Feldwicke and Feldwicke (Child support)

Feldwicke and Feldwicke (Child support) [2023] AATA 1793 (11 May 2023)

DIVISION:Social Services & Child Support Division
REVIEW NUMBER:  2022/PC025219
APPLICANT:  Mr Feldwicke
OTHER PARTIES:  Child Support Registrar
Ms Feldwicke

TRIBUNAL:Member Y Webb
DECISION DATE: 11 May 2023
DECISION:

The decision under review is affirmed.

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 affirmed

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

This review relates to the issue of child support regarding the children of Ms Feldwicke and Mr Feldwicke (“the children”). They have four children aged 12, 10, almost 8 and 6. Child Support records reflect that currently the children are in the 58% care of Ms Feldwicke and 42% care of Mr Feldwicke. The parents separated in October 2019 and the child support has been collectable by Services Australia - Child Support (Child Support) since that date.
On 22 February 2022 Ms Feldwicke applied to Child Support for a change to the administrative assessment on the basis of Reasons 8A and 8B. Mr Feldwicke cross-applied on the basis of Reason 8A.
At the time of Ms Feldwicke’s application for a change to the assessment, and in the period 1 January 2022 to 30 June 2022 Mr Feldwicke was assessed under the administrative formula assessment to pay an annual rate of child support of $3.988. This was based on Mr Feldwicke’s adjusted taxable income for the 2020–21 financial year of $50,518 and Ms Feldwicke’s estimate of income of $19,892.
From 1 July 2022 to 31 October 2022 Mr Feldwicke was assessed to pay an annual amount of child support of $3,988 based on Mr Feldwicke’s adjusted taxable income for the 2020–21 financial year of $50,518 and Ms Feldwicke’s 2020–21 adjusted taxable income of $28,517.
On 21 May 2022 a delegate of the Registrar decided that Reason 8A had been established in relation to both parents and Reason 8B had been established in relation to Mr Feldwicke’s earning capacity. The decision maker changed the assessment by varying Mr Feldwicke’s adjusted taxable income to $100,000 per annum and Ms Feldwicke’s adjusted taxable income to $41,000 per annum for the period 1 January 2022 to 31 December 2023.
On 15 July 2022 (and having been granted an extension of time) Mr Feldwicke objected to that decision.
On 7 November 2022 his objection was partly allowed although in a way that was less favourable to Mr Feldwicke. The objections officer set aside the original decision concluding that Mr Feldwicke’s adjusted taxable income should be varied to $110,500 per annum and Ms Feldwicke’s adjusted taxable income should be varied to $44,450 per annum for the period 1 January 2022 to 31 December 2023.
On 7 November 2022 Mr Feldwicke requested review by the Administrative Appeals Tribunal (“the Tribunal”).
A telephone directions hearing was held on 30 March 2023 with both parents.
The hearing took place on 11 May 2023 and both parents gave evidence on affirmation.

ISSUES

The central issues for the Tribunal to determine in this case are:
· Whether one or more of the grounds for departure referred to in subsection 117(2) of the Child Support (Assessment) Act 1989 (the Assessment Act) exists; and if so,
·      Whether it would be:
(a)   just and equitable as regards the child, the liable parent, and the carer entitled to child support; and
(b)   otherwise proper
to make a particular determination to depart from the administrative assessment of child support.

DOCUMENTARY EVIDENCE

The Tribunal had before it a number of documents, organised into exhibits as set out in the attached Schedule. The Tribunal had regard to all of this evidence and refers specifically to particular items in these Reasons.

CONSIDERATION

The child support law

The legislation relevant to this review is contained in the Assessment Act and the Child Support (Registration and Collection) Act 1988.
The rate of child support payable by the liable parent is usually based on an administrative formula assessment under Part 5 of the Assessment Act. This requires the application of a statutory formula which takes into account factors such as the number of children, the level of care provided and the income of each parent.
The liable parent or carer may apply to the Child Support Registrar for a determination to depart from the child support administrative assessment under Part 6A of the Assessment Act (section 98B). Section 98C provides that the Registrar may make a determination to depart from the formula assessment and establishes a three-step process as described in paragraph 11 above.
The grounds for departure from an administrative assessment of child support are those set out in subsection 117(2) of the Assessment Act. Each ground for a departure from the administrative formula is prefaced by the words “in the special circumstances of the case”. Therefore, when considering whether a ground exists in this case, the Tribunal must be satisfied that there are “special circumstances” in the case. If satisfied that there are “special circumstances” and 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 Assessment Act. Section 98S sets out a range of determinations that may be made under the departure provisions.
The phrase “special circumstances of the case” is not defined in the Assessment Act. In the case of Gyselman and Gyselman (Gyselman),[1] the Full Court of the Family Court of Australia held that:
Section 117(2) sets out the grounds for departure from administrative assessment. Each of those grounds is prefaced by the words “in the special circumstances of the case”.
Whilst it is not possible to define with precision the meaning of that term, 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 administrative formula result in the ordinary run of cases.
[1] (1992) FLC 92-279
Subsection 98C(3) of the Assessment Act provides that subsections 117(4) to (9) of the Assessment Act apply to the Registrar and therefore the Tribunal must consider those provisions when deciding whether, if a ground is established, it would be just and equitable or otherwise proper to make the departure decision.

