Gibbs and Buckby (Child support)

Gibbs and Buckby (Child support) [2022] AATA 4991 (2 November 2022)

DIVISION:Social Services & Child Support Division
REVIEW NUMBER:  2022/MC024075
APPLICANT:  Ms Gibbs
OTHER PARTIES:  Child Support Registrar
Mr Buckby

TRIBUNAL:Member A Beckett, Presiding
Senior Member K Dordevic

DECISION DATE: 2 November 2022
DECISION:

The Tribunal sets aside the decision under review and, in substitution, decides that:

for the period from 1 January 2022 to 30 June 2022, Mr Buckby’s adjusted taxable income is varied to $91,069;
from 1 July 2022 and annually thereafter until a terminating event, Mr Buckby’s adjusted taxable income is to be increased in accordance with the child support inflation factor applicable on 1 July of that year.

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 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

This review is about the rate of child support payable by Ms Gibbs to Mr Buckby for their daughter, who is in the primary care of Mr Buckby and the regular care of Ms Gibbs. The case was registered with Services Australia - Child Support (Child Support) on 21 November 2020.
On 16 November 2021, a differently constituted Tribunal made the following decision:
· for the period 4 January to 30 June 2021, Mr Buckby’s adjusted taxable income (ATI) is set at $162,263;
· for the period 1 July to 31 December 2021, Mr Buckby’s ATI is set at $72,876.
Once this decision no longer had effect, for the period 1 January to 31 December 2022, the administrative assessment determined that Ms Gibbs to pay an annual rate of child support to Mr Buckby of $8,948. This was based on the 2020/21 ATIs of $91,843 for Ms Gibbs and of $60,595 for Mr Buckby.
On 1 January 2022, Ms Gibbs applied to Child Support for a departure from the administrative assessment on the basis that Mr Buckby’s income, earning capacity, property and financial resources are not reflected in the administrative assessment (known as Reason 8A).
On 9 March 2022 a senior case officer rejected Ms Gibbs’s application for a change to the assessment after finding that no reason was established.
Ms Gibbs lodged an objection to this decision on 3 April 2022.
On 8 June 2022, an objections officer disallowed Ms Gibbs’s objection on the basis that no Reason was established.
On 14 June 2022, Ms Gibbs applied to the Social Services and Child Support Division of the Administrative Appeals Tribunal (the Tribunal) for a review of the objections officer’s decision.
Ms Gibbs and Mr Buckby participated in a telephone directions hearing convened by the Tribunal on 13 September 2022. The matter was set down for hearing on 2 November 2022.
On the morning of the hearing, the Tribunal received a submission from Mr Buckby. Amongst other things, this stated that he would not be participating in the hearing. He also said that he had “cancelled” child support. Because Mr Buckby had not agreed to email exchange in this matter, these submissions could not be provided by email to the other parties prior to the hearing. Most of the submissions submitted by Mr Buckby related to the 2021 Tribunal decision and other matters that were not relevant to these proceedings. The Tribunal decided to proceed by putting to Ms Gibbs at the hearing the matters relevant in those submissions to the determination of her application.
Ms Gibbs participated by telephone in the hearing convened by the Tribunal on 2 November 2022. Notwithstanding Mr Buckby’s late submission, the Tribunal attempted to contact him by telephone at the scheduled hearing time. These attempts were unsuccessful.
While non-attendance by an applicant may often lead to dismissal of an application, Mr Buckby is the respondent in this matter.
The Tribunal noted Mr Buckby’s advice that he was “cancelling” child support. The Tribunal had no evidence from Child Support that this had occurred and, in any case, cancellation of child support by Mr Buckby at around the time of the hearing would not affect the assessment of child support from 1 January 2022 to the cancellation date. It would also not prevent the matter being reregistered with Child Support at a later date.
After being satisfied that Mr Buckby was given ample opportunity to participate in the hearing, the Tribunal proceeded in his absence.
Child Support was not represented at the hearing but it provided a bundle of its relevant documents (folios 1 to 274) to Ms Gibbs, Mr Buckby and the Tribunal. Copies of the documents provided to the Tribunal before the hearing by Ms Gibbs (folios A1 to A334) and Mr Buckby (folios B1 to B20) were provided to the other parties.
The Tribunal issued a notice under section 95H of the Child Support (Registration and Collection) Act 1988. The documents in response to this notice – D1 to D2 – have also been copied to the parties.

