Fairall and Aveyard (Child support)

[2023] AATA 4289

Fairall and Aveyard (Child support) [2023] AATA 4289 (26 October 2023)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2023/BC026167

APPLICANT:  Mr Fairall

OTHER PARTIES:  Child Support Registrar

Ms Aveyard

TRIBUNAL:Senior Member S Trotter

DECISION DATE:  26 October 2023

DECISION:

The decision under review is varied so that from 28 November 2022 to 30 November 2024, the annual rate of child support payable by each of Mr Fairall and Ms Aveyard is set at $0.

Notation – Child Support’s decision of 1 August 2022 therefore ceases to apply from 28 November 2022.

CATCHWORDS

CHILD SUPPORT – departure determination – income, property and financial resources of the liable parent – a ground for departure established – decision to depart - decision under review varied

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. Mr Fairall and Ms Aveyard are the parents of [the child] (born 2016). A child support case was registered with Services Australia – Child Support (Child Support) in relation to [the child] in 2018. Mr Fairall’s and Ms Aveyard’s percentages of care utilised for the assessment of child support have been determined as 39% and 61% respectively since 27 January 2022.

2. The Child Support (Assessment) Act 1989 (the Act) provides for an administrative assessment of child support payable. It uses a formula which contains variables such as the parents’ child support incomes and their percentages of care of the children. The Act also provides for a departure from the administrative assessment (commonly termed a change of assessment) in certain circumstances. Departure determinations can include varying components of the child support formula such as a parent’s child support income (which incorporates a parent’s adjusted taxable income) or varying the annual rate of child support.

3. By change of assessment application received 7 November 2022, Mr Fairall sought a change to the administrative assessment of child support on the basis that it did not correctly reflect his income, specifically because he was no longer working due to ongoing health issues. On 27 January 2023, Ms Aveyard cross-applied on the basis that the administrative assessment of child support did not correctly reflect Mr Fairall’s income, property, financial resources and/or earning capacity.

4. On 22 February 2023, Child Support decided that a reason had been established to depart from the administrative assessment of child support and set the annual rate of child support payable by both parents at $0 from 27 December 2022 to 30 November 2024.

5. Mr Fairall objected to this decision and, on 5 May 2023, a Child Support objections officer allowed the objection in part by varying the period for which the child support payable was set at $0, changing the period from 27 December 2022 to 30 November 2024 to 1 January 2023 to 31 December 2024.

6. Mr Fairall applied to the Tribunal on 26 May 2023 seeking independent review of Child Support’s decision stating as follows:

   Forced to sell a property to pay off debts to survive. CSA has increased my income by $55K over the next two years.

7. At a telephone directions hearing on 15 August 2023, procedural directions were made in relation to the conduct of the matter and the provision of further documents from Mr Fairall and Ms Aveyard.

8. The hearing took place on 27 September 2023. Mr Fairall and Ms Aveyard both participated in the hearing by conference telephone and gave evidence on affirmation at the hearing.

9. The Child Support Registrar did not seek leave to participate in the hearing and did not attend but provided relevant documents from the Child Support file.

10. In considering the application, the Tribunal took into account the sworn oral evidence and submissions of Mr Fairall and Ms Aveyard and the following documents:

(a)the documentary material provided by Child Support (Exhibit 1, pages 1 to 523);

(b)documents and written submissions received from Mr Fairall (Exhibit A, pages A1 to A183); and

(c)documents and written submissions received from Ms Aveyard (Exhibit B, pages B1 to B47).

1. There are a number of background and other circumstances of understandable importance to both Ms Aveyard and Mr Fairall which were raised which are not relevant to the issues before the Tribunal in relation to this application. The Tribunal has confined the evidence addressed in these Reasons to only the evidence relevant to the issues before the Tribunal in relation to this application.

ISSUES

12.  As already noted, a parent can apply to the Child Support Registrar for a determination to depart from the administrative assessment of child support (a process known as a change of assessment). Such an application is made under Part 6A of the Act. Pursuant to section 98C of the Act, a decision‑maker can make a change of assessment only if satisfied that:

(a)a ground for a change of assessment has been established;

(b)a change of assessment would be just and equitable as regards the children and each parent; and

(c)a change of assessment would be otherwise proper.

13.  There are 10 possible grounds for a change of assessment set out in subsection 117(2) of the Act. Each ground for departure is prefaced by the words ‘in the special circumstances of the case’. The meaning of this expression is not defined in the Act but the Family Court in Gyselman and Gyselman (1992) FLC 92-279 (Gyselman) held that:

as a generality it is intended to emphasise that the facts of the case must establish something which is special or out of the ordinary. That is, the intention of the Legislature is that the court will not interfere with the formula in the ordinary run of cases.

