Garofalo and Cartwright (Child support)

[2020] AATA 3662

Garofalo and Cartwright (Child support) [2020] AATA 3662 (25 June 2020)

DIVISION:  Social Services & Child Support Division

REVIEW NUMBER:  2020/PC018210

APPLICANT:  Mr Garofalo

OTHER PARTIES:  Child Support Registrar

Ms Cartwright

TRIBUNAL:  Member S Hoffman

DECISION DATE:  25 June 2020

DECISION:

The tribunal sets aside the decision under review and, in substitution, decides as follows:

·     For the period 22 March 2019 to 30 June 2019, Mr Garofalo’s adjusted taxable income is varied to $89,974.

·     For the period 1 July 2019 to 30 April 2020, Mr Garofalo’s adjusted taxable income is varied to $88,419.

·     For the period 1 May 2020 to 30 September 2022, Mr Garofalo’s adjusted taxable income is varied to $64,683.

·     For the period 22 March 2019 to 30 September 2022, Ms Cartwright’s adjusted taxable income is varied to $90,000.

CATCHWORDS

CHILD SUPPORT – departure determination – income, property and financial resources of the liable parent - benefits derived from business – ground established - 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.This review is about the child support assessment in respect of a 14-year-old boy. The Department of Human Services – Child Support (the CSA) has been involved in the assessment of child support since 11 February 2013. The CSA started collecting child support from 8 April 2013, payable by the father.

2.On 22 March 2019 the mother applied for a change of assessment. At that time, according to the CSA’s records, the mother was providing 62% of the child’s care, and the father was providing 38%. Neither parent was required to pay child support to the other, based on the father’s 2017/18 provisional income of $22,212 and the mother’s 2017/18 adjusted taxable income of $22,251.

3.On 10 September 2019 a senior case officer from the CSA decided that the father was to pay an annual rate of child support of $10,400 for the period 22 March 2019 to 31 December 2020 (the original decision).

4.The father objected to the original decision and on 18 December 2019, an objections officer from the CSA set the original decision aside and decided to vary the father’s adjusted taxable income to $75,325 for the period 22 March 2019 to 31 August 2021. According to the objections officer, this meant the annual rate of child support payable by the father was $7,964 during that period.

5.On 14 January 2020, the father lodged an application for review with the Administrative Appeals Tribunal (AAT). A directions hearing was held on 15 April 2020 after which directions were issued. The matter was heard on 17 June 2020. Both parties attended via conference telephone and gave sworn evidence.

6.The CSA provided documents numbered 1 to 456 and 457 to 491, the father submitted documents numbered A1 to A156 and the mother submitted documents numbered B1 to B19. Copies of these documents were sent to the parties before the hearing.

7.As discussed at the hearing, after the hearing the father submitted additional documents (numbered A157 to A162), copies of which were sent to the mother. She was given opportunity to comment on them.  The mother contacted the tribunal on 23 June 2020 to advise she had no questions about them. The tribunal made its decision on 25 June 2020.

ISSUES

8.The statutory provisions relevant to this review are contained in the Child Support (Assessment) Act1989 (the Act). The Act provides for an administrative assessment of child support to be paid. Pursuant to section 98C of the Act, a decision to depart from the administrative assessment may be made if the following three requirements are met:

i.A ground is established; and

ii.It would be just and equitable as regards the child, the liable parent and the carer entitled to child support to make a particular determination; and

iii.It would be otherwise proper to make a particular determination.

9.The grounds for departure from an administrative assessment of child support are set out in subsection 117(2) of the Act.

10.If the tribunal is satisfied that the three requirements are met, it may make one of the determinations prescribed in section 98S of the Act, which include variations to the annual rate of child support payable, or to the adjusted taxable incomes of the parents and/or carer, or to other components of the statutory formula used to calculate child support.

CONSIDERATION

Issue 1 – Does a ground exist to depart from the administrative assessment?

