Gresham and Washford (Child support)

[2018] AATA 1230

Gresham and Washford (Child support) [2018] AATA 1230 (13 March 2018)

DIVISION:  Social Services & Child Support Division

REVIEW NUMBER:  2017/SC012706

APPLICANT:  Mr Gresham

OTHER PARTIES:  Child Support Registrar

Ms Washford

TRIBUNAL:  Ms J Cuthbert, Member

DECISION DATE:  13 March 2018

DECISION:

The decision under review is affirmed.

CATCHWORDS
Child support – Non-agency payments – No mutual intention – Prescribed payments – Discretion exercised under section 71D to refuse to credit the payments – Decision under review affirmed

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

ISSUE

1. This review is about whether two payments totalling $15,773.20 made to a school can be credited against Mr Gresham child support liability.

BACKGROUND

1. Mr Gresham and Ms Washford are the parents of [Child 1] (born 1999) and [Child 2] (born 1997). There has been a child support assessment made by the Department of Human Services – Child Support (the Department) since 7 March 2007. The assessment for[Child 2] ended on 29 December 2015. From 8 March 2016 the assessment for [Child 1] was based on Ms Washford having a care percentage of 100%. That assessment ended on 3 December 2017.

2. On 24 June 2016 a decision was made to refuse to credit two payments ($7,652.50 and $8,120.70) made by Mr Gresham to Ravenswood on 4 January and 21 April 2017, respectively.

3. Mr Gresham lodged an objection to that decision on 20 July 2017. His objection was disallowed on 20 September 2017. He lodged an application for a review of the objection decision with this tribunal on 17 October 2017.

4. Mr Gresham also lodged an application for review in relation to a decision made by the Department on 24 September 2015 (2017/SC103296). That application was dismissed on 6 February 2017 and is not the subject of this review.

5. Mr Gresham attended a hearing on 14 February 2017 in person. Ms Washford attended the hearing by telephone. The Child Support Registrar was not represented at the hearing. In addition to oral evidence the tribunal considered documents provided by the Department (folios 1 to 245).

6. Following the hearing documents were obtained from the Department (folios C1 to C17). They were sent to Mr Gresham and Ms Washford for comment along with documents that Mr Gresham provided to the tribunal on 22 February 2018. The parties were invited to make comments. A decision was made on 13 March 2018 following comments received from Ms Washford and Mr Gresham.

STATUTORY FRAMEWORK

1. The Department (acting for the Child Support Registrar) can credit payments made by a liable parent to a third party against an enforceable maintenance liability.

2. The term “enforceable maintenance liability” is defined in subsection 4(1) of the Child Support (Registration and Collection) Act 1988 (the Act) as a registered maintenance liability. A “registered maintenance liability” is defined by subsection 4(1) as one that is registrable under sections 17 and 18 of the Act. This includes a child support liability that arises under a child support assessment that is registered for collection by the Department.

10.  Section 71A of the Act states that an amount paid by a payer to a third party can be credited provided there is an enforceable maintenance liability and both parents intend that the payment is in satisfaction of child support payable under that liability.

11. Section 71C of the Act allows for the gradual crediting of payments (up to 30% of the child support liability for a period) where they fall into categories set out in regulation 5D of the Child Support (Registration and Collection) Regulations 1988 (the Regulations) regardless of the parents’ intentions. However, section 71C of the Act requires that the liable parent has less than “regular care” of any of the children of the assessment, both at the time the payment was made and when the decision is made to credit the amount. The term “regular care” is defined in subsection 5(2) of the Child Support (Assessment) Act 1989 as a percentage of care of at least 14%, but less than 35%.

12.  The credit must not exceed 30% of the amount payable in the payment period. Excess amounts may be credited against the liability for a later payment period if the criteria are met at that time. No amount can be credited unless the payer has paid the remaining 70% of the liability.

13.  Sections 71A and 71C are subject to section 71D of the Act which provides that the Registrar may refuse to credit an amount under that section if satisfied that, in the circumstances of the particular case, the amount ought not to be credited.