14.  The Tribunal’s approach to the interpretation and application of the particular grounds in subsection 117(2) of the Act must be guided by that qualification.

15.  If satisfied that a ground or grounds exist, and that it would be just and equitable and otherwise proper to make a particular determination, the Tribunal may make one of the determinations prescribed in section 98S of the Act. It permits a range of determinations, including varying the rate of child support payable, the adjusted taxable income or the cost percentage for a child.

16.  It follows that the issues to be determined by the Tribunal are as follows:

(a)Does a ground exist to depart from the administrative assessment?

(b)Would it be just and equitable as regards the children and each parent to depart from the administrative assessment of child support? and

(c)Would it be otherwise proper to make a particular departure determination?

CONSIDERATION

Issue 1 – Does a ground exist to depart from the administrative assessment?

17.  As already noted, the change of assessment application the subject of the Tribunal’s consideration is an application by Mr Fairall dated 7 November 2022 seeking a departure determination on the basis that the administrative assessment of child support did not correctly take into account his income because he was no longer working due to ongoing health issues.

18.  As at 7 November 2022 child support was being assessed pursuant to a previous change of assessment determination by Child Support which had determined that:

(a)From 1 September 2021 to 31 August 2023, the adjusted taxable income of Ms Aveyard be set at $92,888;

(b)From 1 September 2023 to 30 November 2024, the adjusted taxable income of Ms Aveyard be set at $95,303;

(c)From 1 September 2021 to 31 August 2023, the adjusted taxable income of Mr Fairall be set at $68,212; and

(d)From 1 September 2023 to 30 November 2024, the adjusted taxable income of Mr Fairall be set at $69,986.

1. As can be seen therefore, the adjusted taxable income utilised for Mr Fairall in the child support case as at the date of his 7 November 2022 application was $68,212, with an adjusted taxable income of $92,888 then utilised for Ms Aveyard. The respective adjusted taxable incomes utilised were then to increase to $69,986 for Mr Fairall and $95,303 for Ms Aveyard. If that determination (the administrative assessment of child support for the purposes of this application) continued, based upon the current care level, it would result in the following child support payable:

Dates	Mr Fairall’s adjusted taxable income	Ms Aveyard’s adjusted taxable income	Child Support Rate per annum payable by Mr Fairall
1 September 2021 to 2 November 2021	$68,212	$92,888	$2,365 per annum[1]
3 November 2021 to 26 January 2022	$68,212	$92,888	$2,365 per annum[2]
27 January 2022 to 30 November 2022	$68,212	$92,888	$909 per annum[3]
1 December 2022 to 31 August 2023	$68,212	$92,888	$880 per annum[4]
1 September 2023 to 29 February 2024	$69,986	$95,303	$931 per annum[5]

[1] Recorded care percentage of 28% to Mr Fairall and 67% to Ms Aveyard – noting that the care does not total 100% because of different dates of effect applying because of notification of a change in care more than 28 days after it occurred

[2] Recorded care percentage of 33% to Mr Fairall and 67% to Ms Aveyard

[3] With the changed liability resulting from a change to the recorded care percentages to 39% to Mr Fairall and 61% to Ms Aveyard

[4] With the changed liability resulting from a change to the basic values provided for in the legislation and utilised in the child support formula

[5] With the changed liability resulting from a change to the assessed adjusted taxable incomes

1. Therefore, failing a change of assessment, as at the date of his application on 7 November 2022, Mr Fairall had a child support liability of $909 per annum, changing to $880 per annum and then $931 per annum as noted above. As already noted, for there to be a change to that assessment, a ground first needs to be established.

21.  Of potential relevance, subparagraphs 117(2)(c)(ia) and (ib) of the Act – commonly referred to as “Reason 8A” and “Reason 8B” respectively – provide as grounds for departure:

(c) that, in the special circumstances of the case, application in relation to the child of the provisions of this Act relating to 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:

…
(ia) because of the income, property and financial resources of either parent; or
(ib) because of the earning capacity of either parent;

…

22.  Mr Fairall submitted that he should not be set on an income of $69,986 as per the current assessment. Nor is his income now $63,702 as per his 2022/2023 taxable income (Exhibit A, page 23). Mr Fairall submitted that he does not think his expenses in caring for [the child] are very different from Ms Aveyard’s with his costs for [the child]’s care similar if not the same as Ms Aveyard’s. He submitted that even though Ms Aveyard currently provides slightly more care, he still has the costs associated with providing a room, furniture, bedding, TV, clothing, a bicycle, classes, entertainment and activities for [the child], with much of his cost associated with [the child] falling on non-school days with he and Ms Aveyard sharing non-school days evenly. Further he has additional transport to school expenses compared to Ms Aveyard with the school being closer to Ms Aveyard and further away from him. He submitted that Ms Aveyard only has sole parental responsibility in respect of long-term decisions pursuant to the parenting orders. Mr Fairall said that the important thing for him is that the figures are correct. He is not earning $55,000 per year (the basis of Child Support’s 5 May 2023 decision) and he does not have property of $1.3 million as contended by Child Support.

