Fritz and Payne (Child support)

[2022] AATA 317

Fritz and Payne (Child support) [2022] AATA 317 (1 February 2022)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2021/AC022886

APPLICANT:  Mr Fritz

OTHER PARTIES:  Child Support Registrar

Ms Payne

TRIBUNAL:Member P Jensen

DECISION DATE:  1 February 2022

DECISION:

The decision under review is affirmed.

CATCHWORDS

CHILD SUPPORT – non-agency payment – prescribed payment for school fees – discretion exercised not to credit – 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

1. Mr Fritz and Ms Payne are the parents of [Child 1], [Child 2] and [Child 3]. A child support case was registered from 30 September 2020 with what is commonly called the Child Support Agency or CSA. Since registration, child support has been payable by Mr Fritz and it has been registered for collection by the CSA.

2. Mr Fritz paid $227.50 directly to Ms Payne on 15 April 2021, 13 May 2021, 10 June 21, 8 July 2021 and 4 August 2021. On 16 July 2021, Mr Fritz applied to have the first four payments credited against his child support liability. He subsequently applied to also have the fifth payment credited.

3. On 25 August 2021 the CSA decided to credit the five payments. Ms Payne objected to that decision. An objections officer allowed her objection and decided to not credit the five payments. Mr Fritz applied to the Tribunal for further review. I heard the matter on 1 February 2022. Mr Fritz and Ms Payne gave sworn evidence by conference phone.

4. Section 71 of the Child Support (Registration and Collection) Act 1988 (“the Act”) provides that if the payer of child support makes a payment directly to the payee of child support, and certain other requirements are satisfied, the payment can be credited against the payer’s liability to the CSA. One of those other requirements is that the payee intended the payment being credited. There is no dispute that Ms Payne did not intend for any of the five payments to be credited against Mr Fritz’s liability to the CSA.

5. Section 71C of the Act provides that if the payer of child support makes a payment to the payee of child support or to another person, and certain other requirements are satisfied, the payment can be credited against the payer’s liability to the CSA. One of those other requirements is that “the payment is a payment of the kind specified in the regulations”: paragraph 71C(1)(b). The relevant regulation is regulation 19 of the Child Support (Registration and Collection) Regulations 2018, and more specifically subregulation 19(b) which prescribes: “fees charged by a school or preschool for that child”. Mr Fritz’s payments to Ms Payne were for what he described as his half of [Child 2’s] private school fees. There is no dispute that the five payments satisfied all of the requirements of section 71C and the payments could be credited against Mr Fritz’s liability to the CSA. The issue in this case is whether they ought to be credited. Section 71D of the Act states: “The Registrar may refuse to credit an amount under section 71, 71A or 71C if satisfied that, in the circumstances of the particular case, the amount ought not to be credited.”

6. Ms Payne provided some emails to the Tribunal. At the Tribunal hearing she stated that she had not provided all of the relevant emails to the Tribunal. Nevertheless, she referred to an email dated 9 February 2021 in which she effectively asked Mr Fritz’s solicitor to ask Mr Fritz to pay half of [Child 2’s] school fees for 2021.[1] She also referred to an email dated 9 February 2021 in which Mr Fritz replied:

   Yes, I have seen the figures and account details.

   I’ll let you know when first payment is made and confirm how future payments we [sic] be, fortnightly, monthly or per term.

   …

   [1]Page 29 of the hearing papers.

7. On 17 August 2021 the CSA contacted Mr Fritz and noted:[2]

   [Mr Fritz] also advised he could upload text messages from [Ms Payne] regarding agreement between the two of them regarding the payment of fees.

   [2]Page 17 of the hearing papers.

8. On 26 August 2021, Ms Payne sent an email to Mr Fritz which commenced as follows:

   Your [sic] not wanting to pay half of [Child 2’s] Education for [School 1]? You agreed to pay half?

   That was an agreement?

   …

9. At the Tribunal hearing, Mr Fritz said he had not agreed to pay half of [Child 2’s] school fees. The evidence referred to above suggests otherwise. I asked Mr Fritz why he had made the payments to Ms Payne. He said he had felt obliged to do so. I asked him if he could expand upon his answer. He replied, “Not really.” Nevertheless, later during the hearing, he said he made the payments to Ms Payne because he had believed that if he did not make the payments, she would not allow him to see the children.

10. I asked Mr Fritz why his application to have the payments credited was made on 16 July 2021, rather than some earlier date. Mr Fritz replied, “Because that’s when I found out I could possibly claim those payments.” In response to further questions, Mr Fritz confirmed that prior to July 2021 he had been paying his assessed rate of child support via deductions from his wages and he had also been making direct payments to Ms Payne to pay for half of [Child 2’s] school fees, and he had not expected any subsequent adjustment in respect of those payments.

11. Mr Fritz said he paid half of [Child 2’s] school fees for 2021 but he is not paying half of her school fees for 2022. Ms Payne said she lodged a Change of Assessment[3] in January 2022. She explained that she is effectively applying to have Mr Fritz’s rate of child support payable increased on account of [Child 2’s] private school fees.

    [3]“Change of Assessment” is the term commonly used to refer to a departure application made pursuant to Part 6A of the Child Support (Assessment) Act 1989.

12. The evidence can be summarised as follows. Mr Fritz was paying his administratively assessed rate of child support payable via deductions from his wages. In 2021, Ms Payne asked Mr Fritz to also pay half of [Child 2’s] private school fees and he agreed to do so. He made monthly payments. Both parents expected Mr Fritz’s payments to Ms Payne to be in addition to Mr Fritz’s payment of his administratively assessed rate of child support. In July 2021, Mr Fritz learnt of the effect of section 71C of the Act and he applied to have his payments to Ms Payne credited pursuant to that section. However, Ms Payne had relied on their earlier agreement, and it had been reasonable for her to do so. When Mr Fritz stopped voluntarily making an additional contribution towards [Child 2’s] private school fees, Ms Payne applied to have his rate of child support payable increased on account of those fees. It seems likely, and I find, that if Mr Fritz had stopped making those payments directly to Ms Payne sooner, Ms Payne would have lodged a Change of Assessment sooner. In making that finding, I am not commenting on the merit, if any, of Ms Payne’s Change of Assessment. The point is that while Mr Fritz was making the payments directly to Ms Payne, she did not feel the need to formally apply to have Mr Fritz’s rate of child support payable increased. Given her reliance upon their agreement and his payments made pursuant to that agreement, the five payments in question ought not be credited pursuant to section 71D of the Act. The objections officer reached the same conclusion, and decided accordingly. That decision will be affirmed.

DECISION

The decision under review is affirmed.