Grewcock and Thorne (Child support)

Grewcock and Thorne (Child support) [2023] AATA 1650 (4 May 2023)

DIVISION:Social Services & Child Support Division
REVIEW NUMBER:  2022/BC024271
APPLICANT:  Mrs Grewcock
OTHER PARTIES:  Child Support Registrar
Mr Thorne

TRIBUNAL:Senior Member R Ellis
DECISION DATE: 04 May 2023
DECISION:

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

for the period from 29 November 2021 to 30 September 2024 the adjusted taxable income of Mr Thorne is varied to $92,084; and
for the period from 1 February 2022 to 30 April 2023 the annual rate of child support payable by Mr Thorne is increased by $2,800.

CATCHWORDS

CHILD SUPPORT – departure determination – income, property and financial resources of the liable parent – orthodontic costs – 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

This review is about whether or not there should be a departure from the administrative assessment of child support.
Mrs Grewcock and Mr Thorne are the parents of [Child 1] (born May 2010). There has been a child support assessment in place since 23 March 2012 and Mr Thorne is currently the liable parent under the assessment.
The following administrative assessment of child support is under consideration:
· for the period from 1 September 2021 to 30 November 2022 Mr Thorne was assessed to pay an annual rate of $4,769 based on a 2020-21 adjusted taxable income of $60,299 for Mrs Grewcock and a 2020-21 adjusted taxable income for Mr Thorne of $64,941.
On 29 November 2021 Mrs Grewcock applied to Child Support for a change to the assessment on the basis of the special needs of the child (the ground more commonly known as Reason 2) and a parent’s income, property and financial resources (Reason 8A).
On 21 January 2022 Mr Thorne made a cross-application on the basis of a parent’s income, property and financial resources (Reason 8A).
On 9 March 2022 Child Support made the decision to change the assessment so that for the period from 1 February 2022 to 31 January 2024 the annual rate of child support payable by Mr Thorne is increased by $1,750 as his contribution to [Child 1’s] orthodontic costs (the original decision).
On 28 March 2022 Mr Thorne objected to this decision and on 16 June 2022 Child Support allowed the objection and made the decision to refuse to change the assessment under section 98F of the Child Support (Assessment) Act 1989 (the Act) because it would not be just and equitable to do so (the objection decision).
On 18 July 2022 Mrs Grewcock applied for a review of the objection decision by the Administrative Appeals Tribunal (the Tribunal).
A directions hearing was held on 10 November 2022. Mrs Grewcock and Mr Thorne attended by Microsoft Teams audio. Prior to the directions hearing Child Support provided the Tribunal and the parties with a bundle of documents in accordance with section 37 of the Administrative Appeals Tribunal Act 1975 (553 pages).
Mrs Grewcock and Mr Thorne were directed by the Tribunal to provide further information and both complied to the satisfaction of the Tribunal.
A hearing was held on 9 March 2023. Mrs Grewcock and Mr Thorne gave evidence on affirmation by Microsoft Teams audio. Prior to the hearing the Tribunal received documents folioed A1 to A11 from Mrs Grewcock and B1 to B39 from Mr Thorne and these were distributed to the parties. Additional documents were also received from Child Support (pages 554–672).
At the directions hearing and at the commencement of the hearing the Tribunal sought clarification from Mrs Grewcock and Mr Thorne as to the reasons for their applications. Mrs Grewcock told the Tribunal she was seeking a fair level of child support from Mr Thorne. Mrs Grewcock said she was also wanting Mr Thorne to make an equal contribution towards the cost of orthodontics for [Child 1]. Mr Thorne said he was experiencing financial hardship and was unable to contribute half the cost of orthodontics for [Child 1]. Mr Thorne added he was satisfied with the objection decision made by Child Support.

