Genge and Ambler (Child support)

Genge and Ambler (Child support) [2022] AATA 230 (4 January 2022)

DIVISION:Social Services & Child Support Division
REVIEW NUMBER:  2021/BC021749
APPLICANT:  Mrs Genge
OTHER PARTIES:  Child Support Registrar
Mr Ambler

TRIBUNAL:Member T Hamilton-Noy
DECISION DATE: 4 January 2022
DECISION:

The Tribunal sets aside the decision under review and substitutes its decision that:

For the period 1 January 2020 to 31 January 2023, Mr Ambler’s adjusted taxable income is varied to $72,800 per annum;
For the period 1 July 2021 to 30 June 2022, child support payable by Mr Ambler is increased by $4,652.

CATCHWORDS

CHILD SUPPORT – departure determination – income, property and financial resources of the liable parent – a ground for departure established – decision to depart – 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 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

Mrs Genge and Mr Ambler are the separated parents of [Child 1] and [Child 2]. A case has been registered with Services Australia – the Child Support Agency (the Agency) since 5 December 2008 and child support has been collectable by the Agency since 30 May 2016. Mrs Genge is the payee of child support in this matter and Mr Ambler the payer.
There have been previous departure determinations made by the Agency relating to the parents. Most recently, prior to the current departure application, the Agency varied Mr Ambler’s adjusted taxable income to $72,800 for the period 1 July 2019 to 31 April 2022 and, for the period 1 July 2019 to 31 December 2019, child support was increased by $2,000, relating to the children’s school and child care costs. This resulted in an annual rate of child support payable by Mr Ambler of $13,362 from 1 July 2019 to 31 December 2019.
The relevant assessments of child support, for the purpose of this decision, were as follows:
·      For the period 1 January 2020 to 31 July 2020, Mr Ambler was to pay $11,362 per annum, based on his adjusted taxable income of $72,800 and Mrs Genge’s 2018/2019 adjusted taxable income of $24,931;
·      For the period 1 August 2020 to 29 December 2020, Mr Ambler was to pay $11,178 per annum, based on his adjusted taxable income of $72,800 and Mrs Genge’s 2019/2020 adjusted taxable income of $35,763;
·      For the period 30 December 2020 to 31 October 2021, Mr Ambler was to pay $12,358 per annum, based on his adjusted taxable income of $72,800 and Mrs Genge’s 2019/2020 adjusted taxable income of $35,763. The change to the annual rate was due to [Child 1] turning 13 years of age.
On 8 December 2020, Mr Ambler applied for a departure from the administrative assessment of child support based on his income, property and financial resources (called ‘Reason 8A’ by the Agency).
On 9 February 2021, an employee of the Agency found no ground established to depart from the administrative assessments of child support.
Mr Ambler objected to this decision on 15 March 2021.
On 5 June 2021, an objections officer of the Agency allowed the objection and decided to make a departure determination on the following terms:

For the period 1 July 2019 to 30 June 2020, Mr Ambler’s adjusted taxable income was varied to $49,441;
For the period 1 July 2020 to 30 June 2021, Mr Ambler’s adjusted taxable income was varied to $36,964;
For the period 1 July 2021 to 30 October 2022, Mr Ambler’s adjusted taxable income was varied to $52,440;
The previous change of assessment made by the Agency remained in place, which had the effect of increasing the amount of child support by $2,000 for the period 1 July 2019 to 31 December 2019.