23.  Mr Fairall told the Tribunal that he would like to see both parents having equal care with no child support payable by either but with them contributing equally to [the child]’s expenses. As discussed with Mr Fairall at hearing, future changes in care are a matter between the parents and if circumstances change in the future, including in relation to care, that warrant a further change of assessment application, that is a matter for the parents to make such a further application if they choose.

24.  Ms Aveyard’s submissions to the Tribunal were that she was accepting of Child Support’s decision however she feels that a different decision should be made given she is the primary carer of [the child], with sole parental responsibility and all the financial obligations, and she does feel that she should be getting something to contribute to school fees and things like that.

25.  The evidence shows that Mr Fairall’s last income from employment was in October and November 2022 as can be seen from payslips at Exhibit 1, pages 59 to 61. His income is now only $600 per week rental income (Exhibit A, page 2), most of which is expended upon expenses associated with the rental property. Mr Fairall’s evidence was that he is a qualified [Occupation] and has previously worked in that field. He is no longer able to undertake employment in his previous field of employment for medical reasons, as is supported by medical certificates dated 26 October 2022 (Exhibit 1, page 71) and 29 January 2023 (Exhibit 1, page 309). The medical certificates state that Mr Fairall is ‘unfit for his usual occupation from 26/10/2022 ongoing’ and that medical conditions of ‘morton neuroma, arthritis hands and knee, lower back pain’, affect Mr Fairall’s ability to perform his usual work with him being unable to do physical work due to pain and his ability to work being limited to ‘non physical work e.g. desk work’. Mr Fairall said that he is awaiting a specialist appointment but is otherwise unable to provide any additional information because at present the doctors are saying it is arthritis, on top of the Morton’s neuroma. Mr Fairall said that he had previously applied for jobseeker payment but was not qualified, with his understanding being that his assets precluded him.

1. When queried as to whether he has sought other non-physical employment, Mr Fairall said that his principal place of residence is full of termites and he needs to get the house up to a position that it is safe and lockable. His time is taken up doing repair work on that at the moment and he hopes to get that finalised this year and then seek out other work. The house has had termites in it and has structural damage. He cannot afford to pay tradesmen to come and do it. The house in question is the house which he lives in. He bought the house in May 2022. After purchase of the house it was discovered there were live termites and structural damage which needs repair, particularly given they live in a cyclone area. Mr Fairall says that he is stripping back and replacing all the timber and everything that is needed. A lot of the work has been done and he is hoping to have it finished by the end of the year. He first became aware of the damage in February 2023 and he has been doing whatever he can towards fixing the damage, as and when he can. The Tribunal discussed with Mr Fairall that on the one hand the medical evidence is that he cannot do physical work but on the other hand he is putting all his efforts into physical work in his home. Mr Fairall said that he does it at his own pace – what he does in eight hours would probably take someone else two hours. He would not be able to do a 38-hour week – he is only able to do the work in his house because he does it at his own pace. Mr Fairall said that he had bought some shares but that ended up being a mistake. He is looking at other options – perhaps buying some machinery that he can rent out. As to his past employment history, Mr Fairall said that he did his apprenticeship as [an Occupation] after finishing schooling. He did also renovate houses 15 or 20 years ago.

2. The Tribunal noted that as at 28 August 2023, Mr Fairall in his Statement of Financial Circumstances disclosed a balance of $195,000 in an offset account. Mr Fairall said that is now about $185,000. The Tribunal discussed with Mr Fairall that he could be seeking out employment opportunities now and utilising his funds to have tradesmen repair the termite damage and then exercise whatever earning capacity he does have now in non-physical employment towards his duty to support [the child]. Mr Fairall said that he does not agree with that option – he estimates that it would cost $150,000 if he paid someone else to repair the termite damage. That would leave him with practically no money left and it does not make sense for him to pay someone else what it would probably take him four or more years to earn in some other employment, when he can do the work himself in about a year.

28.  In written submissions at Exhibit A, page 182, Mr Fairall submitted that Child Support have incorrectly stated that he has ‘$455,000 recently realised by a sale,… total property worth around 1.3m, around $48,000 in the bank and total mortgage debt of around $650,000’, calculations that are incorrect by a significant amount. As discussed with Mr Fairall at hearing, the Tribunal is not reviewing Child Support’s decision as such and is rather making a fresh decision. The Tribunal nevertheless observes that Child Support in making its assessment has included a figure of $455,000 as part of Mr Fairall’s property, referable to sale of a property at [Street 1, Suburb] (the [Street 1] property) in April 2023, when the settlement statements show that after payment of expenses and the outstanding mortgage he only netted $270,804.81 (Exhibit A, page 62).

