 March 2021 was based on Ms Hardwick’s 2019-20 adjusted taxable income of $176,359.

9. On 8 June 2021, Mr Ethington objected to the decision to accept Ms Hardwick’s estimate of income of $0 from 8 August 2020 (although his objection appears to have been based on evidence that Ms Hardwick commenced employment in December 2020). On 9 June 2021 the CSA spoke to Ms Hardwick and noted:

   She confirmed that she has been working since 07/12/2021, with a base salary of $105k per year.
   She was receiving ISP [income support payments] prior to this also.
   She advised that she does not know the correct figures to be able to provide the income she has received.

   She advised that she did not want to update the estimate with this information.

10. The CSA eventually noted its error concerning its use of Ms Hardwick’s 2019-20 adjusted taxable income of $176,359 from 21 March 2021. On 10 September 2021 the CSA astutely noted:

    Identified the following administrative actions to be taken outside the objection process:

    1) Ms Hardwick’s estimate not applied to the reverse case [when Mr Ethington became the payer] when a care change reverse[d] the roles in March [2021]. This should have occurred, and will need to be corrected administratively.

    2) Estimate review – Mr Ethington has provided Ms Hardwick’s employer details (see corro 16/06/2021 [which] includes email from Ms Hardwick with her business sign off). We also spoke to Ms Hardwick in June 2021 and confirmed the estimate was not accurate but did not update it. An estimate review should be undertaken as we are aware the $0 estimate may not be accurate and the estimate has not yet been reconciled.

11. Regarding 2), the CSA could have unilaterally amended Ms Hardwick’s estimate of income, with effect from December 2020, pursuant to section 63A of the Act, but it did not do so. Such an amendment would have given effect to the CSA’s policy at 2.5.1 of the Child Support Guide under the heading “Reviewing as estimate, amending the assessment”.

12. Regarding 1), the CSA could have administratively corrected its error pursuant to section 42 of the Child Support (Registration and Collection) Act 1988 which is entitled “Correction of clerical errors and other mistakes in Child Support Register”, but it did not do so. Instead, it appears to have addressed the issue by deciding to accept a fictitious estimate of income of $0 from 21 March 2021. However, to accept such an estimate, Ms Hardwick needed to provide such an estimate, and that did not occur: paragraph 62A(1)(b) of the Act. Further, even if she had provided such an estimate, it would have been a significant under-estimate because, as she had already stated to the CSA, she had returned to paid employment in December 2020. The preferable decision would have been to refuse to accept such a significant under-estimate, if it had been made: section 63AA of the Act.

13. Mr Ethington is understandably disappointed with the CSA’s handling of these matters. The CSA identified what steps it needed to take but it did not take them. However, as I explained during the hearing, the current proceeding before the Tribunal is not a broad review of the service provided by the CSA. It is a review of a single decision made by the CSA and effectively affirmed by an objections officer. For the reasons stated above, that decision must be set aside.

DECISION

The decision to accept Ms Hardwick’s (non-existent) estimate of income of $0 from 21 March 2021 is set aside and, in substitution, a decision is made to not accept Ms Hardwick’s (non-existent) estimate of income from 21 March 2021.