Halderman and Child Support Registrar (Child support)

[2020] AATA 3673

Halderman and Child Support Registrar (Child support) [2020] AATA 3673 (21 July 2020)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2020/SC019094, 2020/SC019095 & 2020/SC019096

APPLICANT:  Mrs Halderman

OTHER PARTIES:  Child Support Registrar

TRIBUNAL:Member T Bubutievski

DECISION DATE:  21 July 2020

DECISION:

The decisions under review are affirmed.

CATCHWORDS

CHILD SUPPORT – refusal to grant extensions of time to object - no satisfactory explanation for the delay – no merit - weighing all factors the extension of time was correctly refused - decisions under review affirmed

Names used in all published decisions are pseudonyms. Any references appearing in square brackets indicate that information has been removed from this decision and replaced with generic information so as not to identify involved individuals as required by subsections 16(2AB)-16(2AC) of the Child Support (Registration and Collection) Act 1988.

REASONS FOR DECISION

BACKGROUND

1. These are applications in relation to decisions of Services Australia - Child Support (the Department) made on 6 May 2020, not to grant Ms Halderman an extension of time to lodge objections to three decisions made by the Department on 11 December 2019 and 6 January 2020 to replace adjusted taxable incomes in the child support assessment.

2. Ms Halderman is the parent who was entitled to receive child support in respect of her son. The assessment ended in 2016 as her son turned 18 years of age and completed secondary education. When the case ended, Ms Halderman was still owed child support.

3. On 11 December 2019 the Department made a decision to replace a provision taxable income amount for her son’s father of $76,698.55 for the 2013/14 financial year with his actual taxable income as determined by the Australian Taxation Office (ATO) of $0. This decision affected the child support assessment for the period 1 June 2015 to 30 April 2016 and reduced the arrears outstanding.

4. On the same date, the Department made a decision to replace a provision taxable income amount for her son’s father of $108,788.24 for the 2011/12 financial year with his actual taxable income as determined by the ATO of $54,868. This decision affected the child support assessment for the period 1 October 2011 to 31 December 2012 and reduced the arrears outstanding.

5. On 6 January 2020 the Department made a decision to replace a provision taxable income amount for her son’s father of $77,693.71 for the 2014/15 financial year with his actual taxable income as determined by the Australian Taxation Office (ATO) of $3,405. This decision affected the child support assessment for the period 1 May 2016 to 31 October 2016 and reduced the arrears outstanding.

6. The Department wrote to Ms Halderman on 11 December 2019 and 6 January 2020 respectively, advising her of the decisions that it had made and also advising her that she had the right to object to the decisions within 28 days.

7. Ms Halderman did not lodge her objection against the decisions on time.

8. On 6 May 2020 the Department decided not to grant Ms Halderman an extension of time to lodge any of the objections.

9. On 22 May 2020 Ms Halderman made an application for review by the Social Services and Child Support Division of this tribunal. The matter was heard in Sydney on 7 July 2020. Ms Halderman attended the hearing by telephone and gave sworn evidence. Following the hearing the tribunal deferred the matter to research the law and made a decision on 21 July 2020.

ISSUES

1. The statutory provisions relevant to this review are sections 82 and 83 of the Child Support (Registration and Collection) Act (the R&C Act), which allow a person to lodge an application for an extension of time, which the Child Support Registrar (the Registrar) must consider.

2. The matters that the Registrar must consider when making a decision about an extension of time are set out in clause 4.1.5 of the Australian Government’s Child Support Guide (the Guide). While the tribunal is not bound by government policy, if it is to depart from the policy it must show a cogent reason for doing so, such as the policy not being in keeping with the legislation.

3. The issues for consideration in this case are whether the Department should have granted Ms Halderman an extension of time to lodge an objection in relation to any of the three decisions it made.

CONSIDERATION

1. Section 80 of the R&C Act says that a person has a right to object to certain types of decisions made by the Registrar, including to the particulars of an assessment, which includes the income amounts used in the assessment. Ms Halderman had the right to object to the decisions made.