Does a ground or grounds exist to depart from the administrative formula assessment?

In considering whether a ground or grounds exist which justify departing from the administrative formula assessment, the Tribunal considered the extensive information contained within the documentation provided by Child Support as well as the additional documentation provided by the parents and the oral evidence provided at the hearing.

Reason 8A

The legislative grounds in relation to Reason 8A are set out in subparagraph 117(2)(c)(ia) of the Assessment Act. The test is whether:
…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: [paragraph 117(2)(c)]
(ia) because of the income, property and financial resources of either parent;
To establish Reason 8A it is necessary to show that either Mr Feldwicke’s or Ms Feldwicke’s income, property and financial resources used in the assessment make the child support assessment unfair.

Mr Feldwicke’s income, property and financial resources

At the time that Ms Feldwicke applied for a change to the assessment in February 2022 and since 12 November 2018[2] Mr Feldwicke was working as a fly-in fly-out (“FIFO”) worker for [Company 1]. His 2021–22 personal income tax return shows that in that financial year he earned a gross amount of $110,844 from his employment with [Company 1][3].
[2] C1-page 364
[3] A107
On 28 March 2022 he resigned from his employment with [Company 1] and claimed social security benefits from Centrelink. His personal income tax return for the 2021–22 financial year shows that he received $6,693 (gross) of Centrelink benefits[4]. With deductions of $6,887 Mr Feldwicke’s taxable income as specified in his income tax return was $110,650 for the 2021–22 financial year[5].
[4] A 107
[5] A108
Mr Feldwicke told the Tribunal that around April 2022 he established a business: [Business 1]. He confirmed that he is the sole shareholder and sole director of [Business 1] which his LinkedIn profile states is a [Industry 1 company][6]. Mr Feldwicke is an employee of [Business 1]. He stated that his employment started with [Business 1] around July 2022. He provided a payslip dated 6 October 2022 which showed that he was paid $1,000 per week (gross)[7] and the year-to-date earnings were $14,000. His payslip confirmed that he was working 20 hours per week. He confirmed that the payslip related to his employment with [Business 1]. He confirmed in his Statement of Financial Circumstances signed on 19 December 2022 that he was receiving income of $1,000 per week although at the hearing he told the Tribunal that he was no longer being paid $1,000 per week because the business could not afford to pay him. He referred to his bank balances, which he had provided to the Tribunal. He referred to the “[Business 1] Savings” account which showed a balance of nil and the most recent transaction being on 18 November 2022. He also advised that the bank account labelled “Main Account” also related to [Business 1] and that had a balance of $582.19 at 18 April 2023. He confirmed that his employment income is paid from the Main Account. He stated that the business, while it has potential, is not making a profit and that brokers are looking to restructure it.
[6] C1-pages 521-522
[7] C1-page 462
Mr Feldwicke told the Tribunal that, apart from [Business 1], he is involved with two other businesses. He is one of two directors and one of two shareholders in a [Industry 2] business – [Business 2]. Mr Feldwicke advised that the business was started around September/October 2022 and he confirmed that [Business 2] operates at two locations. He stated that he is not receiving any income from the business. He stated that it was supporting itself, covering its running costs but was not making a profit. He claimed that he has been working most days at the [Business 2] business premises as the [Occupation 1] since October 2022. He stated that as long as the business is self-sufficient he will continue with it.
Mr Feldwicke also established another business in 2022: [Business 3] . He stated that he is one of two directors and one of two shareholders of this company. He denied that the company was trading. He stated that it is “nothing”; it is a brand name and was only registered as a company to preserve the name. He stated that it is costing $80 per month for [a] software program and bank fees which currently his partner is paying. It is something to consider in the future but it is not currently trading.
Child Support records show that Mr Feldwicke ceased receiving assessable Centrelink payments around August 2022[8].
[8] C1-page 17
Mr Feldwicke does not own any real estate. He owns two cars which he stated in his Statement of Financial Circumstances had a combined value of approximately $50,000 (although at the hearing he stated that they were both under finance); superannuation to the value of $40,763 (which is preserved) and household and personal effects which he valued at approximately $5,000[9]
[9] A6-A7
In relation to financial resources Mr Feldwicke stated that he has borrowed money from a financial institution and extensively from friends and family. He advised that an amount of $24,000 deposited into his [Bank 1] account ending in [number] on 21 March 2022 was a commercial loan taken out when he was still working and employed as a FIFO worker with [Company 1]. In addition, Mr Feldwicke advised that his borrowings total at least around $161,000.
The bank accounts provided to the Tribunal currently show minimal balances[10].
[10] A22-A35
