Every and Every (Child support) - [2023] AATA 3744

Every and Every (Child support) [2023] AATA 3744 (12 September 2023)

DIVISION:Social Services & Child Support Division
REVIEW NUMBER:  2023/SC025929
APPLICANT:  Mr Every
OTHER PARTIES:  Child Support Registrar
Ms Every

TRIBUNAL:Member M Douglas
DECISION DATE: 12 September 2023
DECISION:

The decision under review is varied so that for the period 1 September 2022 to 31 December 2023 the annual rate of child support payable by Mr Every is increased by $1,700 only.

For the sake of clarity, the Tribunal notes that for the period thereafter the decision under review does not change, and hence the increase in the annual rate at which Mr Every is to pay child support is increased by:

$2,339 for the period 1 January 2024 to 31 December 2024;
$2,624 for the period 1 January 2025 to 31 December 2025; and
$2,698 for the period 1 January 2026 until a child support terminating event occurs for [Child 2].

CATCHWORDS

CHILD SUPPORT – departure determination – costs of education - manner expected by both parents - cost of maintaining the children are significantly affected – a ground for departure established - decision under review varied

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

Mr Every and Ms Every are the parents of [Child 1] and [Child 2] for whom child support assessments have issued, with the first commencing on 13 September 2015.
On 13 September 2022 Mr Every made a written application to Services Australia - Child Support (Child Support) under subsection 98B of the Child Support (Assessment) Act 1989 (the Act) for a determination to be made to depart from the provisions of the Act with respect to the assessment of child support. Services Australia describes such an application as a “change of assessment application”. The ground for departure upon which Mr Every relied in support of his application was that which Child Support describes as Reason 8A, being that found in subparagraph 117(2)(c)(ib) of the Act.
Ms Every also made a change of assessment application to Child Support on 10 October 2022 relying on the grounds for departure Child Support describes as Reasons 3 and 8A, being those found in, respectively, subparagraphs 117(2)(b)(ii) and 117(2)(c)(ia) of the Act.
The assessments in force at the time Mr Every and Ms Every made their respective change of assessment applications obligated Mr Every to pay child support at an annual rate of $24,436 until 31 August 2022 and then at an annual rate of $27,952 until 14 September 2022 and then at an annual rate of $22,758 until 31 October 2022. The assessment for the period to 31 August 2022 was calculated on adjusted taxable incomes of $116,290 for Mr Every and $57,644 for Ms Every, which reflected their respective taxable incomes for the 2021 year. The assessment for the period 1 September 2022 to 14 September 2022 was calculated on adjusted taxable incomes of $131,836 for Mr Every and $56,011 for Ms Every, which reflected their respective taxable incomes for the 2022 year. For the period from 15 September 2022 to 31 October 2022 the assessment was calculated using an adjusted taxable income for Mr Every of $109,677, which was an amount that Mr Every elected to be used for him based on what he estimated his taxable income would be for the 2023 financial year.
The Tribunal observes that subsequent to Mr Every’ taxable income being assessed for the 2023 financial year in the amount of $139,301, Child Support reissued the assessment for the period 15 September 2022 to 31 October 2022 such that it was calculated on an adjusted taxable income for Mr Every of $130,261.
On 12 January 2023 Child Support determined, in response to the change of assessment applications both Mr Every and Ms Every made, that the following departure should be made from the provisions of the Act relating to the assessment of child support for [Child 1] and [Child 2]:
For the period 1 September 2022 to 31 December 2023, the annual rate payable by Mr Every is increased by $4,178.
For the period 1 January 2024 to 31 December 2024, the annual rate of child support payable by Mr Every is increased by $2,339.
For the period 1 January 2025 to 31 December 2025, the annual rate of child support payable by Mr Every is increased by $2,624.
For the period 1 January 2026 until a terminating event occurs for [Child 2], the annual rate is to be increased by $2,698.
Child Support’s written for that determination make it plain that the purpose of Child Support in making that change to the assessment of child support was to ensure that Mr Every was contributing half of the cost that Ms Every incurred consequent upon the children attending [School 1].
On 18 March 2023 Mr Every lodged an objection with Child Support to its decision. On 18 March 2023 Child Support disallowed his objection.
Mr Every has now applied to the Tribunal for review of Child Support’s decision to disallow his objection.
The Tribunal held an audio hearing of Mr Every’ application on 12 September 2023. Mr Every and Ms Every both participated and they gave affirmed oral evidence. The Tribunal has had regard to their oral evidence and also to documents Mr Every provided in accordance with directions the Tribunal made, which are marked A1-A54, and to documents Ms Every provided also in accordance with directions the Tribunal made, which are marked B1-B46, and to documents Child Support provided in accordance with its obligation under subsections 37(1) and 38AA(1) of the Administrative Appeals Tribunal Act 1975.

