Fehrman and Digne (Child support)

This matter concerned an appeal by the father, Mr. Fehrman, against a decision of the Child Support Registrar regarding the assessment of child support payable to the mother, Ms. Digne. The dispute centred on the father's income for child support purposes, specifically whether certain payments received by him should be included in his assessable income. The appeal was heard by Magistrate P Jensen in the Magistrates Court of Western Australia.

The primary legal issue before the Court was whether payments received by the father from his employer, described as "redundancy payments" or "severance payments," constituted "income" for the purposes of the *Child Support (Assessment) Act 1989* (Cth). The Court was required to determine if these payments fell within the definition of income as defined by the Act, or if they were of a capital nature and therefore excluded from assessable income.

Magistrate Jensen reasoned that the nature of the payments was crucial. The Court considered the purpose for which the payments were made and their characterisation. Applying established principles of income tax law, which are often relevant in child support matters, the Court determined that the payments, being a lump sum received upon termination of employment and not in the nature of regular remuneration for services rendered, were capital in nature. Consequently, they were not to be treated as income for the purposes of the child support assessment.

The Court allowed the father's appeal, setting aside the Child Support Registrar's assessment. The child support assessment was to be recalculated excluding the redundancy payments from the father's assessable income.