Ms Feldwicke contended that Mr Feldwicke was not truthful regarding his income. She stated that she believes Mr Feldwicke is earning income from the [Business 2] business. She believes that he is working on a “cash in hand” basis. She stated that he can afford to drive expensive cars and take the children on outings on weekends. She stated that Mr Feldwicke has failed to provide all of his bank statements for all of his bank accounts to the Tribunal. She stated that she believes that Mr Feldwicke is still undertaking FIFO work. She stated that since February 2022 he has told the children that he was working away from home and he was wearing [specified] clothing. Mr Feldwicke responded that he was working in [location] on occasions but that related to his [Industry 1] business. Ms Feldwicke stated that Mr Feldwicke’s finances do not add up. She is unsure how his lifestyle and expenses are paid. She contends that he has provided “false financials” and is hiding bank accounts and assets[11].
[11] B25-B26
The Tribunal considered all of the available information regarding Mr Feldwicke’s income. It is extremely difficult to ascertain his current income. Mr Feldwicke told the Tribunal that essentially none of his businesses are making any money and he is surviving on loans from friends and family. He referred to a private loan totalling $140,000 which he stated he was repaying at the rate of $1,900 per month (or borrowing further money from friends to repay it). While the Tribunal accepts that friends and family may be financially assisting him, the Tribunal is not persuaded that he has no other source of income.
Following his resignation from his employment with [Company 1] on 28 March 2022 the Tribunal is satisfied that Mr Feldwicke has established three companies. It accepts that [Business 3] and [Business 2] do not appear to be registered for GST. The [Business 1] business is registered for GST. Mr Feldwicke told the Tribunal that he has an Australian Taxation Office debt related to his Business Activity Statement (BAS) of between $40,000 and $60,000. The Tribunal is satisfied that he could not have incurred the debt to the Australian Taxation Office unless one or more of his companies had received significant business income.
Mr Feldwicke confirmed that until very recently he has been paid $1,000 per week by [Business 1] and that has been the case since July 2022.
In relation to [Business 2], the Tribunal is not persuaded that Mr Feldwicke works there most days of the week for no income. Even though it is, without financial statements, impossible to know the exact amount of income Mr Feldwicke receives from [Business 2], it is implausible to suggest that he receives no recompense at all from this business.
In relation to [Business 3], it is difficult to be sure whether this is actually trading or not. Once again, in the absence of financial statements, its financial position is essentially a mystery. Mr Feldwicke told the Tribunal that his partner is paying the costs of this business (which are $80 per month). He advised that his partner works a “small amount”. In the absence of any information to contradict Mr Feldwicke’s statements regarding [Business 3] the Tribunal accepts that this company is not currently trading.
Although the Tribunal directed Mr Feldwicke to provide appropriate documentation regarding the financial state of the three businesses over the last six months, Mr Feldwicke has not produced any profit and loss statements or any other appropriate documents as requested.
Mr Feldwicke, in response to the directions, did provide proof of balances of a number of [Bank 2] bank accounts. He was directed to provide proof of balances for all bank accounts for which he is a signatory (personal and business) as at 30 March 2023. The C1 papers include [Bank 1] bank statements for an earlier period. However, no proof of balances as at 30 March 2023 have been provided for any [Bank 1] accounts. In addition, it appears that Mr Feldwicke told Child Support that he had [two other bank accounts]. No statements or proof of balances was provided regarding these bank accounts[12].
[12] C1-page 519
His taxable income in the 2021–22 financial year of $110,650 comprised income from [Company 1] plus some Centrelink income minus his deductions. The Tribunal is not persuaded that his income is at the low level which he contends. Mr Feldwicke declared that his estimated household expenditure totalled $727.50 per week (approximately $37,830 per year). Although he claims to have no or little income he must be funding his household expenses somehow especially as his partner is only working a small amount of time.
In relation to the loans from friends and family to Mr Feldwicke, no documentation has been provided to the Tribunal about the terms and conditions of those loans. It is feasible that some of the “loans” are in fact gifts which do not involve repayment but even if that is the case the Tribunal does not propose to include any gifts as income for Mr Feldwicke.
Taking all of his financial and business arrangements into account, including the $1,000 per week from [Business 1] which has, at least until recently, been paid to Mr Feldwicke as an employee since July 2022, the Tribunal finds that Mr Feldwicke’s income significantly exceeds the adjusted taxable income of $50,518 which is used for him in the assessment periods under review. The Tribunal finds that Mr Feldwicke continues to receive an income of approximately $110,500 per annum.
The Tribunal finds that the child support assessment is unfair because there is a significant disparity between his actual income in the periods under review and the income being used in the assessment. The Tribunal is satisfied that special circumstances exist and that Reason 8A has been established in relation to Mr Feldwicke’s income.

