Haldeman and Haldeman (Child support)

[2021] AATA 5201

Haldeman and Haldeman (Child support) [2021] AATA 5201 (13 December 2021)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2021/BC022557

APPLICANT:  Ms Haldeman

OTHER PARTIES:  Child Support Registrar

Mr Haldeman

TRIBUNAL:Member J Thomson

DECISION DATE:  13 December 2021

DECISION:

The decision under review is affirmed.

CATCHWORDS

CHILD SUPPORT – prescribed non-agency payment – prescribed payment for school fees – discretion exercised to refuse credit is just and equitable – 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 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

1. Ms Haldeman and Mr Haldeman are the parents of [a child], born 2004. At the time of hearing this matter, the care percentages for [the child] were recorded a 100% to Mr Haldeman and 0% to Ms Haldeman.

2. Ms Haldeman seeks review of an objection decision made by the Child Support Agency (the Agency) on 18 October 2021. This decision disallowed her objection to an earlier decision of the Agency on 27 July 2021 refusing her application for credit of a prescribed non-agency payment (PNAP) of $130 made on 15 July 2021 to [School] for [the child]’s school fees.

3. The Tribunal heard the matter on 9 December 2021. Both parents attended the hearing via conference telephone and gave affirmed evidence. The Tribunal had before it documentation provided by the Agency (admitted into evidence and marked Exhibit 1). Mr Haldeman had copies of these papers with him at the hearing. Ms Haldeman did not have copies of those papers with her at the hearing but was content for the hearing of the matter to proceed in any event.

ISSUES

1. The issue which arises in this case is the Agency’s exercise of the discretion conferred on the Registrar pursuant to section 71D of the Child Support (Registration and Collection) Act 1988 (the Registration Act) to refuse to credit an amount of a PNAP made pursuant to subsection 71C(1) of the Registration Act if satisfied that, in the circumstances of the particular case, the amount ought not to be credited.

CONSIDERATION

1. In reaching its decision, the Tribunal has considered the affirmed evidence given by the parents at the hearing and the documentation contained in Exhibit 1 before the Tribunal.

2. The statutory provisions relevant to this review are contained in the Registration Act. Subsection 71A(1) provides, relevantly, that if:

   (a)   the payer of an enforceable maintenance liability pays a third party an amount that partially or completely satisfies a debt owed by:

   (i)the payee of the enforceable maintenance liability; or

   (ii)the payer; or

   (iii)both the payer and the payee; and

   (b)  the payer or the Payee Applies to the Registrar, in the manner specified by the   Registrar, to have the amount, or part of the amount, received by the third party treated as having been paid to the Registrar; and

   (c)   the amount paid, or a part of the amount paid, was intended by both the payer and the payee to be paid in complete or partial satisfaction of an amount payable under the enforceable maintenance liability in relation to the child support enforcement period;

   The Registrar must, in spite of section 30 and in accordance with subsections (2) and (3), credit the amount, or part of the amount, received by the third party against the amount payable under the enforceable maintenance liability.

3. Subsection 71C(1) of the Registration Act provides, relevantly, that (subject to section 71D) if:

   (a)the payer of an enforceable maintenance liability in relation to a payment period or initial period has made one or more payments to another person; and

   (b)the payment is a payment of the kind specified in the regulations (regulation 5D); and

   (ba) at the time the payment is made, the payer does not have at least regular care (14% or more) of any of the children to whom the relevant administrative assessment relates; and

   (c)the sum of those payments exceeds the sum of all such payments previously credited against the amount payable under the liability for all past periods; and

   (d)the payer does not, at the time at which the registrar applies this section, have at least regular care (sic) of any of the children to whom the administrative assessment relates;

   then the Registrar must, despite section 30, credit the excess amount mentioned in paragraph (c) against the amount payable under the payer’s liability for the period, up to a maximum of 30% of the amount payable.

4. Section 71D, as noted above, provides that the Registrar may refuse to credit an amount under sections 71, 71A, or 71C if satisfied that, in the circumstances of the particular case, the amount ought not to be credited.

5. At the hearing, it was acknowledged by the applicant that Mr Haldeman had not agreed that the applicant’s payment of $130 paid to [School] on 16 July 2021 was a payment in lieu of the applicant’s regular child support liability, which, according to the child support assessment in place for the assessment period 1 July 2021 to 31 October 2021 required the applicant to pay fortnightly child support payments at the rate of $263.67, at a time when the care percentages being assessed by the Agency were 100% to Mr Haldeman and 0% to Ms Haldeman (see pages 28 to 30 of Exhibit 1).

6. It was also acknowledged by Ms Haldeman at the hearing that, contrary to arrangements the parents had with the private school/s at which [the child] had been enrolled prior to his attending [School], the fee-paying arrangement with [School] was that the parents would be jointly and severally liable to the college for the payment of [the child]’s school fees. Ms Haldeman acknowledged at the hearing that she considered she was personally liable to the college the payment of the full amount of [the child]’s school fees.

