Fitzsimons and Fitzsimons (Child support)

Fitzsimons and Fitzsimons (Child support) [2019] AATA 3845 (19 June 2019)

DIVISION:Social Services & Child Support Division
REVIEW NUMBER:  2018/PC015207
APPLICANT:  Mr Fitzsimons
OTHER PARTIES:  Child Support Registrar
Ms Fitzsimons

TRIBUNAL:Senior Member R Ellis
DECISION DATE: 19 June 2019

DECISION:

The Tribunal sets aside the decision under review and, in substitution, decides that:

for the period 7 February 2018 until 30 April 2019 the adjusted taxable income of Ms Fitzsimons is set at A$38,764;
for the period 1 May 2019 until a terminating event for this case the adjusted taxable income of Ms Fitzsimons is set at A$64,825;
for the period 7 February 2018 until 30 November 2018 the adjusted taxable income of Mr Fitzsimons is set at A$137,503;
for the period 1 December 2018 until a terminating event for this case the adjusted taxable income of Mr Fitzsimons is set at A$165,400;
for the period 26 February 2018 to 22 June 2018 the relevant dependent allowance for Mr Fitzsimons will increase by an additional $A7,025 in recognition of the costs of supporting [Child 1] during his tertiary studies; and
for the period 7 February 2018 to 28 November 2018 the relevant dependent allowance for Mr Fitzsimons will increase by an additional A$5,132 in recognition of the expenses associated with Mrs Fitzsimons’ medical conditions.

CATCHWORDS

CHILD SUPPORT – departure determination – income, property and financial resources of both parents – benefits derived from business – duty to maintain an adult child – duty to maintain current spouse – 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

This review is about whether or not there should be a departure from the administrative assessment of child support.
Mr Fitzsimons and Ms Fitzsimons are the parents of [Child 2] (born March 2002) and [Child 1] (born November 1999). There has been a child support assessment in place since 2 May 2014 with collection by the Department of Human Services, Child Support (the Child Support Agency) since 13 February 2018. Mr Fitzsimons lives in [City 1], Australia and Ms Fitzsimons lives in [City 2], South Africa.
It is noted that care for [Child 2] was recorded as 100 per cent to Ms Fitzsimons from 2 May 2014. Care for [Child 2] then changed with Mr Fitzsimons having 100 per cent care from 29 November 2018. The assessment ended in relation to [Child 1] on 8 November 2017 when he reached 18 years of age.
The child support assessment in place prior to the change of assessment required Mr Fitzsimons to pay an annual rate of child support to Ms Fitzsimons of $11,793. This rate was set by a change of assessment decision made by the Child Support Agency on 24 March 2016 following an agreement reached by the parents. From 1 January 2017 the annual rate of child support of $11,400 was to be increased by the Consumer Price Index (CPI) on the 1^st of January each year until a terminating event with respect to [Child 2].
On 7 February 2018 Mr Fitzsimons applied to the Child Support Agency for a change to the assessment and on 11 May 2018 the Child Support Agency made the decision to change the assessment (the original decision) so that:
·     for the period from 7 February 2018 until a terminating event for the case Mr Fitzsimons’s adjusted taxable income is set at $133,500;
·     for the period from 7 February 2018 until a terminating event for the case Ms Fitzsimons’ adjusted taxable income is set at $67,128; and
·     for the period from 7 February 2018 until a terminating event for the case Mr Fitzsimons’ relevant dependent allowance is set at $31,071 in recognition of [Child 1]’s tertiary studies.
This was done on the basis of Ms Fitzsimons’ income, property and financial resources (the ground commonly referred to as Reason 8A) and Mr Fitzsimons’ duty to maintain another child or another person (the ground commonly referred to as Reason 9). Mr Fitzsimons also applied on the ground of money, goods or property received by the child, the payee or a third person (the ground commonly referred to as Reason 5) but this was not established by the Child Support Agency. Ms Fitzsimons made a cross-application on the basis of Mr Fitzsimons’ income, property and financial resources and her responsibility to maintain another child (the ground commonly referred to as Reason 10).
On 22 May 2018 Mr Fitzsimons objected to this decision and on 3 October 2018 the Child Support Agency allowed the objection in part and made the following decision (the objection decision):
·     for the period 7 February 2018 to 1 May 2019 Mr Fitzsimons’s adjusted taxable income is set at $133,500;
·     for the period 7 May 2018 to 1 May 2019 Ms Fitzsimons’ adjusted taxable income is set at $70,000;
·     for the period 7 February 2018 to 22 June 2018 Mr Fitzsimons’ relevant dependent allowance is set at $31,000 in recognition of [Child 1]’s tertiary studies and $10,548 in recognition of Mrs Fitzsimons’ medical expenses; and
·     for the period 23 June 2018 to 1 May 2019 Mr Fitzsimons’ relevant dependent allowance is set at $10,548 in recognition of Mrs Fitzsimons’ medical expenses.
On 10 October 2018 Mr Fitzsimons applied for a review of the objection decision by the Administrative Appeals Tribunal (the Tribunal).
A telephone directions hearing was held on 14 February 2019. Both Mr Fitzsimons and Ms Fitzsimons attended by conference telephone. Prior to the telephone directions hearing the Child Support Agency provided the Tribunal and the parties with a bundle of documents in accordance with section 37 of the Administrative Appeals Tribunal Act 1975 (588 pages).
Mr Fitzsimons and Ms Fitzsimons were directed to provide further information to the Tribunal. Ms Fitzsimons complied while Mr Fitzsimons partly complied. Mr Fitzsimons explained in correspondence to the Tribunal dated 2 April 2019 that his current partner, Mrs Fitzsimons, was reluctant to provide any additional information relating to her health conditions than what had already been previously submitted to the Child Support Agency.
A hearing was held on 4 June 2019. Mr Fitzsimons appeared before the Tribunal and gave evidence on affirmation while Ms Fitzsimons gave evidence on affirmation by conference telephone. The Tribunal received documents folioed A1 to A36 from Mr Fitzsimons and B1 to B53 from Ms Fitzsimons. These were distributed to the parties prior to the hearing. Additional documents were also received from the Child Support Agency (pages 589-882).
On 13 May 2019 additional evidence was received from Mr Fitzsimons which was not accepted as it related primarily to a further change of assessment application not before the Tribunal. At hearing, however, the Tribunal determined it would accept one page of this additional evidence, being a payslip (A37), as it was relevant to the matter under consideration. On 4 June 2019 Ms Fitzsimons provided additional evidence to the Tribunal. At hearing, the Tribunal agreed to accept one page of this evidence, also a payslip (B54), as it was also relevant to the matter under consideration. Copies of each of these were distributed to the parties with the Tribunal’s decision.
At the telephone directions hearing and at the commencement of the hearing the Tribunal clarified with Mr Fitzsimons and Ms Fitzsimons the reasons for their applications. Mr Fitzsimons confirmed he disagreed with the decision made by the Child Support Agency because it did not provide an accurate assessment of Ms Fitzsimons’ income. He also said he wanted the Tribunal to consider his duty to maintain [Child 1] and Mrs Fitzsimons (Reason 9) as well as money received by Ms Fitzsimons (Reason 5). Ms Fitzsimons said she also believed the Child Support Agency had not correctly calculated her income. Ms Fitzsimons did not raise concerns about Mr Fitzsimons’ income property and financial resources but said she disagreed that Mr Fitzsimons had a duty to maintain [Child 1] as he was an adult.