Ms Feldwicke’s income, property and financial resources

In the assessment periods under review there were a number of changes in relation to Ms Feldwicke’s income. In the period from January 2022 to June 2022 Ms Feldwicke’s income was estimated to be $19,892 and from July 2022 her 2020–21 adjusted taxable income was determined to be $28,517. However, when her income tax return was completed for the 2021–22 financial year her adjusted taxable income was determined by the Australian Taxation Office to be $44,450, which is significantly higher than the income figure being used in the periods under review such that it creates a special circumstance.
The Tribunal therefore finds that Reason 8A has been established in relation to Ms Feldwicke’s income.
In relation to the claim that Reason 8B is also relevant in this case, the approach of the Federal Circuit Court of Australia in these cases has been to limit the analysis about particular grounds once it was evident that one had been established, and to thereafter focus on the “just and equitable” considerations. The Tribunal adopts that approach in its reasoning in this matter.

Would it be just and equitable to depart from the administrative assessment?

Section 3 of the Assessment Act states that parents have the primary duty to maintain their children and that this duty takes priority over all commitments of the parents other than commitments necessary to enable the parent to support themselves or any other child or another person that the parent has a legal duty to maintain. The Assessment Act contemplates not only that both parents contribute to the support of their children but that the parents’ capacity to contribute must be taken into account.

Having found a reason for departure, the Tribunal must consider whether it is just and equitable to depart from the administrative formula assessment. The Tribunal must have regard to a range of matters set out in subsection 117(4) of the Assessment Act. This requires an assessment of the duty of the parents towards the children; the needs of the children; any income, earning capacity and financial resources of the children; the income, earning capacity and financial resources of the parents; self-support commitments; and an evaluation of hardship on the parties (and/or the children) if the Tribunal increased or decreased the amount of child support payable.
In considering these issues, the Full Family Court, in the case of Gyselman, stated that:
However, some of the matters listed in sub-section [117](4) may overlap with matters already considered under sub-section (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).
Of particular relevance in this matter are the following aspects of subsection 117(4) of the Assessment Act:

The proper needs of the children

In determining the proper needs of the children, subsection 117(6) of the Act requires the Tribunal to have regard to the manner in which the parents expected the children to be cared for, educated and trained as well as a consideration of any special needs of the children.
Ms Feldwicke stated that she is solely paying for the children’s medical expenses, such as asthma medication for one of the children and laxatives for another. In addition, she stated that although Mr Feldwicke is responsible for half of the school fees for the three youngest children, she is paying for the children’s music lessons, swimming costs, school book list costs and school camp costs. In addition, she is paying for school uniforms and counselling costs for two of the children.
Mr Feldwicke responded that he is supplying asthma medication when the child is in his care. He agreed that he was responsible for half of the private school fee costs for the three youngest children but he denied that he was responsible for the private school fees for the eldest child who is now in secondary school. He stated that he never signed the enrolment form for the private secondary school because he did not agree with her attending a private secondary school. In relation to the counselling costs Mr Feldwicke stated that there were only a couple of sessions and he understands that these were provided without cost to Ms Feldwicke because she was receiving Centrelink benefits.
Ms Feldwicke did not provide receipts in relation to the costs of meeting the proper needs of the children. In relation to schooling, it is not disputed that Mr Feldwicke is responsible for half of the school fee costs for the three youngest children. The Tribunal is satisfied that in relation to the eldest child Ms Feldwicke enrolled the child at a private school against the wishes of Mr Feldwicke and therefore that Mr Feldwicke is not responsible for the eldest child’s school fees. In relation to counselling, it did not appear that in recent times Ms Feldwicke has incurred significant costs. The Tribunal accepts that Ms Feldwicke has paid for music lessons and swimming lessons for the children and also paid school camp fees. It also accepts that she pays for the children’s school uniforms. Mr Feldwicke did not deny that was the case.
In relation to the school uniform costs and other school-related extra-curricular costs these are costs which are generally incurred whether the children attend a private school or a government school and are in the nature of day-to-day costs. Normally, unless there were special reasons these costs would not be separately accounted for in the child support assessment. Normally, it would be expected that the child support payments would cover these types of costs at least to some extent. However, in Mr Feldwicke’s case he has not been paying his owed child support for many months, which means that Ms Feldwicke is solely and unfairly bearing all of the costs of these items. The Tribunal acknowledges the unfairness of that situation and will take that into account in a general way in its determination.

