Hachem and Romaquera (Child support)
[2025] ARTA 1113
•2 May 2025
Hachem and Romaquera (Child support) [2025] ARTA 1113 (2 May 2025)
Applicant/s: Ms Hachem
Respondent: Child Support Registrar
Other Parties: Mr Romaguera
Tribunal Number: 2024/PC028519
Tribunal: General Member M Martellotta
Place:Perth
Date:02 May 2025
Decision:The Tribunal affirms the decision under review.
CATCHWORDS
CHILD SUPPORT – departure determination – dismissal request – grounds to depart not established – income, property and financial resources – family trust – inheritance – costs of education – ground for departure established – special needs – special circumstances – duty to maintain the children – another relevant dependent child – NDIS funding – not just and equitable to make a departure determination – no financial capacity to make contribution toward the special needs – decision under review affirmed
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 pursuant to subsection 16(2AB) of the Child Support (Registration and Collection) Act 1988.
Statement of Reasons
BACKGROUND
The applicant and the second party are the parents of two children. [Child A] (born [date]) and [Child B] (born [date]). According to Services Australia (Child Support) the children are in the above primary care (100% care) of the applicant.
The child support case was registered on 10 May 2016 and Child Support collects on behalf of the applicant.
Child Support records reflect that the following assessments were in place, for the period:
a)26 July 2022–31 January 2023 the second party was assessed to pay the minimum annual rate of $446. This was based on the second party’s 2020/21 adjusted taxable income of $20,194 (ATI) and the applicant’s 2020/21 ATI of $50,494.
b)1 February 2023–31 December 2023 the second party was assessed to pay the minimum annual rate of $493. This was based on the second party’s 2021/22 ATI of $14,931 and the applicant’s 2021/22 ATI of $41,725.
c)1 January 2024–31 March 2024 the second party was assessed to pay the minimum annual rate of $519. This was based on the second party’s 2022/23 ATI of $18,901 and the applicant’s 2022/23 ATI of $16,345.
The applicant applied for a change of assessment on 30 November 2023. She raised as grounds reason 3 (costs of education) and reason 8A (the other parent’s income, property and financial resources).
A decision-maker on 19 April 2024 decided the ground of reason 8A was established and departed from the assessment so that for the period 14 February 2024 to 31 December 2025 the second party’s ATI was increased by $27,000. The impact being that the annual rate of child support payable by the liable parent (the second party) was $3,747 per annum.[1]
[1] Page 245
The applicant and the second party each objected to that decision. An objections officer by decision dated 13 August 2024 concluded that whilst a ground to depart was established pursuant to reason 8A – it was not just or equitable to depart from the administrative assessment.
The applicant applied to the Tribunal on 4 September 2024 seeking review of the Child Support decision.
From 14 October 2024, the Administrative Appeals Tribunal (AAT) became the Administrative Review Tribunal (the Tribunal). Under the transitional provisions in the Administrative Review Tribunal (Consequential and Transitional Provisions No. 1) Act 2024 (the Transitional Act), applications for review to the AAT that were not finalised before 14 October 2024 are taken to be an application for review to the Tribunal. The Transitional Act gives the Tribunal the authority to continue and finalise any aspect of the review not already completed by the AAT. This decision and statement of reasons is made by the Tribunal.
Requests that the application be dismissed, and other matters raised by the parties
On 22 December 2024 the second party made written submissions that the applicant’s application for review be dismissed because he asserted it was brought with vexatious intent, his financial circumstances had already been reviewed and verified by Services Australia, and the application lacked merit or substantive grounds and was a misuse of Tribunal resources. The second party referenced subsection 101(1) of the Administrative Review Tribunal Act 2024 (ART Act). That provision provides a discretion to dismiss an application at any time if the Tribunal is satisfied that the application is:
a)frivolous, vexatious, misconceived or lacking in substance,
b)has no reasonable prospects of success or
c)was otherwise an abuse of the process of the Tribunal.
The Tribunal convened a telephone direction hearing on 12 February 2025. The applicant and the second party participated at that hearing.
At the directions hearing, the Tribunal addressed the second party’s request that the application be dismissed. The Tribunal refused the request and explained that it’s reasons would be addressed in its statement of decision.