ISSUES

The statutory provisions relevant to this review are contained in the Child Support (Assessment) Act 1989 (the Act).
The rate of child support payable by the liable parent is usually based on an administrative assessment under Part 5 of the Act.
Under Part 6A of the Act, the liable parent or the carer of the child or children may apply to the Child Support Registrar for a determination to depart from the administrative assessment (section 98B).
Section 98C provides that the Registrar may make a determination to depart from the administrative assessment and it establishes a three step process such that the issues for determination by this Tribunal are:
·     whether a ground is established to depart from the administrative assessment of child support; and if so
·     whether it is just and equitable to make a particular departure determination; and if so,
·     whether it is otherwise proper to make a particular departure determination.
The grounds for departure from an administrative assessment of child support are set out in subsection 117(2) of the Act.
Each ground is prefaced by the words “in the special circumstances of the case”. The meaning of this expression is not defined in the Act, but the Family Court in Gyselman and Gyselman [1991] FamCA 93 has held:
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 formula in the ordinary run of cases.
In Philippe and Philippe (1978) FLC 90-433 the Court held that “special circumstances” are “facts peculiar to the particular case which set it apart from other cases”.
If the Tribunal is satisfied that a ground exists 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 Act.
The range of determinations which can be made includes variations to the annual rate of child support payable; or to the adjusted taxable incomes of the parents; or to other components of the statutory formula used to calculate child support.

CONSIDERATION

Issue 1 – is there a ground for departure?

In circumstances where multiple grounds for departure are put forward, the Tribunal need only be satisfied that one ground is established before going on to determine whether or not a particular determination is just and equitable and otherwise proper.
A ground for departure exists where, in the special circumstances of the case, application of the administrative assessment of child support would result in an unjust and inequitable determination of child support to be provided by the liable parent in respect of the child because of the income, property and financial resources of either parent (subparagraph 117(2)(c)(ia) of the Act).
Mr Fitzsimons told the Tribunal the current child support assessment was unfair because it did not take into account the true income of Ms Fitzsimons. He said Ms Fitzsimons ran her own [company] and there was no way to accurately determine her actual income without examining the general ledger and loan accounts of the company. He pointed out this had not been done by the Child Support Agency when assessing Ms Fitzsimons’ income.
Mr Fitzsimons said the income declared by Ms Fitzsimons could not possibly support her lavish lifestyle and was far less than her actual income. He said Ms Fitzsimons had deliberately minimised her taxable income and her business paid for many of her personal expenses.
Ms Fitzsimons told the Tribunal she was the [Occupation 1] of her own [company] called [Company 1] which started in 2009. Ms Fitzsimons said [Company 1] traded as part of the [named] network and operated from her home. Ms Fitzsimons confirmed she was the sole shareholder of the company.
Ms Fitzsimons explained the main focus of her business was [undertaking certain activities]. She was also trying to break into [a different] market but with limited success to date. Ms Fitzsimons said the business had [certain characteristics] which generated almost 100 per cent of revenue. Ms Fitzsimons told the Tribunal she was the [Occupation 1] but also undertook the majority of [other tasks] following a recent restructure. Ms Fitzsimons said she employed [a few people].
Ms Fitzsimons told the Tribunal [it] had been a difficult 18 months. She said not long ago [business was better]. Ms Fitzsimons said the [downturn was affecting her business]. She said there was no sign of a recovery anytime soon.
Ms Fitzsimons said her business was struggling and debt was increasing. Ms Fitzsimons said she had been forced to keep her income to a minimum as the business could not afford to pay her a higher salary. Ms Fitzsimons said, following the business restructure, she would now be able to pay herself a salary of approximately R32,000 per month. This was only because she had retrenched her [employee] and focused on reducing other business operating expenses. Ms Fitzsimons said at that level her salary would be considered acceptable for someone in South Africa with her qualifications.
The payslip provided by Ms Fitzsimons [in] May 2019 shows gross earnings for the month of May of R32,000 with total deductions of R6,303 leaving net pay of R25,697.
In response to directions issued by the Tribunal Ms Fitzsimons provided the Tribunal with the South African Revenue Service income tax assessment for [Company 1] for 2018[1]. Ms Fitzsimons also provided company financial statements for the year ended 28 February 2018. These include figures for both the 2017 and 2018 tax years.
[1] The 2018 tax year in South Africa runs from 1 March 2017 to 28 February 2018.
In relation to [Company 1] the Tribunal finds:
·     the company income tax assessment shows sales (turnover) of R1,374,164 and purchases (commissions) of R442,578 leading to a gross profit of R931,586 in 2018;
·     after accounting for total expenses (operating expenses) of R1,191,147 and interest received of R14,343 the company tax assessment shows a net loss of R245,218 in 2018;
·     taxable income in 2018 was a loss of R322,118 which included an assessed loss brought forward of R76,900;
·     the detailed company financial statements for 2018 show that sales of R1,374,164 were similar to those in 2017 of R1,200,742 while commissions paid in 2018 of R442,578 were up from R370,502 in 2017;
·     the detailed company financial statements for 2018 show a net loss of R245,217 in line with the loss as reported in the income tax assessment and a net profit of R40,764 in 2017;
·     the detailed company financial statements for 2018 show that of total operating expenses of R1,191,147 (up from R789,985 in 2017), major expenses include employee costs of R294,000 (up from R168,764 in 2017), interest of R114,168 (up from nil in 2017), insurance of R127,200 (up from R46,488 in 2017), lease rentals of R104,400 (up from R98,400 in 2017), member’s remuneration of R75,750 (up from R75,000 in 2017), motor vehicle expenses of R28,474 (up from R17,808 in 2017) and telephone and internet costs of R95,772 (up from R84,744 in 2017);
·     the balance sheet as at 28 February 2018 shows total assets of R1,161,133 and total liabilities of R1,391,420; and
·     included in the balance sheet as at 28 February 2018 are loans to member of R570,323 up from R211,787 in the previous year.
The Tribunal discussed with Ms Fitzsimons the accounts for [Company 1]. She explained the amount of R442,578 for commission in 2018 was paid directly to the agents who worked for her. Ms Fitzsimons said the commission split with the agents was generally 50-50 but due to the financial difficulties experienced by the business any commission that would ordinarily be owed to her went back into the business to reduce debt levels. Mr Fitzsimons pointed out this would suggest that Ms Fitzsimons could expect to take the same amount, R442,578, as commission for herself but Ms Fitzsimons said this was not the case. She said this amount was generated by a number of [employees] and their earning capacity was far higher than hers. Ms Fitzsimons said she would never be able to make that level of commission and in any case had never been in a position to take commission even though she was entitled to it.
In relation to the operating expenses for [Company 1] Ms Fitzsimons said she was doing everything possible to bring these down as she was extremely concerned about the level of business debt. Ms Fitzsimons said employee costs were for staff salaries which should reduce following the business restructure. She thought lease rental costs were up due to the cost of rent increasing following the split from her partner and the need to lease new premises. Ms Fitzsimons said rent on the property was R18,000 per month of which around half was used as office space for the business. Ms Fitzsimons said interest charges were also up due to the cost of servicing the business overdraft. She said she would need to seek advice from her accountant to provide a more detailed explanation of other business expenses.
Ms Fitzsimons also told the Tribunal that member’s remuneration of R75,000 in 2017 and of R75,750 in 2018 was her salary. The Tribunal notes in evidence from the Child Support Agency a copy of Ms Fitzsimons’ South African Revenue Service individual tax return for 2017 stating a taxable income of R75,000 on which she was required to pay no tax.
Ms Fitzsimons confirmed the business also paid for personal expenses through the business overdraft account. In addition to her rent this included such things as motor vehicle, telephone and internet expenses. She said her expenses were recorded in a running loan account which had to be paid back. Ms Fitzsimons said this was a loan and could not be considered as income. Ms Fitzsimons agreed that the item ‘loans to member’ recorded in the company balance sheet should be considered as the level of her loan account. Ms Fitzsimons reiterated the loan could not be regarded as income and this was a major flaw of the objection decision made by the Child Support Agency. She said the Child Support Agency had set her income at approximately R700,000 per annum based on her personal expenditure and she had “never, never” earned that level of income from the business.
Mr Fitzsimons reiterated that Ms Fitzsimons could not possibly service her personal expenses using her declared income. He pointed to her personal and business bank statements to illustrate his point and said they showed Ms Fitzsimons was not being truthful about her income. Mr Fitzsimons said he had undertaken an analysis of the business bank statements provided in evidence which showed a variety of personal expenses.
Mr Fitzsimons also argued that as the overdraft for the business was increasing the bank must have reassessed Ms Fitzsimons’ income and determined she could service the increased debt. Ms Fitzsimons explained that as part of the business restructure she had recently obtained a loan to reduce the business overdraft which was now at R618,000 (the Tribunal notes that [in] December 2018 Ms Fitzsimons advised the business overdraft was approximately R1,700,000). Ms Fitzsimons said the loan was secured against an amount of funds in a business trust account which was not her money. She said legally she could not touch the trust account as it comprised funds from tenants. Ms Fitzsimons said this was the reason she was able to obtain the loan and it was not in any way related to her ongoing income.
The Tribunal notes in evidence from the Child Support Agency a letter from [Company 2] dated 12 April 2018. The letter states:
Ms Fitzsimons is the sole member of [Company 1] and therefore has a running loan account that [on] February 2017 had a balance of R211 787 (on average R25 564 per month excluding the basic salary). This consists of personal expenses paid by the company on behalf of Ms Fitzsimons, for example, rent, telephone, electricity, fuel etc.
As an [Occupation 1] of [Company 1] Ms Fitzsimons is also entitled commission income on rentals/sales of property currently this is not being paid to Ms Fitzsimons in order to reduce the loan account as well as overdraft.
This letter serves to confirm that the above-mentioned receives R30 000 per month including a basic monthly salary from [Company 1] currently being paid via the company overdraft.