THE REQUIREMENTS FOR A DEPARTURE FROM AN ASSESSMENT

A parent may, if there are special circumstances, apply to Child Support under subsection 98B(1) of the Act for a determination to depart from the provisions of the Act relating to an assessment of child support. Child Support, or the Tribunal in its place, if satisfied that the criteria of subsection 98C(1) are met, can make one or more of the determinations listed in subsection 98S(1) of the Act to depart from the provisions of the Act relating to an administrative assessment of child support. The criteria specified in subsection 98C(1) are that:
i.A ground for departure exists;
ii.It would be just and equitable as regards the child, the liable parent, and the carer entitled to child support to make a determination [under subsection 98S(1)]; and
iii.It would be otherwise proper to make a determination [under subsection 98S(1)].
The grounds for departure are listed in subsection 117(2) of the Act.
The matters that are to be considered in deciding whether it is just and equitable to make a determination to depart from the provisions of the Act are listed in subsection 117(4) of the Act. Broadly speaking, consideration of those matters ensures that any departure will be fair for both parents and fair for the child.
The matters to be considered regarding the third criterion are listed in subsection 117(5) of the Act, and broadly speaking, consideration of those matters ensures that any departure reflects that the parents of a child, rather than the Australian community through the social security system, have primary responsibility for the cost of their child’s care.

CONSIDERATION

Is a ground for departure established?

As mentioned, Mr Every relied on the ground for departure provided in subparagraph 117(2)(c)(ib) of the Act and Ms Every relied on the grounds for departure provided in subparagraphs 117(2)(b)(ii) and 117(2)(c)(ia). It is convenient to deal with subparagraph 117(2)(b)(ii), which Child Support describes as Reason 3, and which reads as follows:
117(2)(b) that in the special circumstances of the case the costs of maintaining the child are significantly affected:
...
(ii) because the child is being cared for, educated or trained in the manner that was expected by his or her parents.
On 16 March 2017 Mr Every signed an enrolment form for [Child 1] to attend [School 1]. Ms Every signed that form on 28 March 2017. [Child 1] commenced Year 7 studies at the school in January 2018. She is currently enrolled in Year 12 and is due to conclude her education at the school on 6 November 2023.
On 11 March 2020 Ms Every signed an enrolment form for [Child 2] to commence her secondary schooling at the same school. Mr Every signed the form on 18 March 2020. [Child 2] commenced her studies at the school in 2021. She is currently enrolled in Year 9.
It is evident from both Mr Every and Ms Every signing those enrolment forms that as at the time they signed the forms it was their expectation that the children would receive their secondary education at [School 1].
In evidence before the Tribunal is a document the school has published titled “Secondary 2023 Schedule of Fees and Charges”. That document reveals that the fees charged for the education of a child enrolled in Year 12 is $4,950 for the 2023 year and for a child enrolled in Year 9 the fees are $4,441. That schedule also reveals that there is a 25% discount on the fees charged for a second child. Consequently, the fees for the children to attend the school in the current year amount to $8,355.75, being $4,950 for [Child 1] and $3,405.75 for [Child 2]. The school also advised in this document that there had been a minimal increase in school fees from 2022 to 2023. There is no document in evidence that reveals exactly what the school charged in the 2022 year for the children’s attendance at the school, but noting that the school said in its 2023 fee schedule that the increase in fees from 2022 to 2023 was minimal, the Tribunal infers that the fees the school charged for the children to attend the school in 2022 was slightly less than the current year.
Mr Every’ evidence was that it is no longer his expectation that the children receive their secondary schooling at [School 1]. Indeed, he notified the school in late 2021 that he wished to have [Child 1] and [Child 2] removed from the school and that if they were to remain at the school the school fees would be the responsibility of Ms Every only. Mr Every’ evidence to the Tribunal was he decided on that course because he considered he did not have the financial capacity to contribute towards the children’s school fees. In other words his evidence was to the effect that from late 2021 he no longer intended the children receive their secondary education at the school because he did not have a financial capacity to contribute to their school fees.
In terms of determining whether this ground for departure is established, the expectation of the parent regarding the education of the parent’s child is a reference to past expectation and not the present intention of the parent’s regarding whether a child attends a private school.[1] As said, the evidence establishes that it was the past expectation of Ms Every and Mr Every that the children be educated at [School 1]. The annual fees for the children to attend the school are significant and are such, in the Tribunal’s view, that the cost of maintaining the children are significantly affected. The fact that the children attend this school rather than a state school is a special circumstance. That is, it sets this case apart from others. Consequently, the Tribunal is satisfied this ground for departure is established.
[1] In the marriage of Mee and Ferguson (1986) FLC 91-716 at 75,196; Warwick and Cutler and Anor [2016] FamCA 934 at [100]-[102]