29.  Mr Fairall in his 28 August 2023 Statement of Financial Circumstances instead states that his property and financial resources (other than a car and household contents) are as follows:

Home at [Address 2]  $ 380,000.00

Other real estate at [Address 3]  $ 500,000.00

Offset account  $ 195,586.00

Shares  $ 77,552.00

Car  $ 3,000.00

Household contents  $ 2,000.00

Subtotal  $1,158,138.00

30.  At hearing, Mr Fairall stated that his monies in the offset account are now $185,000 and the shares have reduced further in value to around $60,000.

31.  Mr Fairall in his 28 August 2023 Statement of Financial Circumstances stated that his liabilities were as follows:

Mortgage [Address 2]  $ 310,151.16

Mortgage [Address 3]    $ 196,332.35

Estimated tax expense for 2023  $ 5,000.00

Personal liabilities – family  $ 35,000.00

Legal costs liability  $ 15,000.00

Subtotal  $ 561,483.51

1. Mr Fairall’s evidence included that he sold the [Street 1] property in April 2023 with the property being tenanted, with rental income, until a couple of months prior to sale. He had rental income from that property for the first six months of the 2022/2023 financial year consistent with the income and expenses for that rental property in the previous financial year. Mr Fairall noted that the rental income prior to sale was approximately $320 per week. Mr Fairall estimates that his income, after expenses, from the property was about $100 per week. The Tribunal discussed with Mr Fairall that based upon an income of $320 per week, it appears that his 2021/2022 tax return (Exhibit A, page 18) incorrectly reflects only a portion, perhaps 50%, of the income he received from that property in that financial year. Mr Fairall surmised that his accountant may have made a mistake in the tax return.

33.  Mr Fairall confirmed that he received $270,804.81 following sale of the [Street 1] property in April 2023 (Exhibit A, page 62), with those monies going towards purchase of shares and the monies he now has in the offset account.

1. Mr Fairall’s evidence was that he also owns a property at [Address 3] that is rented at $600 per week and has been rented from approximately October 2022 (he previously lived there as his principal place of residence prior to moving to [Address 2] which he purchased in around May 2022). The $600 rent he receives includes for electricity, internet and water which is the reason for the seemingly high rent amount. Further, the rent includes garden maintenance which is undertaken by him or his partner. Mr Fairall estimated that after payment of expenses, including interest of about $24,000 per year, he only nets $1,000, maybe $2,000 per year from renting [Address 3].

35.  Mr Fairall’s evidence was that he had invested in shares hoping to have a return on that investment however it has turned out to have been a bad investment decision. The shares have dropped in value further. Statements provided by Mr Fairall show that his share portfolio balance as at 28 August 2023 (Exhibit A, page 57) was $77,486.49 which had reduced, by 8 September 2023 (Exhibit A, page 171), to $72,662.88. Mr Fairall’s evidence at hearing was that the share value had reduced even further now to $60,000.

1. The Tribunal also discussed with Mr Fairall, at hearing, various deposits shown in Mr Fairall’s bank account statements. Mr Fairall told the Tribunal that he bought and sold a couple of cars which explains some of the deposits. He also sold his caravan and one of the deposits into his account is a returned deposit for a house purchase he and his partner were going to make but which was not accepted. Mr Fairall further noted some deposits were funds loaned from family. Mr Fairall said that he was probably a couple of thousand dollars up overall from some car sales he made, seeing a short-term opportunity to make some money during COVID-19. He is no longer doing that including because you are not able to buy and sell more than four cars per year as an individual. In particular the Tribunal asked Mr Fairall about deposits of $8,000 on 4 July 2022 (Exhibit 1, page 121), $6,000 on 24 October 2022 (Exhibit 1, page 123) and $5,000 on 1 November 2022 (Exhibit 1, page 124). Mr Fairall said that he sold his caravan receiving $15,000 cash and then bought and sold a few cars, and those deposits relate to the sale of those cars. He cannot now recall what the $7,147.46 deposit on 2 December 2022 (Exhibit 1, page 125) was for but it could also have been for a car sale.

2. Given Mr Fairall is not currently working, the Tribunal first considered whether he has unexercised earning capacity that should be taken into account for child support purposes, that is whether there are special circumstances of the case such that the application of the administrative assessment of child support would result in an unjust and inequitable determination of the level of financial support to be provided by him because of unexercised earning capacity of Mr Fairall.

