Guadarama and Wanburg (Child support) - [2024] AATA 3817

Guadarama and Wanburg (Child support) [2024] AATA 3817 (3 September 2024)

DIVISION:Social Services & Child Support Division
REVIEW NUMBER:  2024/PC027741
APPLICANT:  Mr Guadarama
OTHER PARTIES:  Child Support Registrar
Ms Wanburg

TRIBUNAL:Senior Member R Ellis
DECISION DATE: 03 September 2024
DECISION:

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

for the period from 14 August 2023 to 30 June 2024 the adjusted taxable income of [Mr Guadarama] is varied to $99,132; and
for the period from 1 July 2024 to 30 November 2024 the annual rate of child support payable by [Mr Guadarama] shall be fixed at $5,160.

CATCHWORDS

CHILD SUPPORT – departure determination – special circumstances – parents’ income and financial resources – earning capacity – commencement of new business – 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.
Mr Guadarama and Ms Wanburg are the parents of [Child 1] (born September 2008), [Child 2] (born August 2014) and [Child 3] (born December 2016). There has been a child support assessment in place since 19 December 2018 and [Mr Guadarama] is currently the liable parent under the assessment.
The following administrative assessments of child support are under consideration:
· for the period from 1 July 2023 to 31 August 2023 [Mr Guadarama] was assessed to pay an annual rate of $12,606 based on a 2021-22 adjusted taxable income of $70,490 for [Mr Guadarama] and a 2021-22 adjusted taxable income for Ms Wanburg of $59,838; and
· for the period from 1 September 2023 to 30 November 2024 [Mr Guadarama] is assessed to pay an annual rate of $4,896 (fixed annual rate) based on a 2022-23 adjusted taxable income of $16,268 for [Mr Guadarama] and a 2022-23 adjusted taxable income for Ms Wanburg of $75,108.
On 14 August 2023 Ms Wanburg applied to Services Australia – Child Support (Child Support) for a change to the assessment on the basis of a parent’s income, property and financial resources (the ground commonly known as Reason 8A).
On 8 December 2023 Child Support made the decision to change the assessment so that for the period from 14 August 2023 to 30 November 2024, the adjusted taxable income of [Mr Guadarama] is set at $85,000 (the original decision).
On 6 January 2024 [Mr Guadarama] objected to this decision and on 21 March 2024 Child Support allowed the objection in part and made the decision to change the assessment so that for the period from 14 August 2023 to 31 December 2024, the adjusted taxable income of [Mr Guadarama] is set at $118,744 (the objection decision).
On 2 April 2024 [Mr Guadarama] applied for a review of the objection decision by the Administrative Appeals Tribunal (the Tribunal).
A directions hearing was held on 9 July 2024. [Mr Guadarama] and Ms Wanburg 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 (381 pages).
[Mr Guadarama] and Ms Wanburg were directed to provide further information and both complied to the satisfaction of the Tribunal.
A hearing was held on 3 September 2024. [Mr Guadarama] and Ms Wanburg gave evidence on affirmation by Microsoft Teams audio. Prior to the hearing the Tribunal received documents folioed A1 to A79 from [Mr Guadarama] and B1 to B15 from Ms Wanburg and these were distributed to the parties. Additional documents were also received from Child Support (pages 382–417).
At the directions hearing and at the commencement of the hearing the Tribunal sought clarification from [Mr Guadarama] and Ms Wanburg as to the reasons for their concerns.
[Mr Guadarama] said Child Support had used a different method to determine his income in comparison to the income of Ms Wanburg, which he felt was unfair. [Mr Guadarama] said he also disagreed with the level of income calculated for him by Child Support, which was far more than he was earning. Ms Wanburg said she was broadly satisfied with the decision made by Child Support and did not contest the outcome.