Is it just and equitable to make a determination?

As already said, the matters the Tribunal must take into account when considering whether it is just and equitable to depart from the provisions of the Act with respect to the assessment of child support are listed in subsection 117(4) of the Act. The Tribunal is not required to go slavishly through each of those matters but must have regard to those that are relevant to the particular circumstances of this case and do so in a practical and flexible way.[2] In other words what Mr Every’ present intention with respect to how the children should be educated is not germane to whether this ground for departure is established, but rather it was what his prior expectation was when the children commenced at that school.
[2] Gyselman and Gyselman (1992) FLC 92-279; Ross and McDermott (1998) FLC 98-003; and Lawson and Edney [2017] FCWA 77
Mr Every is in full-time employment. As already mentioned his taxable income for the 2022 financial year was $131,836. His taxable income for the 2023 financial year was $139,301. As a consequence of Mr Every having elected since 15 September 2022 to have his adjusted taxable income assessed by reference to what he estimates his taxable income was for the 2023 financial year and as a consequence of Child Support reconciling his actual taxable income with that which he elected to be his adjusted taxable income, Mr Every’ child support obligation since 15 September 2022 was based upon his actual taxable income in the period to 30 June 2023, and that will be the case for the current financial year because Mr Every has also elected to have his adjusted taxable income in the current year set by reference to what he estimates his taxable income will be.
The Tribunal observes that for the period 19 March 2022 to 31 August 2022 Mr Every’ child support obligation was set by reference to an adjusted taxable income of $116,290 and that for the period 1 September 2022 to 14 September 2022 by reference to an adjusted taxable income of $131,836. His taxable income for the 2022 year was $131,836, and for the 2023 year his taxable income was $139,301. Hence, there was a discrepancy in his favour between his adjusted taxable income and his actual income in terms of the assessment of child support for the children over the period 19 March 2022 to 14 September 2022.
Mr Every’s evidence to the Tribunal was that in the 2022 and 2023 financial years he worked overtime with a view to increasing his income so to be better able manage his commitments. His evidence to the Tribunal was that he no longer intends to do that “because it is not economic for me”. His view was that if he works overtime it increases the amount of child support he has to pay, and he thinks that, because of that, it makes no financial sense for him to work overtime. Nevertheless, the Tribunal observes that should he have difficulty with meeting his commitments he has the option available to him of working overtime. Only a part of the income he receives by working overtime would be applied to child support.
With respect to his commitments, Mr Every listed his expenses in a Statement of Financial Circumstances that he completed on 17 April 2023, declaring the contents therein to be complete and correct. He specified his weekly expenditures for his household and the portion of those related to him. None of his listed expenses were out of the ordinary. They comprised normal living costs.
Mr Every’s evidence was that his wife earns a “good income” in her profession as an [occupation] and she contributes towards their household expenditures. His evidence was that his wife pays more on their mortgage loan than what their bank requires. Mr Every’s evidence said that it was her choice to do so and he observed, correctly, that his wife has no obligation to assist with the cost of supporting [Child 1] and [Child 2].