38.  The Tribunal can only determine that a person’s earning capacity is greater than is reflected in his or her income if the requirements of subsection 117(7B) of the Act are satisfied. That subsection states as follows:

(7B)In having regard to the earning capacity of a parent of the child, the court may determine that the parent’s earning capacity is greater than is reflected in his or her income for the purposes of this Act only if the court is satisfied that:

(a)      one or more of the following applies:

(i)        the parent does not work despite ample opportunity to do so;

(ii)the parent has reduced the number of hours per week of his or her employment or other work below the normal number of hours per week that constitutes full‑time work for the occupation or industry in which the parent is employed or otherwise engaged;

(iii)the parent has changed his or her occupation, industry or working pattern; and

(b)the parent’s decision not to work, to reduce the number of hours, or to change his or her occupation, industry or working pattern, is not justified on the basis of:

(i)       the parent’s caring responsibilities; or

(ii)       the parent’s state of health; and

(c)the parent has not demonstrated that it was not a major purpose of that decision to affect the administrative assessment of child support in relation to the child.

39.  All three paragraphs of subsection 117(7B) are required to be satisfied for there to be a determination that a parent’s earning capacity is greater than is reflected in their income.

40.  The medical evidence supports that Mr Fairall is unable to undertake his usual occupation as [an Occupation], a physical labour-based occupation.

1. Ms Aveyard submitted, including in written submissions to Child Support (Exhibit 1, page 161), that Mr Fairall has been impacted by the medical conditions (these are not new conditions), for many years and has managed to continue to work full-time for years, including on their matrimonial properties and associated farm and in employment, such that he did not stop work because of medical conditions but rather to affect child support. Ms Aveyard referred to Mr Fairall’s statement in a 2018 affidavit (Exhibit 1, page 204) that he was having issues with his knee at the time and the reason he was not working as [an Occupation] was because he was renovating the [Address 2] property and working on the associated farm. Ms Aveyard referred to other documents in Exhibit 1, documents emanating from the property settlement, which she submitted show that despite medical conditions impacting him previously, Mr Fairall continued to work until after the property settlement. Ms Aveyard said that if these were looming medical conditions from 2018 onwards, Mr Fairall could have taken action much sooner to gain skills in alternative employment that he was able to do to support his family. He has not done so.

2. It is of some concern that Mr Fairall’s evidence is that despite medical evidence that his medical conditions prevent his engaging in physical work, he has been undertaking physical labour in repairing termite damage to his principal place of residence. However, the Tribunal accepts that Mr Fairall has been able to undertake this work because he has been able to pace his work at a much slower rate than would be required in paid employment. Mr Fairall submits that his priority is to finalise the repairs caused by termites at his principal place of residence and he has chosen to undertake that work himself, at his own pace, rather than expend what he estimates would be $150,000 to have tradesmen complete the work. Responsive to the suggestion that given the looming impact of these medical conditions upon Mr Fairall from possibly 2018 or earlier, Mr Fairall could have sought out alternative non-physical labour-based skills and employment from an earlier point in time, Mr Fairall disputes any contention that he has ceased work to affect the child support assessment. Mr Fairall further submitted that such a decision motivated by the effect on child support would not make sense in the context of a child support liability otherwise of only about $16 per week.

3. The Tribunal is satisfied that Mr Fairall has demonstrated that it was not a major purpose of his decision not to work, and to not seek other non-physical work now, to affect the administrative assessment of child support. Rather the Tribunal is satisfied that Mr Fairall is not working in his usual occupation for medical reasons and, further, is not currently seeking work because of his decision to repair termite damage to his home himself, rather than expending a substantial amount of his funds to engage tradesmen to do the work. That is not necessarily a decision others would make however the Tribunal is satisfied that Mr Fairall has elected to not seek out other work at present for that reason and not with the major purpose of affecting child support.

44.  It follows that subsection 117(7B) of the Act has no application and no earning capacity decision can be made in relation to Mr Fairall.

1. The Tribunal then considered whether in the special circumstances of the case, the assessment of child support that would otherwise apply, that is as set out in paragraph 19 of these Reasons, would result in an unjust and inequitable determination of the level of financial support to be provided because of the income, property and financial resources of Mr Fairall. That assessment is based upon assessing Mr Fairall as having an adjusted taxable income of $68,212 (or $69,986) per annum with a resulting child support liability for Mr Fairall of between $880 and $2,365 per annum.

46.  Income statements from Mr Fairall’s previous employers, for the period 1 July 2022 to 4 November 2022 from [Employer 1] and for the period 1 July 2022 to 4 November 2022 from [Employer 2], show respective gross year-to-date incomes of Mr Fairall of $13,062.19 and $4,355.27 prior to him ceasing paid employment in November 2022 (Exhibit A, pages 29 and 27). Mr Fairall submits that he is currently not employed due to medical conditions impacting his ability to undertake physical work. He is not currently seeking out work of a non-physical nature due to his goal of repairing his home property without expending significant money on tradesmen. The Tribunal has found that no earning capacity decision can be made in relation to Mr Fairall.