On 16 June 2021, Mrs Genge made an application to the Administrative Appeals Tribunal for an independent review of the Agency’s decision.
A directions hearing was held on 9 September 2021, on which date both parties participated in the directions hearing by conference telephone. Following the directions hearing, the Tribunal issued directions to the parties for the provision of further documents. The extent of the parties’ compliance with these directions is discussed further by the Tribunal below.
On 1 October 2021, the Agency issued updated assessments to the parties for the following periods:
· For the period 1 November 2021 to 31 October 2022, Mr Ambler was to pay $6,842 per annum, based on his adjusted taxable income of $52,440 (as set by the departure decision) and Mrs Genge’s 2020/2021 adjusted taxable income of $56,980;
· For the period 1 November 2022 to 31 January 2023, Mr Ambler is to pay $2,866 per annum, based on his 2020/2021 adjusted taxable income of $37,152 and Mrs Genge’s 2020/2021 adjusted taxable income of $56,980
The Tribunal hearing was held on 21 October 2021. At the hearing, both parties spoke to the Tribunal by conference telephone and gave evidence on affirmation. The Tribunal had before it documents provided by the Agency (1 to 437), documents provided by Mrs Genge (A1 to A26) and documents provided by Mr Ambler (B1 to B61). The parties confirmed receipt of all documents with the Tribunal.
A resumed hearing was conducted by the Tribunal on 23 December 2021, to take further evidence from Mrs Genge about the children’s special needs. Prior to the resumed hearing, the Tribunal received supplementary documents from the Agency (438 to 493) and further documents from Mr Ambler (B62 to B70). These were provided to the parties prior to the resumed hearing. At the resumed hearing, Mrs Genge again spoke to the Tribunal by telephone and gave evidence on affirmation. Mr Ambler did not participate in the resumed hearing.
The Tribunal then proceeded to make a decision on all of the information before it on 4 January 2022.

ISSUES

The statutory provisions relevant to this review are contained in the Child Support (Assessment) Act 1989 (the Assessment Act) and the Child Support (Registration and Collection) Act 1988.
The rate of child support payable by a liable parent is usually based on an administrative assessment under Part 5 of the Assessment Act. The liable parent or carer may apply to the Child Support Registrar for a determination to depart from the child support administrative assessment under Part 6A of the Assessment Act. Section 98C of the Assessment Act provides that the Registrar may make a determination to depart from the formula assessment and establishes a three-step process. The Registrar, and the Tribunal standing in the place of the Registrar, must be satisfied that:
(i)there is a ground to depart from the administrative assessment of child support;
(ii)it is just and equitable to depart; and
(iii)it is otherwise proper to depart.
The grounds for departure from an administrative assessment of child support are those set out in subsection 117(2) of the Assessment Act. Each ground is prefaced by the term “in the special circumstances of the case”. The term “special circumstances” is not defined in the Assessment Act. In Gyselman and Gyselman (1992) FLC 92-279, the Full Family Court indicated that for there to be special circumstances, the facts of the case must establish something which is special or out of the ordinary.
If satisfied that a ground or grounds exist and that it would be just and equitable and otherwise proper to make a particular determination, the Tribunal may make one of the determinations prescribed in section 98S of the Assessment Act.

CONSIDERATION

Issue 1 – Is there a ground established to depart from the administrative assessment of child support?

The ground raised by Mr Ambler in this matter relates to the income, property and financial resources of the parties.
Subparagraph 117(2)(c)(ia) of the Assessment Act provides that a ground for departure exists where, in the special circumstances of the case, application in relation to the child of the provisions of the Act relating to the administrative assessment of child support would result in an unjust and inequitable determination of the level of financial support to be provided by the liable parent for the child, because of the income, property and financial resources of either parent.
In determining whether this ground exists, the Tribunal must look at the relative levels of income, property and financial resources of both parents.

Mrs Genge’s income, property and financial resources

The Tribunal accepts that Mrs Genge is a PAYG employee and has been in her current role for four years. The Tribunal accepts the evidence Mrs Genge gave at the hearing that she is currently working four days per week, that she has previously worked fewer days per week than this and that the amount of work she undertakes is dependent on the funding made available. The Tribunal accepts that Mrs Genge is now on a one-year contract to undertake four days per week of work.
The Tribunal was provided a Statement of Financial Circumstances from Mrs Genge which states that she has minimal savings in bank accounts, a car with an estimated value of $3,000, household contents totalling $15,000 and no mortgage commitments. The Tribunal accepted this information and finds from this information that Mrs Genge does not have any income, property or financial resources from which she can support the children aside from her employment income.
The administrative assessments of child support used Mrs Genge’s adjusted taxable income of $24,931 for the period 1 January 2020 to 31 July 2020 and $35,763 for periods covering 1 August 2020 to 31 October 2021. The Tribunal notes that, while Mrs Genge had an increase in income from the 2018/2019 to 2019/2020 financial years, the increase in her income had minimal impact on the administrative assessments of child support in these periods. The Tribunal notes that the use of Mrs Genge’s 2020/2021 adjusted taxable income of $56,980 for periods covering 1 November 2021 to 31 January 2023 uses a level of income commensurate with her current and anticipated level of income for this period.