The Tribunal issued Directions dated 12 February 2025 requiring the parties provide further information and materials.
Following exchange of materials provided in response to the Directions the second party made further written submissions seeking dismissal of the application. The second party also made written submissions objecting to materials provided by the applicant and sought the Tribunal strike from the record aspects of the applicant’s submissions and materials and formally caution the applicant.[2] The applicant in written submissions stated that the second party should be directed to provide further evidence in support of certain claims. The Tribunal notes that these submissions were not provided by the date specified in the Directions and were provided within 14 days of the hearing.[3]
[2] The Tribunal notes that the second party references provisions of the Administrative Appeals Tribunal Act 1975.
[3] ART (Child Support) Practice Directions 2024
The Tribunal observes that both parties have presented extensive written submissions pertaining to the conduct of the other parent. Similar grievances also appear in statements and submissions each have made to Child Support. At hearing the Tribunal reminded the parties of their obligation to assist the Tribunal in achieving the objects of the ART Act and that the Tribunal has discretion in relation to procedure and that it controls the scope of the review.[4] The Tribunal requested both parties limit their written and oral submissions to the issues relevant to the decision under review. The Tribunal also explained that in relation to the additional written materials received, it would only take into consideration those aspects which the Tribunal assessed as relevant to the application for review.
[4] Division 5 Subdivision A – General principles
The Tribunal concluded, having considered the second party’s written submissions and taking into consideration materials which formed part of the application, it was not satisfied that the applicant’s application for review met any of the criteria that would warrant dismissal of her application pursuant to subsection 101(1) of the ART Act. The Tribunal notes decisions which have discussed and set out the principals that should be followed in relation to such applications for dismissal. It is apparent that the power to dismiss on such grounds is to be exercised with caution and it invokes a high threshold for the Tribunal to be satisfied that an application meets any of the matters prescribed in that provision.[5]
[5] ReFilsell and Comcare (2009) 109 ALD 198 decision of DP Jarvis
The hearing proceeded on 2 April 2025. The applicant and the second party both attended by telephone to present their affirmed evidence and to present submissions. The Tribunal issued Directions following the hearing requiring both parties to provide further information in support of evidence presented at hearing. The parties were given the opportunity to provide submissions in relation to additional materials prior to the Tribunal making this decision.
The Tribunal in addition to the evidence and submissions received at hearing also took into consideration the following materials: hearing papers prepared and exchanged by Child Support(1–457) as well as materials provided by the applicant (A1–A351) and materials provided by the second party (B1–B202).
ISSUES
The statutory provisions relevant to this review are contained in the Child Support (Assessment) Act 1989 (the Act).
Child Support legislation is interpreted by Child Support with the aid of the Child Support Guide (the Guide). The Tribunal may be guided by policy but is not bound to follow it.[6] The Federal Court[7] has observed that in the absence of any contrary statutory indication, lawful executive policy enacted to guide the exercise of a statutory power is a relevant factor for the Tribunal to take into account in performing its review task. A lawful approach allows the adoption of appropriate policy as a guide but not so as to control the making of the decision and the Tribunal adopts that approach.
[6] Re Drake and Minister for Immigration and Ethnic Affairs(No 2) (1979) 2 ALD 634
[7] G v MIBP [2018] FCA 1229
The issues for the Tribunal to determine in this case are:
· Does a ground for departure exist? If so,
· Would it be just and equitable as regards the children, the liable parent and the carer entitled to child support to depart from the administrative assessment of child support?
· Is it otherwise proper to make a particular departure determination?
Issue 1 – Is there a ground to depart from the administrative assessment?
The rate of child support payable by a liable parent is usually based on an administrative assessment calculated using the relevant formula under Part 5 of the Act. This involves the application of a statutory formula, which takes into account factors such as the number of children, the age of each child, the level of care provided and the income of each parent. The income used in the calculation has a number of components making up the adjusted taxable income (ATI), which is worked out using section 43 of the Act. The general approach is that the Child Support Registrar (the Registrar) will utilise a parent’s ATI as assessed by the Australian Taxation Office (ATO) for the last relevant year of income.
