Freeland and Grainger (Child support)

[2021] AATA 4791

Freeland and Grainger (Child support) [2021] AATA 4791 (29 October 2021)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2021/PC021945 & 2021/PC021942

APPLICANT:  Mr Freeland

OTHER PARTIES:  Child Support Registrar

Ms Grainger

TRIBUNAL:Senior Member R Ellis

DECISION DATE:  29 October 2021

DECISION:

The decision under review is affirmed.

CATCHWORDS

CHILD SUPPORT – non-agency payment – prescribed payment for essential medical treatment – payment correctly credited – decision under review affirmed

Names used in all published decisions are pseudonyms. Any references appearing in square brackets indicate that information has been omitted from this decision and replaced with generic information so as not to identify involved individuals as required by subsections 16(2AB)-16(2AC) of the Child Support (Registration and Collection) Act 1988.

REASONS FOR DECISION

BACKGROUND

1. Mr Freeland and Ms Grainger are the parents of [Child 1] (born February 2014) and [Child 2] (born April 2016).  There has been a child support assessment in place since 15 December 2014 with collection by the Child Support Agency from 7 June 2017.  Mr Freeland is currently the parent liable to pay child support under the assessment.

2. From 5 April 2015 the child support assessment reflected that [Child 1] and [Child 2] were in the 100 per cent care of Ms Grainger.  This changed from 24 December 2020 when Mr Freeland commenced having regular care of the children.

3. On 7 April 2021 Mr Freeland applied to the Child Support Agency for credit of one payment of $120 made for speech therapy as a non-agency payment.

4. On 7 May 2021 the Child Support Agency made the decision to credit the payment of $120 made on 22 January 2020 for speech therapy as a prescribed non-agency payment.

5. On 18 May 2021 Mr Freeland objected to this decision and on 25 June 2021 the Child Support Agency disallowed the objection (the first objection decision).

6. On 7 April 2021 Mr Freeland also applied to the Child Support Agency for credit of one payment of $1,576.43 made for a medical procedure as a non-agency payment.

7. On 7 May 2021 the Child Support Agency made the decision to credit the payment of $1,576.43 made on 8 June 2020 for a medical procedure as a prescribed non-agency payment.

8. On 18 May 2021 Mr Freeland objected to this decision and on 25 June 2021 the Child Support Agency disallowed the objection (the second objection decision).

9. On 15 July 2021 Mr Freeland applied to the Administrative Appeals Tribunal (the Tribunal) for a review of the first objection decision and the second objection decision.

10. The Tribunal conducted hearings into the two applications on 12 October 2021.  Mr Freeland gave evidence on affirmation by conference telephone.  On 11 October 2021 Ms Grainger advised the Tribunal she did not wish to participate in the hearings.  The Child Support Agency provided the Tribunal and the parties with papers relevant to the two reviews (236 pages).

11. During the hearings the Tribunal agreed to allow Mr Freeland until 26 October 2021 to provide additional written evidence he said was directly relevant to his case.  No further evidence was received from Mr Freeland by this date.

ISSUES

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

2. When a child support liability is registered under the Act for collection, the amount payable is a debt due to the Commonwealth and must be paid to the Child Support Agency, not the payee.

3. In some circumstances the Child Support Agency may credit payments made directly to a payee or to a third party against a child support liability that is registered for collection (sections 71, 71A or 71C of the Act).  The Child Support Agency refers to the credits under sections 71 and 71A as ‘non-agency payments’.  Credits under section 71C are known as ‘prescribed non-agency payments’ as this section applies to payments of the kind specified in section 19 of the Child Support (Registration and Collection) Regulations 2018 (the Regulations).

4. Section 71C of the Act provides a mechanism whereby payments made by a liable parent to the payee or to another person for items specified in the Regulations may be taken into account in partial satisfaction of the liable parent’s child support liability. A number of specific criteria must be satisfied for this provision to apply. Even where all the criteria are met, there is still a discretion in section 71D of the Act to refuse to credit amounts that would otherwise be able to be credited against the liability.

5. The issue which arises in this case is whether or not any of the two payments made by Mr Freeland can be accepted as non-agency payments and credited against his child support liability.

CONSIDERATION

1. Mr Freeland told the Tribunal the payment of $120 was for necessary speech therapy for [Child 2].  He said it was a one-off payment as Ms Grainger did not want [Child 2] to continue with private therapy.  Mr Freeland said [Child 2] was now undergoing therapy in the public health system.

2. Mr Freeland explained that initially Ms Grainger had agreed that any payments he made towards speech therapy for [Child 2] would be considered in lieu of child support but she had later changed her mind.  Mr Freeland said he had received a text message from Ms Grainger advising him that she accepted the payment of $120 was in lieu of child support and she would inform the Child Support Agency accordingly.  The Tribunal noted the text message was not in the papers provided by the Child Support Agency and agreed to allow Mr Freeland further time to provide this evidence.  No further evidence was received from Mr Freeland.

3. The Tribunal notes in evidence from the Child Support Agency a tax receipt issued to Mr Freeland by [a therapy service].  It shows Mr Freeland made a payment of $120 on 22 January 2020 for speech therapy services provided to [Child 2].

4. Mr Freeland told the Tribunal the payment of $1,576.43 was his contribution towards [a specified] operation for [Child 2].  Mr Freeland said this was for the hospital costs while Ms Grainger had paid for other costs related to the operation including those for the [specialist].  He said each parent had paid approximately the same, however, Ms Grainger had been able to claim most of her costs back through Medicare while he could not.