2. Section 81 of the R&C Act says that an objection application must be made within 28 days of when a notice of decision is served on a person. There are some allowances in the Acts Interpretation Act 1901 for the ordinary course of the post and holidays, which extends the time. The ordinary course of the post is seven days, so the letters of 11 December 2019 are taken to have been delivered to Ms Halderman by 18 December 2019. For Ms Halderman’s objections to these decisions to have been on time, even allowing for Christmas and New Year public holidays, she would have needed to have lodged her objections by 18 January 2020. There is no dispute that she did not, and her objections were not on time.

3. In the case of the notice of decision of 6 January 2020, it is taken to have been delivered by 13 January 2020, and for Ms Halderman’s objection to have been on time it would need to have been lodged by 11 February 2020 (allowing for Australia Day).

4. The Department has taken the view that Ms Halderman lodged her objections to all three decisions on 17 March 2020. Ms Halderman said that she had actually sent an email on 17 February 2020 objecting to the decisions and it was only one month later that she received a call to say that the email could not be accepted because it had her child support number on it. She was asked to resend it with the number removed, which she did. The tribunal notes that the email of 17 February 2020 appears in the Department’s file and was clearly received at that time. The tribunal finds that the earliest date that Ms Halderman could be considered to have lodged an objection to any of the decisions was on 17 February 2020, which was still out of time.

5. The tribunal finds that Ms Halderman lodged her objections to all three decisions out of time, so the only way her objections could be considered would be if the Registrar granted her extensions of time under sections 82 and 83 of the R&C Act. The Registrar has refused to do so, which has brought the matter before the tribunal.

6. There is no dispute that Ms Halderman made a request for an extension of time in the manner specified by the Registrar (subsection 82(3) of the R&C Act). When a person is requesting an extension of time they must explain why they did not lodge their objection within 28 days. Ms Halderman said that the letters were sent to a post office box that she uses for her employment, not her home address. The post office box was the address she had provided to the Department for contact while the case was current. Ms Halderman said that she was not expecting any correspondence from the Department and that in the past if they had had any issues arise in relation to collection or other matters they had contacted her by telephone. She had an expectation that any further contact from the Department would most likely be by telephone. Ms Halderman said that she had not had any urgent letters from the Department before, and the last letter she had received from the Department was in April 2017. Ms Halderman said that it had never occurred to her that she should change her address with the Department to her home address.

7. Ms Halderman said that she does not regularly check the post office box as she only maintains it for the few clients who may occasionally send her a cheque. She may not go there for weeks at a time. Over much of the particular period Ms Halderman was on leave, as she takes three weeks leave per year over the Christmas period. Her sister was [visiting] from [overseas]. Ms Halderman lives in [a named town] and the post office box is in [another town] (33 km away). Ms Halderman did not check the post office box between December 2019 and February 2020 and told the tribunal that she received all three notices when she checked the post office box on 14 February 2020. She has since changed her postal address for the Department to her home address.

8. Ms Halderman said that she did not really understand what the letters were about, and she contacted the Department by telephone on 17 February 2020. It was only at this point it was explained to her that the decisions had the effect of reducing the amount of child support arrears payable. Ms Halderman said that her son’s father sent her a text in November 2019 asking her to cancel the arrears on the child support account, but she had refused to do so.

9. On 17 February 2020 Ms Halderman was told that she had rights to object to the decisions, but that she was out of time. She was told that if she put in a respectful request for an extension of time it would be considered. She sent the Department an email that evening explaining her reasons for the delay; her views on the decisions; that she wished to object to the decisions; and that she wished to make an application for an extension of time.

10. Ms Halderman said that she did not have any further contact from the Department until 17 March 2020, when she received a telephone call and was asked to resend the email without her own child support number, as it would be passed on to the other party. She was told that the objection could not be accepted in its present form. Ms Halderman said that she resent the email on that day.

11. Ms Halderman said that she responded to the letters within a few days of receiving them. It took her a few days to find the time to be able to call the Department. As soon as she was told the consequences of the decisions she attempted to make her objections. Ms Halderman said that in her opinion the letters should have said that the arrears had reduced from a certain amount to another amount so that she could have understood what they meant more clearly.