Part 6A of the Act allows for a departure from an administrative assessment (a process commonly known as a change of assessment). The liable parent or a carer may apply to the Registrar for a determination to depart from the child support administrative assessment under Part 6A of the Act (section 98B). Section 98C of the Act provides that the Registrar may make a determination to depart from the formula assessment and as noted, establishes a three-step process.
The grounds for departure from the administrative assessment are set out in subsection 117(2) of the Act. Only one ground is required in the special circumstances of the case to depart from the administrative assessment and thereby satisfy the requirements of subsection 117(2) of the Act.[8] The Tribunal first considered if a ground to depart is established pursuant to reason 8A.
Reason 8A – income, property and financial resources of the parties
[8] The phrase “special circumstances of the case” is not defined in the Act. However, the Family Court has held that “it is intended to emphasise that the facts of the case must establish something special or out of the ordinary” (Gyselman and Gyselman (1992) FLC 92–279). Likewise, 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”.
Subparagraph 117(2)(c)(ia) of the Act provides a ground for departure exists where, in the special circumstances of the case, application of the provisions of the Act relating to the administrative assessment of child support would result in an unjust and inequitable determination of the level of financial support to be provided by the liable parent for the child because of the income, property and financial resources of either parent.
The applicant
The applicant submits that the second party has access to income and financial resources which are not reflected in the assessment. She asserts that the second party derived income from a business managed by his partner ([Business 1]). She also asserts that the second party has access to financial resources as a result of an inheritance received from his late father.
In written submissions the applicant states that a review of the second party’s bank statements reveals income which exceeds income support payments he receives and also do not reflect funds received from his inheritance.
The applicant submitted that the Tribunal should make a departure which utilises the funds she states the second party received from his inheritance as the basis to determine his ATI for child support purposes.
The applicant’s financial circumstances
The applicant told the Tribunal that she mainly derives her income as a manager of [Business 2] – a role she has undertaken for over [number] years. [Business 2] is a business she operates in partnership with [siblings]. She stated that the business is located on property owned by a family trust of which she and her [siblings] are beneficiaries. The family trust is controlled by a company of which their mother is the sole director and shareholder. She says that the property is encumbered. The business pays rent to the family trust.
In response to questions asked by the Tribunal the applicant stated:
a)She and her [siblings] manage the business. The business also employs [a number of] part-time staff.
b)Her work hours vary as it is dependent upon her childcare responsibilities. There have also been periods when she has not worked at all.
c)She is paid only for the hours that she works (which she estimates to be about 10–15 hours per week) and these appear as drawings from the business bank account.
d)Any profit the business derives is distributed to the partners based on the hours of work they have each undertaken in that financial year. This explains why in one financial year she did not receive any distribution and in other years her distribution was less than the other partners.
e)She does not derive any other personal benefit from the business – as the business does not pay for her personal use of expenses such as telephone or motor vehicle.
f)One of the other business partners (a sibling) mainly deals with the business accounts but the partnership bank account receives income from clients who utilises the service and the business expenses are paid from the same account.
In her Statement of Financial Circumstances (SOFC) the applicant discloses minimal savings (about $363) and no significant assets. She has about $39,500 in superannuation. The applicant stated she and her partner rent a home that is owned by her sister and her sister’s husband.
The applicant provided the tax returns for the partnership for year end 2023 and 2024. In 2022/23 the total business income was $290,000 and total expenses was $229,999 leaving a net profit of $60,612 (A94). In that financial year the net income was distributed between the [other] partners and not the applicant. As noted, the applicant’s evidence was that this was reflective of the hours of work each had undertaken in the business (A99).
In 2023/24 the partnership tax return identifies an increase in business income to $319,688 with total expenses of $240,332 resulting in net income of $79,356 (A104). In that year the applicant’s share of the net income was $13,950.
In 2022/23 the applicant’s individual income tax return reflects her only income was parental leave pay and government payments totalling $16,510. This appears consistent with her evidence as to why she was not allocated a distribution by the partnership in that financial year.[9] The applicant explained that her income in that year was reduced due to child care responsibilities for a newborn child as compared to the previous financial year (2021/22). The applicant said that since 1 July 2024 she is no longer in receipt of family assistance payments due to the combined income of her household.