Mr Ambler’s income, property and financial resources

Mr Ambler gave evidence to the Tribunal at the hearing that in the first half of the 2019/2020 financial year he was working on a casual basis with [Employer 1], three to four days per week. He gave evidence that around the end of 2019 he had commenced with [Employer 2] and undertook [specified work] for the company under an ABN, around four days per week. He was juggling this with his work with [Employer 1] and was able to do this as he was undertaking shift work with [Employer 1]. He stated that for his work with [Employer 2] he would invoice the company who would pay him weekly. He did not work under a company structure, was not registered for GST and was not entitled to any leave payments if he did not work. He stated that he was also, during this time, trying to undertake other work under the same ABN he was working under for [Employer 2]. The Tribunal accepted the evidence given by Mr Ambler about his 2019/2020 working arrangements.
Mr Ambler gave evidence that both positions – [Employer 1] and [Employer 2] – ceased within weeks of one another due to the COVID-19 pandemic and that he was in receipt of jobkeeper payment from then until February 2021. The Tribunal accepted this evidence as correct.
The Tribunal was provided two 2019/2020 income tax returns for Mr Ambler, contained on the Agency documents. The first, prepared on 10 July 2020, disclosed taxable income of $31,616. The second, prepared on 16 March 2021, disclosed taxable income of $49,441. The Tribunal accepted that Mr Ambler completed the first of these himself and that the amended income tax return was completed by an accountant.
However, the Tribunal had difficulty accepting that the income tax return accurately reflected Mr Ambler’s actual level of income and expenses for that financial year. When asked what expenses he had provided to the accountant to claim, Mr Ambler stated ‘none’. When asked why he had not claimed, for example, laptop and internet expenses, he stated he ‘didn’t claim anything’. When asked whether his accountant had recommended he do so, he stated ‘no, it was put through’ and when asked what kind of information he had provided to his accountant, he stated it was bank statements to show payments coming in. He was unable to clarify how much of the business income had been from [Employer 2] and how much had been from other ad hoc work. The Tribunal found Mr Ambler gave his evidence about the amended income tax return in a confused and unclear manner. While accepting that Mr Ambler’s employment arrangements were impacted by the effects of the COVID-19 pandemic, the Tribunal was not satisfied that the income tax return was an accurate reflection of Mr Ambler’s level of income and financial resources during 2019/2020.
As to the 2020/2021 financial year and into the current financial year, the Tribunal did not consider that Mr Ambler had provided full and frank details of his financial circumstances to the Tribunal, for the following reasons.
Firstly, Mr Ambler gave evidence to the Tribunal that he has been working since February 2021 for [Employer 2] and undertaking as many hours as he can, most of the time five days per week. He gave evidence that he had not returned to [Employer 1] since March 2020; when the Tribunal noted a payslip from [Employer 1] for December 2020, Mr Ambler then stated that whenever they had last paid him was when he last worked for them, and that they had called him back and he thinks he undertook three weeks of work with them. The Tribunal further noted a payment from [Employer 1] in Mr Ambler’s bank statements for January 2021. The Tribunal did not accept Mr Ambler’s evidence that his employment arrangements with [Employer 1] ceased in March 2020 and finds that he has had some employment with [Employer 1] during the 2020/2021 financial year.
Secondly, the change of assessment application was initiated by Mr Ambler in December 2020, in which he claimed his income had reduced significantly as of March 2020. The Tribunal asked Mr Ambler why there was such a significant delay in seeking a change of assessment based on his claimed changed circumstances and he stated he just buried his head in the sand about things and this was one of the things and there was ‘literally no reason why’ he didn’t seek a change of assessment sooner.
Thirdly, Mr Ambler had been directed to provide all bank statements and credit card statements in his name or in joint names for the past three months, in directions issued after the directions hearing. Mr Ambler provided statements for only some of his accounts and, when asked whether he had sent in statements for account ending #1351, stated he had not, that he was looking at it online and it had only a minimal amount in it. Further, the statements for the accounts that were provided to the Tribunal were heavily redacted, with the majority of transactions whited out by Mr Ambler. When asked why, Mr Ambler stated it was ‘about income’. The Tribunal noted during the hearing that it may draw adverse inferences from Mr Ambler’s redaction of the information he had sent in to the Tribunal, in response to which he stated he does not want Mrs Genge seeing all of his expenses.
Case law indicates that the Tribunal should not be unduly cautious in drawing adverse inferences where a parent has failed to provide full and frank details about their financial circumstances. For example, in Agrippa & Horton [2010] FMCAfam 1144, at [24] – [25], the Court noted that:
