Gallegos and Felipe (Child support)

[2020] AATA 1030

Gallegos and Felipe (Child support) [2020] AATA 1030 (12 February 2020)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2019/PC017504

APPLICANT:  Mr Gallegos

OTHER PARTIES:  Child Support Registrar

Ms Felipe

TRIBUNAL:Member S Brakespeare

DECISION DATE:  12 February 2020

DECISION:

The decision under review is varied so that the child support arrears to be collected from Mr Gallegos, in respect of Ms Felipe’s application, is $1.700.50 for the period 2 February 2019 to 1 May 2019.

CATCHWORDS

CHILD SUPPORT - opt-in arrears – application for collection of unpaid amounts should be accepted – calculation of unpaid amount - decision under review set aside and substituted

Names used in all published decisions are pseudonyms. Any references appearing in square brackets indicate that information has been removed 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 Gallegos is the parent liable to pay child support to Ms Felipe for their child [Child 1] (the child).  The case commenced on 25 October 2017 and collection was done privately.

2. On 2 May 2019 Ms Felipe applied for the liability to be collected by the Child Support Agency and also requested that arrears of three months be paid.

3. On 7 June 2019 an officer of the Child Support Agency accepted Ms Felipe’s application for agency collection with arrears of $1,700.50 for the period 2 February 2019 to 1 May 2019 (the original decision).

4. Mr Gallegos lodged an objection to the decision. On 12 September 2019 an objections officer partly allowed the objection and changed the arrears from $1,700.50 to $1,469.23 (the objection decision).

5. Mr Gallegos lodged an application for review of the decision with the tribunal. A hearing was held on 12 February 2020. Mr Gallegos and Ms Felipe both gave evidence on affirmation to the tribunal via conference telephone. The Child Support Agency provided the tribunal and the parties with a bundle of documents relevant to the review (118 pages).

6. Relevant aspects of the evidence and material before the tribunal will be referred to in the tribunal’s consideration of the issues which it has to decide.

ISSUES

1. The statutory provisions relevant to this review are the Child Support (Registration and Collection) Act 1989 (the Act).

2. The issue that must be decided is the amount (if any) of child support arrears Mr Gallegos is liable to pay for the arrears period.

CONSIDERATION

1. The payee of a registered maintenance liability may elect in the child support application that the liability is not enforceable (that is, the child support is collected privately and not by the Child Support Agency) (section 24A of the Act). 

2. At a later time, the payee may apply to the Child Support Agency for the liability to become enforceable (section 28A of the Act).

3. The tribunal finds that Ms Felipe applied for the liability to become enforceable on 2 May 2019.

4. The payee may also apply to the Child Support Agency for any unpaid amounts payable under the liability in relation to a specified period (the opt-in arrears period) to be treated as arrears amounts. The specified period ends on the day before the liability becomes enforceable (subsection 28A(3) of the Act). If the specified period does not exceed 3 months, the Child Support Agency must grant the payee’s application (subsection 28A(4)).

5. The tribunal finds that Ms Felipe applied for three months’ arrears to be collected. Her application for arrears must be granted.

6. The 3 month opt-in arrears period finishes on the day before the day on which the liability first becomes enforceable under the Act. That date in turn is determined under section 28 of the Act.  Paragraph 28(1)(c) provides that the liability becomes enforceable on a day determined by the Child Support Agency (being a day not later than 60 days after the application is made).

7. The Child Support Agency determined that the three month period commenced on 2 February 2019 and ceased on 1 May 2019. The Child Support Agency also determined that Mr Gallegos’ liability for the opt-in arrears period was $1,700.50 and that amount was not contested. The tribunal finds that to be correct.

8. It is Ms Felipe’s contention that In October 2017 she left the family home. At the time she and Mr Gallegos agreed that he would continue to pay both mortgages attached to the property (approximately $400 per month for the fixed mortgage and $599 per month for the variable mortgage).  These payments would cover the $633.55 child support payments Mr Gallegos was assessed to pay, and the remainder would be in lieu of rent Mr Gallegos  should pay Ms Felipe for continuing to occupy the jointly owned property. Ms Felipe said that, as part of property settlement Mr Gallegos was also required to pay her $172,000 and she would sign over her portion of the home to Mr Gallegos.

9. Ms Felipe said that while Mr Gallegos continued to make payments to the fixed mortgage up until February 2019, he ceased paying the $599 per month to the variable account from around June 2018.  She said he only made one payment to that account subsequently ($2,000 in August 2018). Ms Felipe claimed that the only reason the bank did not send letters of demand is that when it came to property settlement she had to agree to a reduced settlement amount of $167,000 as Mr Gallegos’ failure to keep up the repayments meant that the bank would not lend him enough to pay out Ms Felipe. She agreed to the $5,000 reduction so he could get his loan.

10. It is Ms Felipe’s view that once Mr Gallegos reneged on the initial agreement in June 2018 by failing to make each mortgage payment on time as agreed, their agreement was null and void and no payments made subsequently by Mr Gallegos to the fixed account should be considered as payments of child support.

11. Mr Gallegos told the tribunal that he had paid both mortgages as required. However the payments to the variable loan account were not obvious because they had been paid in advance and then each month the appropriate amount had been drawn down reducing the mortgage. He referred the tribunal to pages 71-73 and pages 107-108 of the papers.

12. The tribunal finds with respect to the variable interest loan, (loan …#1605) the papers at 107-108 indicate that Mr Gallegos made no payments to that loan. Mr Gallegos made no payments in the period 12 January 2019 to the settlement date of 4 March 2019 and in that time the balance of the loan went from $122,747 to $124,022 in that period. The account had been paid in advance, and the advance balance had reduced from $24,295 to $21,549 in that period. Documents provided at pages 51-52 indicate that from 12 August 2018 to 12 February 2019 monthly repayments of $599.20 were due.  In that time only one payment was made to the loan by Mr Gallegos; being an amount of $2000 on 18 August 2018.

13. With respect to the fixed rate mortgage (loan #1597), the tribunal is satisfied that Mr Gallegos made the required repayment of $462.55 to that loan every month from his personal bank account from 12 August 2018 to 12 February 2019.

14. With respect to loan #1605 the tribunal does not accept Mr Gallegos’ argument that using the equity built up jointly by him and Ms Felipe to service the loan satisfies the terms of the agreement that they had; that is that he pay both mortgages each month. He has failed to do that in respect of loan #1605.

15. The tribunal finds that Mr Gallegos has made the required mortgage payments of $462.66 for loan #1597 and that one of those loan payments fell within the opt-in arrears period.

16. Ms Felipe argues that that payment should not be considered in lieu of child support, as once Mr Gallegos reneged on the agreement to pay both mortgages, the agreement ceased to exist. The tribunal agrees with that view, as at all relevant times, Mr Gallegos was the sole occupant of the jointly owned property.

17. The tribunal finds that in the opt-in arrears period Mr Gallegos was liable to pay Ms Felipe child support of $1,700.50. The tribunal finds that Mr Gallegos failed to pay Ms Felipe any child support in that period and therefore he has arrears of child support of $1,700.50 that is to be collected from him.

DECISION

The decision under review is varied so that the child support arrears to be collected from Mr Gallegos, in respect of Ms Felipe’s application, is $1.700.50 for the period 2 February 2019 to 1 May 2019.