ISSUES

The statutory provisions relevant to this review are contained in the Child Support (Assessment) Act 1989 (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 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

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).
[Mr Guadarama] told the Tribunal he was currently running his own [service 1] business as a sole trader having recently left employment at [Employer 1], which was a subsidiary of [Employer 1a]. [Mr Guadarama] said his [service 1] business was called [Business 1] and commenced operating under an existing ABN in late 2022. [Mr Guadarama] pointed out that he had previously run a [different type of] business under this ABN but changed the name when he began [Business 1]. He said [that business] had been closed for many years.
The Tribunal notes that a search using the Australian Business Register ABN Lookup shows the business name [Business 1] was registered from 19 January 2023[1]. Prior to this, the business operating under the same ABN was known as [Business 2] and was registered from [February] 2012.
[1] [Source deleted].
[Mr Guadarama] said as [Business 1] had not been operating long and had significant startup expenses, it initially made a loss. [Mr Guadarama] said he did not prepare financial statements for the business but instead sent his accountant all relevant information relating to income and expenditure. [Mr Guadarama] informed the Tribunal that now he was no longer working full time he would be able to concentrate more on growing the business but was restricted due to a back injury. [Mr Guadarama] explained this was why he had left [Employer 1]. [Mr Guadarama] said, nonetheless, he expected [Business 1] to generate income of approximately $4,000 a month in the current financial year. He added that, after expenses, he anticipated net income of approximately $30,000 per annum.
In response to directions, [Mr Guadarama] provided the Tribunal with Business Activity Statements (BAS) for the business for 2023-24. These show sales growing in each quarter to $10,862 for the period from April 2024 to June 2024.
[Mr Guadarama] told the Tribunal he had been working at [Employer 1] as an [occupation 1] and running his owns business on weekends but this was not sustainable. [Mr Guadarama] said after less than a year with [Employer 1], he left the company on 3 June 2024. [Mr Guadarama] said prior to this he was working in a similar role for [Employer 2].
In response to directions, [Mr Guadarama] provided the Tribunal with a copy of his 2023-24 individual tax return. It shows income from two employers totalling $108,110, allowances of $208, gross interest of $1,022 and a net loss from his business, [Business 1], of $8,094. This amounts to $101,246. After allowing for work-related and other deductions totalling $3,205, [Mr Guadarama] had a taxable income of $98,041 in 2023-24.
The tax return also sets out the financial information for his business [Business 1], showing total income of $20,635 and total expenses of $28,729 leaving the net loss from his business activities of $8,094. Expenses for the business include depreciation expenses of $1,091, motor vehicle expenses of $6,594 and all other expenses of $21,044. [Mr Guadarama] said he owned a separate motor vehicle for private use and any expenses for his work ute, a [brand 1], were business related. [Mr Guadarama] added that all other expenses included tools, insurances, various licensing fees and stock such as [stock example].
In response to directions, [Mr Guadarama] provided employment separation certificates relating to his employment at [Employer 1a] and [Employer 2]. These show that [Mr Guadarama] started working for [Employer 2] on 20 February 2023 and ceased on 26 July 2023. [Mr Guadarama] then started working for [Employer 1a] on 1 August 2023 and ceased on 3 June 2024. Both separation certificates confirm he resigned voluntarily.
[Mr Guadarama] also provided the Tribunal with a Statement of Financial Circumstances, received on 15 April 2024. [Mr Guadarama] states his total average weekly expenditure is approximately $1,179, including $550 for rent, $34 for education expenses and $60 for other necessary commitments. [Mr Guadarama] acknowledged his education costs and a portion of the other costs would not be ongoing. [Mr Guadarama] declares personal expenditure of $987 per week, including income tax of $638, child support of $317 and health insurance premiums of $32. He has assets valued at $56,000 and lists total liabilities of $12,811. [Mr Guadarama] has superannuation of $35,471. [Mr Guadarama] said his rent had recently increased to $600 per week.
