Flynn and Plumb (Child support)

[2023] AATA 2134

Flynn and Plumb (Child support) [2023] AATA 2134 (24 May 2023)

DIVISION:Social Services & Child Support Division

REVIEW NUMBERS:  2022/MC024713

2022/MC024739

2022/MC024740

2022/MC024741

2022/MC024743

APPLICANT:  Mr Flynn

OTHER PARTIES:  Child Support Registrar

Ms Plumb

TRIBUNAL:Member J Bakas

DECISION DATE:  24 May 2023

DECISION:

The five decisions under review are affirmed.

CATCHWORDS

CHILD SUPPORT – particulars of the administrative assessment – whether minimum annual rate should be reduced to nil – decisions under review affirmed

CHILD SUPPORT – particulars of the administrative assessment – whether the incomes for past periods for the liable parent should be changed – conditions for changing the incomes to lower amounts are not met – decisions 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 Flynn and Ms Plumb are the parents of two children (born in 1996 and 1999) involved in the child support assessments relevant to the five applications before the Social Services and Child Support Division of the Administrative Appeals Tribunal (the Tribunal).

2. Mr Flynn applied to the Tribunal for further review of the following decisions made by Services Australia – Child Support (Child Support).

3. The applications are as follows:

   3.1.     2022/MC024713

   The decision made on 4 January 2022, to disallow his request to reduce his child support assessment from the minimum annual rate to nil for the period between 25 October 2016 and 23 December 2016. This decision was objected to by Mr Flynn on 19 April 2022 and was disallowed by an objections officer on 29 August 2022.

   3.2.     2022/MC024739

   The decision made on 4 January 2022, to disallow his request to reduce his child support assessment from the minimum annual rate $391 to nil for the period between 1 July 2014 and 18 December 2014. This decision was objected to by Mr Flynn on 19 April 2022 and was disallowed by an objections officer on 29 August 2022.

   3.3.     2022/MC024743

   The decision made on 4 January 2022, to disallow his request to reduce his child support assessment from the minimum annual rate $391 to nil for the period between 1 May 2014 and 30 June 2014. This decision was objected to by Mr Flynn on 19 April 2022 and was disallowed by an objections officer on 29 August 2022.

   3.4.     2022/MC024740

   The decision made on 22 December 2021, to disallow his request to apply Mr Flynn’s 2014/2015 adjusted taxable income to the assessment but to continue to use his 2014/2015 provisional income on the assessment for the period 1 October 2015 to 31 December 2016. This decision was objected to by Mr Flynn on 27 May 2022 and was disallowed by an objections officer on 2 September 2022.

   3.5.     2022/MC024741

   The decision made on 22 December 2021, to disallow his request to apply Mr Flynn’s 2013/2014 adjusted taxable income to the assessment but to continue to use his 2013/2014 provisional income on the assessment for the period 1 July 2014 to 20 September 2015. This decision was objected to by Mr Flynn on 27 May 2022 and was disallowed by an objections officer on 2 September 2022.

4. The matters were heard on 26 April 2023 and both Mr Flynn and Ms Plumb appeared before the Tribunal via MS Teams (audio). Mr Flynn was represented by [Representative A] of [Agency 1] as well as by counsel, [Ms A].

5. Prior to the hearing, Child Support sent a bundle of its relevant documents to the Tribunal and to the parties for each of the five decisions. In addition, the Tribunal took into account the documents provided by Mr Flynn (A1–A10). As Ms Plumb had not received Mr Flynn’s submissions prior to the hearing, the matter was adjourned to provide Ms Plumb with an opportunity to consider the additional information and to provide written submissions, should she wish to do so, by 22 May 2023. No further submissions were received and the Tribunal proceeded to make a decision.

ISSUES

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

2. The issues which arise in this case are whether, Mr Flynn’s minimum annual rate should be reduced to nil for any of  the following periods:

   7.1.1 May 2014 and 30 June 2014

   7.2.1 July 2014 and 18 December 2014

   7.3.25 October 2016 and 23 December 2016

3. Whether a retrospective determination should be applied to the child support based on Mr Flynn’s adjusted taxable income for the relevant year rather than his provisional income for the periods:

   8.1.1 July 2014 to 20 September 2015

   8.2.1 October 2015 to 31 December 2016.

CONSIDERATION

Minimum annual rate

9.Section 66 of the Act provides that a specified minimum rate of child support will apply where the application of the formula results in an annual rate payable that is less than the specified minimum annual rate. The rate applies only where the parent liable to pay child support does not have at least regular care of the child in the child support assessment, as is the case in this matter.