11.Subparagraph 117(2)(c)(ia) of the Act provides a ground for departure exists where, in the special circumstances of the case, the administrative assessment of child support would result in an unjust and inequitable determination of the rate of child support because of the income, property and financial resources of either parent.

What is the father’s income for child support purposes?

12.The father described himself as a retired [occupation 1]. He is now [age] years old. His taxable income in recent years was $179,609 for 2014/15, $54,251 for 2015/16, $21,713 for 2016/17, $25,135 for 2017/18 and $37,247 for 2018/19.

13.The father said that on 22 May 2020 he received his first jobseeker payment. He was unsure of the period the payment covered but was agreeable to the start date of his jobseeker payments being taken to be 1 May 2020 for child support purposes. He wrote in a letter dated 29 May 2020 that he was paid $225 a week plus the Covid-19 payment of $331 a week which will be phased out on 24 September 2020, and that he hoped to remain on the jobseeker payment until he can get age pension in [several] years’ time.

14.The tribunal asked the father about his taxable income for 2018/19 and whether that level of income continued through 2019/20 until he claimed jobseeker payments. The father said his income was pretty much the same through 2019/20 until that point. However in a submission to the tribunal dated 29 May 2020, the father wrote that during the current financial year – 2019/20 – he had withdrawn approximately $71,000 from his superannuation fund, to fund mortgage payments for an investment property, to pay accounting fees and for his living costs until he was granted jobseeker payments.

15.The father is associated with a number of companies and trusts. He said that they were set up when he was working and he is now trying to wind them down. A letter dated 6 February 2020 from his accountant, [Accountant A], of [named firm], explained the entities as follows.

16.The father is a director of three companies, [Business 1], [Business 2] and [Business 3], which act exclusively as trustees of discretionary trusts. [Business 1] has never acted in its own right, [Business 2] has not done so since 2012, and [Business 3] has not undertaken trading activities since the 2015/16 year.

17.[Business 1] is trustee for the [Trust 1] which ceased trading during the 2017/18 year and subsequently deregistered for GST as there was no income during 2018/19 and no expected future income.

18.The 2018/19 financial statements for the [Trust 1] indicate that income in the previous year consisted of consultancy fees of $290,186 and there was no income during 2018/19 apart from $206 in dividends and $74 in interest received. The operating loss of $57,800 included $24,268 being a loss on the sale of non-current assets, $11,794 in depreciation and $5,483 in motor vehicle expenses.

19.Net assets as at 30 June 2019 were valued at $133,907 and mainly comprised the balance of loans from and to the [Trust 1] by related entities and the father. There were also shares in listed companies valued at $22,672 and plant and equipment valued at $27,104 as well as other items of lesser value. According to [Accountant A], the father is unable to repay the loan to [Trust 1].

20.[Business 2] is the trustee of the father’s self-managed superannuation fund. [Accountant A] wrote that the company has retained earnings and franking credits but no cash balance, with the sole asset being an unpaid present entitlement owed by [Trust 1]. According to the financial statements for [Business 2] as at 30 June 2019, the net assets amount to $190,115, made up of a loan of $227,296 made to the [Trust 1] (an asset) predating 4 December 1997 and loans from the father ($27,000) and [Trust 1] ($10,203) to [Business 2] and are therefore liabilities of [Business 2].

21.[Accountant A] wrote that as the loans could not be repaid, the retained earnings will need to be declared as a dividend by the company to the father, and a loan offset arrangement entered into before the company can be wound up, with no associated cash payment made to the father although there was likely to be a tax liability for him. The tribunal accepts that the father has not had a cash benefit from [Business 2] during the period of interest to this review.

22.It was submitted that [Business 3] ceased trading several years ago, retained earnings were less than $2,000 as at 30 June 2018, and this amount will be reduced by accounting and other costs. It was submitted, and the tribunal accepts, that there will be no benefit going forward to the father from this entity.

23.[Business 3] is the trustee for the [Family Trust 1]. The [Family Trust 1] owns a property at [Suburb 1] which is rented out. The father confirmed at hearing that he alone controls the [Family Trust 1]. In his written submission, the father valued this property at between $450,000 and $480,000 due to market conditions and repair work needing to be done. He wrote that the mortgage secured against the property amounts to $186,000.