The income, earning capacity, property and financial resources of the children

Both Ms Feldwicke and Mr Feldwicke advised, and the Tribunal accepts, that the children have no income, property or financial resources of their own and the Tribunal finds that the children are wholly dependent on their parents for financial support. Mr Feldwicke advised that the children are beneficiaries of a trust associated with his [Business 1] business but that no funds have been distributed to them.

Mr Feldwicke’s income, property, financial resources, expenses and earning capacity

Mr Feldwicke’s income has been covered at length above. There is no evidence of any other income or financial resources. As stated above the Tribunal accepts that some of the “loans” which Mr Feldwicke has received from one or more family members may actually be gifts but given the lack of information about the terms and conditions of the loan arrangements the Tribunal does not consider that it would be just and equitable to treat any of the “loans” as a financial resource to Mr Feldwicke.
He has an unspecified BAS-related debt to the Australian Taxation Office, which he estimated will be between $40,000 and $60,000 and personal loans with approximately $160,000 owing. He has household expenses of approximately $37,830. However, these debts do not reduce his primary obligation to support his children.
As detailed above, the Tribunal has found that Mr Feldwicke is most likely continuing to earn an income of approximately $110,500 per annum. The Tribunal finds it implausible that Mr Feldwicke would resign from his well-paid job to become self-employed unless he could make a comparable income from doing so. He is working “most days” for [Business 2] and in addition is working 20 hours per week (and earning $1,000 per week) in [Business 1].
In the event that the Tribunal is mistaken about Mr Feldwicke’s income, it considered his earning capacity and whether Mr Feldwicke had deliberately reduced his income to reduce his child support liability. The earning capacity provisions are difficult to satisfy. There are three criteria all of which must be satisfied. Subsection 117(7B) of the Assessment Act states:
(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.
In relation to criterion one, Mr Feldwicke is currently working part-time for [Business 1] and also working (he contends for no payment) at [Business 2]. He is now self-employed. Previously he was working as a FIFO full-time employee earning at least $110,500 per year. The Tribunal is satisfied that he has changed his occupation and working pattern. The first criterion is satisfied.
In relation to criterion two, Mr Feldwicke contended that his mental health was the reason why he changed his working arrangements. He provided a brief referral letter from his general practitioner which did not specify his medical condition but Mr Feldwicke advised that it was in relation to his mental health. He did not, however, provide any documentation from a suitably qualified medico which stated that Mr Feldwicke’s mental health condition rendered him incapacitated for work in his usual FIFO occupation.[13]
[13] A42
Mr Feldwicke also provided a letter from a therapist who confirmed that she treated him in 2021 for mental health issues. She also did not advise that his health conditions rendered him too incapacitated to work in his usual FIFO occupation[14].
[14] A56
Mr Feldwicke provided a letter from the owner of [Company 2], a place at which Mr Feldwicke previously worked. The author advised that they were aware of the court case involving Mr Feldwicke and Ms Feldwicke. The person stated that they supported Mr Feldwicke’s decision to resign from his employment because his decision to resign “was in the best interests of his personal safety and that of the others he led on the worksite”[15]. However, the [Company 2] owner cannot be considered a health expert and therefore that person is not qualified to advise whether Mr Feldwicke’s decision to change his occupation and working pattern is justified on the state of his health.
[15] A53
The Child Support records show that Mr Feldwicke told an officer that he had resigned from his FIFO employment because he was spending so much time with lawyers that he had no time to work.[16] His Employment Separation Certificate stated that he left his employment for “personal reasons”[17]. At the hearing Mr Feldwicke told the Tribunal that he resigned from his employment because he was not concentrating on his work but instead he was concentrating on the issues regarding his children and the court proceedings. There is nothing in the papers to indicate that at the time that Mr Feldwicke resigned from his employment he did so on the advice of a suitably qualified medical professional. Rather, he resigned because he wanted to concentrate on the legal proceedings surrounding his children. Hence, the Tribunal finds that his decision to resign from his FIFO work was not justified on health grounds.
[16] C1-page 348
[17] C1-page 364
In relation to the third criterion of the earning capacity provisions, there is a requirement that in order to determine that the parent’s earning capacity is greater than is reflected in the person’s income it needs to be demonstrated that a major purpose of Mr Feldwicke’s resignation was to affect the assessment of child support in relation to the children. Mr Feldwicke strongly denied that his decision to resign had any connection to child support. He stated that it related to court proceedings, meetings with lawyers, his new relationship and the impending birth of his child, his mental health and his desire to forge a new career path.
Ms Feldwicke strongly contended that Mr Feldwicke had quit his FIFO job on several occasions always when Child Support had attempted to engage with him about paying child support or a child support assessment was issued to him. She stated it was a familiar pattern ever since they separated that he would quit his job for a period of time and then return to FIFO work once Child Support stopped reviewing him.
The Tribunal considers it more likely than not that Mr Feldwicke’s decision to become self-employed for what he claims is minimal income was at least partly motivated by his reluctance to pay child support to Ms Feldwicke. The legislation does not require that this be the only reason but only that “a major purpose” of the decision to change his working pattern or occupation was the effect that his work arrangements would have on the child support assessment. It need not be the dominant purpose and there may be more than one major purpose.
The Tribunal finds that all three criteria detailed in paragraph 117(7B)(a) to 117(7B)(c) of the Assessment Act are satisfied and that Mr Feldwicke is most likely not exercising his full earning capacity. The Tribunal concludes that it would be just and equitable to determine that Mr Feldwicke has an earning capacity of $110,500 per annum (in the event that his actual income is below $110,500 per annum).

