Finley and Child Support Registrar (Child support)

[2023] AATA 2925

Finley and Child Support Registrar (Child support) [2023] AATA 2925 (21 July 2023)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2023/AC025741

APPLICANT:  Mr Finley

OTHER PARTIES:  Child Support Registrar

TRIBUNAL:Senior Member R Ellis

DECISION DATE:  21 July 2023

DECISION:

The Tribunal sets aside the decision under review and, in substitution, decides that the extension application should be granted.

CATCHWORDS

CHILD SUPPORT – refusal to grant an extension of time to object - no satisfactory explanation for the delay - arguable merit – no significant prejudice to other party or the general public – weighing all factors extension of time should be granted - decision under review set aside and substituted

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

1. Mr Finley and Ms [A] are the parents of [Child 1] (born December 2004) and [Child 2] (born October 2006).  Mr Finley is the parent liable to pay child support.

2. On 9 May 2021 Services Australia – Child Support (Child Support) accepted an income estimate from Mr Finley of $73,668 (annualised) to be used in the child support assessment from 9 May 2022 to 30 June 2022.

3. On 20 October 2022 Child Support issued an assessment notice to Mr Finley advising that his actual 2021–22 adjusted taxable income of $93,866 would be used to calculate child support and he owed an additional amount of $2,193.09 for the period from 9 May 2022 to 30 June 2022 (the original decision).

4. On 4 January 2023 Mr Finley objected to this decision and as his objection was not made within the prescribed period, he applied to Child Support for an extension of time on the same date.

5. On 15 February 2023 the request for an extension of time was refused and on 8 March 2023 Mr Finley sought a review of the refusal decision by the Administrative Appeals Tribunal (the Tribunal).

6. The Tribunal conducted a hearing into the application on 21 July 2023.  Mr Finley gave evidence on affirmation by Microsoft Teams audio.  Child Support provided the Tribunal and Mr Finley with papers relevant to the matter (158 pages).

ISSUES

1. The statutory provisions relevant to this review are contained in the Child Support (Registration and Collection) Act 1988 (the Act) and the Child Support (Assessment) Act 1989 (the Assessment Act).

2. The issue which arises in this case is whether or not to grant Mr Finley’s request for an extension of time to lodge an objection to the original decision.

CONSIDERATION

1. Part VII of the Act is about the procedures related to objections made for certain decisions. Section 81 is about time limits on lodging objections and provides that a person has 28 days in which to lodge an objection after a notice of the decision is served on them. Section 82 provides for a person to apply for an extension of time to lodge an objection after the 28-day period has elapsed. Section 83 requires Child Support to either grant or refuse an extension of time application and serve notice in writing of the decision.

2. In the event Child Support refuses the extension of time application, the person applying may apply to the Tribunal for a review (item 1 of the table in subsection 89(1) of the Act).

3. The Tribunal finds Mr Finley was advised about the outcome of the original decision by post in a letter from Child Support dated 20 October 2022.  Under provisions of the Acts Interpretation Act 1901 and the Evidence Act 1995, he was therefore taken to be served with written notice of this decision by 7 November 2022.  Given Mr Finley lodged his objection more than 28 days after he was served with notice, the Tribunal is satisfied an extension of time is necessary.

4. The Tribunal is required to consider whether or not it is reasonable or proper for an extension of time to be granted to Mr Finley to lodge his objection to the decision made on 20 October 2022.  From other decisions, which provide guidance to the Tribunal on this matter, it is clear that generally the statutory time limit of 28 days is to be enforced unless there are acceptable reasons for departing from this prescribed timeframe.

5. A consideration of other relevant authorities establishes that when considering matters relating to an extension of time, the Tribunal should consider and balance a range of factors.  These factors are a guide and are not exhaustive, but generally include:

   ·     the reasons for the delay and whether the applicant rested on their rights;

   ·     the merits of the substantive application;

   ·     any prejudice to the other party including any difficulties they will experience in providing evidence as a result of the delay;

   ·     any prejudice to the general public; and

   ·     fairness in granting an extension of time.

Reasons for the delay

1. The Tribunal finds that Mr Finley’s application for an extension of time on 4 January 2023 in relation to the decision of 20 October 2022, of which he was notified by post, is approximately 30 days out of time.

2. Mr Finley told the Tribunal that when he first submitted his estimate of income he was advised by Child Support that any updates would need to be made by 30 June 2022.  Mr Finley said he endeavoured to amend his estimate on 30 June 2022 but was then informed by a child support officer this could not be done.  Mr Finley said he was surprised by this contrary advice but decided he could not take the matter further.

3. The Tribunal notes in evidence from Child Support that during a conversation with a child support officer on 30 June 2022 Mr Finley said he had found an error in his estimate which he wanted to adjust.  Mr Finley was informed by the child support officer he could not adjust his year-to-date income.

