Firestone and Firestone (Child support)

[2022] AATA 4678

Firestone and Firestone (Child support) [2022] AATA 4678 (8 November 2022)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2022/SC024348

APPLICANT:  Mr Firestone

OTHER PARTIES:  Child Support Registrar

Ms Firestone

TRIBUNAL:Member F Staden

DECISION DATE:  8 November 2022

DECISION:

The decision under review is affirmed.

CATCHWORDS

CHILD SUPPORT – departure determination – earning capacity of the carer entitled to receive – no ground for departure established – decision under review affirmed

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 Firestone and Ms Firestone are the separated parents of [Child 1], born 2013, and [Child 2], born 2015. Care of the children is equally shared by the parents.

2. Where care of the children is shared, each parent is assessed as having a child support liability to the other, with the lower rate subtracted from the higher and the parent with the amount remaining being the parent with a child support liability.

3. The child support assessment for this case began on 4 December 2019. Ms Firestone was the parent initially liable to pay child support, with collection by Services Australia ꟷ Child Support (Child Support) from 31 January 2020. Since 9 September 2020, Mr Firestone is the parent liable to pay child support, with collection by Child Support from 9 September 2020.

4. On 13 January 2022, Mr Firestone applied for a change of assessment on the basis that the assessment did not correctly reflect Ms Firestone’s earning capacity (Reason 8B).

5. At around the time of Mr Firestone’s change of assessment application, the following assessment was in place:

   ·     For the period 1 October 2021 to 30 June 2022, Mr Firestone’s annual child support liability was $17,126, based on Mr Firestone’s 2020/21 adjusted taxable income of $191,153 and Ms Firestone’s 2021/22 estimated income of $22,630;

6. On 16 March 2022, Ms Firestone lodged a written response to Mr Firestone’s application.

7. On 29 March 2022, a Child Support primary decision maker refused Mr Firestone’s application on the basis that Reason 8B was not established.

8. Mr Firestone lodged an objection to the 29 March 2022 decision on 19 April 2022.

9. On 15 July 2022, an objections officer disallowed Mr Firestone’s objection.

10. On 28 July 2022, Mr Firestone applied to the Social Services and Child Support Division of the Administrative Appeals Tribunal (the tribunal) for review of the objections officer’s decision.

11. On 27 September 2022, a telephone directions hearing was conducted with Mr Firestone and Ms Firestone. Directions were issued on that day. At the telephone directions hearing, Mr Firestone raised an additional ground for departure from the administrative assessment which was that the assessment did not correctly reflect the income, property and financial resources of Ms Firestone (Reason 8A).

12. A hearing was held on 8 November 2022 in Canberra. Mr Firestone and Ms Firestone gave sworn evidence by MS Teams audio. The tribunal had before it papers from Child Support (469 pages), Mr Firestone (pages A1 to A34) and Ms Firestone (pages B1 to B119). Copies of these documents were provided to all parties.

13. Relevant aspects of the evidence are referred to in the consideration below.

ISSUES

1. The rate of child support payable by a liable parent is usually based on an administrative assessment under the Child Support (Assessment) Act 1989 (the Assessment Act). The formula used to calculate the rate takes into account factors such as the number of children, the levels of care provided and the income of each parent.

2. Under section 98B of the Assessment Act, a liable parent or carer receiving child support can apply to the Child Support Registrar for a determination to depart from the administrative assessment. This is known as a change of assessment.

3. Under section 98C of the Assessment Act, the Child Support Registrar, here the tribunal, may change the administrative assessment if the case meets the following three criteria:

   · There is a ground to depart from the assessment (subsection 117(2) of the Assessment Act lists those grounds). Only one ground has to be established for the tribunal to proceed to consider the next criterion (Marsh & Eccles [2008] FMCAfam 1417);

   ·     It is “just and equitable” to make particular changes to the assessment; and

   ·     It is “otherwise proper” to make those changes to the assessment.

CONSIDERATION

Issue 1: Is there a ground to depart from the administrative assessment?

1. Subparagraphs 117(2)(c)(ia) and (ib) of the Assessment Act provide grounds for departure exist where, in the special circumstances of the case, the use of the administrative assessment would result in an unjust and inequitable determination of a parent’s child support liability because the income, property and financial resources or earning capacity of either parent are not properly taken into account.

2. The term “special circumstances” is not defined in the Assessment Act. In Gyselman and Gyselman [1991] FamCA 93, the Full Family Court indicated that for there to be special circumstances, the facts of the case must establish something which is special or out of the ordinary.

Ms Firestone’s earning capacity

1. The tribunal is required to consider three criteria in determining whether a parent’s earning capacity is greater than their income as used in the administrative assessment (subsection 117(7B) of the Assessment Act):

   ·     Whether the parent:

   ois not working despite ample opportunity to do so; and/or

   ohas reduced their weekly hours of work to below full-time work; and/or

   ohas changed their occupation, industry or working pattern; and

   ·     Whether the parent’s work arrangements are not justified by either their caring responsibilities or their state of health; and

   ·     Whether the parent has not demonstrated that it was not a major purpose of their work arrangements to affect the administrative assessment of child support.