10.  The Tribunal finds that on 12 October 2021 Mr Flynn applied to have the annual rate reduced to nil for the periods:

10.1.1 May 2014 and 30 June 2014

10.2.1 July 2014 and 18 December 2014

10.3.25 October 2016 and 23 December 2016

11.  It is not in dispute that the father was incarcerated from:

11.1.[April] 2012 to [July] 2012

11.2.[August] 2013 to [November] 2013

11.3.[May] 2014 to [December] 2014

11.4.[October] 2016 to [December] 2016

11.5.[May] 2018 to about [a day in] April 2023

12.Subsection 66A(1) of the Act provides a discretion for Child Support (acting for the Child Support Registrar) to reduce the minimum annual rate to nil on application by the person liable to pay child support.

13.Subsections 66A(2), (3) and (3A) provide that the discretion to reduce the annual rate to nil applies only if the person’s income is below a specified level. Subsection 66A(4) of the Act states the following in relation to the definition of income:

"income", in relation to a person, means:

(a) any money earned, derived or received by the parent for his or her own use or benefit, other than money earned, derived or received in a manner, or from a source, prescribed by the regulations for the purposes of this paragraph; or ...

1. The effect of those provisions in this case is that the discretion to grant the application is not available unless the Tribunal, standing in the place of the Child Support Registrar, is satisfied that Mr Flynn’s income for the three periods, detailed above, is less than the annual rate, noting that the term ‘income’ in subsection 66A(4) of the Act is broader than income for the purposes of determining a child support liability.

15.Regulation 13 of the Child Support (Assessment) Regulations 2018 (the Regulations) relevantly states:

13 Prescribed payments

...

(2) For the purposes of paragraph (b) of the definition of income in subsection 66A(4) of the Act, the following kinds of payments paid to a person are prescribed:

(b) payments, in the nature of an amenity allowance or gratuity, authorised by the Governor of a prison, paid to the person if he or she is serving a term of imprisonment in the prison, to the extent that the payment is not for:

(i) work done by the person inside or outside the prison; or ...

1. The Child Support Guide (the Guide) at paragraph 2.5.4 states that payments for prisoners are excluded if they are “amenity allowances or gratuities (incidental payments for personal items or other personal items or minor expenses)” but payments for “work, study or participation in approved programs” are not excluded. That is, they are income for this purpose.

2. Although not bound by policy as set out in the Guide, the Federal Court has held that a Tribunal should take into account relevant government policy which is not inconsistent with the provisions or objects of the legislation.

3. In this case the Tribunal regards the policy as a useful guide to applying the legislation and considers it consistent with the objects of the legislation.

4. Mr Flynn’s evidence and submissions included the following:

   19.1.He would receive about $34 per week while in prison for undertaking particular  activities but a percentage of this was set aside to be provided upon his release.  He would actually only receive about $26 per week for coffee and milk and to buy basic toiletries. The money is placed on a card. The portion set aside is an amount made available to him upon his release.

   19.2.The types of activities he would undertake included emptying the staffroom bin, mopping the floor, wiping down the bench. These activities are not “work” but rather “chores”. He did not have an actual job in prison. However, if he did not undertake those chores he would not receive the weekly payment.

   19.3.If he did not spend all of the money on his card he would be able to receive it upon release.

   19.4.If family or friends gave him any money he would only be able to receive it once a month.

   19.5.The payments he received are an amenity allowance or gratuity payment to purchase personal items and as such should be excluded as income for the purposes of subsection 66A(4). 

5. Ms Plumb’s submissions and evidence included that Mr Flynn’s mother would visit him and provide him with extra money.

6. The matter of Boulding and Wrinch (Child Support) [2021] AATA 5281 (10 November 2021) was submitted by Mr Flynn as supporting his position. In that matter the Tribunal found that the chores undertaken in prison were not considered “work” and were exempt from being considered as income pursuant to section 66A and as such Mr Boulding’s income was considered to be nil.

7. The Tribunal also notes that a more recent Tribunal matter of Colenzo and Colenzo (Child Support) [2022] AATA 3963 (29 September 2022) found that money of $20 per week paid to Mr Colenzo while incarcerated for work undertaken were not exempt and were in excess of the minimum specified level in section 66A of the Act.