There is further significance in the inconsistency between the father’s evidence to the Tribunal and the financial records. In financial proceedings under the Family Law Act 1975 a party has a duty of full and frank disclosure of all of his or her financial circumstances (Black & Kellner, (1992) 15 Fam LR 343, (1992) FLC 92-287, Weir & Weir, (1992) 16 Fam LR 154, (1993) FLC 92-338). If it is established to the Court’s satisfaction that there has been deliberate non-disclosure, “then the court should not be unduly cautious about making findings in favour of the innocent party. To do otherwise might be thought to provide a charter for fraud” (Weir, above, FamLR at 158, FLC at 79,593).
In my view the same principle must apply in the assessment of child support for the same reason. If the SSAT is satisfied that a parent has made a deliberate non-disclosure of his or her financial circumstances, it should be reasonably robust in assessing the non-disclosing parent’s financial circumstances adversely to that parent and in favour of the other parent. That is not to say that it may arrive at an entirely arbitrary result, but rather that it may draw generous inferences adverse to the non-disclosing party about that party’s financial circumstances.
The Tribunal is concerned that Mr Ambler claims that his income reduced significantly in March 2020, but he did not contact the Agency to notify of a change in circumstances until December 2020. Mr Ambler then lodged a change of assessment application but did not provide information to support the change of assessment application and the original decision maker found no ground established to depart as a result of this. He was unable to explain his income and expenses to the Tribunal for the 2019/2020 financial year and his evidence, given on affirmation, about ceasing work with one employer in March 2020 was incorrect based on other documents before the Tribunal. He was required to provide documents to the Tribunal to help establish his more recent level of income and expenditure, but redacted the documents so heavily that the Tribunal is unable to make any findings about his current level of income and expenditure. While Mr Ambler stated during the hearing he could provide non-redacted information to the Tribunal, he also submitted that he did not want Mrs Genge seeing his information; the Tribunal further notes that the consequences of non-disclosure of required documents had been explained to the parties both at the directions hearing and in the directions document sent to the parties after the directions hearing. Prior to the resumed hearing on 23 December 2021, the Tribunal wrote to Mr Ambler on 22 November 2021 noting that the Tribunal was reconvening to take further evidence and inviting Mr Ambler to provide full, non-redacted copies of his bank statements to the Tribunal if seeking the Tribunal further consider his income and expenses. Mr Ambler’s written response to the Tribunal was that he was happy to show a ‘government official’ his bank statements but it was a breach of his privacy for this information to be given to Mrs Genge. Mr Ambler provided statements relating to his secondary bank account, but not unredacted copies of the primary bank account he uses on a day-to-day basis.
Given the findings of the Tribunal set out above, and having regard to the comments in Agrippa & Horton also noted above, the Tribunal finds that Mr Ambler has not made full and frank disclosure about his financial circumstances. The administrative assessments of child support use an adjusted taxable income for Mr Ambler of $72,800, as set in a previous change of assessment decision by the Agency following a review of his circumstances at that time. The Tribunal was not satisfied that the use of this amount is inappropriate, having regard to the findings of the Tribunal above, up to 31 October 2021, being the end of the administrative assessment period in this matter.
As to his more recent level of income, Mr Ambler provided to the Tribunal on 6 December 2021 payslips for periods covering 8 November 2021 to 5 December 2021. The Tribunal also had before it copies of Mr Ambler’s bank statements for this period, provided in the Agency’s supplementary documents. These bank statements indicate that in October 2021 Mr Ambler was paid $5,911 in payments from [Employer 2] and in November 2021 he was paid $10,179 in payments from [Employer 2]. These amounts, when annualised, equate to $96,000 per annum. However, the Tribunal is mindful that some of the bank deposits are described as reimbursements for expenses. Having regard again to the findings made by the Tribunal above, and to the amounts being deposited into Mr Ambler’s bank account in October and November 2021, the Tribunal considers that an adjusted taxable income of $72,800 going forward is not an unreasonable reflection of Mr Ambler’s level of income, property and financial resources. The Tribunal notes that this amount is a mid-point between the weekly wages showing in the bank account (of between $1,054 and $1,140) and the annualised total amount calculated by the Tribunal; and a use of this amount going forward by the Tribunal is intended to reflect a balance between Mr Ambler’s apparent total payments from [Employer 2] and a reasonable amount of work-related deductions.