Mr Every in accordance with the direction the Tribunal made provided copies of the statements his bank issued him detailing the transactions for the period of three months ending 30 June 2023 on all accounts to which he is a signatory. All of those accounts were accounts he holds jointly with his wife. Those accounts reveal that Mr Every spends money on a TAB account, restaurants, clubs and liquor outlets. Mr Every contended, again correctly, that he is entitled to a reasonable lifestyle. Nevertheless, it seems to the Tribunal that there is come ability for him to use less of his income to defray expenses on entertainment and liquor and restaurants insofar as he has any difficulty in meeting his child support obligation.
In his Statement of Financial Circumstances Mr Every listed his assets to comprise of a house that he and his wife own jointly, a balance in a bank account of $7,390 and $20,000 in household furniture. The Tribunal considers that Mr Every does not have any assets that he could convert to cash to meet his child support obligation.
He listed his liabilities to comprise of a home mortgage of which his 50% share is $288,200, and credit card and finance liabilities amounting to just under $7,000.
Ms Every works 62.5 hours a fortnight as an [occupation] at a [workplace]. Her evidence was that she has been with the same employer for numerous years. She works five days a week. Her evidence was that the hours of her job suit her in terms of her being able to look after the children. It was Mr Every’ contention that Ms Every has an ability to work more hours a week. Noting that Ms Every has been with the same employer for numerous years, and that the children reside with her all of the time, the Tribunal does not accept Mr Every’ contention.
Ms Every was assessed with a taxable income of $56,011 in the 2022 financial year. Her taxable income for the 2023 financial year has not yet been assessed but her evidence was that her gross wages for the year were around $59,000. In the 2022 year she offset work-related expenses of $3,120 in the calculation of her taxable income. Assuming she has the same order of expenditures this year, her taxable income is likely to be marginally higher than it was in the preceding year.
Ms Every also completed a Statement of Financial Circumstances on 15 April 2023 in which she also declared the content to be complete and correct. Her household expenditure as listed in that form did not include anything extravagant. She too produced copies of the statements from her bank detailing transactions in the bank accounts of which she is a signatory, and that confirmed that no part of her income is spent on anything that could be considered indulgent.
She listed in her Statement of Financial Circumstances her assets to comprise $18,000 in a bank account, of which she attributed half to herself and half to her husband, her motor vehicle of which she estimated the value to be $2,500 and household contents worth $10,000.
With respect to the children, [Child 2], as said above, attends [School 1], for which the fees in the 2022 year were in all likelihood slightly less than $3,400 and are $3,405.75 in the current year. [Child 2] has no income or assets. There is no evidence to indicate that she has any special needs.
[Child 1] as said above also attends [School 1], for which the fees last year were in all likelihood slightly less than $4,950. Her fees in the current year were $4,950. She will cease her education on 6 November 2023.
[Child 1] since February 2022 has been working in a school-based apprenticeship. She is still required to complete secondary courses at her school and the school still charges the school fees just mentioned. Ms Every’s evidence was that in the 2023 financial year [Child 1] was assessed with a taxable income of $19,000 for the income she received as an apprentice. Ms Every’s evidence was that [Child 1] is receiving the same level of remuneration in the current financial year.
The Tribunal considers that the income that [Child 1] is receiving would enable her to meet a significant portion of the cost associated with her current care. That is a circumstance that the Tribunal must weigh when determining whether it is just and equitable to make a departure from the provisions of the Act with respect to the assessment of child support for [Child 1] and, if so, what departure it is just and equitable to make.