ISSUES

The statutory provisions relevant to this review are contained in the Act.
The rate of child support payable by the liable parent is usually based on an administrative assessment under Part 5 of the Act. Under Part 6A of the Act, the liable parent or the carer of the child or children may apply to the Child Support Registrar for a determination to depart from the administrative assessment (section 98B).
Section 98C provides that the Registrar may make a determination to depart from the administrative assessment and establishes a three-step process such that the issues for determination by this Tribunal are:
·     whether or not a ground is established to depart from the administrative assessment of child support; and if so,
·     whether or not it is just and equitable to make a particular departure determination; and if so,
·     whether or not it is otherwise proper to make a particular departure determination.
The grounds for departure from an administrative assessment of child support are set out in subsection 117(2) of the Act.
Each ground is prefaced by the words “in the special circumstances of the case”. The meaning of this expression is not defined in the Act, but the Family Court in Gyselman and Gyselman [1991] FamCA 93 has held that:
as a generality it is intended to emphasise that the facts of the case must establish something which is special or out of the ordinary. That is, the intention of the Legislature is that the court will not interfere with the administrative formula result in the ordinary run of cases.
In Philippe and Philippe (1978) FLC 90-433 the Court held that “special circumstances” are “facts peculiar to the particular case which set it apart from other cases”.
If the Tribunal is satisfied that a ground exists 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 Act.
The range of determinations which can be made includes 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

In circumstances where more than one ground for departure is put forward, the Tribunal needs only be satisfied that one ground is established before going on to determine whether or not a particular determination is just and equitable and otherwise proper.

Issue 1 – Is there a ground for departure?