12. Ms Halderman said that she was subsequently told on 4 May 2020 that her objections would not be considered because the assessment was more than 18 months old. She said that she found this really confusing, as there seemed no point in being told that you could object to a decision if such an objection could not make any difference. The tribunal notes that this advice only applies to changes to the assessment made as a result of the change of assessment process, not other changes made by the Registrar.

13. Ms Halderman said that throughout the periods that the assessment was amended her son’s father was always in contact with her son. He always seemed to be working and to be able to afford to take her son on expensive outings. He indicated to their son that in addition to wages he received cash income. As far as she was aware, he was always earning money. She acknowledged that there was a period in which he was made bankrupt, and that this may have had an impact on his income, but that she had been told by the Department that bankruptcy did not affect child support arrears. Ms Halderman said that in her opinion the new income figures in the assessment were wrong and did not reflect the payer’s circumstances. She said he earned good money and travelled Australia, as he is a specialist in [a particular industry] and often did very large jobs. She said that she did not think he had lodged income tax returns for about 10 years.

14. Ms Halderman confirmed that she had never made an application for a change of assessment. She said that she always trusted the Department would work it all out.

15. Their son is attending university full-time and shares accommodation with his girlfriend. He had casual employment before the pandemic, and is receiving Jobkeeper from one of his workplaces. Although he lives independently, Ms Halderman said that she still provides him with some financial support.

16. Ms Halderman said that she is aware that her son’s father has admitted to being an addict and has had serious mental health issues. She said that he has never had an ability to pay debts and tended to make unwise choices. She was also aware that he lost a son a little over a year ago and has separated from his wife. Ms Halderman said that there were periods of time where she asked the Department not to chase him for child support arrears as she was aware of his circumstances and did not want to make things worse. There are other times when she was aware that he was working, and he should have paid.

17. Ms Halderman said that it seemed unfair to go back and change an income amount from so long ago. It also appeared particularly unfair not to discuss that proposed change with the other parent before it was made. Ms Halderman said that the whole process doesn’t seem fair to her.

18. The matters to be considered by the Registrar when deciding whether or not to grant an extension of time are set out in clause 4.1.5 of the Guide. The matters set out therein are consistent with general principles of administrative law and the tribunal sees no reason to depart from them:

    “…The Registrar will make a decision on an application for an extension of time taking into account that Parliament intended that parents lodge an objection within time. This gives some certainty to parents who organise their arrangements around the Registrar's decisions. In determining whether to grant an extension of time the Registrar must consider all of the factors listed below.

    ·          reasons for delay,

    ·          the merits of the objection,

    ·          any prejudice to the other parent,

    ·          whether the parent rested on their rights, and

    ·          prejudice to the general public.

    The Registrar will not grant an extension of time simply because a parent has made out any one of the above factors. All factors must be considered and given appropriate weight, with no single factor taken to be conclusive on its own….”

Reasons for the delay

1. Ms Halderman did not delay once she received the notices, but she did not receive any of the notices until after the time period for making an objection had passed. The reason for that is that the notices were sent to a post office box that she rarely used. Ms Halderman said that she was not expecting any correspondence from the Department, and she had not thought to change her address for correspondence to her home address, as she had not received any letters from the Department since 2017. She said that she thought that she would be contacted by telephone about matter such as these. The tribunal notes that under the law the Registrar is obliged to advise of decisions of this type in writing. The contact Ms Halderman has had with the Department since 2017 is not of the same nature. It is also the responsibility of a person who is receiving child support (including arrears) to provide the Department with a current postal address, and to check their mail. While the tribunal accepts Ms Halderman’s evidence that the correspondence was unexpected and she was on leave for part of the period, this does not detract from her overall responsibility.

Merits of the objection

1. This simply means that the person has an arguable case in which they may be successful. In this case, the decisions made were to replace provisional income amounts with actual taxable incomes supplied by the ATO. The decision to replace the provisional incomes was made under section 58A of the Child Support (Assessment) Act (the Assessment Act).