24.According to the profit and loss statement for 2018/19, the gross profit from rent was $10,384 and expenses amounted to $59,639, resulting in a loss of $49,255. Included in the loss were depreciation and amortisation expenses of $14,835 and $155 which together total $14,990. As these types of expense do not usually represent cash actually paid out in a given year, the figures suggest there was a shortfall of $34,265 ($49,255 less $14,990). The tribunal asked the father how he covered this loss as it was difficult to see how he would do that on a taxable income of $37,247 for 2018/19.

25.After the hearing the father explained that mortgage interest of $9,477 (a proportion of the interest expense recorded in the profit and loss statement) was not paid with the effect that the mortgage was increased accordingly. That left $24,758 in expenses not covered by the rental income. It was submitted that this shortfall was covered by $18,000 from the [Trust 1], $1,525 from [Business 3] and $6,992 drawn down from the mortgage.

26.The father submitted that a total of $77,200 was drawn down from the mortgage, of which $70,208 was paid to him mainly as a loan repayment, and the difference of $6,992 went towards the [Suburb 1] property expenses as just mentioned. An amount drawn down from a mortgage is a loan that has to be repaid and for that reason, the tribunal does not consider it appropriate to treat the amount of $77,200 as income for child support purposes.

27.The property was rented out via Airbnb and it was submitted that it has not been possible to rent it out since the coronavirus shutdown.  

28.[Accountant A] in his letter of 6 February 2020 wrote that the [Trust 1] owned [specified vehicles] which “have all been written off, sold or [are] in the process of being sold”. He referred to [another vehicle] owned by the [Family Trust 1] which was used in the cleaning and maintenance of the investment property, and that the father had 50% personal use of this vehicle. He wrote that neither the father nor the other entities owned any other vehicles. The tribunal notes that in his Statement of Financial Circumstances (SFC) dated 29 May 2020, the father included petrol, maintence and registration costs as part of the costs he incurred. [Accountant A] suggested a figure of $3,219 to represent the benefit the father gets from the use of a company vehicle for his personal use. The tribunal considers this to be reasonable.

29.The tribunal finds that the payments of $18,000 from the [Trust 1] and $1,525 from [Business 3] were benefits to the father.

30.The father provided the operating statement from his superannuation fund which shows he was paid $29,982.60 in pension during 2018/19. The tribunal considers it appropriate that these payments are added to the 2018/19 taxable income figure of $37,247 to arrive at a figure of $89,884 as better reflecting the father’s income, property and financial resources for 2018/9.[1]

[1] $37,247 plus $29,983, $18,000, $1,525 and $3,219 = $89,974.

31.The tribunal has already referred to the father withdrawing approximately $71,000 from his superannuation fund during 2019/20. He did so to fund mortgage payments for the [Suburb 1] property, to pay accounting fees and to cover living expenses. His evidence was that his income reduced from 1 May 2020, the date from which he started to receive jobseeker payments. On that basis he used the amount of $71,000 during the ten-month period from 1 July 2019 to 30 April 2020. The annualised equivalent is $85,200.

32.The tribunal concludes therefore, that for the period from 1 July 2019 to 30 April 2020, the amount of $88,419 (including $3,219) represents the financial resources available to the father.

33.The tribunal notes that in his SFC, the father wrote that his income was made up of the jobseeker payment ($275 a week), the coronavirus supplement ($331) and an income payment from his superannuation fund of $576 a week ($29,952 a year). These total $1,182 a week, or $61,464 a year. The tribunal also notes that the coronavirus supplement is $275 week and not $331. Including the benefit the father receives from the use of a company vehicle ($3,219), this gives a total of $64,683 a year ($1,244 a week).

34.The father referred to the Covid-19 supplement ending in September 2020 in which case the weekly income would drop by $275 a week to $969 a week ($1,244 - $275). The tribunal notes that it is anticipated that the jobseeker payment will increase at that time from its current level. The tribunal also notes that the father wrote that he was advised to reduce his withdrawals from the pension fund to $30,000 a year. However, he is not restricted to withdrawing this amount.