A ground for departure exists where, in the special circumstances of the case, application of the administrative assessment of child support would result in an unjust and inequitable determination of child support to be provided by the liable parent in respect of the child because of the income, property and financial resources of either parent (subparagraph 117(2)(c)(ia) of the Act).
Mrs Grewcock told the Tribunal she was employed as [an occupation 1] at [Employer 1] in Brisbane. Mrs Grewcock said she worked three days a week on a casual basis but was sometimes able to pick up extra shifts.
The Tribunal notes in evidence from Child Support that in 2021-22 Mrs Grewcock had an adjusted taxable income of $65,540 and in 2020-21 she had an adjusted taxable income of $60,299.
Mrs Grewcock said in 2021-22 she secured more work to help cover extra costs for [Child 1] which explained the increase in her income compared to 2020-21. Mrs Grewcock said she expected her income in the current financial year to be slightly higher again but it was difficult to predict as it was dependent upon the number of shifts she might receive. Mrs Grewcock added she had no income from any other source other than her employment.
Mrs Grewcock also provided the Tribunal with a Statement of Financial Circumstances received on 27 October 2022. Mrs Grewcock lists total weekly household expenditure of $1,401 including mortgage payments of $195, education expenses of $186, total motor vehicle expenses of $268 and other expenses of $100. Mrs Grewcock explained that she was meeting the full costs of educating [Child 1] and other expenses was the outstanding amount owed for her braces. Her total personal expenditure is approximately $280 per week including income tax of $250 and private health insurance premiums of $30. Mrs Grewcock has total assets valued at $486,000 including the family home valued at $450,000, a motor vehicle and household contents. She lists total liabilities of $149,427 being the mortgage on her home. Mrs Grewcock has superannuation of approximately $70,257.
Mr Thorne said it was his understanding Mrs Grewcock had considerable savings, in the order of $21,000, which she had not declared. Mrs Grewcock acknowledged that she did have savings of that magnitude in 2020 but this had diminished over time with the extra costs she was meeting for [Child 1]. Mrs Grewcock pointed out she was receiving no child support from Mr Thorne which had also meant she was forced to draw on her savings.
The Tribunal finds that Mrs Grewcock had an adjusted taxable income of $65,540 in 2021-22 and this is an accurate representation of the income, property and financial resources available to her for the purposes of child support. The Tribunal is satisfied Mrs Grewcock is fairly assessed under the usual administrative processes.
The Tribunal also considered the income, property and financial resources of Mr Thorne.
Mr Thorne told the Tribunal he was self-employed and ran a [service 1] business called [Business 1]. Mr Thorne said the business was established in 2016 and he was the sole director and shareholder. He said the focus of the business was on [a type of service 1]. Mr Thorne added he had also been an equal shareholder in another [service 1] business which commenced operating in 2020 called [Business 2], trading as [Business 2A], but went into administration [in] March 2022.
Mr Thorne said [Business 1] had struggled financially for a couple of years primarily as a result of the downfall of [Business 2A] but also the effects of the COVID-19 pandemic. Mr Thorne explained that as [Business 2A] began to falter, the business had contracted work to [Business 1] but had ultimately been unable to pay [Business 1]. Mr Thorne said [Business 1] was dragged down by [Business 2A] and he had been forced to redraw on his mortgage to pay off his debts associated with [Business 2A]. Mr Thorne added that [Business 1] worked closely with several building companies and was also hit by the flow-on impact associated with disruption to that sector caused by the COVID-19 pandemic.
The Tribunal notes in evidence from Child Support an extract from the Australian Securities and Investments Commission (ASIC) database which confirms [Business 2] was placed under external administration [in] March 2022. Mr Thorne also provided the Tribunal with an ASIC extract confirming the company was subsequently deregistered [in] January 2023.
Mr Thorne said he was working hard to rebuild [Business 1] and felt it had turned the corner. Mr Thorne pointed out that although [Business 1] was now making a profit he had been unable to draw a wage for some time due to cash flow concerns. Mr Thorne said he stopped receiving a wage from around mid-September 2021 but the business started paying him an amount of $500 a week from November 2022. He said he felt if he paid himself any more [Business 1] might cease to exist as a business.
In response to directions Mr Thorne provided the Tribunal with a copy of his individual tax return for 2021-22 as well as the tax return and financial statements for [Business 1].
According to his individual tax return Mr Thorne had a taxable income of $13,222 in 2021-22. Mr Thorne informed the Tribunal this was the salary he was able to draw from [Business 1] up until mid-September 2021. The Tribunal notes in evidence from Child Support that Mr Thorne had a taxable income in 2019-20 of $84,108 and a taxable income in 2020-21 of $64,941.
The company tax return for [Business 1] shows total income of $515,647 and total expenses of $441,255 leaving a profit of $74,392 in 2021-22. After allowing for reconciliation items, including tax losses of $73,862 from a prior financial year, [Business 1] generated a taxable income of $0 in 2021-22. The tax return also shows that major expenses include cost of sales of $110,893, wages and salaries of $212,484, motor vehicle expenses of $29,830, repairs and maintenance of $23,084, superannuation expenses of $20,205, insurance of $9,156, telephone expenses of $4,270, accounting expenses of $4,173, contractor expenses of $2,903 and rent expenses of $2,884.
Mrs Grewcock said she found it unusual Mr Thorne would continue employing so many staff when the business was not performing well. Mrs Grewcock added that Mr Thorne had stated is wife was not earning an income when she understood his wife was working at [Business 1]. Mrs Grewcock said she did not believe Mr Thorne was in hardship.
