Ferraro and Marberry (Child support)

This matter concerned an appeal by the father, Mr Ferraro, against a decision of the Child Support Registrar regarding the assessment of child support payable to the mother, Ms Marberry. 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 the Federal Magistrates Court of 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 (Registration and Collection) Act 1988* (Cth) and the *Child Support (Assessment) Act 1989* (Cth). The Court was required to determine the nature of these payments and whether they fell within the definition of income as defined by the relevant legislation, or if they were capital in nature and therefore excluded from child support assessments.

Magistrate Jensen M considered the nature of the payments received by the father. His Honour noted that the payments were made upon the termination of the father's employment and were calculated based on his length of service. The Court applied the principles established in case law concerning the distinction between income and capital. His Honour found that the payments were a lump sum received in consequence of the termination of employment and were not in the nature of regular earnings or remuneration for services rendered. Consequently, the payments were considered to be of a capital nature and not assessable income for child support purposes.

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.