[9] The second party also made submissions that this tax return indicated that the applicant had incorrectly claimed parenting payment at the single rate – the Tribunal however does not consider that a relevant consideration in the context of this application for review. The Tribunal notes that her return in any event discloses the details of her spouse.
The applicant, in response to questions asked by the Tribunal about credit transfers made into her bank account, stated that as the second party does not make any significant financial contribution towards their two children, her parents provide her with financial assistance to meet some of the children’s costs. She confirmed that her father pays for one of the children’s [extracurricular] lessons, her mother has contributed towards the costs of one the children’s orthodontic treatment and also assists her in meeting school fees. The applicant stated that her mother also contributes $360 a fortnight towards her and her husband’s rent. The applicant described some of these contributions as loans and she strongly feels it is the second party’s responsibility to assist in meeting these costs by paying a reasonable level of child support.
The Tribunal reviewed financial documents provided by the applicant, this included financial statements for the partnership, partnership tax returns, partnership bank statements as well as the applicant’s personal tax returns and bank statements. The Tribunal requested the applicant provide submissions regarding the retained income amounts reflected in those materials. In response she provided advice from the accountant which clarified that these were not retained profits as all profits are distributed. The Tribunal was satisfied on balance that these materials were consistent with the applicant’s evidence at hearing as to her sources of income and financial resources.
The second party
The second party submits that the applicant has misrepresented her financial position. He submits that his analysis of her financial documents reveals the applicant’s total earnings from the business are disproportionately low despite significant retained profits held by the business. He also refers to additional financial resources he says that the applicant receives from members of her family which he stated misrepresents her financial circumstances.
The second party’s financial circumstances
The second party stated that he has not been employed since being asked to leave his previous role in 2018. Since that time his income has been derived from social security payments.
The second party stated that he is in receipt of carer payment and carer allowance for the care of his [child] who was born in [year] and has a diagnosis of [Health conditions 1 and 2]. He is married and his spouse also is in receipt of carer payments for her children.
The second party stated that contrary to the applicant’s assertions he had no significant involvement in his wife’s business. He said that his role was limited to assisting in moving items about. The second party said that [reviews] provided by the applicant thanking ‘[Mr Romaguera] and the team’ should not be attached any weight. The second party stated that business mainly operated whilst he was still living in [State 1] and also for a time when he moved interstate in about 2019. However, the business assets were largely destroyed in [an incident] in mid-2023 and since then it has not operated in any significant way. His position is that this issue has been thoroughly examined by Child Support in previous decisions and he has never and does not derive any financial benefit from the business.
The second party stated that his father passed away in 2023 and as the only child he was the sole beneficiary of the estate. The second party explained that the grant of probate identified the value of the estate to be [amount] however when it came to the sale of the main asset (his father’s house) the value of that property for various reasons was significantly less and it eventually sold for [amount]. The other remaining asset was an amount of about [amount] his father held in a bank account.
The second party said that his father’s home settled in October 2023 and at that point he had already entered into negotiations to purchase a house in Australia. He said that the entire amount he received from the inheritance was transferred to the estate agent’s trust account in Australia and was used to purchase his current residence. The Tribunal notes that a settlement statement for the purchase of the property references an amount of about $[amount] being held in their trust account.[10] After purchase price and costs were deducted an amount of $[amount] was refunded to the second party.
[10] B14
The applicant in submissions takes issue with the veracity of documents the second party had provided. The Tribunal reviewed a copy of the Grant of Probate and the settlement statements for the sale of the home in [Country 1] and the purchase of the property in Australia. The settlement statement for the [Country 1] sale reflects it was sold for [amount] and the purchase statement for the Australian property shows the purchase amount as [amount] plus costs and stamp duty. The Tribunal is satisfied on balance that the second party’s explanation of how the inheritance funds were utilised is consistent with these materials.
The Tribunal asked the second party given his child support obligations did he consider either purchasing a more modest home or investing some or all of the inheritance to create an income stream. The second party stated that his focus was on ensuring that his family which includes his wife, [child] and stepchildren (all of whom have special needs) had a stable environment and home. He said that even if he invested the funds, his financial position would not be any better off given the current rental market and his capacity to pay any greater amount of child support would not have been enhanced in any significant way.