4. Mr Finley told the Tribunal that after receiving the letter from Child Support informing him his estimate had been reconciled and he owed additional child support he decided to pursue the matter further.  Mr Finley said he needed to obtain additional information in relation to his year-to-date income which was the main reason for the delay in objecting.  Mr Finley acknowledged that he also lost track of time when pulling together his objection.

5. The notification of the decision provided by Child Support dated 20 October 2022 outlines what to do if Mr Finley disagreed with the decision.  This includes submitting an objection in writing “within 28 days from the date you receive this letter”.  The words “within 28 days” are in bold which, in the view of the Tribunal, gives a clear indication of the importance of this timeframe.

6. Given Mr Finley had previously been advised by Child Support that his year-to-date income could not be amended it is reasonable for him to believe he might need additional and more detailed evidence before submitting an objection in relation to this matter.  It is nonetheless unclear why it took Mr Finley nearly two months to source this evidence and then submit his objection.

7. The Tribunal is not satisfied that Mr Finley has provided a reasonable explanation for the delay in applying for a review of the original decision.

Merits of the application

1. Mr Finley told the Tribunal that at the time he submitted his estimate of income he was working [onsite].  Mr Finley said when he provided the estimate and his year-to-date income he was relieved when advised he could provide updates if required.

2. Mr Finley said he was self-employed and it was difficult to be precise about his income as it fluctuated from month-to-month.  Mr Finley said towards the end of the financial year, when pulling together his accounts, he realised the year-to-date figure he had provided was likely to be wrong.  Mr Finley added that he had also neglected to include a lump sum insurance payout in his year-to-date income which had been included in his 2021–22 taxable income even though it was received in the previous financial year.

3. Mr Finley explained this was why he had contacted Child Support on 30 June 2022 in an attempt to amend his estimate.  Mr Finley said he was aware Child Support had subsequently re-reconciled his estimate based on an amended year-to-date income but he was still not satisfied.

4. Section 60 of the Assessment Act allows a parent to elect to use an estimate of their adjusted taxable income to apply from the day of the election to the end of the financial year (the estimate period). The estimate is an annualised amount of their taxable income and supplementary amounts for the estimate period. When it is the first estimate election and made for part of the financial year, the parent making the estimate election must also provide their partial year income for the remaining period and an estimate of their year-to-date income (their adjusted taxable income from the start of the financial year to the beginning of the estimate period). This allows Child Support to reconcile the estimate when information is available from the Australian Taxation Office for the relevant financial year.

5. The Tribunal is satisfied that the year-to-date income provided by Mr Finley when he lodged his estimate was not accurate.  This means the reconciliation first undertaken by Child Support is likely to be incorrect.

6. Section 63AE of the Assessment Act allows Child Support to determine a new year-to-date income amount in certain circumstances including when satisfied the year-to-date income amount is incorrect.

7. The test of merit has alternatively been expressed as whether, were it to proceed, the application for review “would have good prospects of success” (Smith and Commissioner of Patents [2012] AATA 60 at [29]–[31]).

8. The Tribunal finds the objection made by Mr Finley would have good prospects of success on the ground that the reconciliation of his estimate is likely to be incorrect.  The Tribunal therefore considers his application has some merit.

Potential prejudice to Ms [A] and the wider public

1. The Tribunal must also consider the potential prejudice to Ms [A] and the wider public.  Ms [A] should ordinarily be able to rely on the child support assessment once the period for objection has passed.  The application made by Mr Finley is approximately 30 days out of time, however, the Tribunal is satisfied that Ms [A] would be able to provide evidence relevant to the objection.  The Tribunal does not consider that Ms [A] would be significantly disadvantaged should the extension of time to lodge an objection be granted.

2. Time limits for the review of administrative decisions should be observed as strictly as possible in order to assist the proper administration of government agencies.  There is also a public expectation that there be a degree of certainty in relation to time limits, however, the law also allows for extensions of time.  In this case the Tribunal does not believe there would be prejudice to the general public if an extension of time to lodge an objection was granted.

Fairness in granting an extension of time as between Mr Finley and other persons in similar positions

1. Child Support notifies parties that they can object to decisions and have 28 days within which to submit a request for such a review.  Most people comply within the 28-day timeframe.  The Tribunal was not completely satisfied with the explanation Mr Finley gave for the delay in submitting his objection, however, the Tribunal has found there is clear merit to his objection.  It is reasonable to accept that any other person’s request for an extension of time in such circumstances would be granted.  The Tribunal finds that it would not be unfair to others to grant Mr Finley an extension of time.

CONCLUSION

1. Mr Finley has not provided a satisfactory explanation for the delay in applying for review of the original decision. The Tribunal found merit to his application, however, which weighs in favour of the granting of an extension of time. The Tribunal also found there is unlikely to be significant prejudice to Ms [A] or the general public should an extension of time be granted nor would it be unfair to do so.

2. Having carefully considered the various factors which must be taken into account, the Tribunal finds it would be appropriate in this case for the extension of time in which to lodge an objection to be granted.

DECISION

The Tribunal sets aside the decision under review and, in substitution, decides that the extension application should be granted.