Ms Fitzsimons also provided the Tribunal with a Statement of Financial Circumstances received on 14 January 2019. Ms Fitzsimons states the following[2]:
·     her total average weekly income is A$277.59 which includes her salary (R75,750) plus company benefits listed as telephone, fuel and medical insurance;
·     her total weekly household expenditure is A$1,098.61 which includes A$418.60 a week for rent, $A93.02 a week for electricity, $A81.39 for water charges, $A58.00 a week for child minding and A$58.00 a week for cleaning costs;
·     her total weekly personal expenditure is A$159.68 which includes child support payable for [Child 2] and credit card payments;
·     total value of property owned is A$8,400 including household contents of A$8,000; and
·     total liabilities of A$181,448.59 including a business overdraft of A$173,000 for which she signed a personal surety, a credit card debt of A$4,265.40, a personal overdraft and other personal loans.
[2] The Tribunal notes Ms Fitzsimmons converted her expenses to Australian dollars using an exchange rate of R10:$A1.
The Tribunal also considered the income, property and financial resources of Mr Fitzsimons.
Mr Fitzsimons told the Tribunal he worked in [for] [named employer] and had been in the role since August 2017. Mr Fitzsimons said his salary had recently increased. Following the hearing the Tribunal sought clarification from Mr Fitzsimons about his new salary and he advised it increased around the beginning of December 2018.
The Tribunal notes in evidence a payslip for the period [April] 2019 to [April] 2019 showing gross annual remuneration for Mr Fitzsimons of A$167,400. Previous payslips from the same employer show a gross annual salary of A$139,503.
Mr Fitzsimons also provided the Tribunal with a Statement of Financial Circumstances received on 3 November 2018. Mr Fitzsimons states the following:
·     his total average weekly income is A$3,031 which includes his salary of A$2,789, rent from an investment property of A$218, dividends and minor company benefits;
·     his total weekly household expenditure is A$2,370 which includes A$576 a week for mortgage costs;
·     his total weekly personal expenditure is A$2,124 including income tax of A$1,191, superannuation of A$279, child support payments of A$344 credit card payments of A$128 and combined life insurance and health insurance premiums of A$182;
·     total value of property owned is $1,697,345 including an investment property valued at A$146,000 (his 50 per cent share), a [motor] vehicle valued at A$12,499, household contents of A$5,000, a camper trailer valued at A$2,300 and a life insurance policy valued at A$1,529,000. Mr Fitzsimons lives in the family home which is 100 per cent owned by his current partner and is not valued;
·     total liabilities of A$381,049 including the mortgage on the investment property of A$127,923 (his 50 per cent share), credit card debts of A$24,920 and A$228,206 for a home mortgage (his 50 per cent share – not listed in his assets); and
·     superannuation in two separate funds of A$25,967.
Mr Fitzsimons is currently earning a salary of A$167,400. He also declares annual rental income from an investment property of A$11,336. Mr Fitzsimons told the Tribunal he had yet to submit his 2017-18 tax return. The Child Support Agency noted that in Mr Fitzsimons’s 2015-16 tax return, net rental losses on his investment property of A$7,248 were reported and added back to obtain his adjusted taxable income for that financial year. Based on this information the Tribunal calculates that Mr Fitzsimons has income, property and financial resources equivalent to a person with an adjusted taxable income of approximately A$165,400 after accounting for reasonable tax deductions.
The Tribunal acknowledges Mr Fitzsimons was earning a lower salary of approximately A$139,503 through most of 2018. For the same reasoning as above, the Tribunal calculates Mr Fitzsimons had income, property and financial resources equivalent to a person with an adjusted taxable income of approximately A$137,503 through most of 2018.
Neither parent’s adjusted taxable income was varied under the change of assessment decision made on 24 March 2016. The Tribunal notes the adjusted taxable income used in the assessment for Mr Fitzsimons up until [May] 2019 was A$133,500. The adjusted taxable income used in the assessment for Mr Fitzsimons from [May] 2019 is A$123,554 based on a deemed income for 2017-18 (as he has yet to submit his tax return for this financial year).
The Tribunal must also make a determination in relation to the income, property and financial resources of Ms Fitzsimons. Mr Fitzsimons submits that Ms Fitzsimons is claiming a low income and using her business to fund her personal expenses. Ms Fitzsimons agrees her business meets some of her personal expenses. The parents dispute the level of personal expenditure funded by the business. Mr Fitzsimons also believes Ms Fitzsimons is entitled to commission-based income from the business. Ms Fitzsimons agrees she is entitled to commission but chooses not to receive it in order to keep the business running.
As the owner of the business Ms Fitzsimons is able to decide the terms and amount of her remuneration. This could be a fixed salary or commission or a combination of both. It could be drawings which vary from week to week depending on the state of the business. The point is Ms Fitzsimons, unlike an employee, is not entitled to be paid any particular amount. The Tribunal does not accept the suggestion from Mr Fitzsimons that Ms Fitzsimons is entitled to commission and must therefore receive it otherwise this is to his disadvantage.
The Tribunal acknowledges, however, there are certain advantages in being self-employed which are not generally available to salary and wage earners. These advantages may include being able to write off personal expenses against the business, reducing personal tax liability as a result of the way the business is structured and being able to claim business expenses which offer a parent some personal gain. In such cases, assessing child support on the basis of taxable income only can result in an unjust and inequitable level of child support.
While this may be quite legitimate for tax purposes, the Family Court has found that such practices may not properly reflect the true financial resources or capacity of a person to contribute to the financial support of their children and may therefore be ignored. For example, in Voss & Child Support Registrar (SSAT Appeal) [2009] FMCAfam 1296, the Court commented on the common situation of a self-employed person’s taxable income not corresponding with his or her income or financial resources for child support purposes:
There is a body of cases where simple reference to a person’s tax return does not provide an appropriate quantification of their capacity to provide financial support. Most commonly this occurs in cases involving the self-employed, where it is well accepted that legal structures and arrangements may generate taxable income that doesn’t properly reflect the realistic capacity of the person to provide financial support for their children.
The Tribunal accepts, based on the financial statements provided by Ms Fitzsimons, that her [business] is struggling. Revenue growth has been flat and expenses have increased by approximately 50 per cent between 2017 and 2018. The business made a small profit in 2017 and a large loss in 2018. Ms Fitzsimons has stated the immediate outlook for the property sector, particularly in rentals, is poor. Ms Fitzsimons has said she is taking remedial action, including a business restructure, in an attempt to address this situation.