The Tribunal asked the second party if he could explain transactions on his joint account which show transfers of funds out of the joint account to a separate account. The second party stated that these were transfers his wife had undertaken and he could not give an explanation of what they pertained to.
The second party subsequently provided further clarification of the bank accounts. He stated that the savings account which he understood to be in his wife’s sole name was actually a joint account. He said that his wife is the person who operated the account for household purposes, but that account had since been closed. The second party provided 12-month statement which he submits demonstrates that funds were being internally transferred between accounts and do not reflect any additional financial resources.
The Tribunal reviewed the bank statements and on balance it is satisfied that the second party’s explanation of various internal transactions are consistent with those statements. In addition to certain transfers from and then back into the account, the most consistent source of income credited to the bank accounts originate from Centrelink.
The second party stated that he and his family live frugally, their vehicles are old, whilst the home is unencumbered, they are living on minimal income as he is the full-time carer of his child who has special needs he said that there is no other income or financial resources. He also provided a number of overdue notices addressed to the household advising that various utility accounts and council rates remained unpaid and were owing.
The second party provided a SOFC which disclosed 50% ownership of the family home which he asserts his share is valued at [amount]. He discloses minimal savings ($300) and a nominal value for his shared interest in a 2006 motor vehicle ($2,500). He discloses a superannuation balance of about $69,215.
Tribunal’s conclusions
Both the applicant and second party have made extensive written submissions and at hearing made oral submissions alleging that the other parent has access to additional financial resources which they have failed to disclose. In the case of the applicant the second party submits she has additional financial resources from a family trust, from her business and from family members. In the case of the second party, the applicant submits he has access to income generated by a business operated by his wife and access to an inheritance that has not been fully accounted for.
It is not the role of the Tribunal to undertake a forensic audit or major investigation of a parent’s financial arrangements rather it needs to be satisfied on the balance of probabilities in making findings pertaining to a parent’s income, property and financial resources.[11]
[11] Morse & Potts (SSAT Appeal) [2010] FMCAfam 1305 and also in Shearer & Benson (SSAT Appeal) [2011] FMCAfam 623
In that regard the Tribunal makes the following findings of fact.
In relation to the applicant, she derives her income from work that she undertakes from time to time in a family business. From time to time, she has also received government assistance payments. Distributions she receives from [Business 2], reflects the hours of work she undertakes. She does not derive any additional personal benefits from the business. The Tribunal in that regard observes that the applicant’s involvement in the business appears to be limited. Apart from that income, the applicant does not personally own any significant assets. Her superannuation balance is about $39,500.
In relation to the second party the Tribunal finds that he has not been in paid employment since 2018. Since then, his income is derived from Centrelink income support payments he receives. In 2023 he acquired an inheritance from his late father’s estate, those funds were transferred to the trust account of a real estate agent and utilised to purchase the home where he now lives with his wife and children.
In relation to the applicant the Tribunal is on balance satisfied that her income, financial resources and property relevant to the assessment is that as reflected in her ATO assessed taxable income which have been utilised in the administrative assessments.
In relation to the second party the Tribunal on balance concludes it is not satisfied that he derives income from another source which is in addition to the Centrelink payments he receives. The Tribunal on the presented evidence is satisfied that whilst he received an inheritance from the estate of his late father those funds have been utilised to purchase a family home. As noted in the Guide[12] when a parent receives a lump sum it is necessary to consider the circumstances of each case to determine whether the receipt of a lump sum makes the assessment unjust and inequitable. Whilst the Tribunal acknowledges the applicant’s position that having received the lump sum, the second party ought to have prioritised the support of the children of the assessment – the reality of the situation is that the funds have been expended in the purchase of the family home and on that basis, it is not a lump sum available as a financial resource.
[12] 2.6.14
The Tribunal concludes that for these reasons apart from the income utilised in the administrative assessment, neither party has access to additional income, financial resources or property. For that reason a ground to depart from the administrative assessment is not established pursuant to reason 8A.
Is another ground to depart established?
The applicant’s change of assessment application also references reason 3.