Directions

On 13 September 2022, the Tribunal issued directions to both parents. These required evidence to be provided to the Tribunal by 10 October 2022 and submissions by 21 October 2022. These directed in part that:
1.4Ms Gibbs and Mr Buckby comply with their obligations to make full and frank disclosure of their financial circumstances to the AAT for the purposes of the review.
1.5 Ms Gibbs must provide the following evidence to the AAT by the close of business on 10 October 2022:
1.5.1 A copy of her 2021 and 2022 income tax returns and tax assessment notices;
1.5.2 If necessary, an updated Statement of Financial Circumstances form (enclosed);
1.5.3 Copies of her two most recent payslips from employment showing year to date earnings;
1.5.4 An itemised schedule of expenses claimed against income from [Company 1] in the period 1 July 2021 to 30 June 2022;
1.5.5 Statements for the period 01 July 2021 to 30 June2022 for all accounts for financial institutions (including savings, cheque, credit cards, and loans) held solely in her name, or jointly by her and another person, or accounts to which she is a signatory;
1.5.6 Statement from property manager(s) of the [Suburb 1] rental property, showing income and expenses for the period 1 July 2021 to 30 June 2022 and a list of expenses for that property, with supporting documentation such as receipts, that are not contained in the property manager(s)’s statement; and
1.5.7 Any other evidence on which she intends to rely.
1.6 Mr Buckby must provide the following evidence to the AAT by the close of business on 10 October 2022:
1.6.1 A copy of his 2022 income tax return and tax assessment notice;
1.6.2 A copy of 2022 income tax returns and tax assessment notices for:
a. [Company 2];
b. [Company 3];
c. [Trust 1];
1.6.3 A copy of 2021 income tax return and tax assessment notice for [Company 2];
1.6.4 If necessary, an updated Statement of Financial Circumstances form (enclosed);
1.6.5 Copies of his two most recent payslips from employment showing year to date earnings;
1.6.6 Financial statements, including balance sheets, profit and loss statements, business activity statements and depreciation schedules for any company of which he is a director, shareholder or office bearer for the 2022 financial year.
1.6.7 Statements for the period 01/07/2021 to 30/06/2022 for all accounts for financial institutions (including savings, cheque, credit cards, and loans) held solely in his name, or jointly by him and another person, or accounts to which he is a signatory;
1.6.8 Schedule listing all shares and investments held by him personally or by the [Trust 1], and showing earnings, gross dividends (that is, without franking credits), transfer/sale of these and any capital gain on such transfer/sale for the period 1 July 2021 to 30 June2022;
1.6.9 Statement(s) from property manager(s), if any, of any investment property held by him personally or by [Trust 1] or by [Company 2], showing income and expenses for the period 1 July 2021 to 30 June 2022 and a list of expenses for such property, with supporting documentation such as receipts, that are not contained in the property manager statement(s). If such property is not rented through a property manager, then a schedule of all income from and expenses for such property, with supporting documentation such as receipts;
1.6.10 Evidence of out-of-pocket expenses (that is, after any Medicare or Health Fund rebate) for orthodontic work for the child;
1.6.11 Evidence (such as a report from the treating orthodontist), that the orthodontic work was not solely for cosmetic purposes; and
1.6.12 Any other evidence on which he intends to rely.
Ms Gibbs complied with the directions by submitting bundles of documents on 14 October 2022.
Mr Buckby did not comply with the directions, apart from submitting a Statement of Financial Circumstances and submissions.
On 12 October 2022, the Tribunal sent Mr Buckby a Non-Compliance with Directions letter. This referred to Mr Buckby’s failure to comply with the issued directions and stated that this may result in the Tribunal drawing adverse inferences against him. It said that this would be considered by the Tribunal if he still had not complied with the directions by 26 October 2022.
Mr Buckby provided no additional evidence in compliance with the directions.
The documents sought by the directions should have been readily obtainable by Mr Buckby. There was no evidence or submission before the Tribunal indicating that Mr Buckby could not comply with the directions. Mr Buckby indicated only that he did not wish to provide financial information to Ms Gibbs. He did not do so despite Ms Gibbs providing a detailed response to the directions regarding her financial position.
The Tribunal explained at the directions hearing that the financial information for both parents was required because under the law the Tribunal must consider the financial resources of both parents before determining whether it is just and equitable to depart from the administrative assessment of child support (subsection 117(4) of the Child Support (Assessment) Act 1989 (the Act)).
The Tribunal decided to draw the adverse inference that Mr Buckby did not comply with the directions because the documents required would not support his case that his income from all sources was reflected in his personal income tax return for 2020/21.
Mr Buckby’s failure to comply with the directions meant that the Tribunal had before it only 2020/21 tax returns and limited information regarding his 2021/22 financial circumstances from bank statements over a three-month period in the first half of the 2022 calendar year.
Noting that Mr Buckby had ample opportunity to correct the record if this information was non-representative, the Tribunal decided to proceed with the information it had and pro rata it as required, rather than deferring the matter for the time necessary to issue notices to numerous third parties to produce documents, to exchange these documents between the parties and give them the opportunity to comment on them by way of further hearing or written submissions. In proceeding to determine the matter in this way, the Tribunal took into account Ms Gibbs’s compliance with the directions, the fact that by the time of the hearing it had been 11 months since she lodged her change of assessment application and the statutory objectives of the Tribunal which include that it provide a quick mechanism of review (section 2A of the Administrative Appeals Tribunal Act 1975).