The Tribunal notes, according to an article on the website Bizcommunity[3], a business-to-business information platform based in South Africa, the trend is for lower than normal residential rental demand in South Africa through 2019. The article states, “From a rental perspective, I see our current conditions with high vacancies and low escalations across most of the country fueled by lower than normal demand, continue into 2019.”
[3] See
Nonetheless, the Tribunal is not satisfied that Ms Fitzsimons’ true income and financial resources are accurately reflected by her taxable income.
Ms Fitzsimons acknowledges the business pays for many of her personal expenses. This is supported by a review of the business bank accounts for [Company 1] and by the letter from her accountant. Ms Fitzsimons’ accountant confirms that Ms Fitzsimons receives R30,000 a month (R360,000 per annum) from the business overdraft facility to pay her basic salary and her personal expenses. These expenses are recorded in a running loan account which, as disclosed in the business accounts, totalled R570,323 in 2018 and R211,787 in 2017.
The Tribunal notes the difference between the amount recorded in the loan account in 2017 of R211,787 and the amount recorded in 2018 of R570,323 is R358,536. This is roughly equivalent to the annual amount Ms Fitzsimons’ accountant states she receives in benefits from the business plus her annual salary.
Ms Fitzsimons believes that because her expenses are paid from the business overdraft and is therefore debt it cannot be considered as income. The Tribunal does not accept this argument. The Tribunal regards the considerable personal benefits available to Ms Fitzsimons through her business as income for the purposes of child support.
Ms Fitzsimons has stated she is now earning R32,000 a month which equals R384,000 a year. Ms Fitzsimons also receives R30,000 a month from the business, or R360,000 a year, which pays for her basic salary and her personal expenses. By removing her declared salary of R75,750 in 2018 from the amount of R360,000, the Tribunal is satisfied that her business paid for personal expenses to a total of approximately R284,250. Adding this to the total annual salary Ms Fitzsimons now earns of R384,000 and taking account of reasonable tax deductions, the Tribunal considers Ms Fitzsimons currently has income, property and financial resources equivalent to a person with an adjusted taxable income of R648,250.
The Tribunal notes in the expenses listed for [Company 1] an amount for depreciation. The notes to the financial statements show the depreciation expense is largely for motor vehicles. The Tribunal accepts that [the] majority of motor vehicle use would be for business reasons. The Tribunal is therefore satisfied that depreciation in this case is a legitimate business expense.
The Tribunal is also satisfied the personal expenses Ms Fitzsimons runs through the business are appropriately recorded in the member loan account. The Tribunal considers the expenses in the financial statements for [Company 1] to be primarily for business purposes.
The Tribunal recognises that Ms Fitzsimons’ income in 2018 would not be the same as it is currently. Ms Fitzsimons was not paying herself a salary of R32,000 a month, however, the business was still meeting many of her personal expenses. Her basic monthly salary and expenses, as advised by her accountant, were R360,000 per annum. In 2017 the business made a profit of R40,764 which the Tribunal will add to the amount of R360,000 as the profit would be a resource available to her as the owner of the business. The Tribunal is therefore satisfied that Ms Fitzsimons had income, property and financial resources available to her equivalent to a person with an adjusted taxable income of approximately R380,764 in 2018 after allowing a reduction for normal tax deductions.
Mr Fitzsimons argues the Tribunal should take a more systematic and detailed approach towards assessing Ms Fitzsimons’ income. The Tribunal accepts there are difficulties in determining a completely accurate income for a parent who is self-employed. The Tribunal is mindful, however, that its primary role is to pursue the objective of providing a mechanism of review that is fair, just, economical, informal and quick as well as being proportionate to the importance and complexity of the matter. The Tribunal is not required to undertake a forensic audit or major investigation of the financial circumstances of the parents. Rather, the Tribunal must be satisfied on the balance of probabilities as to each party’s income, property and financial resources (section 2A of the Administrative Appeals Tribunal Act 1975 and Tanner & Dalton (SSAT Appeal) [2012] FMCAfam 732).
The Tribunal finds that Ms Fitzsimons currently has an income of R648,250. For the purpose of determining, under subdivision BA of Division 7 of Part 5 of the Act, an amount of income expressed in foreign currency to be a parent’s overseas income, the Tribunal is required to convert this amount into an equivalent amount in Australian currency. To do so, the Tribunal considered subsection 12(2) of the Child Support (Assessment) Regulations 2018, which states:
The equivalent amount in Australian currency must be worked out using:
(a) the average exchange rate for the foreign currency for the financial year which the income was derived, being the average of the international money transfer buying rates published by the Commonwealth Bank of Australia for that currency for that financial year; or
(b) if no such rate is available for the foreign currency for that financial year – an exchange rate for the foreign currency that the Registrar considers appropriate.
The Tribunal calculated an Australian dollar value for Ms Fitzsimons’ South African income after examining historical exchange rate data published by the Reserve Bank of Australia. Based on an exchange rate of A$1 to R10, which the Tribunal considers appropriate, the Tribunal is satisfied Ms Fitzsimons’ current income, property and financial resources for the purposes of child support is approximately A$64,825. On the same basis Ms Fitzsimons’ income, property and financial resources in 2018 for the purposes of child support was approximately A$38,764.
In using this exchange rate the Tribunal notes Ms Fitzsimons used the same exchange rate when converting her expenses to Australian dollars and it was not disputed by Mr Fitzsimons.
The annual rate of child support in place when Mr Fitzsimons applied for a change to the assessment was A$11,400 per annum subject to CPI increases. This was set under a previous change of assessment decision.
When Ms Fitzsimons’ and Mr Fitzsimons’ 2018 income, property and financial resources as calculated by the Tribunal are applied in the child support formula, the annual rate of child support payable by Mr Fitzsimons would be approximately A$17,425 (if Ms Fitzsimons still had 100 per cent care of [Child 2]). This takes into account their respective relevant dependent children.
The Tribunal is satisfied special circumstances exist and application of the administrative assessment of child support would result in an unjust and inequitable determination of child support. On this basis the Tribunal finds there is a ground for departure from the administrative assessment.