35.Assuming there is no change to the jobseeker payment, the father’s weekly income would be $969 a week (including the motor vehicle benefit) or $50,388 a year. If the jobseeker payment was to increase by $100 a week, the father’s income would be $1,069 a week or $55,588 a year. As already noted, the father is not restricted as to how much he draws from his superannuation; he withdrew $71,000 in a ten month-period. The tribunal considers it to be reasonable to proceed on the basis that the father will draw more than $30,000 a year from his superannuation fund from 25 September 2020. In light of the foregoing, the tribunal considers it reasonable that the amount of $64,683 continues to be used to represent the father’s annual income for child support purposes from 25 September 2020.

36.By way of summary, the tribunal is of the view that the following income figures reflect the father’s income, property and financial resources at different times, including the vehicle benefit of $3,219:

PeriodAnnual income              

22 March 2019 to 30 June 2019  $89,974                   

1 July 2019 to 30 April 2020  $88,419                   

1 May 2020 to 30 September 2022  $64,683  

What is the mother’s income for child support purposes?

37.The mother’s taxable income was $24,987 in 2014/15, $21,557 in 2015/16, $19,789 in 2016/17, $22,251 in 2017/18 and $17,231 in 2018/19.

38.At the directions hearing, the tribunal asked the mother to resubmit her SFC dated 24 January 2020 as there were some mistakes in it, which she did. The second version was dated 5 May 2020.

39.In her first SFC, the mother wrote that her weekly income was nil which was clearly incorrect. In her SFC dated 5 May 2020, the mother recorded weekly income of $429. She wrote that she gets $75 a week interest on savings, and $354 a week from her [business], although she has not been getting that much recently because of the coronavirus shutdown. At the directions hearing the mother said she had been operating her business as a sole trader for about a year, and her sales were about $10,000 to that point in time. At the main hearing, the mother said that since 1 April 2020 she has been in receipt of the jobkeeper payment and received $1,415 in jobkeeper in April 2020.

40.The mother owns a property that she usually rents out. She did not record rental income in her second SFC on the basis that it was usually rented through Airbnb but had not been rented for a few weeks. In her first SFC, she wrote that the net income from the rental property was $8,274. The tribunal understands this to be an annual figure. The weekly equivalent is $159 a week. The mother recorded in her second SFC that she has $606,000 in a savings account. It is this that generates the interest income of about $75 a week.

41.The mother recorded that her total outgoings were $2,915 a week, compared with income of $429 a week. The tribunal will increase the income figure by $159 a week to $588 to include the rental income she received for part of the period relevant to this review. The mother covers her expenses by drawing on her savings. As she uses these savings to cover her daily living expenses, the tribunal considers it appropriate to consider them to be a financial resource available to her.

42.The figures suggest that the mother needs to use $2,327 ($2,915 less $588) a week from her savings to cover her expenses. However, there are some errors in the figures in the SFC. The mother recorded that she spent $1,025 a week on education expenses, including a tutor. This was split between $635 for the child of the case, $20 for the adult daughter and $40 for the mother. These amounts add up to $695 a week. There is therefore a discrepancy of $330 ($1,025 - $695).

43.Taking that discrepancy into account reduces the weekly shortfall by $330 from $2,327 to $1,997. In addition, the mother excluded child support payments of $151.27 a week.[2] If these are taken into account, the weekly shortfall reduces to $1,846. This suggests that the mother is drawing $95,992 a year from her savings to live on. Given the mistakes identified by the tribunal, the tribunal considers the figures in her SFC to be a guide to her expenses rather than an accurate representation. The mother said that she has negotiated a reduction in the rent she pays for where she lives. Some of the expenses recorded were d discretionary expenses such as for holidays and supporting her adult daughter. The mother did not record any credit card payments or liabilities. In documents she provided to the CSA, the mother referred to her dwindling savings as she used these to cover her expenses.