1. Mr Fairall’s income is now therefore limited to the net rental income he receives from [Address 3]. Pending finalisation of his 2022/2023 tax return the exact amount of net rental income (in addition to the employment income from [Employers 1 and 2] at the beginning of that financial year) is unknown. However, even the gross rental income, without deducting appropriate expenses, plus the employment income in the first half of the 2022/2023 financial year is significantly less than the previously assessed adjusted taxable income of $68,212. The Tribunal finds that Mr Fairall has real property with an approximate value of $380,000 and $500,000 encumbered by mortgages of approximately $310,000 and $196,000. Further whilst Mr Fairall does have other financial resources, namely $185,000 in an offset account and shares currently valued at approximately $60,000, the Tribunal is satisfied that the offset monies are dwindling including as they are utilised for living expenses and expenses to repair the termite damage. As submitted by Ms Aveyard the share value may in future increase, however at present the Tribunal accepts the share portfolio is valued at approximately $60,000.

2. Given the change in Mr Fairall’s circumstances as canvassed, including that he is not currently in paid employment as he previously was, the Tribunal is satisfied that there are special circumstances such that application of the administrative assessment of child support would result in an unjust and inequitable determination of the level of financial support to be provided by Mr Fairall because of his now income, property and financial resources.

49.  It follows that the Tribunal considers there is a ground for a departure from the administrative assessment of child support pursuant to subparagraph 117(2)(c)(ia) of the Act as regards Mr Fairall’s income, property and financial resources.

Issue 2 – Would it be just and equitable as regards the children and each parent to depart from the administrative assessment of child support?

50.  The Tribunal has found that a ground has to be established to depart from the administrative assessment of child support. It does not necessarily follow that a change will result. Firstly at issue before the Tribunal is whether it would be just and equitable for there to be a change.

51.  The Tribunal must consider, pursuant to subsection 117(4) of the Act, whether it would be just and equitable to make a particular determination pursuant to sub‑subparagraph 98C(1)(b)(ii)(A) of the Act as follows:

(a)      the nature of the duty of a parent to maintain a child (as stated in section 3); and

(b)      the proper needs of the child; and

(c)      the income, earning capacity, property and financial resources of the child; and

(d)the income, property and financial resources of each parent who is a party to the proceeding; and

(da)    the earning capacity of each parent who is a party to the proceeding; and

(e)the commitments of each parent who is a party to the proceeding that are necessary to enable the parent to support:

(i)     himself or herself; or

(ii)    any other child or another person that the person has a duty to maintain; and

(f)the direct and indirect costs incurred by the carer entitled to child support in providing care for the child; and

(g)      any hardship that would be caused:

(i)        to:

(A)      the child; or
(B)      the carer entitled to child support;

by the making of, or the refusal to make, the order; and

(ii)       to:

(A)      the liable parent; or

(B)any other child or another person that the liable parent has a duty to support;

by the making of, or the refusal to make, the order.

52.  The Tribunal is not limited by the matters listed in subsection 117(4) of the Act and may consider any other relevant matters (subsection 117(9) of the Act).

53.  The Full Family Court, in the case of Gyselman, stated that:

some of the matters listed in sub-section (4) may overlap with matters already considered under sub‑section [117](2) and some of the paragraphs in sub-section (4) may be more significant in one case than they would be in another or of little relevance in a particular case. It is an essential part of the s.117 exercise to carry out the obligation under sub-section (4). However, that does not mean that it is necessary in each case to slavishly go through each of the paragraphs. The extent to which it is necessary to do so will depend upon the facts and conduct of the individual case and the analysis already performed under sub-section (2).

54.  The Tribunal does not propose to explore every matter in detail, but will discuss those it regards as pertinent in this application.

1. As regards paragraph 117(4)(a) of the Act, the Tribunal recognises that Mr Fairall and Ms Aveyard have a duty to maintain their child. Further, the Tribunal notes the statements contained in sections 3 and 4 of the Act to the following effect:

(a)The duty of a parent to maintain his or her child has priority over all commitments of the parent other than commitments necessary to enable the parent to support himself or herself and any other child or person that the parent has a duty to maintain.

(b)The level of support should be determined in accordance with the costs of children, and according to the parents’ capacity to provide financial support.

56.  In determining the proper needs of a child for the purposes of paragraph 117(4)(b) of the Act, subsection 117(6) of the Act requires the Tribunal to have regard to the manner in which the child is being, and in which the parents expected them to be, cared for, educated or trained and any other special needs they may have.