Issue 2 – is it just or equitable to make a particular determination?

As the Tribunal finds there is a ground to depart from the administrative assessment of child support, the next step is to consider whether it is just and equitable as regards the child, the liable parent, and the carer entitled to child support to make a particular determination in accordance with sub-subparagraph 98C(1)(b)(ii)(A) of the Act. This in turn requires the Tribunal to consider the matters discussed below,[4] which are as set out in subsection 117(4) of the Act:
[4] The Tribunal is required to give “overt consideration” to relevant factors listed in subsection 117(4) of the Act: Tyagi & Meares [2008] FMCAfam 886.
(4)In determining whether it would be just and equitable as regards the child, the carer entitled to child support and the liable parent to make a particular order under this Division, the court must have regard to:
(a)    the nature of the duty of a parent to maintain a child (as stated in section 3); and
(b)    the proper needs of the child; and
(c)    the income, earning capacity, property and financial resources of the child; and
(d)    the income, property and financial resources of each parent who is a party to the proceeding; and
(da) the earning capacity of each parent who is a party to the proceeding; and
(e)    the commitments of each parent who is a party to the proceeding that are necessary to enable the parent to support:
(i)himself or herself; or
(ii)any other child or another person that the person has a duty to maintain; and
(f)     the direct and indirect costs incurred by the carer entitled to child support in providing care for the child; and
(g)    any hardship that would be caused:
(i)to:
(A)the child; or
(B)the carer entitled to child support;
by the making of, or the refusal to make, the order; and
(ii)to:
(A)the liable parent; or
(B)any other child or another person that the liable parent has a duty to support;
by the making of, or the refusal to make, the order; and
(iii)to any resident child of the parent (see subsection (10)) by the making of, or the refusal to make, the order.

The nature of the duty of a parent to maintain a child (as stated in section 3 of the Act)

Section 3 of the Act states that it is the primary duty of a parent to maintain the child and this has priority over nearly all other commitments.
In this case both Mr Fitzsimons and Ms Fitzsimons each have two relevant dependent children. The Tribunal has taken this into account in making its assessment.

The proper needs of the child

In relation to the proper needs of the child, regard must be had to the manner in which the child is being, and in which the parents expected the child to be, cared for, educated or trained, and any special needs of the child (subsection 117(6) of the Act).
The Tribunal was not made aware that the parents expected [Child 2] to be educated or trained in a particular way. Mr Fitzsimons told the Tribunal that [Child 2] had special needs and he had made a separate application to the Child Support Agency for, amongst other things, consideration of the costs associated with these special needs. The change of assessment application currently before the Tribunal was made by Mr Fitzsimons on 7 February 2018. As [Child 2] was in the 100 per cent care of Ms Fitzsimons in South Africa at that time and did not move to Australia until [November] 2018 the Tribunal is satisfied his special needs are more appropriately considered as part of the new change of assessment application.
Ms Fitzsimons has two other relevant dependent children. She did not establish the costs for supporting only [Child 2] while he was in her 100 per cent care. The Tribunal is satisfied it is therefore appropriate to calculate the costs of [Child 2]’s needs by reference to the Costs of the Children Table (provided for in section 155 of the Act).

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

The Tribunal finds [Child 2] has no income, earning capacity, property and financial resources which are to be taken into account for the purpose of child support.

The income, property, financial resources and earning capacity of each parent

The Tribunal has already considered in detail the income, property and financial resources of both parents.
Ms Fitzsimons told the Tribunal she had not received child support from Mr Fitzsimons since February 2018 and he was significantly in arrears. As a result she had gone deeper into debt. Mr Fitzsimons said he was primarily concerned with the way Ms Fitzsimons’s income had been assessed. Mr Fitzsimons also pointed out he had not received any child support payments from Ms Fitzsimons since [Child 2] had arrived in Australia.

The Tribunal is satisfied that the earning capacity criteria (set out in subsection 117(7B) of the Act) are not met in relation to either parent.

Commitments to support any other child or another person

Mr Fitzsimons told the Tribunal he had a legal duty to care for both his adult son, [Child 1], who was a student and his current spouse, Mrs Fitzsimons, who was unable to work for medical reasons.