   All three criteria must be met before a departure determination can be made to take into account a greater earning capacity than that which a parent is exercising. If the criteria are satisfied, then the tribunal must determine an actual earning capacity.

Did Ms Firestone’s work arrangements change?

1. Ms Firestone’s employment history since the 4 December 2019 start of the child support assessment in this case is as follows:

   ·     Having worked for [Employer 1] since 1 April 2011, on 18 February 2020 Ms Firestone was made redundant.

   ·     Centrelink granted Ms Firestone parenting payment single from 6 November 2020. The evidence indicates that since then Ms Firestone has complied with her job search requirements, as negotiated with her [employment service provider].

   ·     Ms Firestone was employed by [Employer 2] from 4 January 2022 to 16 February 2022 at a [Workplace 1]. Her employment ended when the [workplace] closed.

   ·     Ms Firestone worked for [Employer 3] from 28 March 2022 to 30 June 2022. This employment ceased because the [workplace] in which she was working closed.

2. The tribunal found no evidence that Ms Firestone was not working despite ample opportunity to do so. In each instance of her employment above, it was her employer who terminated her employment, not Ms Firestone.

3. Mr Firestone argued that Ms Firestone had changed her occupation, industry or working pattern by not seeking employment in the [sector] where she had worked for many years. His view was that her work post [Employer 1] was short term, below her level of qualification and was poorly paid relative to Ms Firestone’s capacity to earn. Ms Firestone responded that she was badly affected by her redundancy from [Employer 1] and no longer felt able to work in such a high-pressure environment.

4. Mr Firestone further argued that there are low stress jobs available in the [sector] if Ms Firestone was minded to seek them out. Ms Firestone stated that she had sought such work, particularly in the period immediately after leaving [Employer 1], but had been unsuccessful in obtaining anything suitable. In her view, her difficulty in obtaining employment at that time was in large part to do with the impact of the pandemic. Mr Firestone disputed this, noting that he had obtained relatively stress-free employment during this time.

Was any change in work arrangements justified by Ms Firestone’s caring responsibilities or state of health?

1. The tribunal observed that even if one accepted Mr Firestone’s argument in relation to Ms Firestone having changed her occupation, industry or working pattern, there is significant evidence that such a change was justified by her mental health difficulties.

2. An 18 October 2022 letter from Ms Firestone’s psychiatrist of the last four years, [Dr A], reads in part:

   I can confirm that in the time that Ms Firestone has been seeing me she has required medication to treat her depression and anxiety and she continues to take medication on a daily basis. …

   My opinion is that Ms Firestone’s mental health would be a major factor in the type of work that she chooses to pursue.

3. A 13 October 2022 letter from Ms Firestone’s general practitioner, [Dr B], additionally includes:

   Mrs Firestone … has been suffering from moderate to severe depression, anxiety and stress according to mental health assessment done on 17/06/2022 along with current assessment done on 13/10/2022.

4. On the evidence before it, the tribunal found that any change in Ms Firestone’s working arrangements was justified by the state of her health. The second criterion necessary for the taking into account of a parent’s earning capacity was thus not satisfied.

Can Ms Firestone’s earning capacity be considered?

1. As all three criteria were not satisfied, it was not open to the tribunal to consider a greater earning capacity for Ms Firestone. Reason 8B was therefore not established.

Ms Firestone’s income, property and/or financial resources

1. Mr Firestone’s essential argument here was that Ms Firestone has access to financial resources not being taken into account in the administrative assessment.

2. Mr Firestone pointed to money he had provided to Ms Firestone post separation to assist with her set-up costs after leaving the former family home and to clear a joint debt in relation to work done on that former family home. Ms Firestone responded that any such transfers of funds were part of financial negotiations between herself and Mr Firestone and would be taken into account once they are able to complete a property settlement. The parties disagree about the factors delaying a property settlement.

3. The tribunal was satisfied that any significant post separation transfer of funds between the parties would be dealt with in the course of their property settlement and should not be considered here.

4. Mr Firestone also pointed to loans to Ms Firestone from her current partner and various family members as being financial resources not taken into account by the assessment. Ms Firestone provided the tribunal with statutory declarations from the four people who have loaned her money. All stated that the loaner expected to be repaid the borrowed money at some time. Three referred to that time most likely being when Ms Firestone had finalised her property settlement with Mr Firestone.

5. The total of the four loans to Ms Firestone was $33,000. The tribunal was not persuaded that this amount was sufficient to constitute a special circumstance in this case and so to warrant the assessment being changed to take it into account. The tribunal therefore found that Reason 8A was not established.

Conclusion

1. As no reason to change the administrative assessment was established, the tribunal refused Mr Firestone’s change of assessment application under section 98F of the Assessment Act.

DECISION

The decision under review is affirmed.