57.  Both parties provided documentary and written evidence about the types of costs they incur in meeting [the child]’s needs including for extracurricular activities such as drama lessons, music lessons, swimming lessons and school excursions and the like, noting that [the child] is in grade [Number] at [School]. The Tribunal is satisfied that the costs incurred by each parent in relation to [the child]’s care are the usual sorts of costs of children taken into account in the costs of children component of the usual child support formula or are otherwise additional discretionary costs that the parents choose to provide to [the child] over and above her base needs. There is no evidence before the Tribunal that the costs of providing for the proper needs of [the child] are other than the usual costs of providing for children of her age.

58.  The Tribunal has already canvassed Mr Fairall’s income, property and financial resources in detail in its earlier consideration.

1. As regards Ms Aveyard’s income, property and financial resources and liabilities, Ms Aveyard had previously provided Child Support with a copy of her employment contract with her current employer (Exhibit 1, pages 148 to 149), showing that her base salary was $80,000 per annum plus superannuation of 10.5% which would equate to a gross annual package of $88,400. Recent payslips provided pursuant to the Tribunal’s directions (Exhibit B, pages 46 to 47) show that Ms Aveyard’s year-to-date gross income as at 4 August 2023 was $9,989.89, suggestive of a higher annual income. The Tribunal asked Ms Aveyard at hearing what might explain the higher year-to-date income. Ms Aveyard’s evidence was that since commencing employment she has received a $5,000 pay increase after three months (Exhibit 1, page 150) and a further 3.5% increase at the end of the financial year with a total package now of approximately $87,000 per annum. Further, she has an arrangement to purchase more leave per year and if it is not utilised she then gets paid extra, as she thinks might have occurred and might be the reason for a higher gross pay than expected to 4 August 2023. Ms Aveyard agreed with the Tribunal’s suggestion that overall it appeared that her adjusted taxable income for child support purposes, after taking into account superannuation and reasonable deductions, might not be inconsistent with the $95,303 figure that would be utilised in the child support assessment failing a change in assessment. Additionally, Ms Aveyard receives approximately $70 per week family tax benefit. Ms Aveyard confirmed that as disclosed in her Statement of Financial Circumstances she has a 50% share as tenants in common of her principal place of residence, with that share valued at approximately $200,000 with her share of the associated mortgage being approximately $190,000 (with property settlement proceeds after legal costs contributing to her share of acquisition of the property). Ms Aveyard confirmed she has approximately $40,000 in savings, a credit card debt of a couple of thousand (down a bit from the $10,000 balance as at the date she completed her Statement of Financial Circumstances) and an ongoing liability to the Australian Taxation Office in relation to a HECS debt of approximately $3,000.

2. As regards the necessary commitments of each parent, both parties provided an estimate of their personal and household expenditure in Statements of Financial Circumstances (SFC); Mr Fairall’s SFC being dated 28 August 2023 (Exhibit A, pages 1 to 9) and Ms Aveyard’s SFC being dated 6 June 2023 (Exhibit B, pages 1 to 9). The Tribunal discussed the various estimated expenses with Mr Fairall and Ms Aveyard at hearing. As discussed at hearing, it is not the role of the Tribunal to conduct a forensic examination of a party’s spending habits or choices. Generally speaking the Tribunal is satisfied the estimated expenses are appropriate and reflect Mr Fairall’s and Ms Aveyard’s respective necessary commitments.

3. When queried, as to any hardship that would result if a change from the administrative assessment was not made, Mr Fairall said that he would have to live with whatever transpires however given his dwindling resources and current circumstances, he does not consider he has the capacity to pay child support and rather seeks contribution from Ms Aveyard to the costs he covers for [the child] including when she is in his care. As regards potential hardship, Ms Aveyard told the Tribunal that if she was required to pay child support, that would result in her likely not being able to afford all of the extracurricular activities in which [the child] participates. Further, as the parent with sole parental responsibility, she has to have regard to future needs for [the child], including stockpiling money for future needs such as braces or other medical needs and schooling expenses, including if [the child] is educated at a private school in the future. She has to continue to save and strive for those things for [the child] in the future. She would like to see Mr Fairall having equal contribution to [the child]’s expenses. Mr Fairall responded that he would always be willing to contribute to any medical needs or the like that [the child] may have in the future such as braces.

4. Mr Fairall submitted that any change of assessment should only be until the end of 2023 as he can then finish up the termite repair work on his house and start to earn an income, no matter that it might only be a small amount. Mr Fairall said his circumstances will be changing – he will have to do something otherwise he will be broke. Ms Aveyard submitted that if there is any departure made, that it should be for at least 12 months so she has some certainty and some reprieve from these sorts of processes.

