Fryer and Crutcher (Child support)

[2022] AATA 1557

Fryer and Crutcher (Child support) [2022] AATA 1557 (22 April 2022)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2022/PC023234

APPLICANT:  Mr Fryer

OTHER PARTIES:  Child Support Registrar

Ms Crutcher

TRIBUNAL:Member S Letch

DECISION DATE:  22 April 2022

DECISION:

The decision under review is affirmed.

CATCHWORDS

CHILD SUPPORT – particulars of the administrative assessment – estimate of income - whether the estimated income is less than the amount likely to be the actual income - estimate of income correctly refused - 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. This matter concerns a decision by the Child Support Agency (CSA) to originally accept a “nil” income estimate from Mr Fryer for the 2020/21 financial year from 2 November 2021, and subsequently refuse an objection by Ms Crutcher.

2. It is convenient by way of background to set out an extract from the objection officer decision dated 7 January 2022:

   WE CONSIDERED THE FOLLOWING EVIDENCE IN THE DECISION

   From 1 September 2021Mr Fryer’s 2020/2021 Income tax declaration of $107,000 and [Ms Crutcher’s] 2020/2021 taxable income of $49,000 was used on the Child support assessment.

   On 2 November 2021 Mr Fryer contacted us and lodged a $0 estimate of income and advised he had been advised by his employer his services were no longer required. Mr Fryer also advised he will receive a final payment on 30 November 2021.

   On 2 November 2021 we made a decision to accept Mr Fryer`s $0 estimate of income from 2 November
   2021 to 30 June 2022.

   On 8 November 2021 [Ms Crutcher] objected to the decision and stated through multiple Change of Assessments in the past year the paying parent states he has a small business. I believe he earns money from this business and I also believe he is still work at [Employer 1] or elsewhere in the [Town 1] area.

   On objection we spoke with Mr Fryer and he stated that he has discussed his financial situation with Child Support on two occasions and as far as he is concerned, his current zero income is correct and accurate. Mr Fryer said he would provide his final payslip and separation certificate, however, these
   were not received. He also did not provide any information about his business.

   We contacted Mr Fryer’s employer and they advised Mr Fryer’s employment was ceased on 10 November
   2021. We also received a deduction from Mr Fryer’s pay on 30 November 2021.

   REASONS FOR THE DECISION

   An income estimate is an election that a parent can make to have their assessment based on their expected income for a year of income, or for part of a year of income (Section 60, Section 62A and Section 63AA of the Child Support (Assessment) Act 1989).

   In order to accept Mr Fryer`s estimate of income, we must be satisfied that when an initial or subsequent estimate is lodged it includes all components of likely adjusted taxable income for the estimate period and that the election is a reasonable estimation of the person`s expected adjusted taxable income for that year.

   When Mr Fryer lodged his $0 estimate of income he advised he would still be receiving a final payment on 30 November 2021, meaning his estimate did not include all his expected income.

   Mr Fryer`s employer advised his employment did not cease until 10 November 2021.

   Based on the information provided we cannot be satisfied Mr Fryer provided a reasonable estimate of his expected taxable income from 2 November 2021.
   We have made the decision to refuse Mr Fryer`s $0 estimate of income from 2 November 2021 to 30 June 2022.

   The objection is allowed.

3. Mr Fryer told the Tribunal that due to the actions of a subordinate, he was required to finish work. He said he was paid monthly; he last worked on 12 October 2021 but did not receive his last payment until 30 November 2021. He was “stood down” for a period of four weeks. His workplace had removed his email access so he did not receive information from his employer. He told the CSA everything – they were aware that he was to be paid a further sum on 30 November 2021. He said he was homeless for over a month, and struggled through the relevant period; he did not receive CSA correspondence. Mr Fryer told the Tribunal there was no way for him to know what his final payment was going to be.

4. Ms Crutcher told the Tribunal she agrees with the CSA. She said the same thing happened to her – when she went on maternity leave, she put in a “nil” estimate, and then unexpectedly received a “manager’s bonus”. Her “nil” estimate was revoked by the CSA, which she accepted. She said she and Mr Fryer were “both incorrect”.

5. The pivotal provision in this application is section 63AA of the Child Support (Assessment) Act 1989:

   63AA  Registrar may refuse to accept an income election

   (1)  If:

   (a)  a parent makes an income election to which subsection 60(2) applies; and

   (b)  the Registrar is satisfied that the amount worked out under that subsection is less than the amount that the Registrar considers is likely to be the parent’s actual adjusted taxable income for the year of income to which the income election relates;

   the Registrar may refuse to accept the income election.

   (2)  The Registrar may refuse to accept a parent’s income election to which subsection 60(3) applies if the Registrar is satisfied that:

   (a)  the partial year income amount for the income election is less than the amount that the Registrar considers is likely to be the parent’s actual adjusted taxable income for the remaining period in relation to the income election; or

   (b)  the total of the income component amounts estimated by the parent under paragraph 60(3)(b) for the period referred to in that paragraph is more than the amount that the Registrar considers is likely to be the total of the actual income component amounts for the parent for that period.

   (3)  If:

   (a)  a parent makes an election under subsection 62A(1); and

   (b)  the Registrar is satisfied that the partial year income amount for the income election is less than the amount that the Registrar considers is likely to be the parent’s actual adjusted taxable income for the remaining period in relation to the income election;

   the Registrar may refuse to accept the income election.

   (4)  In making the decision as to whether to refuse to accept the income election, the Registrar:

   (a)  may act on the basis of information that the Registrar has received or obtained as to the financial circumstances of the parent; and

   (b)  may, but is not required to, conduct an inquiry into the matter.

   (5)  Except for the purposes of Parts VII, VIIA and VIII of the Registration and Collection Act (dealing with objections and appeals), if the Registrar refuses to accept the income election, the election is taken never to have been made.

6. In short, the Registrar may refuse to accept an income election if the estimated amount is less than the amount that the Registrar considers is likely to be the parent’s actual adjusted taxable income for the year of income to which the income election relates.

7. Here the CSA was clearly advised by Mr Fryer that he was anticipating a further and final payment on 30 November 2021: folio 41 of the CSA materials. Despite that advice, it accepted his income would be “nil” from 2 November 2021. Mr Fryer’s final payment was required to form part of his estimated income for the period 2 November 2021 to 30 June 2022. In other words, the CSA ought not have accepted a “nil” estimate as Mr Fryer’s adjusted taxable income was always going to be greater than “nil”.

8. On objection, the CSA corrected what was an incorrect decision on 2 November 2021. Accordingly, the Tribunal agrees with the objection officer decision, and the decision under review is legally correct and must be affirmed.

9. The Tribunal understands Mr Fryer will find this outcome unsatisfactory.  By changing its decision, the CSA has effectively acknowledged it made the wrong decision on 2 November 2021. As a result, Mr Fryer may have been deprived of an opportunity to make a correct estimate from an earlier date. He is at liberty to apply for a “change of assessment” which, in appropriate circumstances, can be back-dated for a period of up to 18 months; the Tribunal also observes that the CSA administers a compensation scheme for economic loss which Mr Fryer is also at liberty to approach the CSA to pursue. [1]

   [1] The Scheme for Compensation for Detriment caused by Defective Administration (CDDA Scheme). The Tribunal is careful to observe it has no jurisdiction or role over that scheme. 

DECISION

The decision under review is affirmed.