Mr Thorne told the Tribunal that most of his staff were casuals but he had one permanent employee. He said although he did not draw a wage for more than a year he felt an obligation to keep his staff in work even during difficult times. Mr Thorne said his wife also worked in the business as a casual doing client liaison and administration. Mr Thorne acknowledged the business did meet his motor vehicle and telephone costs, otherwise expenses listed in the accounts were for genuine business purposes.
In response to directions Mr Thorne also provided the Tribunal with payment summary details for all employees at [Business 1] for the year ended 30 June 2022. It shows total gross payments of $205,403 including payments to Mr Thorne of $13,222 and payments to Mrs Thorne of $14,780. Mr Thorne also provided a profit and loss statement for [Business 1] for the six months ended 31 December 2022. It shows total trading income of $314,235 and costs of goods sold of $98,140, leaving a gross profit of $216,094. After accounting for total operating expenses of $215,725 [Business 1] made a profit of $367 in the six-month period. Of total operating expenses the Tribunal notes an amount of $92,550 for bad debts.
In his written submission to the Tribunal Mr Thorne said the amount for bad debts was made up of a $50,000 shift payment arising from the liquidation of [Business 2A] as well as invoices written off following the collapse of builders [named]. Mr Thorne explained to the Tribunal that he had been forced to redraw on his mortgage an amount of $50,000 to cover this debt and use $40,000 in personal savings to meet the remainder.
Mr Thorne also provided the Tribunal with a Statement of Financial Circumstances received on 2 September 2022. Mr Thorne states his total average weekly expenditure is $1,224 including $507 for mortgage repayments and $270 for food. There are no motor vehicle or telephone expenses listed. Mr Thorne has no personal expenditure. He declares total assets of approximately $683,000 including the family home valued at $650,000, $20,000 in household contents and a boat worth $13,000. Mr Thorne declares total liabilities of $369,335 which is the mortgage on the family home. He has superannuation of $132,013.
The Tribunal finds that Mr Thorne had a taxable income in 2021-22 of $13,222. The Tribunal is not satisfied, however, that Mr Thorne’s true income and financial resources are accurately reflected by his taxable income alone.
While the Tribunal accepts his [service 1] business struggled financially for a period, it is clear, based on the evidence available, that [Business 1] has now returned to profitable operations. The Tribunal also acknowledges the additional financial difficulties Mr Thorne experienced following the demise of [Business 2A] in which he was a shareholder.
The company tax return shows [Business 1] made a taxable income of $0 in 2021-22, however, this includes tax losses of $73,862 from a prior financial year. While a legitimate deduction for tax reasons, these losses may be ignored for the purposes of child support as they represent a loss on paper for that financial year rather than a loss that has actually been incurred. There are also certain advantages in being self-employed which are not generally available to salary and wage earners. Such advantages may include being able to write off personal expenses against the business, reducing personal tax liability as a result of the way the business is structured and being able to claim business expenses which offer a parent some personal gain.
While this, again, may be quite legitimate for tax purposes, the Family Court has found that such practices may not properly reflect the true financial resources or capacity of a person to contribute to the financial support of their children and may therefore be ignored. For example, in Voss & Child Support Registrar & Anor (SSAT Appeal) [2009] FMCAfam 1296, the Court commented on the common situation of a self-employed person’s taxable income not corresponding with their income or financial resources for child support purposes:
There is a body of cases where simple reference to a person's tax return does not provide an appropriate quantification of their capacity to provide financial support. Most commonly this occurs in cases involving the self-employed, where it is well accepted that legal structures and arrangements may generate taxable income that doesn't properly reflect the realistic capacity of the person to provide financial support for their children.
In such cases, assessing child support on the basis of taxable income only can result in an unjust and inequitable level of child support.
In addition to his taxable income Mr Thorne is the sole director and shareholder of [Business 1]. The Tribunal considers the actual business profit to be a financial resource available to Mr Thorne for the purposes of child support. The Tribunal is also satisfied Mr Thorne is meeting some of his personal costs through his business, for example, motor vehicle and telephone expenses.
The Tribunal finds Mr Thorne had access to income, property and financial resources equivalent to a person with an adjusted taxable income of approximately $92,084 in 2021-22. The Tribunal has calculated this figure by adding to his taxable income the amount of $73,862 representing the actual profit of the business excluding prior losses and a modest sum of $5,000 for personal motor vehicle and telephone expenses met by the business.
The Tribunal is satisfied that $92,084 represents a fair level of income and financial resources available to Mr Thorne in 2021-22.
Mr Thorne has told the Tribunal that he started paying himself a salary of $500 per week from November 2022. This would equate to an amount of approximately $17,000 per annum if annualised across the 2022-23 financial year. According to the financial statements provided by Mr Thorne, [Business 1] also made a small profit of $369 in the first half of 2022-23 despite the significant bad debts totalling $92,550.
Bad debts are not a recurring expense in the same way as many other expenses. If [Business 1] continues to perform well in the second half of the financial year, as Mr Thorne has indicated, the business is on-track to make at least a similar profit in 2022-23 as it did in 2021-22 and possibly more. Mr Thorne also receives the ongoing benefit of the business meeting his motor vehicle and telephone costs.
The Tribunal is satisfied that $92,084 is also a fair representation of the income, property and financial resources available to Mr Thorne in 2022-23 and going forward.