[2] This was the rate of child support that applied before the tribunal’s decision.

44.The tribunal notes that the father relies in part on his superannuation of $700,000 to draw on to cover living expenses. The tribunal considers it reasonable to take into account the funds the mother relies on for her living expenses. Given her taxable income, what she has recorded in her SFC and that she draws on her savings to cover the shortfall in her income each week, the tribunal considers an income figure of $90,000 a year adequately reflects the mother’s income, property and financial resources for child support purposes.

How does the administrative assessment compare with an assessment of child support using the tribunal’s income figures for the parents?

45.As already recorded, on 22 March 2019 the mother applied for a change of assessment. At that time, neither parent was required to pay child support to the other, based on the father’s 2017/18 provisional income of $22,212, the mother’s 2017/18 adjusted taxable income of $22,251 and that the mother was providing 62% of the child’s care, and the father was providing 38%.

46.Using incomes of $89,974 for the father and $90,000 for the mother results in a child support liability of $4,373 payable by the father. (The tribunal would stress that because of the complexity of the child support formula, its calculations of rates of child support are just estimates.)

47.Given the difference between no child support being payable and the father being required to pay $4,373 a year, the tribunal is satisfied that in the special circumstances of this case, the administrative assessment does result in an unjust and inequitable rate of child support, and that a ground for departure from the administrative assessment has been established pursuant to subparagraph 117(2)(c)(ia) of the Act.

Issue 2 – Is it just and equitable to make a particular departure determination?

48.As the tribunal is satisfied that there is a ground to depart from an administrative assessment of child support, the next step is to consider whether it is just and equitable as regards the child, the father and the mother to make a particular determination in accordance with sub-subparagraph 98C(1)(b)(ii)(A) of the Act. This in turn requires the tribunal to consider a variety of factors, as set out in subsection 117(4) of the Act.[3]

[3] The tribunal is required to give “overt consideration” to relevant factors listed in subsection 117(4) of the Act: Tyagi and Meares (SSAT Appeal) [2008] FMCAfam 886.

49.Section 3 of the Act makes it clear that parents have the primary duty to maintain their children, and that this duty has priority over all commitments of the parents other than commitments necessary for self-support or the support of another person the parent has a duty to maintain. In this case the father and the mother have the primary duty to financially support their child. 

Income, property and financial resources – the father

50.In addition to what has already been discussed, the father said he would probably be trying to sell his investment property soon. It is apparent to the tribunal that he is reorganising his financial affairs having recently retired.

51.According to the letter from his accountant, the father lives in a property owned by his de facto and her mother. The father said she was a friend and not his de facto. The mother said that they have been together for years. The tribunal notes that the CSA documents include a letter dated 18 October 2019 (page 223) from a person who describes herself as being in a relationship with the father for eight years. The CSA has blacked out her name. Statements are made in this letter relevant to other matters the tribunal must consider, which can be found in the section headed “Other issues pertaining to the parents’ incomes, property and financial resources”.

52.According to his SFC, the father’s income is $1,182 a week and his outgoings total $930. He has $2,621 in his bank account. He does not own a vehicle as already discussed although the tribunal notes that he recorded motor vehicle expenses in the weekly household expense schedule. He valued household contents at $6,000 and recorded that he had old motorbikes, a tractor, bicycles and tools that would be worth about $20,000.

53.The father stated that he had $730,000 in his superannuation fund. As for liabilities he owed about $1,620 on credit cards. He said that his child suppprt arrears were $640. The father wrote that his rent was $250 a week and that this includes gas, water and electricity.

54.There was nothing else of particular note in the father’s SFC.

Income, property and financial resources – the mother

55.In addition to what has already been recorded, and based on her SFC and evidence at the hearing, the mother lives in rental accommodation which used to cost $700 a week.[4] She said that she has secured a reduction in her rent due to the coronavirus situation.

[4] The mother wrote that her rent was $800 a week but that included $100 a week she paid in respect of her adult daughter’s rent.