[Child 1]

Mr Fitzsimons told the Tribunal the parents had agreed to support [Child 1] until he completed his tertiary education as long as he applied himself. He said this was mandated in court orders made in South Africa in 2014. Mr Fitzsimons said [Child 1] arrived in Australia [in] January 2018 with little work experience, no skills and behind in his emotional development.
Mr Fitzsimons said [Child 1] did not qualify for government or other assistance and he was required to support [Child 1] financially while he looked for work before commencing his studies. This included accommodation, food, medical expenses, glasses, driving lessons and sporting activities. He said [Child 1] was not initially successful in securing paid employment although he did assist [Child 1] in obtaining volunteer work. He said [Child 1] travelled for a few months and secured paid casual employment around January 2019.
Mr Fitzsimons said he also assisted [Child 1] to enrol in a university preparation course at [University 1]. He said this was free but he had covered the cost of a student bag, stationery and transport. Mr Fitzsimons said unfortunately [Child 1] was forced to postpone his enrolment at [on] three occasions because Ms Fitzsimons refused to contribute to the cost of his studies. Mr Fitzsimons said he could not afford to cover the cost on his own.
The Tribunal notes in evidence provided by Mr Fitzsimons, offers from [University 1] to [Child 1] for admission to various courses. These offers were made for admission in Semester 1 2018, Semester 2 2018 and Semester 1 2019. The Tribunal also notes confirmation of enrolment for a University Preparation Course in Semester 1 2018 from [University 1]. The confirmation of enrolment is dated 27 February 2018. Semester 1 at [University 1] ended on 22 June 2018.
Mr Fitzsimons made the point that child support for [Child 1] should have ended when he turned 18 year of age. He said he had continued to pay child support for both [Child 1] and [Child 2] as the assessment should have been halved when [Child 1] turned 18 years old but did not. He said this was an error and meant he was paying the same amount in child support for one child as he was for two children.
Ms Fitzsimons told the Tribunal she did not believe she should be required to contribute any form of child support for [Child 1] after he turned 18 years of age. She said there was a time when [Child 1] was not living with Mr Fitzsimons but was instead staying in a [Location 1]. Ms Fitzsimons acknowledged the intent of the court order raised by Mr Fitzsimons and said she had always been prepared to contribute, according to her means, to [Child 1]’s expenses while he was studying. She said Mr Fitzsimons had not paid child support to her for some time which also made it more difficult for her financially to assist with the cost of [Child 1]’s studies.
Mr Fitzsimons acknowledged that [Child 1] had lived in [Location 1] for a period of time but said his home had always been with them. He said this was where [Child 1] had a bedroom and [Child 1] had considered it to be his primary residence even though he was not sometimes physically at home. Mr Fitzsimons said [Child 1] did move out permanently in mid-February 2019. He reiterated it was always the intention for [Child 1] to study when he arrived in Australia but he could not without the support of both parents. He said [Child 1] had now been offered a place at [University 2] to undertake a Bachelor of[subject] and had until 11 July 2019 to accept this offer.
Ms Fitzsimons said she had recently spoken to [Child 1] and he had accepted the offer at [University 2]. Ms Fitzsimons said she had committed to paying half the total fees of approximately A$8,000 per annum. She said [Child 1] would borrow the other half from another relative and repay the relative when he received his tax return. Mr Fitzsimons confirmed this was the case and there would be no direct cost to him arising from [Child 1]’s studies.
A parent does not automatically have a duty to maintain a child over 18 years of age. The Family Court has found that the words ‘duty to maintain’ are limited to a legal duty and do not include what is only a moral obligation to maintain a person or child.[5]
[5] Vick and Hartcher (1991) FamCA 79
Mr Fitzsimons may have a legal duty to support [Child 1] if he is supporting him in accordance with the requirements of the Family Law Act. The Federal Circuit Court has found that in circumstances where an adult child was studying at university, living full time with one parent and working part time, there was “little doubt that the parents have an obligation to [the adult child] under section 66L of the Family Law Act 1975” and that the “duty to maintain” the adult child should have been taken into account under subsection 117(4) of the Act.[6]
[6] Carlson & Acuff & Anor (SSAT Appeal) [2010] FMCAfam 677
The Tribunal accepts that it was the intention of both parents, according to their respective means, to support their children should they undertake tertiary studies.
[Child 1] commenced his tertiary education by enrolling in a university preparatory course for Semester 1 2018 at [University 1]. According to the university’s website Semester 1 commenced on 26 February 2018 and ended on 22 June 2018. The Tribunal is satisfied that Mr Fitzsimons was meeting [Child 1]’s expenses during this period and this significantly affected his ability to provide financial support for [Child 2]. While [Child 1] continued to live on and off with Mr Fitzsimons after this time, he was also travelling and did not carry on with his studies. Mr Fitzsimons and Ms Fitzsimons have confirmed [Child 1] will recommence his tertiary education at a different university in July 2019. Mr Fitzsimons has also stated [Child 1] moved out of home on a permanent basis in February 2019.

Mrs Fitzsimons

Mr Fitzsimons told the Tribunal that Mrs Fitzsimons was diagnosed with several different medical conditions which had prevented her from working for approximately five years. He said she had trialled returning to work but this was not successful. Mr Fitzsimons said Mrs Fitzsimons had been employed as a [Occupation 2] but was unlikely to work again in the foreseeable future.
Mr Fitzsimons said it had been very difficult for his family to adjust without two incomes and his ability to support [Child 2] had been greatly reduced by his obligation to support Mrs Fitzsimons.
On 14 February 2019 the Tribunal directed Mr Fitzsimons to provide medical reports and other documentation evidencing Mrs Fitzsimons’s medical conditions and the impact of these on her capacity to earn an income. The Tribunal also directed Mr Fitzsimons to provide records of medical treatment and costs of that treatment for Mrs Fitzsimons’s medical conditions. In response Mr Fitzsimons told the Tribunal that Mrs Fitzsimons was not willing to provide this information as she regarded it as sensitive and personal. He provided a letter from Mrs Fitzsimons dated 29 March 2019 outlining why she was unwilling to provide the Tribunal with confidential information and requesting that the Tribunal consider using information already provided to the Child Support Agency.
The Tribunal notes in evidence from the Child Support Agency two letters from Dr [A], Mrs Fitzsimons’ usual treating GP, relating to her medical conditions. The first is dated 13 March 2018 and states she is not fit for work on medical grounds. The second letter is dated 22 September 2018 and states that Mrs Fitzsimons is under regular review and treatment for [several medical conditions]. The letter confirms she is, “unable to work due to these ongoing chronic mental and physical health conditions at the moment and for the foreseeable future.”
The Tribunal also notes in evidence a number of medical receipts showing the following costs:

Date of service	Provider	Service	Fee	Medicare benefit
[Date 1]	Dr [B]	Consultation	A$248.50	A$73.50
[Date 2]	Dr [B]	Consultation	A$248.50	A$73.50
[Date 3]	Mr [C]	Psychologist	A$200.00	-
[Date 4	Mr [C]	Psychologist	A$200.00	-
[Date 5]	Dr [D]	MRI	A$395.00	-

Mr Fitzsimons explained that Mrs Fitzsimons attended her psychologist, Mr [C], approximately once every two weeks. He said a discount was received on the first 10 sessions with the charge being A$140.00 and the remaining 16 visits were at the full cost of A$200.00.
Mr Fitzsimons also provided the Child Support Agency with a prescription history for a particular medication he states is not covered by Medicare. The report is for prescriptions filled between [January] 2018 and [September] 2018 and totals A$378.90.