ISSUES

The relevant legislation is the Act, which sets out the method for administratively assessing the child support payable by applying a formula with variables such as the parents’ adjusted taxable incomes and their percentages of care. The Act also provides that this administrative assessment can be departed from in certain circumstances.
The issues to be determined in this case are:
· Does a ground exist for departure from the administrative assessment of child support? If so,
· Would it be just and equitable and otherwise proper to make a particular determination?

CONSIDERATION

Is there a ground for departure from the administrative assessment of child support?

Reason 8A: Income, property and financial resources

Ms Gibbs has sought a departure from the administrative assessment on the ground that in the special circumstances of this case the administrative assessment would result in an unjust and inequitable level of child support because of Mr Buckby’s income, property and financial resources (Reason 8A). This ground for departure is found in subparagraph 117(2)(c)(ia) of the Act.
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.

Mr Buckby’s income and financial resources

Mr Buckby is a part-time PAYG employee of [Employer 1].
The Tribunal finds that Mr Buckby also has an interest in two companies – [Company 3] and [Company 2] and a discretionary trust, [Trust 1].
The Tribunal is satisfied that Mr Buckby is the controller of the two companies and trust and the effective beneficiary of income from them. Applying principles established by the Family Court (for example, in Carey and Carey (1994) FLC 92-489), the Tribunal decided that Mr Buckby’s income for child support purposes should take into account the financial resources available to him from these entities.
At the hearing Ms Gibbs said that Mr Buckby has a lifestyle that would not be sustainable on the income he claims of about $60,000 a year. She effectively submitted that Mr Buckby is able to obtain considerable financial advantage by using the company and trust structures to minimise his income for tax purposes and to claim as company/trust expenses amounts that are for his personal benefit. She suggested his income could be as high as $200,000.

[Employer 1]

Mr Buckby works as a [Occupation 1] for [Employer 1].
Based on his tax return, the Tribunal finds that his income from his [Employer 1] employment was $24,472 in 2020/21.
Mr Buckby’s [Bank 1] account #1090 for the period 10 February to 4 May 2022 has fortnightly deposits labelled as salary. At the directions hearing, Mr Buckby advised that this was his salary from [Employer 1]. In the absence of any evidence from Mr Buckby supplied in accordance with the directions regarding his income from [Employer 1], this is the best evidence that the Tribunal has regarding his income from that employment.
These salary amounts vary from fortnight to fortnight. The six payments in that period total $8,159.36. Pro-rated this amounts to $35,357.23.
As Mr Buckby is a PAYG employee, the above represents net rather than gross income. Applying the ATO’s Gross Income Estimator, the above figures indicate a gross income of $1,549 a fortnight, or $40,274 a year.
While this is significantly higher than Mr Buckby’s reported 2020/21 income, the Tribunal considered that such an increase may be explicable for various reasons, such as the fact that [businesses] were closed for extended periods in the time covered by the 2020/21 tax return.
In his 2020/21 income tax return Mr Buckby claimed deductions of $4,379. Mr Buckby has supplied no evidence indicating an increase in deductions and given the nature of his employment it is unlikely there would be a significant change to these. However, the Tribunal considered it was reasonable to increase the rate of tax deductions proportional to the increase in income. The Tribunal decided to reduce the gross income of $40,274 by deductions of $7,206, to arrive at a taxable income for [Employer 1] of $33,068.