8. Having considered the details of these matters before the Tribunal, the Tribunal finds that in this case it is appropriate to find that the weekly allowance paid to Mr Flynn while in prison, can be considered as income and not an amenity allowance or gratuity. While the activities undertaken may be classed as chores, the Tribunal finds that Mr Flynn was paid for work undertaken and notes that if he did not undertake the required activities, he would not receive a payment. Further, the amount he received is above the minimum specified level.

9. Therefore, the Tribunal finds that the monies received while incarcerated are not exempt and therefore section 66A of the Act precludes the Tribunal from considering whether or not the discretion to reduce the rate of child support payable by Mr Flynn to nil should be exercised in this case.

Retrospective determination

1. As detailed above, Mr Flynn is seeking that a retrospective determination be applied to the child support assessments for the period 1 July 2014 to 30 September 2015 and 1 October 2015 to 31 December 2016.

2. In particular, for the period 1 July 2014 to 30 September 2015, Mr Flynn was assessed on provisional income of $47,046 per annum. However his actual income was significantly lower as he was solely reliant on Centrelink for income.

3. Similarly for the period of 1 October 2015 to 31 December 2016, Mr Flynn was assessed on a provisional income of $47,219 per annum. However his annual income was significantly lower as he was solely reliant on Centrelink for income.

4. Section 58 of the Act provides that, if Child Support cannot ascertain a person’s taxable income, it can determine an income to be used in the administrative assessment.

5. As Child Support was not able to derive an income for Mr Flynn for either the 2013/2014 or 2014/2015 years due to insufficient information, they used a provisional income amount of $47,046 and $47,219 respectively.

6. Subsection 58A(2) provides for retrospective determinations and in particular states that where circumstances prescribed by the Regulations for the purposes of this section apply in relation to the parent then the Registrar must immediately amend the administrative assessment for the child support period on the basis that the parent’s adjusted taxable income for that year of income is, and has always been, the amount that was subsequently ascertained or later determined (as the case requires).

7. Regulation 11 relevantly sets out these prescribed circumstances and states:

   (1) For the purposes of section 58A of the Act, the following circumstances are prescribed in relation to a parent who was unable to provide information about the parent’s adjusted taxable income to the Registrar at the time the relevant administrative assessment was made:

   (a) one or more of the following applied in relation to the parent at that time:

   (i) the parent did not know that an application for the assessment had been made and accepted;

   (ii) the parent had a serious illness or injury;

   (iii) the parent was under detention or imprisonment;

   (iv) the parent resided in a remote location which made it difficult to contact the Registrar;

   (v) a natural disaster prevented the parent from being able to contact the Registrar;

   (vi) there was some other exceptional circumstance that prevented the parent from providing the information;

   (b) the Registrar confirms that the parent was unable to provide the information at that time because of a circumstance mentioned in paragraph (a);

   (c) the parent later provides the information to the Registrar as soon as is practicable in the circumstances.

   (2)  For the purposes of section 58A of the Act, the following circumstances are prescribed in relation to a parent who resided overseas during the last relevant year of income for the child support period for which the Registrar made the relevant administrative assessment:

   (a)  the parent was not required to lodge a tax return under the Tax Act;

   (b)  the parent provides the information about the parent's adjusted taxable income to the Registrar within a reasonable time in the circumstances.

8. Regulation 11 therefore provides that to make a retrospective determination, Mr Flynn must have been affected by a prescribed circumstance at the time the assessment was made, and been prevented from providing his income information at that time because of a prescribed circumstance and subsequently provided his income information within a reasonable timeframe.

9. Child Support used a 2013/2014 provisional income in the assessment until 30 September 2015 from 1 July 2014. Child Support used a 2014/2015 provisional income in the assessment until 31 December 2016 from 1 October 2015. On 11 February 2016 they attempted to derive a 2013/2014 and a 2014/2015 income for Mr Flynn but were unsuccessful due to insufficient information.

10. On 4 October 2018 they sent a letter to Mr Flynn at a prison address requesting he contact them by 18 October 2018, otherwise they would not be able to update his child support assessment to reflect his present circumstances. This letter also refers to a dedicated telephone service for customers in prison.