Reason 3 – Costs of education
A ground for departure exists if, in the special circumstances of the case, the costs of maintaining the children are significantly affected because the children are being cared for, educated or trained in the manner that was expected by their parents (subparagraph 117(2)(b)(ii)).
The applicant told the Tribunal that [Child B] attends a [public] school and [Child A] attends a Catholic school. The intention is that [Child B] will transfer to the same school as [Child A] in [year].
In response to questions asked the applicant stated that she does not have any communication with the second party and she solely made the decision as to where to enrol the children. She said when she and the second party separated the children were [Ages] and there had been some general but not specific discussion about their education prior to separation.
She provided copies of school enrolments which are jointly signed by herself and her mother. The applicant confirmed that her mother assists financially in meeting the school fees for the children. She said her mother currently pays 50% of the annual cost of $7,000 and that once [Child B] starts at the same school the education costs will significantly increase. The applicant stated that she does not consider it right that her mother is having to assist in such costs because the second party does not financially provide in any significant way.
The applicant also refers to tutorial costs for [Child B]. She said that since July 2024 the child has been receiving extra tuition to assist with maths. She confirmed that she made the decision herself in light of poor grades.
As noted, the question that arises is whether the children are being educated in a manner expected by the parents. On the presented evidence, the Tribunal is satisfied that the decision as to the children’s enrolment and education was a decision taken (out of necessity) by the applicant alone and as such they are not being education in a manner expected by both her and the second party.[13]
[13] Mee v Ferguson [1986] FamCA 3 discusses the notion of ‘manner expected’
The Tribunal concludes that for this reason a ground to depart pursuant to reason 3 is not established.
Reason 2 – Special needs
This was a ground raised by the applicant at hearing.
The applicant also seeks consideration of costs she said arise in relation to the children’s special needs.
There may be a ground to depart where, in the special circumstances of the case, the costs of maintaining a child are significantly affected because of the special needs of the child (subparagraph 117(2)(b)(ia)).
The term “special needs” is not defined in the legislation, but special needs have been held to mean the needs of a child which relate to a condition or disability that is out of the ordinary.[14] Special needs require that the cost is something additional to the normal needs of a child which would usually be expected to be met from the child support assessment. It requires a consideration of the rate of child support and the income of the parents.[15]
[14] Special needs can be because of a physical, mental or learning disability or because of a special talent or ability of the child (Lightfoot v Hampson [1996] FLC 92-663).
[15] Potter & Burbage(SSAT Appeal) [2010] FMCAfam 1009 (Potter) considered the term ‘significantly affected’ in the context of Reason 3.
The applicant also seeks consideration of counselling sessions one of the children had in 2018. This appears to have followed on from a custody dispute between the parents which involved the Family Court. Given that these are costs which have been incurred some years prior to the applicant’s application for a change of assessment the Tribunal does not consider such costs are pertinent to any proposed departure.
The applicant stated that one child has undergone orthodontic treatment. The other child is currently being assessed. The applicant stated she has paid a total of $1,970. According to further information provided she claimed $1,800 as treatment costs and was paid a benefit of $861 leaving her out-of-pocket expense after health insurance as $939. She agrees that her mother has assisted in paying for these costs but she stated the second party should be responsible to meet 50% and on that basis (as the Tribunal understands) she would pay back her mother.
[Child B] has also undergone an assessment for [Health condition 2] following recommendation from [the] school. This has incurred an out-of-pocket expense of $497.25. The applicant states the second party should meet 50% of that expense.
As noted special needs are not defined by the legislation. There is authority that the costs of orthodontic treatment that is essential rather than cosmetic may constitute special needs.[16] On balance the Tribunal is satisfied that the treatment received by the children constitute special needs. However, in order for this to constitute a basis for departure, it needs to be demonstrated that costs of maintaining a child are significantly affected. In this case the Tribunal notes that the out-of-pocket costs incurred by the applicant are about $1,436 (not taking into account the contribution made by her mother).