7. Both parents conceded at the hearing that they had agreed to share equally [the child]’s school fees at [School]. It was also conceded that this agreement had been reached at a time when both parents were employed, and the care percentages being assessed by the Agency were 49% to Mr Haldeman and 51% to Ms Haldeman (effectively 50% shared equal care).

8. Mr Haldeman gave evidence that there had been a change in care for [the child] in or about April 2021. The child support assessment notices in evidence before the Tribunal for the period 5 April 2021 to 31 October 2021 reflect the assessed care percentages changed from shared 50% equal care to 100% to Mr Haldeman and 0% to Ms Haldeman from 5 April 2021. Ms Haldeman did not challenge this evidence.

9. Mr Haldeman also gave evidence at the hearing that he was made redundant in about May 2021. Up until that point, he had been assessed for child support purposes on an income estimate of $60,049; Ms Haldeman’s income for child support purposes from 19 October 2020 until 30 June 2021 was based on her income estimate of $63,880 (see Exhibit 1 pages 19 to 27).

10. Consequent upon his redundancy in May 2021, Mr Haldeman’s adjusted taxable income (ATI) for child support purposes reflected in the child support assessment notices for the period for May 2021 to 30 June 2021 was $0 (see Exhibit 1, pages 25 to 27). Although his ATI for child support purposes for the period 1 July 2021 onward recorded in the assessment notices for that period reflected his pre-redundancy 2020 taxable income of $79,636, the Agency’s assessment notice of 9 July 2021 for the period 1 August 2021 to 30 June 2022 at pages 35 and 36 of Exhibit 1 record his estimated ATI at $14,182, which is consistent with the evidence he gave at the hearing that following his redundancy, his sole source of income was his jobseeker Centrelink payments and family tax benefit, equating to an income of approximately $15,000 per annum.

11. Both parents acknowledged at the hearing that, due to the change in their joint financial positions following Mr Haldeman’s redundancy in May 2021, for this and other reasons, they had decided to withdraw [the child] from [School] in July 2021.

12. Mr Haldeman gave evidence that he ceased contributing to [the child]’s school fees at [School] shortly after he became redundant as he could no longer afford to contribute to those school fees, as a consequence of which, [the child]’s school fees fell into arrears.

13. There was evidence before the Tribunal at Pages 15 to 17 of Exhibit 1 that Mr Haldeman lodged an income estimate on 4 May 2021, estimating his income from 19 October 2020 to 3 May 2021 at $60,094, and $0 from 4 May 2021 to the end of the 2020/21 financial year on 30 June 2021.

14. Ms Haldeman gave evidence that, consistent with their joint and several liability agreement with [School] for the payment of [the child]’s school fees, the college looked to her for payment of those school fees, and to preserve her credit rating, she entered into an arrangement with the College to pay [the child]’s outstanding school fees by instalments, commencing with a payment of approximately $350 on 3 June 2021 and made the payment, the subject of this review application, of $130 on 15 July 2021.

15. Ms Haldeman gave evidence that she submitted an application to the Agency for credit of the payment of $350 on 3 June 2021 as a non-agency payment (NAP). Although the Agency initially refused her application, on the basis that Mr Haldeman had not mutually agreed to that payment being accepted in lieu of child support, she gave evidence the Agency subsequently reversed its decision, and credited the payment as a PNAP. Ms Haldeman said that, based on assurances from the Agency, following her further payment of $130 to [School] on 15 July 2021, she submitted an application for credit of that amount as a PNAP.

16. The Tribunal finds that the discretion conferred by section 71D of the Registration Act is absolute and unrestricted.

17. The Agency refused to accept Ms Haldeman’s application for credit of her payment of $130 on 15 July 2021, basing its decision on the lack of mutual intention on the part of the parents that the payment be credited as a NAP (see decision of 27 July 2021 at page 44 of Exhibit 1), and on review, the Agency’s objections officer affirmed that decision although on different grounds, finding that Ms Haldeman’s payment was her half share of her liability for [the child]’s school fees, and in the exercise of the discretion conferred by section 71D of the Registration Act refused to credit that payment against her child support liability.

18. The Tribunal is satisfied that, notwithstanding the provisions of section 71C of the Registration Act being satisfied, and the Agency’s previous decision to credit Ms Haldeman’s earlier payment of $350 in June 2021 against her child support liability, having regard to the circumstances of this case, in particular, the change in the parents’ care from 5 April 2021 from 50% shared equal care to 100% care to Mr Haldeman and 0% to Ms Haldeman, and Mr Haldeman’s significant reduction in his income following his redundancy in May 2021 (see his income estimate recorded at pages 16 and 17 of Exhibit 1), the Agency’s exercise of its discretion to refuse to credit Ms Haldeman’s payment of $130 on 15 July 2021 against her child support liability as a PNAP is appropriate, just and equitable.

19. As the Tribunal has reached a conclusion consistent with the objections officer’s determination in the decision under review, the Tribunal affirms that decision.

DECISION

The decision under review is affirmed.