[Company 3]

The 2020/21 income tax return for [Company 3] shows income of $1,750 and expenses of $6,585. In other words, Mr Buckby claimed expenses amounting to 376% of the income for [Company 3]. It is likely that some of these expenses provide a personal benefit to Mr Buckby that would not be available to a PAYG employee. However, the Tribunal considered that, even allowing for this, it is likely that the expenses of the company would still outweigh its income.
The Tribunal is not satisfied that Mr Buckby has any net income/financial benefit from [Company 3].

[Company 2]

Mr Buckby works as a [Occupation 2] and receives income from this through [Company 2].
This company is not referred to in the decisions of the senior case officer and objections officer.
In the period 13 February 2022 to 2 May 2022, the bank account for [Company 2] shows deposits of $4,164.96. This is the only evidence before the Tribunal regarding the income of [Company 2], other than references in the 2021 Tribunal decision (differently constituted) to evidence of the 2020/21 income for [Company 2].
Consistent with the approach that Tribunal took in relation to Mr Buckby’s [Employer 1] income, the Tribunal decided to pro rata the deposits from the bank statements to obtain a full year income figure of $19,512.
Mr Buckby provided no documentary evidence regarding expenses to be set off against this income. The Tribunal decided that it would be fair to allow for the same rate of deductions as that claimed by Ms Gibbs in her 2021/22 tax return for her home-based business: 46% (see paragraph 72 below).
After allowing deductions of $8,975, the Tribunal finds that for child support purposes it is appropriate to increase Mr Buckby’s income by $10,537 to allow for his income from [Company 2].

[Trust 1]

The income for [Trust 1] is derived from dividends on investments and rent on an investment property.
Mr Buckby submitted that the previous Tribunal decision did not take into account that some of his income from [Trust 1] related to sale of shares. Mr Buckby did not provide any evidence of share sales despite being directed to do so. The bank account information for [Trust 1] includes only deposits relating to dividends; there is no evidence of income received by Mr Buckby from sale of shares.
Mr Buckby also submitted that in its previous decision, the Tribunal did not take into account franking credits which effectively reduced the income from his investments. However, these franking credits were included in his 2020/21 income tax return, which included his income from [Trust 1].
Mr Buckby’s 2020/21 income tax return lists an income of $34,800 from the [Trust 1].
The Tribunal also had before it the 2020/21 income tax return for [Trust 1]. In the absence of any corroborating evidence from Mr Buckby, the Tribunal was unable to test the calculations of income and expenses in this tax return.
The Tribunal considered that the best evidence it had of Mr Buckby’s income from [Trust 1] is what he himself claimed was his income in his 2020/21 income tax return: $34,800.
The 2020/21 income tax return for [Trust 1] indicates that its income had been reduced by a net rental loss of $12,664 in that year.
There is nothing improper about this reduction from a tax point of view. However, the usual practice when assessing a person’s financial position for child support purposes is to add back such a rental or investment loss. This occurs automatically as part of the administrative assessment of child support when such a loss appears on a person’s personal income tax return. It did not happen in this case because the rental loss appeared in the company tax of [Trust 1] rather than Mr Buckby’s personal income tax return. As Mr Buckby is the controller and beneficiary of [Trust 1], the Tribunal is satisfied that it is appropriate to add this rental loss to Mr Buckby’s income in accordance with standard practices for assessing income for child support purposes.