56.The mother recorded that she owned shares worth $8,388, a 2015 Audi worth $10,000 and household contents worth $10,000. She wrote that she has $28,000 in superannuation.

57.The mother valued the investment property at $560,000. The tribunal understands that this used to be the family home. She did not record a mortgage secured against it. The tribunal understands that she also is considering selling her investment property.

Other issues pertaining to the parents’ incomes, property and financial resources

58.Subsection 117(7B) of the Act prescribes the circumstances in which a parent’s earning capacity may be taken into account; certain criteria have to be met. These include that the parent has failed to demonstrate that decisions made about their work arrangements were not substantially motivated by the effect they would have on the rate of child support.

59.The father’s work arrangements have changed in that he has recently retired. In her application for a change of assessment lodged 22 March 2019, the mother suggested that the father had been reducing his income – “dwindled his earnings” – since 2012 to affect the rate of child support.

60.The person who wrote of being in a relationship with the father referred to him working in [a generally described] industry, and that as “the boom turned to bust, [his] business went from employing 20 people to none. His level of income similarly declined.” The letter also stated that the writer held the opinion that the father would never work again in his professional capacity.

61.In a letter dated 29 October 2019 to the CSA, the father wrote that by the end of 2013, his business had just four from [number] staff left, but the business did not survive and in the end it was only him, and he now has no work. The father mentioned the difficulty in finding work at his age.

62.The tribunal accepts that the changes in work arrangements over a number of years have largely been the result of matters outside of the father’s control as clearly the [specified] industries have seen peaks and troughs. It notes that should a person choose to retire, and the primary motivation is for a change in lifestyle, this would not enliven this provision.

63.The tribunal is not satisfied that there is sufficient evidence to make a finding that changes made by the father to his work arrangements were substantially motivated by a desire to affect the rate of child support.

64.The mother’s taxable income has been below the self-support amount for a number of years. Again there was no suggestion that she has made decisions about her work arrangements that were substantially motivated by the impact those decisions would have on the rate of child support.

65.The tribunal concludes that it is not open to it to make an earning capacity determination in respect of either parent and need not consider the application of subsection 117(7B) of the Act in relation to either parent any further.

66.The tribunal is required to have regard to the commitments of each parent that are necessary to enable the parent to support himself or herself, or any other child or another person that the person has a duty to maintain (paragraph 117(4)(e) of the Act). There was no evidence before the tribunal of either parent having a legal duty to maintain another person.    

Costs related to the children

67.In determining the proper needs of the children, it is necessary to have regard to the manner in which they are being, and in which the parents expected them to be, cared for, educated or trained, and any special needs they may have (subsection 117(6) of the Act).

68.The mother pays for the child to be privately educated. This is in accordance with a binding child support agreement made 26 August 2013. The mother agreed that costs related to the child’s education need not be considered as part of this review.

69.In filling out her SFC, the mother allocated all the household costs between her and the children. In his SFC, the father allocated only some of the household costs, amounting to $42 a week, to the child. The tribunal therefore has incomplete evidence regarding the actual costs of the child and concludes that using the “Costs of the Children Table” is reasonable in the circumstances of this case for costs related to the child of the case.[5] 

[5] The Costs of Children Table is available at the Services Australia website, accessed 22 June 2020 at align="left">Hardship

70.The tribunal is required to consider any hardship its determination might cause and is guided by Gyselman and Gyselman[6] in this respect:

This requires the Court to balance the “hardship” which the parents or the children may suffer as a result of either making or refusing to make the order. It is a recognition of the circumstance that in this area there is likely to be hardship both ways and the Court is required to take into account the balance of that hardship and give it the weight which is appropriate to the circumstances of the individual case.