The Tribunal finds that the use of an adjusted taxable income for Mr Ambler of $72,800 for periods covering 1 January 2020 to 31 October 2021 is appropriate given the findings of the Tribunal above. By the time of this decision, further administrative assessments have been issued by the Agency which the Tribunal considers form part of the relevant information before it. These assessments use an adjusted taxable income of $52,400 (as set by the objections officer) for 1 November 2021 to 31 October 2022 and $37,152 for 1 November 2022 to 31 January 2023. The Tribunal considers that neither of these amounts correctly reflects Mr Ambler’s actual level of income and financial resources in these periods and that they under-represent his level of income and finances. The Tribunal considers that this discrepancy, and the resulting amounts of child support payable, create special circumstances in this case, such that the application in relation to the children of the provisions of the Assessment Act relating to the administrative assessment of child support would result in an unjust and inequitable determination of the level of financial support to be provided by Mr Ambler, due to his actual level of income, property and financial resources of either parent. This ground for departure is established.

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

As the Tribunal is satisfied that there is a ground to depart from the administrative assessment of child support, the next step is to consider whether it is just and equitable as regards the child, the liable parent and the carer entitled to child support to make a particular determination in accordance with sub-subparagraph 98C(1)(b)(ii)(A) of the Assessment Act. This in turn requires the Tribunal to consider a range of factors, set out in subsection 117(4) of the Assessment Act. In addition to the income, property and financial resources of the parents, already considered above, the Tribunal also took the following matters into consideration.

The nature of the duty of a parent to maintain a child and the income, earning capacity, property and financial resources of the children

The Tribunal finds from the evidence before it that neither [Child 1] nor [Child 2] have access to any other financial resources from which to support themselves. They are reliant on Mrs Genge and Mr Ambler to meet all of their needs.

The proper needs of the children

Subsection 117(6) of the Assessment Act states that in having regard to the proper needs of the child, the court must have regard to the manner in which the child is being, and in which the parents expected the child to be, cared for, educated or trained; and any special needs of the child.
The Tribunal notes that the term ‘special needs’ is not defined in the legislation. The Child Support Guide at 2.6.8, which sets out the Agency’s policy interpretation of its legislative requirements, provides that the needs must relate to a condition or disability that is out of the ordinary and may be because of a physical, mental or learning disability. The special need may result in costs that are essential or desirable for a child’s welfare that are outside the ordinary costs of a child that can be met from an administrative assessment. The Tribunal notes that it is not bound by the policy of the Agency. However, in Drake and Minister for Immigration and Ethnic Affairs [1979] 2 ALD 60, the Full Federal Court held that a Tribunal should take into account relevant government policy which is not inconsistent with the provisions or objects of the legislation. In this instance, the Tribunal accepts that the policy is consistent with the objects of the Assessment Act and assists in making a determination in accordance with the Assessment Act.
Mrs Genge provided the Tribunal with invoices relating to surgery which [Child 1] had in July 2021. At the resumed hearing Mrs Genge gave the following evidence about [Child 1’s] costs for the procedure.
[Child 1] had experienced [a medical condition] as a result of long-term medication he had been taking. He had been skipping [sport] lessons, was refusing [a specified behaviour] and his psychiatrist recommended he undergo [specified surgery], and referred him for surgery as a result of this recommendation. While the procedure was described as cosmetic on one of the payment invoices, there were concerns raised that [Child 1] would suffer increased levels of depression if the procedure was not performed, at a time at which he had already been diagnosed with depression. [Child 1] underwent [the specified surgery] [in] July 2021. Total out of pocket costs included $500 for an anaesthetist; $500 for nursing services; $300 for attendance at consulting rooms in May 2021 prior to the surgery; $7,900 for the surgery; and $104.50 for pathology. The Tribunal found Mrs Genge to give her evidence about [Child 1’s] surgery and the need for the surgery in a clear and credible manner and accepted the evidence she gave about this. The Tribunal finds that between May 2021 and September 2021 Mrs Genge incurred costs totalling $9,304 relating to [Child 1’s] surgery which was performed in July 2021.
The Tribunal notes that Mrs Genge also provided evidence of regular medical costs for the children. The Tribunal did not consider these costs to be significant and considered that they are the type of costs that are intended to be covered in the usual child support formula. The Tribunal also heard from Mrs Genge that the costs relating to both of the children’s disabilities are covered by NDIS packages.