[16] Holman & Child Support Registrar & Ors (SSAT Appeal) (No. 2) [2014] FCCA 2382
The term significantly affected is not defined in the Act. The term was considered in the context of another ground for departure in Potter & Burbage (SSAT Appeal) [2010] FMCAfam 1009. In that case it was stated that when considering the question, it is necessary to consider not only the rate of child support but also the income of the parents.
In this case the rate of child support is the minimum annual rate. The Tribunal has concluded that the applicant’s income is that as reflected in her ATO assessed taxable income which in 2022/23 was $16,345 and for the second party it was $18,901 (comprised of income support payments). In that context the Tribunal concludes given the low income amounts and the rate of child support that the costs of maintaining the children are significantly affected because of their special needs.
On that basis the Tribunal concludes a ground to depart is established in the special circumstances of the case.
Issue 2 – What is a just and equitable determination?
As the Tribunal is satisfied that there is a ground to depart from the administrative assessment of child support, the next step is to consider whether it is just and equitable as regards the 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,[17] which are as set out in subsection 117(4) of the Act.
[17] 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
Duty to maintain the children
Both parents have a duty to maintain the children and in this regard the Tribunal notes the following relevant provisions of the Act:
that parents of a child have a primary duty to maintain the child. The duty has a priority over all commitments of the parent other than commitments necessary for self-support.[18]
[18] Section 3 of the Act
The Guide notes[19] in that regard that:
In deciding whether it is appropriate to change an assessment the Registrar must consider the parent's duty to support their child.
The duty to support a child applies to all the children of a parent equally (CSA Act paragraph 117(4)(e)(ii)). All the children of a parent have equal priority and the CSA Act does not discriminate between the children of different relationships.
[19] 2.6.17
The Tribunal observes that the second party’s position was that he prioritised the purchase of a home with the inheritance he received. The Tribunal notes that the second party does have a relevant dependent child, and that child is accommodated within the administrative formula. The second party also has stepchildren – he stated that he believes their mother (his wife) receives child support for those children. The second party does not have a duty to maintain his stepchildren.
Proper needs of the children
In determining the proper needs of the children, it is necessary to have regard at a broad level to the manner in which the children are being, and in which the parents expect the children to be, cared for, educated or trained, and also any special needs of the children. It is apparent from authorities that the scope of matters to be taken into consideration are broader than the costs of education or their health.
The Tribunal has concluded that the children have special needs which constitutes some orthodontic treatment and an assessment for [Health condition 2]. The Tribunal has found that the applicant’s relevant out-of-pocket cost in this regard was $1,436.
Income, earning capacity, property and financial resources of the children
In having regard to the income, earning capacity, property and financial resources of the children, the Tribunal must disregard any entitlement of the children or the carer entitled to child support to an income-tested pension, allowance or benefit (subparagraph 117(7)(b)(ii) of the Act). There was no evidence before the Tribunal relevant to a consideration of a variation based on the children’s income, earning capacity, property or financial resources.
Other party receiving money, goods and property for the benefit of the children
The second party submits that the applicant receives financial assistance from her family which are for the children’s benefit. The Tribunal notes that this is a consideration where the payee receives money, goods or property from the liable parent to the caree or child.[20] The Tribunal is satisfied that this is not relevant to any proposed departure.
[20] See the Guide at 2.6.11
Income, property and financial resources of each parent who is a party to the proceeding
The Tribunal has already made findings regarding the parties’ income, property and financial resources and does not repeat those findings.
Earning capacity
Neither party made specific submission pertaining to earning capacity. Their submissions were mainly directed to issues pertaining to financial resources. The Tribunal notes that when considering this as a factor as a ground for departure, the Tribunal must be satisfied that all three compulsory criteria in subsection 117(7B) are satisfied before it determines that a parent’s earning capacity is greater than is reflected in his or her income for the purposes of the Act. Those criteria are:
a) change in a pattern of work demonstrated by:
·the parent not working despite having ample opportunity to do so
·the parent reducing the number of hours per week of his or her employment or other work below the normal number of hours per week that constitute full-time work for the occupation or industry in which the parent is employed or otherwise engaged
·the parent changing his or her occupation, industry or working pattern.
b) the parent’s decision not to work, to reduce the number of hours, or to change his or her occupation, industry or working pattern is not justified on the basis of:
·the parent’s caring responsibilities
·the parent’s state of health.