11. On 12 October 2021, Mr Flynn with the assistance of [Agency 1] made applications requesting his 2013/2014 and 2014/2015 income be backdated as he was only in receipt of Centrelink payments. The application included a letter from Mr Flynn’s doctor, [Doctor A]. Child Support sought further information which was not provided and made a decision on 22 December 2021 to refuse the request for the assessment to be amended retrospectively pursuant to Regulation 11, as it could not be satisfied that Mr Flynn’s prescribed circumstances prevented him from providing income information and the information was not provided within a reasonable timeframe.

12. On 27 May 2022 Mr Flynn objected to those decisions.

13. As detailed above, On 22 December 2021 the objections officer made the decision to refuse the request for the assessments to be amended retrospectively pursuant to Regulation 11. In part this decision was due to Mr Flynn not contacting Child Support at times when he was not incarcerated. Of note, he was not incarcerated between [dates in] December 2014 and [October] 2016 as well as between [dates in] December 2016 and [May] 2018. In addition, the only evidence before the objections officer regarding prescribed circumstances was a short letter form [Doctor A] which was considered not to provide clarification as to how his medical conditions prevented him from providing income information sooner.

14. The submissions provided for Mr Flynn as well as his evidence and submissions at the hearing included:

    38.1.He has been diagnosed with anxiety, depression, diabetes, coronary artery disease and post-traumatic stress disorder (PTSD).

    38.2.He is unable to understand the processes of Child Support.

    38.3.He believes that as deductions were being made from his Centrelink benefits, that Child Support must have been aware of his financial circumstances. He is completely illiterate and has no understanding of the assessment or how the debts arose.

    38.4.During periods of imprisonment, he had no income apart from a basic allowance for personal items and to make telephone calls. It was only when he was able to trust another prisoner in 2021 that he asked the prisoner to read a letter Child Support had sent him and learned of the arrears. He immediately contacted [Agency 1] for assistance.

    38.5.Upon his release from prison, he required a reasonable period to transition back into the community. This involves seeking and obtaining housing, reconnecting with family and friends, being connected to support services and other steps to resume a normal lifestyle. The instability caused by alternating between being in and out of prison exacerbated his depression and anxiety such that he was unable to prioritise his child support matters.

    38.6.He depends on his mother to explain documents to him due to his illiteracy and had difficulties providing documents to her while incarcerated for long periods of time as he was not allowed to take any letters with him to the visits with his mother.

    38.7.He provided information to the Registrar as soon as was practicable in the circumstances given the nature and severity of his medical conditions, illiteracy and his periods of imprisonment.

    38.8.He also meets the requirements of exceptional circumstances due to COVID-19 and lockdowns and restricted access which made it difficult to provide information sooner.

    38.9.He is currently trying to access a Mental Health Care Plan and an NDIS plan to work on his PTSD.

15. Ms Plumb’s submissions and evidence included that Mr Flynn is not completely illiterate as he has a [social media] account. As for the paperwork, he could have posted it to his mother. She had no comment regarding the medical conditions other than to state that he is not the only one who has medical issues.

16. In response to the [social media] comment, Mr Flynn stated that he uses a microphone rather than typing.

17. The Tribunal accepts that Mr Flynn has suffered from and continues to suffer from a number of complex medical conditions including anxiety, depression, diabetes, coronary artery disease and post-traumatic stress disorder. Having considered all of the evidence before it, the Tribunal finds that Mr Flynn had a serious illness, that he was in prison for various periods as detailed above. The Tribunal finds that Mr Flynn was affected by a prescribed circumstance at the time the assessment was made.

18. The Tribunal notes that the assessments were first made on 1 July 2014 for the use of 2013/2014 provisional income and 1 October 2015 for the use of the 2014/2015 provisional income.

1. Mr Flynn was incarcerated at the time of the first decision but not the second. He was not in prison between [in] December 2014 and [October] 2016 or between [dates in] December 2016 and [May] 2018. While the Tribunal appreciates that there would be a period of adjustment upon release from prison, these were extensive periods of not being in prison and Mr Flynn would have had an opportunity to contact Child Support. The Tribunal does not accept that Mr Flynn’s medical conditions were such that he would not have been able to make the necessary inquiries via a representative as he eventually did in 2021.

2. Accordingly, the Tribunal accepts that Mr Flynn was affected by a prescribed circumstance at the time the assessment was made and that he may have been prevented from providing his income information at that time because of a prescribed circumstance. However, the Tribunal finds that he did not subsequently provide his income information as soon as was practicable in the circumstances.

DECISION

The five decisions under review are affirmed.