The earning capacity of Mrs Genge

Subsection 117(7B) of the Assessment Act requires the Tribunal to consider the following matters in determining that a parent’s earning capacity is greater than is reflected in his or her income used in the administrative assessment:
·   Whether the parent:
oIs not working despite ample opportunity to do so (subparagraph 117(7B)(a)(i)); and/or
oHas reduced their weekly hours of work to below full-time work (subparagraph 117(7B)(a)(ii)); and/or
oHas changed their occupation, industry or working pattern (subparagraph 117(7B)(a)(iii)); and
·   If the parent’s decision about their work arrangements is not justified by either their caring responsibilities (subparagraph 117(7B)(b)(i)) or their state of health (subparagraph117(7B)(b)(ii)); and
·   If the parent has not demonstrated that it was not a major purpose of their decision not to work despite ample opportunity to do so or to stop working, reduce their hours of work or change their occupation, industry or working pattern to affect the administrative assessment of child support (paragraph 117(7B)(c)).
The Tribunal accepted the evidence given by Mrs Genge at hearing that she has been in her current employment for four years. The Tribunal finds that it is not open to make an earning capacity determination in respect of Mrs Genge’s circumstances.

The earning capacity of Mr Ambler

The Tribunal has found, above, that there have been several changes to Mr Ambler’s employment arrangements in the relevant period. The Tribunal has accepted that Mr Ambler’s changed employment arrangements in 2020 were due to the impact of the COVID-19 pandemic and, given this, the Tribunal considers that it is not open to make an earning capacity determination in respect of Mr Ambler’s circumstances.

The necessary commitments of Mrs Genge

The Tribunal accepts that the children are in the sole care of Mrs Genge. In her Statement of Financial Circumstances, Mrs Genge estimated that her weekly household expenses total $1,505. When asked how she is meeting these expenses on her current level of income, Mrs Genge stated she ‘is not’ and that the household is cutting back on their expenses. The Tribunal finds on the evidence before it that Mrs Genge’s current level of income is insufficient to meet her estimated household expenses.

The necessary commitments of Mr Ambler

Mr Ambler’s Statement of Financial Circumstances estimates his weekly household expenses for himself of $880 per week. The majority of this amount relates to $650 per week rent/mortgage. Mr Ambler gave evidence to the Tribunal at the hearing that he is covering some of the costs of his current partner’s children, such as their living, food and clothing expenses. The Tribunal finds that, as Mr Ambler does not have a legal duty to support these children, these amounts are discretionary amounts that could be used towards the needs of [Child 1] and [Child 2]. The Tribunal is not satisfied on the evidence before it that Mr Ambler’s income is insufficient to meet his necessary self-support commitments.

The direct and indirect costs incurred by Mrs Genge in providing care for the children

The Tribunal accepted that Mrs Genge is currently employed four days per week and that, in previous years she has been employed between two and four days per week. The Tribunal accepted Mrs Genge’s evidence that her employment arrangements are dependent on student funding and, as such, finds that Mrs Genge is not currently foregoing income in order to provide care to [Child 1] and [Child 2].