Ms Feldwicke’s income, property, financial resources, expenses and earning capacity

Ms Feldwicke’s income has been covered above in paragraphs 42 and 43. Her taxable income in the 2021–22 financial year was $44,500, which relates to income she received from working in a [workplace] plus Centrelink parenting payments of $17,727. Since June 2022 she has been working full time for a [business]; initially as a [Occupation 1] and since March 2023 as a [Occupation 2]. Her annual salary is now approximately $62,000 per annum but this salary will be earned for only a small part of the 2022–23 financial year. In addition, Ms Feldwicke explained that she is no longer eligible for parenting payment or rent assistance and her family tax benefit has reduced due to her higher employment income.
Mr Feldwicke contended that Ms Feldwicke is still working in [an Industry 3] business. He provided multiple screen shots of [Industry 3 events] and [invitations] to work at such events. He claimed that these showed that Ms Feldwicke was working in that industry and earning well above her employment income. Ms Feldwicke denied that she had worked in that industry since 2021. She agreed that many of the advertisements of events included a comment “Ms Feldwicke – Free” but she stated that while this indicated that she was “available” to attend the event, in fact she never actually attended any of those events. The Tribunal is satisfied that stating she is “free” to attend does not mean that she undertook any work on those dates. However, there were a number of other [invitations] to work at events which included the comment “Filled – Ms Feldwicke”[18]. There are also numerous [invitations] which appear to have been circulated by Ms Feldwicke. At the hearing Ms Feldwicke strongly denied that she had undertaken any [Industry 3] work since 2021. She stated that to do so would put her employment at risk. She advised, however, that she does “post jobs” for friends to help them out. She denied that she takes any commissions for posting jobs for friends. The Tribunal is not persuaded that Ms Feldwicke has severed all links to [Industry 3]. She admitted that she still is involved in posting jobs for friends and it appears that she has, since 2021, “filled” invitations to work. However, Ms Feldwicke strongly denied that she had received any income from her association with [Industry 3] in recent years. The Tribunal has little evidence of any paid work since the beginning of the 2021 financial year. Even if she received any payment it is unlikely to be significant if it relates to only a small number of events. For example, if Ms Feldwicke’s income was increased by $3,000 this would only result in a decrease in Mr Feldwicke’s child support liability of approximately $6.20 per week (based on an income of $110,500 for Mr Feldwicke and an income of $44,450 for Ms Feldwicke).
[18] A61 - 18 June 2021, A66 – 3 Dec 2022, A67 – 26 Nov 2022, A97 – 22 Dec 2022.
In relation to her expenses, Ms Feldwicke advised in her Statement of Financial Circumstances that her household expenses total approximately $1,285 per week or $66,820 per annum. She is repaying a personal loan of $10,000 and a HECS debt of $65,000. In relation to property, Ms Feldwicke owns no real estate. She has a motor vehicle which she estimated to be valued at approximately $30,000 and household and personal effects which she valued at $10,000. In relation to financial resources Ms Feldwicke advised that she received an inheritance in 2022 after her mother passed away. She stated that after payments of her mother’s expenses she received an amount of approximately $26,000. The Tribunal is satisfied that this is not income and it does not propose to treat it as a financial resource for child support purposes.
In relation to earning capacity Ms Feldwicke’s income from employment has steadily increased since separation to the point where she is now working full time and is no longer dependent on Centrelink benefits. Mr Feldwicke contended that she could earn more in [Industry 3]. However, that misunderstands the intent of the earning capacity provisions. The Tribunal has no hesitation in accepting that Ms Feldwicke is exercising her full earning capacity.