The administrative assessment in place at the time Mrs Grewcock made her application for a change of assessment on 29 November 2021 was based on a 2020-21 adjusted taxable income for Mr Thorne of $64,941. The Tribunal notes that Mr Thorne is currently being assessed on an estimated income of $0. The Tribunal has found, however, that Mr Thorne has access to income, property and financial resources equivalent to a person with an adjusted taxable income of approximately $92,084. When this amount is applied in the child support formula, the annual rate of child support payable by Mr Thorne would be approximately $7,913.
The Tribunal finds this to be significantly more than his liability under the administrative assessment. The Tribunal is satisfied that special circumstances exist and the application of the administrative assessment of child support would result in an unjust and inequitable determination of child support to be provided by Mr Thorne. On this basis the Tribunal finds there is a ground for departure from the administrative assessment.

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

As the Tribunal finds 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 Act. This in turn requires the Tribunal to consider the matters discussed below,[1] which are as set out in subsection 117(4) of the Act:
[1] The Tribunal is required to give “overt consideration” to relevant factors listed in subsection 117(4) of the Act: Tyagi & Meares(SSAT Appeal) [2008] FMCAfam 886.
(4)In determining whether it would be just and equitable as regards the child, the carer entitled to child support and the liable parent to make a particular order under this Division, the court must have regard to:
(a)the nature of the duty of a parent to maintain a child (as stated in section 3); and
(b)the proper needs of the child; and
(c)the income, earning capacity, property and financial resources of the child; and
(d)the income, property and financial resources of each parent who is a party to the proceeding; and
(da) the earning capacity of each parent who is a party to the proceeding; and
(e)the commitments of each parent who is a party to the proceeding that are necessary to enable the parent to support:
(i)himself or herself; or
(ii)any other child or another person that the person has a duty to maintain; and
(f)the direct and indirect costs incurred by the carer entitled to child support in providing care for the child; and
(g)any hardship that would be caused:
(i)to:
(A)the child; or
(B)the carer entitled to child support;
by the making of, or the refusal to make, the order; and
(ii)to:
(A)the liable parent; or
(B)any other child or another person that the liable parent has a duty to support;
by the making of, or the refusal to make, the order; and
(iii)to any resident child of the parent (see subsection (10)) by the making of, or the refusal to make, the order.

The nature of the duty of a parent to maintain a child

Section 3 of the Act states that it is the primary duty of a parent to maintain the child and this has priority over nearly all other commitments.
In this case the parents have a duty to support [Child 1]. Mr Thorne also has [number] relevant dependent children. The Tribunal will take this into account under subparagraph 117(4)(e)(ii) of the Act when making its assessment.

The proper needs of the child

In relation to the proper needs of the child, regard must be had 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 (subsection 117(6) of the Act).
Mrs Grewcock told the Tribunal that [Child 1] had special needs. She said [Child 1] had required braces and the work was undertaken by an orthodontist commencing on 18 January 2022. Mrs Grewcock said the cost was $7,000 and as she only had singles private health cover she was required to meet the full cost under a payment plan agreed to by the orthodontist. Mrs Grewcock added that she had taken on additional shifts as well as utilised her savings to meet this cost and to date Mr Thorne had not contributed.
The Tribunal notes in evidence from Child Support a treatment quote from orthodontist [Doctor A] dated 8 November 2021 relating to the requirement for orthodontics for [Child 1]. The total costs as outlined is $7,000 with the initial fee of $1,510 and the balance of $5,490 due in instalments of approximately $366 per month over 15 months.
Mrs Grewcock said she was fortunate the orthodontist had allowed her to make payments over time that suited her budgetary constraints.
The Tribunal notes in evidence from Child Support a copy of a receipt showing Mrs Grewcock made a payment to [Doctor A] of $1,510 on 19 January 2022. In response to directions Mrs Grewcock also provided the Tribunal with evidence of additional electronic transfers made to [Doctor A] for the cost of [Child 1’s] braces. This shows a payment of $800 made on 5 February 2022 and regular ongoing payments of varying amounts.
Mr Thorne told the Tribunal he did not believe the orthodontic work was necessary and, in any case, the costs should be met by his existing child support payments. Mr Thorne pointed out that when Mrs Grewcock approached him about sharing the cost of the orthodontics he was not paying himself a wage due to the uncertain state of his business. Mr Thorne said he could not afford to make a contribution towards the orthodontics.
The term ‘special needs’ is not defined in the legislation. Generally, the Tribunal must be satisfied that the needs of the child relate to a condition or disability that is out of the ordinary. These special needs can be because of a physical, mental or learning disability or because of a special talent or ability of the child.[2]
[2] Lightfoot v Hampson [1996] FLC 92-663)
The Tribunal is satisfied, based on the evidence provided, that [Child 1] has special needs in relation to her requirement for braces.
The total net cost to Mrs Grewcock of orthodontics for [Child 1] was $7,000. The Tribunal will consider the cost of meeting these special needs when determining a just and equitable outcome.
The Tribunal finds that, apart from the extra costs identified, it is appropriate to otherwise calculate the costs of [Child 1’s] needs by reference to the Costs of the Children Table (provided for in section 155 of the Act).

The income, earning capacity, property and financial resources of the child

The Tribunal is satisfied that [Child 1] has no income, earning capacity, property and financial resources which should be taken into account for the purpose of child support.

The income, property, financial resources and earning capacity of each parent

The Tribunal has already considered in detail the income, property and financial resources of both parents.
The Tribunal is satisfied that the earning capacity criteria (set out in subsection 117(7B) of the Act) are not met for either parent in this case.