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.
The Tribunal concludes that on the available evidence it could not be satisfied on the evidence that a finding of earning capacity could be made in relation to either parent. The second party’s pattern of work has not changed since leaving his employment in 2018. The Tribunal notes that the applicant’s pattern of work has changed from time to time. In both instances the Tribunal is satisfied that to the extent there may have been any changes this was justified on the basis of their respective caring responsibilities.
Commitments of each parent who is a party to the proceeding that are necessary to enable the parent to support themself, or any other child or person that the person has a duty to maintain
According to their respective SOFCs, the applicant’s necessary self-support commitments amount to about $800 per week and the second party’s amounts to about $532 per week.
The second party as noted has another relevant dependent child. The costs of that child is taken into consideration as part of the assessment. The second party at hearing confirmed that the child has been approved for and receives NDIS funding of about $10,000 to meet therapy and other costs. He stated however he still incurs other costs and provided receipts for items such as nappies and baby wipes.[21]
[21] The Tribunal notes that NDIS is not taxable income and not part of a person’s ATI for general child support purposes. Income Tax Assessment Act 1997
The Tribunal is satisfied, taking into account the relevant costs of self-support utilised in the assessments and based upon evidence provided at hearing, that the self-support commitments of the parents would not warrant a variation.
Any hardship that would be caused
The Tribunal considered what hardship would be caused to the liable parent, the carer entitled to child support and the children (and also to any other child or another person that the liable parent has a duty to support or to any resident child of a parent) by the making or refusal to make a particular departure determination.
The applicant stated that the second party does not provide financially in any meaningful way towards the costs of their children. She states that whilst her parents have been supportive in covering certain costs, they are aging and cannot be expected to continue to provide in this way. She stated that circumstances cause her and the children hardship. She notes that unlike the second party she is still renting and does not have the benefit of the security of an unencumbered family home.
The second party stated that any change to the existing assessment in which he is only required to pay the minimum annual rate would cause him and the child of his current relationship hardship. He said that he is solely in receipt of a carer payment and carer allowance – any departure in the terms sought by the applicant cannot be accommodated.
Conclusions as to a particular departure
In many respects this is a difficult matter in the sense that on the one hand the applicant has care of two children for whom she receives the minimum annual rate of child support from the second party. On the other hand the second party’s position is that he is reliant upon social security payments and does not have the financial capacity to make further contribution.
As noted the second party has a primary duty to maintain his two children of the previous relationship as well as the child of his current relationship. The second party in 2023 inherited a not insignificant amount of money. His decision to use the entirety of that inheritance to purchase a property to accommodate his new family in circumstances where his only source of income is carer payment and carer allowance has caused the applicant to feel that the second party has unfairly prioritised the needs of his new family over that of his children from their relationship.
The second party’s position is that he felt it important to make that decision given (as he describes the situation) he is the primary carer of a child with special needs. He also asserts that whilst the children of this assessment do not receive a significant level of child support, they are financially supported within the applicant’s broader family system and on that basis, he argues they are better off than his own child. That last submission misconstrues the primary duty the second party has as a parent towards his children.
In any event the reality of the situation is that the second party does not have access to the funds he used to purchase the home. The Tribunal accepts that given his lack of significant income it is unlikely that he would be in a position to obtain a loan. The Tribunal has also concluded that the second party is reliant upon income support payments and further observes that the second party has now provided evidence which indicates that the household is in financial arrears of certain household commitments (such as the rates). This would suggest to the Tribunal that he does not have the financial capacity to make a contribution toward the children’s special needs albeit that that amount would only be in the vicinity of $700.
For these reasons the Tribunal concludes that whilst it has found a ground established in all the circumstances and taking into consideration the factors specified in subsection 117(4) of the Act it would not be just and equitable to make a particular departure determination.
The Tribunal has (for different reasons) arrived at the same conclusion as that of the objection decision. As such it concludes that the decision under review is to be affirmed.
DECISION
The decision under review is affirmed.
| Date(s) of hearing: | Wednesday, 2 April 2025 |
| Representative for the Applicant: | Self-represented |
| Representative for the Other party: | Self-represented |
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