2. Usually, where a provisional income has been used in an assessment and the actual taxable income is determined much later, the Registrar will only retrospectively change the income if the taxable income is higher than the income that was previously used. However, under paragraph 58A(2)(c) of the Assessment Act the Registrar can retrospectively change an income to a lower income if one of the circumstances in section 11 of the Child Support (Assessment) Regulations 2018 is met – i.e.:

   “…(i)  the parent did not know that an application for the assessment had been made and accepted;

   (ii)  the parent had a serious illness or injury;

   (iii)  the parent was under detention or imprisonment;

   (iv)  the parent resided in a remote location which made it difficult to contact the Registrar; (v)  a natural disaster prevented the parent from being able to contact the Registrar;

   (vi)  there was some other exceptional circumstance that prevented the parent from providing the information;…”

3. The Registrar has indicated that the decisions made in this particular case were “section 11” decisions. Such decisions are made if the payer is able to demonstrate their circumstances, regardless of the wishes of the payee.

4. Ms Halderman is clearly trying to argue that the new incomes are wrong (i.e. the taxable incomes were not the payer’s actual incomes for the years in question). Ms Halderman is very unlikely to be successful on that basis, since the new incomes are the payer’s taxable incomes as issued by the ATO. Ms Halderman is also unlikely to succeed in an objection on the basis that none of the section 11 circumstances existed, as she has given the tribunal evidence about the payer’s circumstances which indicate that she is aware that he has had a number of difficult circumstances which may meet the relevant criteria.

5. What Ms Halderman is seeking is actually for the Department to look behind the figures provided by the ATO, perhaps by contacting the payer’s employers or looking at his bank accounts. Objections to these decisions will not achieve that goal. In the absence of an application to change the child support assessment in special circumstances, the Department does not look behind the adjusted taxable income as determined by the ATO. Ms Halderman can make such an application, but she needs to be aware that the Registrar can only amend a child support assessment that is up to 18 months old on the basis of such an application. The courts can amend an assessment which is up to 7 years old, but this would require Ms Halderman to make an application to a court with a family law jurisdiction.

6. While the tribunal acknowledges Ms Halderman’s moral arguments, it is satisfied that these objections are not likely to succeed and therefore do not have merit.

Prejudice to the other parent

1. In this case, the payer was advised of the decisions at the time they were made and also advised that Ms Halderman had 28 days in which to raise any objection. Prior to contacting the Department and laying his circumstances bare he contacted Ms Halderman and requested her to discharge the arrears. She refused to do so. He was therefore aware that she was likely not to agree with the decision that was made, and perhaps met the passing of the requisite 28 days without an objection from Ms Halderman with some degree of relief. There are still arrears outstanding, and he still has a liability to pay. The tribunal is satisfied that the payer was entitled to rely on the decisions that were made and the fact that Ms Halderman had not objected to them.

Parent resting on their rights

1. The tribunal does not find that Ms Halderman rested on her rights. She attempted to object to the decisions as soon as she became aware of them - she just simply did not become aware of them for quite some time.

Prejudice to the general public

1. To grant the extension would mean that Ms Halderman was being treated differently to the general public and run counter to the public expectation that the child support scheme is administered in an efficient manner and the participants in it make their objections in time. This is now an ended assessment and the child is at university. The public purse needs to be conserved and the public has a right to expect that excess resources will not be expended on cases where the children are already grown up and have left the child support system.

1. Overall, the tribunal was persuaded that the decision of the Registrar not to grant extensions of time in relation to the three decisions made on 11 December 2019 and 6 January 2020 was correct. While Ms Halderman does have rights to object to the decisions made, her prospects of success are so minimal that there would be no value in granting extensions. Ms Halderman’s primary argument, that the adjusted taxable incomes determined by the ATO are not reflective of the payer’s income and financial circumstances cannot be addressed by objections to these decisions. Addressing that matter requires an entirely different process, the change of assessment process.

DECISION

The decisions under review are affirmed.