The Tribunal finds that for the first half of 2022 Mr Buckby’s income for child purposes should be set at a full year equivalent of $91,069, made up as follows:
·[Employer 1]   $33,068
·[Company 3]   $0
·[Company 2]  $10,537
·[Trust 1]   $34,800
·Net property loss add back  $12,664

Is Reason 8A established?

Under the administrative assessment in place since 1 January 2022, child support is calculated based on an income for Mr Buckby of $60,595.
The objections officer found that Mr Buckby’s ATI was about $73,259. Yet the objections officer considered that the difference this would make to the child support assessment – Ms Gibbs paying approximately $17 a week less – was not sufficient to amount to special circumstances so that Reason 8A was established.
However, based on its findings above, the Tribunal is satisfied that for child support purposes Mr Buckby’s income is more properly assessed at $91,069, which, if applied to the administrative assessment, would have a significant impact on Ms Gibbs’s child support liability.
This is significantly greater than the ATI of $60,595 used for Mr Buckby in the assessment. The Tribunal considers that this difference amounts to special circumstances so that Reason 8A is established.

Is it just and equitable to depart from the administrative assessment?

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 to do so is just and equitable.
In making this decision, the Tribunal considered all the oral and documentary evidence before it. The Tribunal also had regard to the factors the Act states (at subsection 117(4)) must be considered when making such a decision:
·   the duty of a parent to maintain the child and meet the child’s proper needs;
·   the income, earning capacity, property and financial resources of the child and of each parent;
·   the commitments of each parent to support themselves and any other child or person that they have a duty to maintain;
·   the direct and indirect costs incurred by the carer entitled to child support in providing care for the child;
·   any hardship that would be caused to the child, the parents or any resident child of the parent by the making of, or the refusal to make, a determination.
Section 3 of the Act states that it is the duty of both parents to financially support their children, who should receive a proper amount of financial support to support their needs from their parents in accordance with the parents’ capacity to contribute.
There is no evidence that the child has any income, financial resources or earning capacity that would render the assessment fair or unjust if it was not taken into account.
The child is educated in a public school and has at least the usual needs and expenses of a child her age. In the directions hearing, Mr Buckby referred to school fees and orthodontic costs for their daughter.
Neither Ms Gibbs nor Mr Buckby has a duty to support any other person that is not already taken into account in the formula for the administrative assessment.
The income of Mr Buckby has been discussed above.
The Tribunal also considered the assessment of Ms Gibbs’s income. At the time Ms Gibbs lodged her application for change of assessment, the administrative assessment ws based on an ATI for Ms Gibbs of $91,843, based on her 2020/21 income tax
According to her 2021/22 income tax return, Ms Gibbs’s taxable income for that year was $88,053.
Her gross income included $93,033 from PAYG employment. In addition, Ms Gibbs earned income from [specified] work through her company, [Company 1]. This income was listed in the income tax return as $6,619. The company who paid the invoices for [Company 1] advised that in 2021/22 this income was $8,047 for 55.5 hours of work. Ms Gibbs claimed $3,698 in expenses against this business in her tax return. This is equivalent to 46% of $8,047.
Payslips provided by Ms Gibbs indicate that as at the end of September 2022 her current annual salary from PAYG employment was $95,000.
Apart from deductions relating to the investment property, Ms Gibbs claimed a total of $4,779 in deductions to set off against her income. The Tribunal noted that in 2020/21 Mr Buckby claimed a similar amount of deductions ($4,379) against a significantly lower income ($60,595). In his [Company 3] and [Trust 1] 2020/21 income tax returns, he claimed more than $56,000 in expenses to set off against his incomes. Considering this and Ms Gibbs’s total gross income, the Tribunal considered that the amount in Ms Gibbs’s 2021/22 tax return was not an unreasonable rate of deductions overall.
Ms Gibbs claimed a net rental property loss of $6,822. Under standard practices for assessing adjusted taxable income, Child Support will add this net rental loss amount to Ms Gibbs’s taxable income for child support purposes.
Similarly, Ms Gibbs’s taxable income will be adjusted to take into account reportable contributions to superannuation. Her payslips indicate that Ms Gibbs salary sacrifices $100 a month to superannuation.
In response to the Tribunal’s questions, Ms Gibbs advised as follows:
· payment of $500 from [Ms A] was for Ms Gibbs to purchase a toolbox from the discount shop run by her employer; her account shows this amount then going out;
· her investment property is a small studio that at the time of purchase was part of a nursing home and professional business complex. That business is no longer operating and according to council restrictions the studio can only be rented as student accommodation. Its value has fallen significantly and another slightly larger unit in the same complex was sold recently according to realestate.com for $93,000. The unit could only be rented for part of the 2021 and 2022 financial years because of the COVID-19 lockdowns, meaning there was no demand for student rental.
In his submissions Mr Buckby raised other matters including a loan made to Ms Gibbs’s sister and the distribution of property and financial payout after the separation. These are all matters to be dealt with by the property settlement process, which the Tribunal understands has been completed in this case. The Tribunal will not revisit them here.
At the hearing, Ms Gibbs advised that the only payments received from her sister in 2022 were for birthdays. For example, the only payment shown in the bank statements from 1 January to 30 June 2022, for $100, was for [Child 1]’s birthday. At hearing Ms Gibbs stated that she had not required financial assistance from her sister after her child support liability was decreased following the 2021 Tribunal decision.
The previous Tribunal decision meant that until 31 December 2021 the child support assessment took the payments from Ms Gibbs’s sister into account. Mr Buckby submits that these were in repayment of the loan made to the sister before separation. For the reasons cited in the paragraphs above and taking into account that there is no cogent evidence of substantial payments from the sister in 2022, the Tribunal does not consider that fairness requires an adjustment of Ms Gibbs’s income to reflect payments from her sister from 1 January 2022.