[Mr Guadarama] is running his own [service 1] business as a sole trader and his individual tax return indicates that in 2023-24 it operated at a loss. This is not unexpected for a business in the early stages of growth. [Mr Guadarama] was also working full-time as an [occupation 1] but resigned on 3 June 2024. [Mr Guadarama] has explained that he expects [Business 1] will make a small profit in the current financial year, especially as he has more time to focus on the business.
The Tribunal finds that [Mr Guadarama] had a taxable income of $98,041 in 2023-24. While [Mr Guadarama] has legitimate expenses in the operation of his business, the Tribunal is of the view this should not preclude a fair outcome in relation to the provision of child support. The Family Court has held that in circumstances where a parent is self-employed, it can be appropriate to look behind their taxable income. 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 his or her 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.
The Tribunal accepts that [Mr Guadarama’s] business expenses are genuine and provide no significant personal benefit to him. The Tribunal would nonetheless expect that in any future review of his income [Mr Guadarama] should be able to provide financial statements for [Business 1]. Costs such as depreciation, however, are a legitimate expense for taxation purposes but are not an actual expense incurred until such time as the equipment depreciated is replaced. In many instances, the cash flow effect of a claim for depreciation is not matched by actual capital expenditure in the same year.
The Tribunal finds that [Mr Guadarama] would be more fairly assessed as if he had access to income, property and financial resources of approximately $99,132 in 2023-24. This includes his taxable income and the amount claimed for depreciation for his business.
As [Mr Guadarama] is no longer working full-time as an [occupation 1] and is only running his business, this will be his only source of income. [Mr Guadarama] has explained he expects that, after costs, [Business 1] will generate approximately $30,000 in the current financial year. This appears reasonable given the revenue figures for the final quarter of 2023-24 in the BAS statements for [Business 1] provided by [Mr Guadarama].
The Tribunal is satisfied that, going forward, [Mr Guadarama] will have an income of approximately $30,000.
The Tribunal also considered the income, property and financial resources of Ms Wanburg.
Ms Wanburg told the Tribunal she was currently working as [an occupation 2] at [Employer 3] and had been for nearly six years. Ms Wanburg said her income had increased in the past two years as she was working more overtime, however, her capacity to keep doing so was limited by her caring responsibilities. Ms Wanburg added that she expected her income would now remain stable.
In response to directions, Ms Wanburg provided the Tribunal with a copy of her Australian Taxation Office notice of assessment for 2023-24. It shows an adjusted taxable income of $81,857. The Tribunal notes in evidence from Child Support that Ms Wanburg had an adjusted taxable income of $75,108 in 2022-23.
Ms Wanburg also provided the Tribunal with a Statement of Financial Circumstances, received on 22 April 2024. Ms Wanburg lists total weekly household expenditure of $1,990, including rent of $495 and children’s activities of $400. She pointed out that she had recently purchased a home and the mortgage was slightly higher than her rent. Ms Wanburg said the children’s expenses included [specified activities and] classes. She has total personal expenditure of $620 per week. Ms Wanburg declares total assets valued at $552,400, including her home valued at $500,000 and a [brand 1] motor vehicle worth $45,000. Her liabilities comprised of a home loan and motor vehicle finance, totalling $410,000. Ms Wanburg has superannuation of approximately $55,535.
Ms Wanburg is currently assessed on her 2022-23 adjusted taxable income of $75,108. The Tribunal is satisfied that Ms Wanburg is fairly assessed under the usual administrative process.
The administrative assessment in place at the time Ms Wanburg made her application for a change of assessment on 14 August 2023 was based on a 2021-22 adjusted taxable income of $70,490 for [Mr Guadarama]. [Mr Guadarama] is currently assessed on his 2022-23 adjusted taxable income of $16,268. The Tribunal has found that [Mr Guadarama] would be more fairly assessed as if he had an adjusted taxable income of approximately $99,132 in 2023-24. When this amount is applied in the child support formula, the annual rate of child support payable by [Mr Guadarama] would be approximately $20,635.
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 Guadarama].
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 or not it is just and equitable as regards the children, 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,[2] which are as set out in subsection 117(4) of the Act:
[2] 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 (as stated in section 3 of the Act)