Mr Every contended that it was not necessary for the children to go to their present school and that the cost associated with that could be avoided if they went to a local high school. Mr Every said that the children have friends at the local high school through extracurricular activities in which they participate. Ms Every disputed that, and said that the children would suffer hardship were they to leave their school because they have an established group of friends at the school.
In the Tribunal’s view it is likely that the children would experience hardship were they to leave their current school, particularly so with [Child 1] noting that she has been there since 2018 and is shortly to conclude her secondary studies. To disrupt her schooling now in all likelihood would cause hardship to her. Further, she is attending the current school in accordance with the intention that Mr Every and Ms Every formed some years ago. Similarly, with [Child 2] the Tribunal considers it would cause her hardship for her to change her school given too that she has now been at the school for more than a year. The Tribunal consequently considers that one of the children’s proper needs is to remain at their current school.
The Tribunal considers that if Mr Every were not to make a contribution towards the cost of [Child 2]’s education, hardship would be cause to both [Child 2] and to Ms Every, noting Ms Every’ limited income. Whilst some hardship would be caused to Mr Every as a consequence of increasing his child support liability to require him to make a contribution towards the cost of [Child 2]’s schooling, the degree of hardship caused to him would be far less than that caused to Ms Every, in the Tribunal’s view, given that he has a larger income and also has some discretionary expenditure that he could reduce.
With respect to [Child 1], Ms Every would incur hardship were she to pay those fees exclusively. Again, Mr Every has, in the Tribunal’s view, the income to contribute towards those fees and, furthermore, it would be fair for him to do so. However, there is more to consider with respect to [Child 1], and that is that she is receiving an income of around $19,000 a year and, as said earlier, has the capacity to meet a significant component of the cost associated with her care.
Weighing all those matters, the Tribunal considers that the just and equitable determination to make in this case would be to vary the annual rate of child support payable by Mr Every such that it is increased by $1,700 from 1 September 2022 to 31 December 2023, and then by the amounts that Child Support determined in accordance with its objection decision. The increase represents half of what is payable for [Child 2] to attend the school. The Tribunal considers that there ought to be no increase in the annual rate of child support payable by Mr Every on account of the cost of [Child 1] attending the school given that [Child 1] has had an income to meet a significant proportion of the cost of her upbringing since she started her apprenticeship. The Tribunal considers that the extent to which she would have been able to contribute towards her own cost of support would be more than half of the school fees payable for her, but noting that Mr Every did not pay any school fees for [Child 2] in the 2022 academic year, and also had a higher income in the period until mid-September 2022 than that upon which his child support obligation was assessed, it seems to the Tribunal that on balance the just and equitable determination to make in this case is that which the Tribunal has just stated.
In other words, over the period 1 January 2022 until 6 November 2023, on which date [Child 1] will conclude her secondary schooling, the annual rate of child support payable by Mr Every for [Child 1] should have been reduced marginally and not increased by any component for school fees, due to the income [Child 1] was earning, but when balanced against the fact that Mr Every paid no school fees at all for [Child 2] from the start of 1 January 2022, the just and equitable result, and the most convenient way to effect a departure, is to vary the decision Child Support made such that the annual rate of child support payable by Mr Every is increased by only $1,700 for the period 1 September 2022 to 31 December 2023 and to leave in place the determination Child Support made for the period thereafter.

Is it otherwise proper to change the assessment?

In deciding whether it is otherwise proper to depart from the administrative assessment, the Tribunal must have regard to the fact that the primary obligation to support the children rests with Mr Every and Ms Every, and also have regard to whether, and if so how, any determination it makes would affect any entitlement Ms Every and the children have to an income-tested pension, allowance or benefit.
The evidence does not reveal that the children receive an income-tested pension, allowance or benefit. That circumstance will not change if the determination the Tribunal considers it is just and equitable to make, is made.
Ms Every revealed in her Statement of Financial Circumstances that she does not receive a family tax benefit from the Commonwealth Government or any other allowance. Child Support confirmed that during its consideration of Mr Every’s objection. That circumstance will not change if the Tribunal were to make the determination that the Tribunal considers it is just and equitable to make.
The Tribunal considers that it is otherwise proper to make the determination that it considers it is just and equitable to make.

DECISION

The decision under review is varied so that for the period 1 September 2022 to 31 December 2023 the annual rate of child support payable by Mr Every is increased by $1,700 only.

For the sake of clarity, the Tribunal notes that for the period thereafter the decision is affirmed, such that the annual rate of child support payable by Mr Every is increased by:

$2,339 for the period 1 January 2024 to 31 December 2024;
$2,624 for the period 1 January 2025 to 31 December 2025; and
$2,698 for the period 1 January 2026 until a child support terminating event occurs for [Child 2].