Ms Gibbs’s main source of income is as a PAYG employee. As well as her income tax returns, the Tribunal has information of her income from this employee as well as payments made to her other source of income, [Company 1]. Ms Gibbs also provided statements from her financial institutions and in relation to her investment property.
The Tribunal found that there was a discrepancy regarding [Company 1] income as declared in Ms Gibbs’s income tax return and detailed by the company that paid Ms Gibbs’s invoices, with the latter income being $1,428 higher in 2021/22.
Ms Gibbs explained that this discrepancy arose because the income in her tax returns is based on the amounts that are invoiced in a financial year, while the company that pays the invoices listed amounts according to the date that these invoices were paid. Ms Gibbs notes that there can be some months delay in payment of the invoices. Consequently, an amount that is invoiced in May 2021, and so included in her 2020/21 income tax return, may not be paid until July 2021.
The Tribunal accepts Ms Gibbs’s explanation of the discrepancy. In any case, the Tribunal does not consider that the difference of $1,428 would make the normal administrative assessment of Ms Gibbs’s adjustable taxable income unfair as it would only change the administrative assessment child support by a little more than three dollars a week.
Taking into account the oral and written evidence and submissions before it, the Tribunal is not satisfied that any change needs to be made to Ms Gibbs’s adjusted taxable income under the standard administrative assessment of child support.
Mr Buckby did not respond to the Tribunal’s directions to supply evidence relating to the orthodontic work for the child. In the absence of the required documentary evidence, the Tribunal is unable to take costs for orthodontic treatment for the child into account.
After Ms Gibbs lodged her change of assessment application, Mr Buckby provided to Child Support evidence of:
·   payment of $36 to MSP Melbourne; in the absence of evidence from Mr Buckby, the Tribunal does not know what this payment was for;
·   payment of $23 on 27 April 2021 for a school coastal excursion;
·   payments of $52.08 on 1 February, $75.60 on 24 May, $50.40 on 9 November (years of these payments unknown); in the absence of evidence from Mr Buckby, the Tribunal does not know what these payments were for,
·   payment of $350 to [College 1] on 10 February 2021 for Year 8 camp;
·   payment of $248.85 to [educational supply store] on 25 October 2021;
·   payments to [College 1] of $67.50 on 18 February 2021, $22.50 on 4 November 2021 $430 on 1 February 2022 and $60 on 2 March unknown year;
·   payment of $190.95 for delivery in November 2020 of a student bundle;
·   various purchases at Big W, Woolworths and Officeworks. There was no indication what these purchases related to.
On the limited evidence before it, the Tribunal is not satisfied that Mr Buckby has education expenses for the child that require an adjustment to the assessment of child support because they are sufficiently above usual education expenses already factored into the administrative assessment.
Ms Gibbs states in her Statement of Financial Circumstances completed on 19 February 2022 (apparently referred to in her indexes September 2022) that her weekly average income is $2,107.53, her total personal expenditure is $774 and the total household expenditure is $1,108.
Ms Gibbs states in her Statement of Financial Circumstances completed on 22 June 2022 that her weekly average income is $2,038.53, her total personal expenditure is $760 and the total household expenditure is $1,070. She lists the total value of property owned by her at $1,381,572, with liabilities of $589,996.
In his Statement of Financial Circumstances, Mr Buckby states that his gross weekly average income is $1,249.49 (made up of salary of $465.03 and income from business/partnership/company/trust of $784.46) and his total household expenditure is $1,755. He lists the total value of property owned by him at $270,479 and his liabilities as $6,100. Mr Buckby left blank the column for listing his personal expenditure
Ms Gibbs is the payer in this case. The Statements of Financial Circumstances indicate that she is in a significantly better capital position than Mr Buckby. The Tribunal is satisfied that she has the financial resources to contribute towards her daughter’s child support in accordance with her duty to support her.
Ms Gibbs is currently in arrears of child support. Consequently, a decrease in her child support liability from 1 January 2022 will, at least in part, be set off against these arrears. In light of his income and financial resources the Tribunal considers that the proposed reduction in child support should not cause Mr Buckby hardship.
Ms Gibbs lodged her application to change the assessment with Child Support on 1 January 2022.
The Tribunal finds that it would be just and equitable for the administrative assessment of child support to be changed by setting Mr Buckby’s adjustable taxable income at $91,069 from this date.
The Tribunal then considered when any change to the administrative assessment should end.
The child of the assessment is 15 and a half years old.
Since 4 January 2021, the parents have been continuously involved in change of assessment processes relating to an application for such a change lodged on that day and the application for a change of assessment that is the subject of this review. This has involved reviews of the original decisions, objections to the decisions, reviews by this Tribunal and, in the case of the application lodged last year, an appeal (later withdrawn) to the Federal Circuit and Family Court.
In view of the considerable time and resources expended in relation to all of these processes, and the desirability of giving some certainty to both parents regarding child support liabilities, the Tribunal considered it should make the change to the assessment for a longer period than the Tribunal’s previous decision. The Tribunal decided to end the assessment when a terminating event occurs. Such a terminating event, for example, would be the child turning 18.
The Tribunal considered that, because of Mr Buckby’s failure to comply with its directions, its estimate of his income is likely to be a conservative one. The Tribunal determined that each year Mr Buckby’s adjustable taxable income should be increased annually by an amount equivalent to the child support inflation factor published for 2022.