63.  Failing a change of assessment, Mr Fairall would currently be assessed to pay child support of $931 per annum. On the one hand, Mr Fairall is not currently employed and his income is limited to minimal net rental income after expenses. However, he has approximately $245,000 in liquid assets (funds in bank and shares), albeit those monies are being diminished by living costs and repair costs for his home. He also has equity in an investment property. On the other hand, Ms Aveyard is in continuing employment with income after reasonable tax deductions likely in the $85,000 to $95,000 per annum range. She has $40,000 in savings. As the parent with the greater percentage of care of [the child] (61%), Ms Aveyard’s costs of caring for [the child] are likely slightly higher than Mr Fairall’s. However, the Tribunal recognises that costs of accommodation, clothing etc. are fixed costs which both parents have to provide.

64.  The evidence shows that both Mr Fairall and Ms Aveyard are each respectively managing their finances based on the assessment of child support of $0 child support payable by either parent in place since the date of the original decision on 22 February 2023. Mr Fairall’s financial resources are understandably dwindling because he has no source of income other than the rental income and because of his expenditure towards the repairs to his home necessitated by termite damage. However, whilst Mr Fairall’s resources are dwindling, the Tribunal does not consider that hardship will result to Mr Fairall, or [the child], if he is not in receipt of child support from Ms Aveyard including because he does have access to $185,000 (and shares which can be sold if necessary) until he is able to seek out non-physical employment. Likewise the Tribunal does not consider hardship will result to Ms Aveyard, or [the child], if Ms Aveyard is not in receipt of child support from Mr Fairall because of her continuing income from employment. The Tribunal therefore proposes to make a departure from the administrative assessment of child support and to determine that the annual rate of child support payable by each parent is $0 pursuant to paragraph 98S(1)(a) of the Act. The Tribunal notes that as both parents have more than regular care, this is not prohibited by section 98SA of the Act.

65.  As regards the duration of the departure, Mr Fairall made his change of assessment application on 7 November 2022. At that time, Child Support’s previous 1 August 2022 change of assessment was operative. Mr Fairall’s payslips show that his last paid employment was to 27 November 2022 (Exhibit A, page 59). The previous change of assessment was made setting each parent’s adjusted taxable income as set out in paragraph 18 of these Reasons. Following the earlier change of assessment, Mr Fairall’s circumstances have changed in that he currently receives no income from employment. For the reasons given the Tribunal considers 28 November 2022 to be an appropriate date to effect a different change to the assessment to the previous determination. Section 98J permits such a decision on the basis of Mr Fairall’s change in circumstances. As regards the end date of the departure determination, Mr Fairall sought that it terminate at the end of this calendar year on the basis that he expects that he will then be finished the termite work on his house and be able to seek other employment. Ms Aveyard seeks certainty for as long as possible. The Tribunal considers it appropriate that the departure extend until the end of November 2024, enough time after the end of the current financial year to enable Mr Fairall’s and Ms Aveyard’s adjusted taxable incomes to be known. This enables Mr Fairall to seek further employment or otherwise and there will be more certainty around Mr Fairall’s circumstances including completion of the termite work and his alternative paid employment or other income options. Allowing until the end of November 2024 means that will be more than sufficient time for tax returns to be finalised and notices of assessment to issue and, further, it aligns with when the previous change of assessment would otherwise finish. If there is a significant change in circumstances in the meantime, including in relation to the care position of [the child], either parent is at liberty to seek a further change to the assessment.

66.  Having had regard to the relevant subsection 117(4) matters, the Tribunal is satisfied that this proposed departure is just and equitable.

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

67.  The Tribunal considered whether it would be otherwise proper to make the proposed departure determination in accordance with sub‑subparagraph 98C(1)(b)(ii)(B) of the Act. Subsection 117(5) of the Act sets out the matters that must be considered when deciding whether it would be ‘otherwise proper’ to make a departure determination. Subsection 117(5) focuses on the balance of support between parents on the one hand and the taxpayer on the other. It is appropriate for the children to be primarily supported by their parents rather than by government assistance. Paragraph 117(5)(b) of the Act means that the Tribunal must consider whether the level of a benefit, in particular family tax benefit, received by the party caring for a child may be affected by the level of child support.

68.  Changing the administrative assessment so that Ms Aveyard is not in receipt of child support from Mr Fairall as she otherwise would be means that she will likely have a slightly higher family tax benefit entitlement, therefore a higher impost upon the public purse. However, the higher entitlement is likely to be minimal given the relatively small reduction from approximately $900 assessed child support payable to her per annum to $0. Given the circumstances of Mr Fairall and Ms Aveyard as canvassed by the Tribunal, and the minimal impact upon family tax benefit entitlement, the Tribunal considers that it is otherwise proper to make the particular departure determination proposed.

DECISION

The decision under review is varied so that from 28 November 2022 to 30 November 2024, the annual rate of child support payable by each of Mr Fairall and Ms Aveyard is set at $0.

Notation – Child Support’s decision of 1 August 2022 therefore ceases to apply from 28 November 2022.