CONSIDERATION

14.  Although Mr Gresham provided the tribunal with letters from the Department dated from March 2012 to November 2016 which state that the liability “is currently registered as private collect”, the tribunal accepts the Department’s explanation that the letters were sent to Mr Gresham in error. The tribunal notes Mr Gresham’s evidence that he received regular statements showing amount owed to the Department. The tribunal also notes that a payer account and other records which form the Child Support Register indicate that the liability was registered for collection by the Department at all times. The tribunal finds that Mr Gresham was the payer under that liability in 2017 when the payments which are the subject of this review were made.

15.  On 13 June 2017 Mr Gresham notified the Department of payments to[different schools], totalling $106,979.95, in respect of school fees for [Child 1] and [Child 2]. There is no dispute that Mr Gresham made the payments for school fees. However, as the objections officer only considered Mr Gresham’s objection in relation to payments made on 4 January and 21 April 2017, the tribunal only has jurisdiction in relation to those payments. Ms Washford states that she did not intend that the payments of school fees were in lieu of child support.

16.  Mr Gresham contends that Ms Washford instructed the Department that she would forego child support if he paid the children’s private school fees. He noted Ms Washford’s letter to the Department in August 2015 in which she stated:

As discussed with the CSA some time ago. I am happy for Mr Gresham to not pay me any direct child support as long as he maintains both children at their current schools.

17.  The tribunal notes that the letter was in response to a departure application made by Mr Gresham in July 2015. Mr Gresham sought a reduction in the assessed amount to take into account his payment of the children’s school fees. Ms Washford made a cross-application in which she raised concerns about the adjusted taxable income used for Mr Gresham in the child support assessment. In the decision made on 24 September 2015 the decision maker noted that Ms Washford acknowledged that she intended that the children would attend private schools. The decision maker noted that Ms Washford was “happy to forego her child support payments in lieu of this expense”. However, the decision made, after consideration of all of the grounds raised, was to vary Mr Gresham’s adjusted taxable income from 5 August 2016 until the assessment for [Child 1] ends and to reduce the annual rate of child support payable by Mr Gresham by $5,298 from 5 August 2015 to 22 March 2016 and by $9,000 from 23 March 2016 until the assessment for [Child 1] ends. The tribunal is satisfied that the latter part of the decision took into account that Mr Gresham was meeting Ms Washford’s share of the children’s school fees.

18.  At the time that decision was made Mr Gresham was assessed to pay nil child support. However, after a change to the care arrangements for[Child 1] in 2016 he became liable to pay child support.

19.  The tribunal is satisfied that Ms Washford considered that any payments Mr Gresham made for school fees following the decision on 24 September 2015 were already taken into account in the assessment of child support payable. The tribunal finds that she did not intend that the payments made in January and April 2017 were in satisfaction of Mr Gresham’s child support liability for that reason. The tribunal finds that the payments cannot be credited under section 71A of the Act.

20. The tribunal finds that the payments were for “fees charged by a school or pre-school” for [Child 1] (paragraph 5D(c) of the Regulations). The tribunal finds that the payments are prescribed payments for the purposes of section 71C of the Act as Mr Gresham had a care percentage of 0% for all of the children in the assessment when he made the payments and when he notified the Department.

21. However, even though the requirements of section 71C of the Act are met, that section is subject to section 71D of the Act. Mr Gresham contends that it would not amount to “double dipping” if the payments were credited as the decision maker did not properly take into account Ms Washford’s share of the school fees when making the decision of 24 September 2015. However, the tribunal finds that the child support liability Mr Gresham has been assessed to pay already takes into account that he will pay [Child 1’s] school fees. The decision of 24 September 2015 is not the subject of this review. For those reasons, the tribunal finds that in the particular circumstances of this case the amounts totalling $15,773.20 ought not to be credited against Mr Gresham’s child support liability.

DECISION

The decision under review is affirmed.