Handley and Mummery (Child support)

Handley and Mummery (Child support) [2023] AATA 4463 (19 December 2023)

DIVISION:Social Services & Child Support Division
REVIEW NUMBERS:  2023/MC025450, 2023/MC025702 and 2023/MC025703
APPLICANT:  Mr Handley
OTHER PARTIES:  Child Support Registrar
Ms Mummery

TRIBUNAL:Member P Jensen
DATE OF DECISIONS: 19 December 2023
DECISIONS:

The decision to collect child support arrears of $1,579.92 in respect of the period from 4 July 2022 to 3 October 2022 is set aside and the matter is remitted to the Child Support Registrar for reconsideration with a direction to recalculate the arrears in respect of that period on the basis that Mr Handley paid $1,341.35 in child support in respect of that period.

The decisions to not credit payments of $1,313.84 on 4 September 2022, $196.87 on 6 October 2022, $196.87 on 13 October 2022 and $196.87 on 11 November 2022 as non-agency payments are affirmed.

CATCHWORDS

CHILD SUPPORT – opt-in arrears – collection of child support arrears – non-agency payments – whether various payments made to third parties in lieu of child support – refusal to credit non-agency payments – decision under review affirmed in respect of certain payments – decision in respect of other payments remitted for reconsideration with a direction to recalculate arrears on basis of payments made