Necessary commitments to support themselves or others

The Tribunal notes that the Family Court of Australia has been prescriptive about the types of expenses that can be considered “necessary” expenses and that there are only a few expenses that can be considered to take priority over a parent’s primary duty to support their children. This includes expenses such as a reasonable amount for payment of rent or mortgage, food, utilities, and some loans. In Mee and Ferguson[19] the Full Court of the Family Court stated at paragraph 128:
Some of the items obviously have to be taken into account before maintenance is arrived at; for example, the cost of reasonable transport, food and clothing, and other like expenses are necessary to the continued reasonable existence of a parent, and, barring legislative direction to the contrary, it would not accord with the understanding in this jurisdiction to suggest that those items should be put out of consideration before child maintenance is determined. On the other hand there is no doubt that one of the primary responsibilities of a parent is the continued support of children to the extent to which the parent continues to be able to do so and that may in appropriate circumstance mean making financial sacrifices or cutting one's cloth to meet that commitment during the years when it applies.
[19] [1986] FamCA3.
Ms Feldwicke did not raise any issues in relation to her own self-support expenses. Mr Feldwicke referred to his high level of debt. However, the Tribunal does not consider that it would be justifiable to increase Mr Feldwicke’s self-support amount in the formula thus reducing his child support liability because of the debts which he has voluntarily incurred.

Commitments to support someone else

The Tribunal notes that Mr Feldwicke has a child (born in November 2022) with his new partner.

Direct and indirect costs incurred by the carer entitled to child support in providing care for the children

Ms Feldwicke confirmed that she does not incur any child care costs relating to the children.

Any hardship to either parent or the children by the making of, or refusal to make, an order

Ms Feldwicke stated that if the Tribunal decided not to change the assessment this would cause her significant hardship. She explained that she is already suffering financial hardship with the high costs of living, high rental and utility costs. If Mr Feldwicke does not contribute to the costs of the children she could end up having to make a choice, on financial grounds, between buying food or medication or paying for the children to see a doctor.
Mr Feldwicke stated that he has minimal income but he supports the children when they are in his care. He does not consider it is fair to set his income at $110,500. He stated that he hasn’t paid any child support for the last 12 months and Ms Feldwicke seems to be managing OK without it so he doesn’t agree that she is suffering hardship.

Proposed determination

The Tribunal has carefully considered the evidence provided and the statements and submissions of both parents.
The Tribunal considers that it would be just and equitable to vary both parents’ adjusted taxable incomes. It agrees with the objections officer that Mr Feldwicke’s adjusted taxable income should be varied to $110,500 per annum as the Tribunal is satisfied that this is the approximate income which Mr Feldwicke has continued to earn since the 2021–22 financial year or alternatively this is the income that he has the capacity to earn. The Tribunal considers that he has a capacity to make a fair contribution to the children’s costs and expenses and that it is unfair to expect that Ms Feldwicke be responsible for the majority of the children’s costs.
In relation to Ms Feldwicke the Tribunal proposes to vary her adjusted taxable income to $44,450 again in agreement with the objections officer. This was her taxable income for the 2021–22 financial year and it is just and equitable that that be used in the assessment as it more accurately reflects her improved financial circumstances.
The Tribunal is satisfied that varying both parents’ incomes will result in a more equitable sharing between the parents in relation to the support of their four children.
The Tribunal considered the duration of the change to the assessment. Ms Feldwicke lodged her application in February 2022. The Tribunal does not propose to backdate its decision beyond 1 January 2022. This is because Ms Feldwicke did not lodge her application until 22 February 2022 and there are no compelling reasons to back date the change for a longer period. To do so would significantly increase Mr Feldwicke’s arrears most likely to an unaffordable level. Rather, the Tribunal proposes to commence the change to the assessment from 1 January 2022 for both parents. In relation to the duration of its decision, the Tribunal proposes to end the departure on 31 December 2023. The Tribunal considers this date is fair and equitable and provides some certainty for a reasonable period to both parents. The Tribunal does not propose to extend the change to the assessment for a longer period into the future because it is mindful that any improvements in the parents’ financial positions should be reflected in the child support assessment as soon as reasonably possible.
Ending the change to the assessment on 31 December 2023 will provide an opportunity for both parties to lodge their personal income tax returns (and company/trust returns for Mr Feldwicke) for the 2022–23 financial year and to reassess their financial situations.
This proposed determination will mean that Mr Feldwicke’s child support payments will increase to $11,584 per annum from 1 January 2022 reducing to $9,508 per annum from 16 November 2022 due to the birth of Mr Feldwicke’s child.
The Tribunal considers this proposed determination is fair, just and equitable and that it balances the needs and financial capacities of both parents.