Hardship

Paragraph 117(4)(g) of the Act requires the Tribunal to consider any hardship that would be caused to [Child 1], [Child 2] or Mrs Genge by the making of, or the refusal to make, a departure determination; and also to consider any hardship that would be caused to Mr Ambler or any other child or other person that Mr Ambler has a duty to support, by the making of, or the refusal to make, a departure determination.
The Tribunal has found, above, that Mrs Genge’s current level of income is insufficient to meet her regular household expenses. While the children’s disability-related expenses are covered by NDIS packages, Mrs Genge incurred significant costs for [Child 1’s] operation in mid-2021, which has added to her level of financial stress. The Tribunal finds that there would be significant hardship to Mrs Genge and, in particular, to [Child 1] and [Child 2], if the Tribunal were to refuse to make a departure determination in this matter.
The Tribunal has noted, above, Mr Ambler’s evidence that he is currently making payments towards the needs of the children of his current partner, who are not his financial dependents and who he does not have a legal duty to support. The bank statements obtained by the Agency, contained in the supplementary documents and covering the last part of the 2021 calendar year, show many entries for discretionary expenditure by Mr Ambler. The Tribunal finds on the information before it that Mr Ambler would not suffer financial hardship if the Tribunal were to make a departure determination in this matter.

What is the proposed departure determination in this case?

The Tribunal notes that there is a previous change of assessment in place to set Mr Ambler’s income at $72,800 from 1 July 2019 to 31 April 2022, and to increase child support by $2,000 from 1 July 2019 to 31 December 2018 to reflect the additional costs of the children. The Tribunal does not intend to disrupt this decision.
The Tribunal considers it appropriate to maintain Mr Ambler on an adjusted taxable income of $72,800 for the reasons explained earlier in this decision. The Tribunal intends to maintain Mr Ambler on this level of income from 1 January 2020 up to 31 January 2023, being the end of the administrative assessments issued by the Agency at the time of this decision, with the intention of this leading to a level of child support that better reflects Mr Ambler’s actual capacity to provide for the children’s needs. The Tribunal has commenced this departure determination from 1 January 2020, to confirm the Tribunal’s intention to have Mr Ambler’s income to be reflected at this level, given the findings of the objections officer in this matter.
While Mrs Genge’s income has increased in each financial year, this is not unusual and is not, in the Tribunal’s view, a reason to also vary her adjusted taxable income for the periods being considered by the Tribunal. Rather, the use of the last relevant year of income is the usual practice in an administrative assessment and, in the absence of anything out of the ordinary about Mrs Genge’s circumstances, is considered appropriate by the Tribunal.
The Tribunal has found that Mrs Genge incurred expenses totalling $9,304 between May and September 2021 relating to [Child 1’s] surgery. The Tribunal notes that an increased rate of child support to reflect the special needs of a child is contemplated in the Assessment Act as both a specific ground for departure and as one of the ‘just and equitable’ criteria to be considered. The Tribunal finds that, given Mrs Genge’s stringent financial circumstances, it is appropriate that Mr Ambler contribute half of the costs of this surgery. The Tribunal therefore intends to increase child support payable by Mr Ambler by $4,652 for the 2021/2022 financial year, with the intention that Mr Ambler contribute 50% of these costs. Having regard to Mr Ambler’s discretionary expenditure, the Tribunal is satisfied that spreading these costs for Mr Ambler over a 12-month period will not cause him undue financial hardship.

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

The third step is to consider whether it would be otherwise proper to make a particular departure determination in accordance with subparagraph 98C(1)(b)(ii)(B) of the Assessment Act. The Tribunal accepts that Mrs Genge is in receipt of family tax benefit. Any departure determination made by the Tribunal is likely to reduce the impact on the public purse and the Tribunal therefore concluded that it is also otherwise proper to make the proposed departure determination.

DECISION

The Tribunal sets aside the decision under review and substitutes its decision that:

For the period 1 January 2020 to 31 January 2023, Mr Ambler’s adjusted taxable income is varied to $72,800 per annum;
For the period 1 July 2021 to 30 June 2022, child support payable by Mr Ambler is increased by $4,652.

[2022] AATA 230

4 January 2022

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Administrative Law

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