5. Mr Freeland said that during a family court hearing [in] May 2021 Ms Grainger had informed his lawyer that his contribution to the costs of the [operation] would also be considered in lieu of child support.  He said Ms Grainger had again changed her mind.

6. The Tribunal notes in evidence from the Child Support Agency a receipt issued by [a named] Hospital on 8 June 2020 to Mr Freeland for $1,576.43.

7. Mr Freeland told the Tribunal a child support officer had informed him that Ms Grainger had initially agreed to both payments being considered in lieu of child support.  He said there was no record of this conversation between Ms Grainger and the child support officer in the papers from the Child Support Agency despite her agreement.

8. Following the hearings the Tribunal sought further relevant information from the Child Support Agency arising from any discussions between Ms Grainger and a child support officer in relation to the two payments under consideration.  In response the Child Support Agency advised that Ms Grainger had never initially agreed to the two payments being considered in lieu of child support and so there was no record of such discussions (C1).

9. Although she did not participate in the hearing the Tribunal notes in evidence from the Child Support Agency that Ms Grainger disputes there was any arrangement with Mr Freeland the two payments were intended to be in lieu of child support.  On 4 June 2021, during a conversation with a child support officer, Ms Grainger is recorded as stating that the payment of $120 for speech therapy and the payment of $1,576.43 for [the specified] surgery, were not in lieu of child support.

10. It is not in contention and the Tribunal finds that Mr Freeland made a payment on 22 January 2020 of $120 for speech therapy for [Child 2] and a payment of $1,576.43 on 8 June 2020 for a medical procedure for [Child 2].

11. Section 71A of the Act provides for payments made by the payer of an enforceable maintenance liability to a third party to be credited against the amount payable under the child support liability. The amount paid by the payer to the third party must partially or completely satisfy a debt owed by the payee, the payer or both the payer and the payee (paragraph 71A(1)(a)).  It must be the intention of both parties that the payments, or part of the payments, be credited against the payer’s enforceable child support liability in relation to the child support enforcement period (paragraph 71A(1)(c)).

12. The Tribunal is satisfied, based on the evidence provided, that the payment made by Mr Freeland for speech therapy for [Child 2] and the payment made by Mr Freeland for a medical procedure for [Child 2] were not intended by both parents to be in lieu of child support.  The Tribunal finds these two payments made by Mr Freeland cannot, therefore, be considered as non-agency payments under section 71A of the Act.

13. Where such payments cannot be credited under section 71A, they may be credited under section 71C even if there is no mutual intention between the parents. Section 71C provides, subject to section 71D, for an amount to be credited against a payer’s child support liability regardless of the intention of the parents at the time the payment was made.  Under subsection 71C(1) of the Act the Child Support Agency must credit an amount when all the conditions set out in paragraphs 71C(1)(a) to 71C(1)(d) are met.

14. The payment to be credited must also be a payment of the kind specified in section 19 of the Regulations.  This section states that for the purposes of paragraph 71C(1)(b) of the Act, specified payments are payments of the following kinds in relation to an enforceable maintenance liability:

    (a) child care costs for the child who is the subject of the enforceable maintenance liability;

    (b) fees charged by a school or preschool for that child;

    (c) amounts payable for uniforms and books required by a school or preschool for that child;

    (d) fees for essential medical and dental services for that child;

    (e) the payee’s share of amounts payable for rent or a security bond for the payee’s home;

    (f) the payee’s share of amounts payable for utilities, rates or body corporate charges for the payee’s home;

    (g) the payee’s share of repayments on a loan that financed the payee’s home;

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

15. The Tribunal finds that the payment made by Mr Freeland on 22 January 2020 for speech therapy and the payment made on 8 June 2020 for a medical procedure are payments of the kind specified under the Regulations.  They may, therefore, be considered as non-agency payments under section 71C of the Act.

16. The condition in paragraph 71C(1)(a) of the Act is that the payer of an enforceable maintenance liability in relation to a payment period or initial period has made one or more payments to the payee, or to another person.  The Tribunal is satisfied this is the case.

17. The condition in paragraph 71C(1)(ba) is that at the time the payment is made, the payer does not have at least regular care of the child to whom the relevant administrative assessment relates. It is also a condition that the payer does not have at least regular care of the child at the time at which the Registrar applies section 71C (paragraph 71C(1)(d)).  The Tribunal is satisfied that at the time the two payments were made Mr Freeland had less than 14 per cent care, or regular care, of [Child 2].  The Tribunal notes, however, that Mr Freeland had regular care of [Child 2] from 24 December 2020.

18. Where the conditions in subsection 71C(1) are met, the Registrar must credit any amount that has not already been credited against the amount payable under the payer’s liability for the period, up to a maximum of 30 per cent of the amount payable for that period.

19. In this case the Tribunal finds the payment made by Mr Freeland of $120 on 22 January 2020 and the payment made of $1,576.43 on 8 June 2020 meet the conditions set out under the Act and must, therefore, be credited under section 71C.

20. The Tribunal does not consider the exercising of the discretion set out in section 71D of the Act is warranted in the circumstances of these two payments.

21. The Tribunal is satisfied the applications made by Mr Freeland on 7 April 2021 for the credit of a payment of $120 made on 22 January 2020 for speech therapy and for the credit of a payment of $1,576.43 made on 8 June 2020 for a medical procedure should be accepted as prescribed non-agency payments.

DECISION

The decision under review is affirmed.