Is it otherwise proper to depart from the administrative assessment?

The final step for the Tribunal to undertake is to determine whether it is “otherwise proper” to make the particular determination to depart from the administrative assessment. Subsection 117(5) of the Assessment Act requires the Tribunal to take into consideration the following matters:
(a) the nature of the duty of a parent to maintain a child (as stated in section 3) and, in particular, the fact that it is the parents of a child themselves who have the primary duty to maintain the child; and
(b) the effect that the making of the order would have on:
(i) any entitlement of the child, or the carer entitled to child support, to an income tested pension, allowance or benefit; or
(ii) the rate of any income tested pension, allowance or benefit payable to the child or the carer entitled to child support.
The Tribunal must consider whether the proposed departure is “proper” within the context of the public interest and welfare expenditure by the community (see Gyselman). It is a prime objective of the child support legislation that parents should be obliged to support their own children to the extent of their real capacity, and that that obligation should not be unnecessarily left to the public welfare system when the parents themselves have the capacity to maintain their children.
The Tribunal is satisfied that Ms Feldwicke needs financial assistance to support the children and that Mr Feldwicke has the capacity to contribute to those costs.
Paragraph 117(5)(b) of the Assessment Act directs the Tribunal to have regard to the effect that the making of the order would have upon the rate of entitlement to any income-tested pension, allowance or benefit.
Ms Feldwicke advised that she is receiving some family tax benefit. A change in the child support liability may affect her rate of family tax benefit. The Tribunal is satisfied that this is otherwise proper having regard to the fact that parents have a primary duty to maintain their children rather than relying on government support.
Therefore, the Tribunal is satisfied that the proposed determination is “otherwise proper” and that the determination should be made.

DECISION

The decision under review is affirmed.

SCHEDULE – List of Exhibits

Child Support Agency marked as C exhibits:
· CSA’s large bundle of 601 pages marked as exhibit – C1
Mr Feldwicke has provided the following documents marked as A exhibits:
·     A1–A2                Cover email
·     A3–A13               Statement of Financial Circumstances
·     A14–A15              Cover document
·     A16  Family Court of WA Advice of listing
·     A17–A21              Cover document
·     A22–A35               `[Bank 2] bank balances
·     A36–A37              Cover document
·     A38–A39               Notice of assessment
·     A40–A41              Cover document
·     A42  Letter from [a] Medical Centre
·     A43–A44              Cover document
·     A45–A46              Written submission
·     A47  Email between Mr Feldwicke and Ms Feldwicke
·     A48–A49              Cover document
·     A50  Letter from [Company 2]
·     A51-A52               Cover document
·     A53  Letter from [Company 2] (duplicate)
·     A54-A55               Cover document
·     A56  Letter from therapist
·     A57-A58               Cover document
·     A59–A103             [Industry 3] screenshots
·     A104–A105          Cover document
·     A106–A111          Income tax return 2021–2022
Ms Feldwicke has provided the following documents marked as B exhibits:
·     B1   Cover email
·     B2–B6                Personal income tax return 2021–2022
·     B7–B10                Payslips
·     B11–B12              Centrelink Income Statement
·     B13  Centrelink Payment Summary 2022
·     B14  Written submission
·     B15–B23               Statement of Financial Circumstances
·     B24  Cover email
·     B25–B26              Written submission
·     B27  Cover email
·     B28 –B29              [Bank 1] bank statement

[2023] AATA 1793

11 May 2023

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Family Law

Administrative Law

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Judicial Review

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