Is it otherwise proper to depart from the administrative assessment?

The final step for the Tribunal to undertake is to determine whether it is ‘otherwise proper’ to depart from the administrative assessment. This directs attention to what is fair to the community because it effectively takes into account the effect that making the order may have on any government income support or family tax benefit payments payable to the parents. The child support law recognises that parents, rather than the community, have the primary duty to maintain a child.
Mr Buckby advised in his Statement of Financial Circumstances that he does not receive any benefit from Centrelink (income support or family tax payments). In these circumstances, the reduction to the child support payable by Ms Gibbs as a result of this decision will not impact on payments to him from the public purse.
The Tribunal is satisfied that it is otherwise proper to depart from the administrative assessment in the terms detailed above.

DECISION

The Tribunal sets aside the decision under review and, in substitution, decides that:

for the period from 1 January 2022 to 30 June 2022, Mr Buckby’s adjusted taxable income is varied to $91,069;
from 1 July 2022 and annually thereafter until a terminating event, Mr Buckby’s adjusted taxable income is to be increased in accordance with the child support inflation factor applicable on 1 July of that year.

[2022] AATA 4991

2 November 2022

Key Legal Topics

Areas of Law

Family Law

Administrative Law

Legal Concepts

Statutory Construction

Judicial Review

Remedies

Procedural Fairness