Any hardship that would be caused

Mrs Grewcock is on a modest income and relies on child support to help meet expenses for [Child 1]. The Tribunal had found Mrs Grewcock had an adjusted taxable income of $65,540 in 2021-22. Her average household expenses total $72,852 per annum although this includes the full cost of braces for [Child 1]. Mrs Grewcock declares total personal expenditure of $14,560 per annum. Mrs Grewcock told the Tribunal she worked hard to meet her living costs and had very little left. She said her family was also helping out financially.
Mr Thorne is self-employed and the Tribunal has found he has access to income, property and financial resources for the purposes of child support of approximately $92,084 per annum. Mr Thorne declares total estimated household expenditure of approximately $63,687 per annum and has no personal expenditure. Mr Thorne told the Tribunal he had little in the way of savings and was struggling financially. Mr Thorne said he had been meeting his living costs with the assistance of family.
The Tribunal is limited to making a determination in respect of a day in a period that is not more than 18 months prior to the date the change of assessment application was made (paragraph 98S(3B)(a) of the Act). The Tribunal must decide whether or not it is just and equitable to backdate the determination.
Mrs Grewcock applied for a change of assessment on 29 November 2021. The Tribunal finds it just and equitable to commence the departure determination from 29 November 2021 and not from an earlier date.
Having considered the interests of both parents the Tribunal proposes to make the following determination:
· for the period from 29 November 2021 to 30 September 2024 the adjusted taxable income of Mr Thorne is varied to $92,084; and
· for the period from 1 February 2022 to 30 April 2023 the annual rate of child support payable by Mr Thorne is increased by $2,800.
The administrative assessment in place at the time the change of assessment process commenced was based on an adjusted taxable income of $64,941 for Mr Thorne. As previously calculated, when using the income determined by the Tribunal for Mr Thorne of $92,084, the annual level of child support he is liable to pay increases to approximately $7,913. The Tribunal has varied the income of Mr Thorne until 30 September 2024 which provides the parents with some certainty about the level of child support for [Child 1]. Given Mr Thorne is self-employed this will also allow time to determine the ongoing performance of his [service 1] business as it continues to recover and profit further improves.
The Tribunal has also varied the income of Mr Thorne to take account of the cost of orthodontics for [Child 1]. The total costs to Mrs Grewcock was $7,000 and the Tribunal finds it reasonable that Mr Thorne meet an equal share of this expense. As Mrs Grewcock is making repayments over a 15-month period the Tribunal considers it fair that Mr Thorne meet his 50 per cent share across the same timeframe commencing from 1 February 2022, being the first full month after the orthodontic treatment commenced. The annual rate of child support otherwise payable by Mr Thorne has been increased by $2,800 until 30 April 2023, meaning he will effectively pay an additional $3,500 over the 15 months.
Under the decision of the Tribunal the combined annual amount of child support and orthodontic costs payable by Mr Thorne will be approximately $10,713 from 1 February 2022. This will obviously fall from 1 May 2023 once Mr Thorne has met his share of the orthodontic costs.
Whilst commencing the decision from 29 November 2021 will create some arrears for Mr Thorne the Tribunal is satisfied he has the financial resources to meet this obligation. The Tribunal is also conscious that Mr Thorne was likely under-assessed for a period when his lower 2021-22 adjusted taxable income was being used in the administrative assessment.
The Tribunal is satisfied the proposed determination will not cause hardship to Mrs Grewcock, Mr Thorne or [Child 1] and is just and equitable.

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

The third step is to consider whether it would be otherwise proper to make a particular departure determination in accordance with sub-subparagraph 98C(1)(b)(ii)(B) of the Act. Subsection 117(5) sets out the matters that must be considered when deciding whether it would be otherwise proper to make a departure determination. It focuses on the balance of support carried between the parents on one hand and the taxpayer on the other. It is appropriate for the children to be primarily supported by their parents rather than by government assistance. The Tribunal must consider whether the level of a benefit, in particular family tax benefit, received by the party caring for the children may be affected by the level of child support.
Mrs Grewcock is not 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 that:

for the period from 29 November 2021 to 30 September 2024 the adjusted taxable income of Mr Thorne is varied to $92,084; and
for the period from 1 February 2022 to 30 April 2023 the annual rate of child support payable by Mr Thorne is increased by $2,800.

[2023] AATA 1650

4 May 2023

Key Legal Topics

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Family Law

Administrative Law

Legal Concepts

Jurisdiction

Remedies

Judicial Review

Statutory Construction