Franklin and Corey (Child support)

[2021] AATA 3696

Franklin and Corey (Child support) [2021] AATA 3696 (19 August 2021)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2021/BC021734

APPLICANT:  Mr Franklin

OTHER PARTIES:  Child Support Registrar

Ms Corey

TRIBUNAL:Member H Moreland

DECISION DATE:  19 August 2021

DECISION:

The decision under review is affirmed.

CATCHWORDS

CHILD SUPPORT – non-agency payment - whether payment made to a third party in lieu of child support - intention of both parents – whether payments prescribed payments - 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. This application for review is about whether payments made by Mr Franklin should be credited as payment towards his child support liability.

2. Mr Franklin made a payment of $8,000 which he then applied to Services Australia – Child Support (the Department) to be credited towards his child support liability on 9 April 2021.[1]

   [1] T documents, p 19.

3. On 16 April 2021, the Department refused to credit the amount. On 10 May 2021, Mr Franklin objected to the Department’s decision. On 9 June 2021, a Departmental objections officer disallowed Mr Franklin’s objection and refused to credit the non-agency payment.

4. On 14 June 2021, Mr Franklin applied to the Administrative Appeals Tribunal (the tribunal) for review. On 19 August 2021, the tribunal conducted a hearing. Mr Franklin and Ms Corey spoke to the tribunal via conference telephone and gave sworn evidence. The tribunal received documents (72 pages) provided by the Department (the T documents). Copies of these documents were provided to both parties by the Department prior to the hearing.

CONSIDERATION

1. The statutory provisions relevant to this review are contained in the Child Support (Registration and Collection) Act 1988 (“the Act”). Section 71A of the Act states that if a payer makes a payment to a third party in satisfaction of a liability and it is intended by both parties to the child support case to be in complete or partial satisfaction of the payer’s child support liability, the amount can be credited against the payer’s liability as a non‑agency payment.

2. In his application for review, Mr Franklin said his children asked him for some money and he agreed to pay it; and that he and Ms Corey had agreed that the amount would be “accepted as a non-agency payment”.[2] At the hearing, Mr Franklin told the tribunal that he spoke to Ms Corey and told her that he would transfer $8,000 to her for their sons, [Child 1] and [Child 2], to use to purchase a car. He told the tribunal that he told Ms Corey that she needed to contact Child Support and inform them that this would be a non-agency payment and that she had not disagreed with this. Mr Franklin told the tribunal that there was no written evidence that there was ever a mutual intention that the $8,000 was to be a non-agency payment.

   [2] T documents, p 1.

3. Ms Corey told the tribunal that she and Mr Franklin had a conversation about him giving their sons $8,000 for them to purchase a car and that the reason it was transferred to her was to ensure that the funds went to the purchase of a car, rather than directly into the accounts of their 18-year-old sons who may not be responsible with the funds. Ms Corey told the tribunal that she had been under the impression that this payment was a gift to her sons from Mr Franklin until the aforementioned phone call. Ms Corey told the tribunal that she was stunned by Mr Franklin’s suggestion that the money was a non-agency payment and did not provide any response during that phone call. Ms Corey said it was never her intention that the $8,000 be a non-agency payment.

4. Based on the evidence before it, the tribunal is not satisfied that there was a mutual intention by Mr Franklin and Ms Corey that the payment would be credited against his child support liability, so the tribunal cannot find that the payments were in lieu of child support. Accordingly, the tribunal cannot accept that the payments were intended by both Mr Franklin and Ms Corey to be credited against Mr Franklin’s child support liability as non-agency payments under section 71A of the Act.

5. Section 71C of the Act also allows for some non-agency payments to be credited. It is not necessary for there to be a mutual intention between the parties that the payments are treated in this way. To be credited under section 71C, the payments need to be one of the types of payments prescribed under the Child Support (Registration and Collection) Regulations 2018 (the regulations).

10.The regulations prescribe the following payments that can be considered as non-agency payments:

·     child care costs for the child who is the subject of the enforceable maintenance liability;

·     fees charged by a school or preschool for that child;

·     amounts payable for uniforms and books required by a school or preschool for that child;

·     fees for essential medical and dental services for that child;

·     the payee’s share of amounts payable for the payee’s home; and

·     costs to the payee of obtaining and running a motor vehicle, including repairs and standing costs.

1. In addition to the payments being prescribed under the regulations, the payer must have less than regular care of the children for the payments to meet the requirements under section 71C of the Act. In this case, based on the information recorded in the Department records of Mr Franklin and Ms Corey’s care, Mr Franklin had less than regular care of the children. However, the payment made by Mr Franklin does not meet the type of payments prescribed by the regulations. The tribunal notes that while the funds were intended for the purpose of a motor vehicle, the motor vehicle was for [Child 1] and [Child 2], not Ms Corey.

2. The tribunal therefore determines that the payment of $8,000 made by Mr Franklin cannot be credited as payment towards his child support liability as non-agency or prescribed non‑agency payments and therefore the decision of the Department is correct.

DECISION

The decision under review is affirmed.