100.In addition to the medical receipts the Tribunal also notes in evidence a Medicare claims history for Mrs Fitzsimons provided by Mr Fitzsimons for the period [September] 2017 to [September] 2018. In 2018 the total cost of services were:
Dr [E]                  A$220.00
Dr [F]                  A$240.00
Dr [G]                             A$696.90
Dr [H]                  A$224.35
Dr [I]                   A$95.00
Dr [J]                  A$538.70
Dr [B]       A$497.00
Dr [K]                   A$1,078.30
Dr [L]  A$329.45
Dr [M]  A$143.15
Dr [N]                  A$239.00
Dr [O]                  A$37.05
Dr [P]                   A$182.75
Dr [Q]                  A$275.50
Dr [R]      A$41.25
Dr [S]                   A$65.00
Dr [T]                   A$71.70
Dr [U]                  A$37.05
Dr [V]  A$103.65
Dr [W]                  A$28.45
Dr [A]                   A$1,157.15
Dr [X]                   A$110.00
Dr [Y]       A$90.00
Mr [C]                  A$1,750.00
Dr [Z]                   A$384.35
Dr [AA]                A$103.65
Total in 2018                   A$8,739.40
101.Mr Fitzsimons told the Tribunal this summary of medical expenses was accurate and should be used to determine what was spent on medical bills for Mrs Fitzsimons.
102.Ms Fitzsimons acknowledged that Mrs Fitzsimons had health conditions which meant she was currently unable to work. Ms Fitzsimons said it was her view that as Mr Fitzsimons had a high income he should be able to comfortably meet all his expenses. She added that, like Mr Fitzsimons, she also had two other children and needed child support to care for [Child 2].
103.The Tribunal calculates the total medical expenses for Mrs Fitzsimons in 2018 to be A$1,145.00 (receipted medical costs) plus A$378.90 (medications) plus $A8,739.40 (Medicare claims history) for a total of A$10,263.30. It is apparent from this list the costs are not the net costs to Mr Fitzsimons, that is, after the Medicare rebate and any private health insurance refunds have been taken into account.
104.Mr Fitzsimons may have a duty to maintain Mrs Fitzsimons in accordance with section 72 of the Family Law Act if she is unable to adequately support herself due to physical or mental incapacity. It does not follow, however, that his duty to maintain Mrs Fitzsimons should consequentially impact on the amount of his child support obligation for [Child 2].
105.Mr Fitzsimons has not provided all the evidence required to support the total costs to him of supporting Mrs Fitzsimons as a result of her incapacity. The Tribunal is also unaware of what income, property and financial resources Mrs Fitzsimons may have at her disposal or any government benefits she may receive as a result of her health conditions. It is noted the family home is in the name of Mrs Fitzsimons. It is also noted Mrs Fitzsimons’ condition is not recent and Mr Fitzsimons has had time to adjust to the circumstances of being a single income family.
106.Nonetheless, the Tribunal accepts that Mr Fitzsimons is incurring additional costs in relation to his support of Mrs Fitzsimons.

Other relevant matters

107.Mr Fitzsimons raised with the Tribunal additional child support payments he made arising from an exchange rate miscalculation on the part of Ms Fitzsimons. He said this followed the private child support agreement reached between the parents which the Child Support Agency then collected. Mr Fitzsimons said after the parents agreed on what was considered a fair arrangement for child support the Child Support Agency then confirmed with Ms Fitzsimons the amount to be paid in Australian dollars. Mr Fitzsimons said the exchange rate impact could have gone either way but when it did not favour Ms Fitzsimons he then paid an additional amount to make up the difference.
108.Mr Fitzsimons added that the last two payments he made under this agreement were after [Child 1]’s 18^th birthday and at the very least an adjustment needed to be made in recognition of this.
109.The Tribunal notes in evidence a summary of payments provided by Mr Fitzsimons “during the period of private collect” from 3 February 2016 to 1 February 2018. The summary sets out the payments made by Mr Fitzsimons and the amount required by the Child Support Agency. Mr Fitzsimons submits he overpaid a total of A$4,703.71.
110.Ms Fitzsimons did not dispute the payments were made but said she disagreed that Mr Fitzsimons had overpaid as the private agreement was for him to pay child support at a value in South African Rand. She said Mr Fitzsimons would never willingly agree to pay extra. Ms Fitzsimons also said some of the payments made were for expenses in addition to child support.
111.The Tribunal accepts that Mr Fitzsimons made additional payments under the private agreement between the parents. The Tribunal is of the view, however, this private agreement was made by mutual consent of both parents and so will not consider the matter of payments made during this period. The Tribunal also notes this private agreement was to continue until a terminating event with respect to [Child 2] and does not appear to make any reference to [Child 1] turning 18 years of age.
112.Mr Fitzsimons also raised the cost of living in South Africa and made the point that the spending power of the Australian dollar was twice that of the South African Rand. He said every Australian dollar of child support paid to Ms Fitzsimons was worth two Australian dollars in South Africa. Mr Fitzsimons pointed to the website Numbeo which is a database on world living conditions including cost of living.
113.Ms Fitzsimons said in response that she did not agree that all basic living expenses in South Africa were less than those in Australia. She said in her view electricity and petrol costs were higher in South Africa and she believed medical expenses were on par with Australia.
114.The Tribunal does not doubt that the cost of living in South Africa is significantly lower than in Australia. On this basis the level of child support provided by Mr Fitzsimons to Ms Fitzsimons may well create an advantageous outcome in terms of the wellbeing of [Child 2].
115.It is the primary purpose of the Act to ensure that children receive a proper level of child support from both parents according to their respective capacity. The Tribunal notes there is nothing in the legislation which requires a decision maker to account for differences in the cost of living between, for example, capital cities and regional towns in Australia let alone between countries. This is because it is indirectly taken into account by the Tribunal when considering the commitments of self-support of each parent under subsection 117(4) of the Act. Ms Fitzsimons’ commitments of self-support whilst living in South Africa are expressed in Rand and converted to Australian dollars. Mr Fitzsimons’ commitments of self-support whilst living in Australia are expressed in Australian dollars.
116.The Tribunal is satisfied the cost of living issues raised by Mr Fitzsimons do not require further consideration.