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 DECISIONS

Mr Handley and Ms Mummery are the parents of two children. On 29 April 2022, Mr Handley applied to register a child support case with Services Australia – Child Support (Child Support). At all relevant times, Ms Mummery has been recorded as providing 100% care for the children. Mr Handley was assessed to pay $11,072 per annum in child support. Initially, neither parent applied to have Child Support collect the child support payable.
On 4 October 2022, Ms Mummery applied to have Child Support collect the ongoing child support payable. Child Support granted that application. Neither parent objected to that decision. Ms Mummery also applied under section 28A of the Child Support (Registration and Collection) Act 1988 (the Act) to have Child Support collect the child support arrears in respect of the preceding three months, i.e. 4 July 2022 to 3 October 2022. Child Support granted that application and decided to collect arrears of $1,579.92. Mr Handley objected to that decision. An objections officer disallowed his objection. He applied to the Tribunal for further review. That application is Review Number 2023/MC025703.
Mr Handley made personal loan repayments of $196.87 per week. He applied to have the payments that he made on 6 October 2022, 13 October 2022 and 11 November 2022 credited against his child support liability to Child Support. Such payments are called non‑agency payments. Child Support decided to not credit the payments as non-agency payments. An objections officer disallowed Mr Handley’s objection. Mr Handley applied to the Tribunal for further review. The application in respect of the first two payments of $196.87 is Review Number 2023/MC025702. The application in respect of the third payment of $196.87 and an objections officer’s decision to refuse to credit a payment of $1,313.84 on 4 September 2022 is Review Number 2023/MC025450.
It is convenient to deal firstly with the four payments identified in the previous paragraph. From 4 October 2022, Mr Handley’s child support payable was a liability that he owed to Child Support, and not to Ms Mummery, although she was the ultimate recipient of any child support that Mr Handley paid to Child Support. Sections 71A and 71C of the Act relevantly provided that in certain circumstances, payments that Mr Handley made to third parties could be credited against his child support liability.
One of the requirements of section 71A and section 71C is that when the payment was made, the payer was required to pay child support to Child Support: paragraphs 71A(1)(a) and 71C(1)(a). Mr Handley paid $1,313.84 to a third party on 4 September 2022. He was not required to pay child support to Child Support until 4 October 2022. The payment of $1,313.84 cannot be credited as a non-agency payment under section 71A or 71C.
Another requirement of 71A is that Mr Handley and Ms Mummery intended the payment to be credited against Mr Handley’s child support liability. For reasons that are discussed below, I find that Ms Mummery did not intend for the payments of $196.87 to be credited as non-agency payments. The three payments of $196.87 cannot be credited as non-agency payments under section 71A.
Section 71C of the Act also contains a number of requirements. The only requirement in dispute is whether the payment in question “is a payment of the kind specified in the regulations”: paragraph 71C(1)(b). That is a reference to regulation 19 of the Child Support (Registration and Collection) Regulations 2018, which relevantly specifies “the payee’s share of repayments on a loan that finances the payee’s home”. Mr Handley said a component of his personal loan was in respect of costs associated with the renovation of the ex-family home in which Ms Mummery continued living after the parent’s physical separation. Mr Handley did not provide any documentation that would have allowed for a calculation of that component, but in any event, Ms Mummery is not a party to Mr Handley’s personal loan; it is solely in his name. As the Child Support Guide correctly notes at 5.3.1: “[Crediting under section 71C can only occur] for repayments on a loan that finances the payee’s home where the payee is named on the mortgage documents and is liable for the repayments on the loan.” The three payments of $196.87 cannot be credited under section 71C.
Turning to Ms Mummery’s application for the collection of arrears in respect of the period from 4 July 2022 to 3 October 2022, a question arises as to whether Mr Handley and Ms Mummery had an agreement concerning the payment of child support. There is no dispute that there was no written agreement. Mr Handley said they had a verbal agreement. In June 2021, Mr Handley moved out of the family home. Ms Mummery and the children continued living in the family home. On Mr Handley’s account of events, he told Ms Mummery that he would pay their debts instead of paying her child support, and she agreed. On Ms Mummery’s account of events, Mr Handley told her that he would pay their debts, and she agreed, but there was no mention of child support. At the time, Mr Handley was in paid employment. Ms Mummery was not in paid employment. She said she had been “falling apart” and still hoping for a reconciliation. She said she had lacked the financial capacity to pay the debts. As noted earlier, Mr Handley applied to register a child support case in April 2022. He explained that he had wanted to know his assessed rate of child support payable. Ms Mummery said she had believed that the rate of child support payable would be more than the rate of payments that Mr Handley was making privately, but initially, she did not want to apply for child support because she did not have the strength to deal with the anticipated difficulties that such an application would create. She said that when Mr Handley registered a child support case, she initially did not apply to have Child Support collect the payments for the same reason.
The difficulty in this case is that, on both parents’ accounts of events, they did not formalise a detailed agreement but there does appear to have been some agreement or arrangement whereby Mr Handley would make certain payments and thereby maintain the status quo, which included Ms Mummery living in the ex-family home and using a car while Mr Handley paid certain associated expenses, rather than Mr Handley paying an assessment rate of child support and presumably ceasing to pay at least some of those expenses. It does not automatically follow that every payment that Mr Handley made fell within the ill-defined parameters of the parents’ agreement or arrangement. Mr Handley sought credit for payments that fell into five categories: car loan repayments; car registration payments; internet payments; Mr Handley’s personal loan repayments; and Mr Handley’s payments in respect of Ms Mummery’s beauty course.
There is no dispute that at all relevant times, Ms Mummery had the use of a car and Mr Handley paid the associated car loan repayments, which were $69.02 per week. Having heard from both parents, I am satisfied that those repayments formed part of the parents’ agreement. The period in question is 13 weeks, and $69.02 x 13 = $897.26.
During the period in question, Mr Handley paid $189.10 + $185.00 = $374.10 in car registration fees for the car that Ms Mummery was using. I am satisfied that those payments formed part of the parents’ agreement.
Mr Handley’s personal loan repayments were $196.87 per week. He said the personal loan incorporated the refinancing of a loan that had been used to renovate the ex‑family home as well as the financing of a car that he used. He estimated that one third of the loan related to the renovation costs and two thirds related to his car. As noted earlier, he did not provide any documentation that would have allowed for a calculation of the respective components. Ms Mummery said the loan in respect of the renovation was “paid out” and it was her understanding that Mr Handley’s personal loan was solely in respect of his car. I accept her evidence that she held that belief. Whether that belief was correct is a separate issue, and it is not necessary to resolve that issue. I find that Ms Mummery had not agreed to Mr Handley’s personal loan repayments forming part of the parents’ agreement.
On 16 July 2022, Mr Handley made his final payment of $66.99 in respect of the ex-family home’s internet service. I find that that payment formed part of the parents’ agreement.
Ms Mummery enrolled in a beauty therapy course and Mr Handley guaranteed the payment of the associated costs. He said Ms Mummery was not making the payments and he was liable as the guarantor. He said he contacted Child Support and it informed him that if he paid the outstanding balance, the payments would be credited as child support payments. Child Support does not have a record of such a conversation and I consider it inherently unlikely that such a conversation occurred because Mr Handley paid the outstanding balance via payments of $1,368.45 on 1 September 2022 and $1,313.84 on 4 September 2022. Ms Mummery did not apply to have Child Support collect the child support payable until 4 October 2022. In any event, Mr Handley acknowledged that he made the two payments without discussing the matter with Ms Mummery. Ms Mummery was adamant that there had been no agreement about whether such payments would be in lieu of child support. I find that the payments did not form part of the parents’ agreement.
In summary, I find that Mr Handley made a number of payments that the parents had agreed would effectively be categorised as child support payments, even if the parents did not express themselves with that level of formality. The payments totalled $897.26 + $374.10 + $69.99 = $1,341.35.
Child Support concluded that Mr Handley paid $1,093.26 in child support during the three-month period via his payments to third parties: page 57 of the hearing papers for Review Number 2023/MC025703. My decision will presumably reduce Mr Handley’s child support arrears by $1,341.35 - $1,093.26 = $248.09.

DECISIONS

The decisions to not credit payments of $1,313.84 on 4 September 2022, $196.87 on 6 October 2022, $196.87 on 13 October 2022 and $196.87 on 11 November 2022 as non-agency payments are affirmed.

[2023] AATA 4463

19 December 2023

Key Legal Topics

Areas of Law

Family Law

Legal Concepts

Jurisdiction

Appeal

Procedural Fairness