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], [Child 2] and [Child 3].

The Tribunal was not made aware that either parent has a legal responsibility to any other child or person.

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).
The Tribunal was not made aware that the parents expected [Child 1], [Child 2] and [Child 3] to be cared for, educated or trained in a particular way or that they had any special needs. The Tribunal is satisfied it is therefore appropriate to calculate the costs of their needs by reference to the Costs of the Children Table (provided for in Schedule 1 to the Act).

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

The Tribunal is satisfied the children have no income, earning capacity, property and financial resources that 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.
[Mr Guadarama] voluntarily resigned from employment at [Employer 1a] on 3 June 2024 and his income has fallen considerably. In order to establish that [Mr Guadarama’s] earning capacity might be greater than that reflected in the child support assessment and render the assessment unfair, all three compulsory criteria set out in subsection 117(7B) of the Act must be satisfied. Those three criteria are:
(a)    one or more of the following applies:
·the parent does not work despite ample opportunity to do so (subparagraph 117(7B)(a)(i));
·the parent has reduced the number of hours per week of their employment or other work below the normal number of hours per week that constitutes full-time work for the occupation or industry in which the parent is employed or otherwise engaged (subparagraph 117(7B)(a)(ii));
·the parent has changed their occupation, industry or working pattern (subparagraph 117(7B)(a)(iii)); and
(b)    the parent’s decision not to work, to reduce the number of hours, or to change their occupation, industry or working pattern is not justified on the basis of:
·the parent’s caring responsibilities (subparagraph 117(7B)(b)(i)); or
·the parent’s state of health (subparagraph 117(7B)(b)(ii)); and
(c)    the parent has not demonstrated that it was not a major purpose of that decision to affect the administrative assessment of child support in relation to the child (paragraph 117(7B)(c)).
[Mr Guadarama] has explained that he left his role at [Employer 1a] primarily because of a back injury, which was playing up due to overwork. [Mr Guadarama] said the pressure of working for [Employer 1a] and running his business after hours was too much and had aggravated the injury. [Mr Guadarama] added it was likely he would seek a casual role with a new employer once his back had improved. [Mr Guadarama] said, in the meantime, he would continue to run his business.
In response to directions, [Mr Guadarama] provided the Tribunal with a medical certificate from his GP dated 31 May 2024. It states that [Mr Guadarama] is unfit for normal duties from 31 May 2024 to 14 June 2024. [Mr Guadarama] also provided a referral from his GP dated 31 May 2024 for an opinion from a neurosurgeon in relation to back pain commencing in March/April 2024. A radiological report prepared on 12 August 2024 arising from an MRI requested by the neurosurgeon states that [Mr Guadarama] has “Moderately sever central spinal canal stenosis at L4/5 due to annulus bulging with partial accompanying endplate spurring and a superimposed 5.5 mm central disc extrusion…”. The subsequent opinion from the neurosurgeon dated 15 August 2024 indicates that surgery “at this point” is not required and the “best treatment is still exercise and fitness”.
[Mr Guadarama] is working in his own business but in leaving [Employer 1a] he has changed his working pattern as he is now only self-employed. The first criterion is, therefore, met. The Tribunal notes that neither his neurosurgeon nor his GP recommended that [Mr Guadarama] cease working altogether. The Tribunal is satisfied, however, that resigning from [Employer 1a] to concentrate on his business does enable [Mr Guadarama] to dictate his own hours and afford him more time to allow his back to improve. The Tribunal finds, based on the medical evidence, the decision [Mr Guadarama] made to resign from full-time employment can be justified by his state of health. In reaching this decision, the Tribunal was also swayed by the reference [Mr Guadarama] made to finding casual employment when he recovered from his back injury.
As all three criteria must be satisfied, it follows that if one is not satisfied, then this ground cannot be considered. The Tribunal finds that the earning capacity criteria (set out in subsection 117(7B) of the Act) are not met for [Mr Guadarama] in this case.
The Tribunal is also satisfied the earning capacity criteria are not met in relation to Ms Wanburg.