Any hardship that would be cause

117.The Tribunal finds Ms Fitzsimons currently has access to income of approximately A$64,825. The Tribunal accepts this may vary in line with the nature of her business activities.
118.Ms Fitzsimons lists total estimated household expenditure of A$57,127.72 per annum. This includes rent of A$21,767.20 which is paid by the company (approximately half is recorded in the company expenses). Her personal expenses include minimum credit card payments of approximately A$1,706 per annum. The Tribunal notes Ms Fitzsimons includes in her personal expenses an amount for child support payable for [Child 2] of approximately A$6,597 per annum.
119.Ms Fitzsimons told the Tribunal her annual expenses exceeded her annual income and the difference was met primarily through increased debt.
120.The Tribunal is satisfied Mr Fitzsimons has a current income of approximately A$165,400 but was earning a lower salary of approximately A$137,503 through most of 2018. Mr Fitzsimons has estimated annual household expenses of A$123,240 per annum and personal expenditure of A$110,448 per annum. These amounts appear high, however, the Tribunal notes that his personal expenditure includes A$17,888 in child support payable for [Child 2].
121.Mr Fitzsimons acknowledged he was earning a good income but wanted the Tribunal to be aware that Mrs Fitzsimons was no longer working and the family had been required to readjust to living on a single income. Mr Fitzsimons said he was not doing well financially and the family was living a frugal lifestyle. He said there was nothing extra left at the end of every month.
122.The Tribunal accepts that Mr Fitzsimons has high personal expenses which limit his disposable income but is also conscious he has an investment property and his salary has recently increased.
123.The Tribunal is satisfied Mr Fitzsimons had a legal duty to support [Child 1] while he was in tertiary education. The Tribunal will therefore reduce Mr Fitzsimons’ child support liability by applying an additional relevant dependent allowance of approximately A$7,025 in recognition of the costs associated with supporting [Child 1] and the impact this had on Mr Fitzsimons’ ability to support [Child 2].
124.The Tribunal is satisfied Mr Fitzsimons has a legal duty to support Mrs Fitzsimons as a result of her inability to work for medical reasons. Given Mr Fitzsimons did not provide the exact net costs and in recognition of the fact Mrs Fitzsimons stopped work approximately five years ago the Tribunal considers A$5,132 to be a reasonable amount in recognition of the additional costs associated with Mrs Fitzsimons’s medical conditions and the impact this had on Mr Fitzsimons’s ability to support [Child 2]. This is half the amount as identified by Mr Fitzsimons.
125.The Tribunal will therefore reduce Mr Fitzsimons’ child support liability for [Child 2] by applying an additional relevant dependent allowance of A$5,132 for the period up until [Child 2] moved to Australia to live with Mr Fitzsimons.
126.The Tribunal is limited to making a determination in respect of a day in a period that is not more than 18 months prior to the date the change of assessment application was made (paragraph 98S(3B)(a) of the Act). The Tribunal notes that Mr Fitzsimons requested any variation to the assessment take effect from 1 January 2018. Mr Fitzsimons applied for a change to the assessment on 7 February 2018. The Tribunal notes that Ms Fitzsimons became the paying parent on 29 November 2018 after the change of care for [Child 2] when he moved to Australia. The Tribunal is of the broad view that retrospectively changing entitlements should be avoided without compelling reasons.

127.On balance, the Tribunal finds it just and equitable to commence the departure determination from 7 February 2018 and not from an earlier date.
128.After considering all the circumstances of this case, the Tribunal proposes to make the following determination:
·     for the period 7 February 2018 until 30 April 2019 the adjusted taxable income of Ms Fitzsimons is set at A$38,764;
·     for the period 1 May 2019 until a terminating event for this case the adjusted taxable income of Ms Fitzsimons is set at A$64,825;
·     for the period 7 February 2018 until 30 November 2018 the adjusted taxable income of Mr Fitzsimons is set at A$137,503;
·     for the period 1 December 2018 until a terminating event for this case the adjusted taxable income of Mr Fitzsimons is set at A$165,400;
·     for the period 26 February 2018 to 22 June 2018 the relevant dependent allowance for Mr Fitzsimons will increase by an additional $A7,025 in recognition of the costs of supporting [Child 1] during his tertiary studies; and
·     for the period 7 February 2018 to 28 November 2018 the relevant dependent allowance for Mr Fitzsimons will increase by an additional A$5,132 in recognition of the expenses associated with Mrs Fitzsimons’s medical conditions.
129.Applying the 2018 incomes of both parents to the assessment, along with relevant dependent amounts for their respective children, the annual rate of child support is approximately A$17,425. The additional measures in recognition of Mr Fitzsimons’ legal duty to support [Child 1] and Mrs Fitzsimons will reduce this annual rate of child support during the periods in question by less than A$1,000.
130.The Tribunal is satisfied that the proposed determination will not cause hardship to Mr Fitzsimons, Ms Fitzsimons or the child and is just and equitable.

Issue 3 – is it otherwise proper to make a particular determination?

131.The third step is to consider whether it would be otherwise proper to make a particular departure determination in accordance with sub-subparagraph 98C(1)(b)(ii)(B) of the Act. Subsection 117(5) sets out the matters that must be considered when deciding whether it would be “otherwise proper” to make a departure determination. It focuses on the balance of support carried between the parents on one hand and the taxpayer on the other. It is appropriate for children to be primarily supported by their parents rather than by government assistance. The Tribunal must consider whether the level of a benefit, in particular family tax benefit, received by the party caring for the children may be affected by the level of child support.
132.Mr Fitzsimons is not in receipt of family tax benefit or an income tested pension or other benefit. Ms Fitzsimons resides in South Africa. It is unlikely the Tribunal’s decision will impact on the extent to which the community will be supporting [Child 2].
133.The Tribunal is satisfied that its determination will result in an appropriate apportionment of financial responsibility between the parents and would be otherwise proper.
DECISION

The Tribunal sets aside the decision under review and, in substitution, decides that:

for the period 7 February 2018 until 30 April 2019 the adjusted taxable income of Ms Fitzsimons is set at A$38,764;
for the period 1 May 2019 until a terminating event for this case the adjusted taxable income of Ms Fitzsimons is set at A$64,825;
for the period 7 February 2018 until 30 November 2018 the adjusted taxable income of Mr Fitzsimons is set at A$137,503;
for the period 1 December 2018 until a terminating event for this case the adjusted taxable income of Mr Fitzsimons is set at A$165,400;
for the period 26 February 2018 to 22 June 2018 the relevant dependent allowance for Mr Fitzsimons will increase by an additional $A7,025 in recognition of the costs of supporting [Child 1] during his tertiary studies; and
for the period 7 February 2018 to 28 November 2018 the relevant dependent allowance for Mr Fitzsimons will increase by an additional A$5,132 in recognition of the expenses associated with Mrs Fitzsimons’s medical conditions.

[2019] AATA 3845

19 June 2019

Key Legal Topics

Areas of Law

Family Law

Administrative Law

Legal Concepts

Statutory Construction

Judicial Review

Remedies

Jurisdiction