[6] [1991] FamCA 93

71.The tribunal has estimated the rate of child support to be as follows based on the current care percentages and the mother assessed on an income of $90,000:

PeriodFather’s annual income     Annual child support rate

22 March 2019 to 30 June 2019                   $89,974  $4,373

1 July 2019 to 30 April 2020  $88,419  $4,206

1 May 2020 to 30 September 2022                $64,683  $1,430

72.The tribunal is satisfied that neither parent will experience hardship because of the tribunal’s determination. The father is largely up to date with his child support payments. As he is now retired, he has access to his superannuation funds of over $700,000. Through the [Family Trust 1], he owns a property which may well be sold soon. Although there was conflicting evidence regarding his living situation and whether he lives with a friend or a partner, the tribunal understands from the documents that his accommodation is secure. Although the mother has a low taxable income, she has savings of about $600,000 and an investment property which she owns outright.

Any other relevant matters

73.The tribunal may take into account any other matters it considers relevant in making a particular departure determination (subsection 117(9) of the Act).

74.The mother made a number of submissions concerning the support she provides to the parties’ daughter who is now an adult. She said that she pays $100 a week towards the daughter’s rent. The tribunal acknowledges that parents often provide financial support to their adult children. This is a choice - an understandable choice - but there is no legal basis for doing so. There was nothing in the evidence before the tribunal to suggest that the support to the daughter provided by the mother should affect the rate of child support.

75.The mother wrote that the father has not paid child support since October 2019. The father took exception to this on the basis that it was incorrect. The mother acknowledged she was wrong.  

76.The father queried CSA documents in the bundle numbered 457 to 491. He referred to CSA documents that said his income was nil for 2018/19 and that this did not affect the rate of child support. This figure was then replaced by a figure of $37,247, consistent with his 2018/19 tax return. The CSA advised him in writing that this did not affect the rate of child support either. The explanation is that the father father’s adjusted taxable income had been varied by the objection decision to $75,325 for the period 22 March 2019 to 31 August 2021, and the rate of child support would continue to be assessed on an income for him of $75,325 regardless of his taxable income as advised by the Australian Taxation Office, unless that is changed by this tribunal on review.

77.The tribunal’s determination starts from 22 March 2019, consistent with the CSA decisions and when the mother lodged her change of assessment application.

78.As to the end date of its determination, the tribunal has taken its decision to 30 September 2022. The tribunal acknowledges that it is not known at the time of this decision what the rate of jobseeker will be from 24 September 2020. However, there is often a degree of uncertainty with regards to people’s future income, and the tribunal is of the view it is preferable to extend its determination to September 2022 rather than end it in September 2020, as this will give the parents some certainty into the future.

79.The tribunal notes that neither parent generates much taxable income through employment or their rental properties. Both own investment properties and both said they intended to sell them. While the father, now retired, has about $700,000 in superannuation, the mother has about $600,000 in savings. Both rely on these sums to cover their living expenses to varying degrees. Given this, the tribunal is satisfied that its departure determination is just and equitable with regard to the parties.

80.It is open to either parent to apply for a change of assessment if their circumstances change before this determination ends.

Issue 3 – Is it otherwise proper to make a particular departure determination?

81.The requirement to consider whether a departure determination would be otherwise proper is concerned with what is fair to the community; it is preferable for a child or children to be primarily supported by their parents rather than by government assistance. Paragraph 117(5)(b) of the Act means that the tribunal must consider whether the level of a benefit, in particular family tax benefit, received by the party caring for a child or children, may be affected by the level of child support.

82.Based on their SFCs, neither parent is in receipt of family tax benefit. The tribunal is satisfied that its determination will result in an appropriate apportionment of financial responsibility between the parents and the community and would be otherwise proper.

DECISION

The tribunal sets aside the decision under review and, in substitution, decides as follows:

·     For the period 22 March 2019 to 30 June 2019, Mr Garofalo’s adjusted taxable income is varied to $89,974.

·     For the period 1 July 2019 to 30 April 2020, Mr Garofalo’s adjusted taxable income is varied to $88,419.

·     For the period 1 May 2020 to 30 September 2022, Mr Garofalo’s adjusted taxable income is varied to $64,683.

·     For the period 22 March 2019 to 30 September 2022, Ms Cartwright’s adjusted taxable income is varied to $90,000.