Any hardship that would be caused

The Tribunal has found that [Mr Guadarama] would be more fairly assessed as if he had an adjusted taxable income of approximately $99,132 in 2023-24. [Mr Guadarama] is now self-employed and this amount will fall to approximately $30,000 from 1 July 2024 in line with his expectations of the net revenue generated by his business.
[Mr Guadarama] lists total estimated household expenditure of approximately $61,308 per annum, although this includes some expenditure that he acknowledges is not ongoing. The Tribunal notes of this $61,308, an amount of approximately $3,161 relates to costs which would be met by the business, however, this saving would be partially offset by the increase in his rent. His annual personal expenditure amounts to $51,324, including income tax of $33,176 and child support of $16,484. His income tax will fall commensurate with the decline in his income.
[Mr Guadarama] was uncertain how he would meet his ongoing living expenses given his lower income. [Mr Guadarama] said he would be forced to live more cheaply and could rely on his partner to help support him for a short period until his back recovered. [Mr Guadarama] reiterated that he would need to find causal work as an [occupation 1] while building his business.
Ms Wanburg is working full-time and her adjusted taxable income was $81,857 in 2023-24. Ms Wanburg has informed the Tribunal she was earning more due to the amount of overtime she was working but this was not sustainable given her caring responsibilities. Ms Wanburg is also in receipt of family tax benefit although this is not taken into account for child support purposes. Her total estimated household expenditure is $103,480 and her personal expenditure is $32,240. Ms Wanburg said she relied on child support from [Mr Guadarama] to help meet the children’s expenses and her parents assisted in this regard when they could. Ms Wanburg pointed out she was currently surviving on no more than five hours sleep a night given the overtime she was working and the need to take the children to their various activities.
In her application for a change of assessment made on 14 August 2023, Ms Wanburg sought to have a decision start from 1 July 2022. 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.
The Tribunal is of the broad view that retrospectively changing entitlements should be avoided without compelling reasons. The parents have a right to rely upon the assessment in place at the time. The Tribunal finds it just and equitable to commence its determination from 14 August 2023, which balances the interests of both parents. In doing so, the Tribunal notes that in considering a previous change of assessment application lodged by Ms Wanburg on 18 November 2022, Child Support refused the application as a ground for departure from the administrative assessment was not established.
The Tribunal proposes to make the following determination:
· for the period from 14 August 2023 to 30 June 2024, the adjusted taxable income of [Mr Guadarama] is varied to $99,132; and
· for the period from 1 July 2024 to 30 November 2024, the annual rate of child support payable by [Mr Guadarama] shall be fixed at $5,160.
Under the decision of the Tribunal, the annual rate of child support payable by [Mr Guadarama] from 14 August 2023 will be approximately $20,655. This will create some arrears for [Mr Guadarama] when compared to the administrative assessment, however the Tribunal finds this to be fair in light of the income he was earning during this period. From 1 July 2024 the Tribunal has determined an annual rate payable by [Mr Guadarama] of $5,160, which is equivalent to the current fixed annual rate of child support for three children. The fixed annual rate is usually payable by parents with a low adjusted taxable income or estimated income who did not receive income support payments during the last relevant year of income. As there is a degree of doubt around the income [Mr Guadarama] will generate from his business and [Mr Guadarama] has also indicated it is likely he will find casual employment in the current financial year, the Tribunal considers this to be just and equitable. The Tribunal is also conscious that under the child support scheme parents have a duty to maintain the child and this takes priority over all commitments apart from necessary commitments of self-support.
The Tribunal has ended its determination on 30 November 2024. By this time, it should be clearer what [Mr Guadarama] is earning from his business and he may well have taken on further casual employment. At this point, [Mr Guadarama] may wish to consider submitting an estimate of his income, otherwise the assessment will revert to his last relevant year of income, being his 2023-24 adjusted taxable income of $98,041. In taking this approach, the Tribunal also seeks to provide the parents with some certainty about the level of child support for [Child 1], [Child 2] and [Child 3] while not being so far into the future as to render the decision out of touch with [Mr Guadarama’s] financial circumstances.
There may be some hardship arising to [Mr Guadarama] from 1 July 2024 as a result of the determination made by the Tribunal, however, this must be balanced against the needs of Ms Wanburg and the children. The Tribunal is satisfied [Mr Guadarama] will be able to arrange his finances during this short period in order to minimise any hardship.
The Tribunal finds the proposed determination will not cause hardship to Ms Wanburg or the children and is otherwise 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.
Ms Wanburg is in receipt of family tax benefit for the children. 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 14 August 2023 to 30 June 2024 the adjusted taxable income of [Mr Guadarama] is varied to $99,132; and
for the period from 1 July 2024 to 30 November 2024 the annual rate of child support payable by [Mr Guadarama] shall be fixed at $5,160.