Hargraves and Fischhoff (Child support)
[2025] ARTA 617
•25 February 2025
Hargraves and Fischhoff (Child support) [2025] ARTA 617 (25 February 2025)
Applicant/s: Ms Hargraves
Respondent: Child Support Registrar
Other Parties: Mr Fischhoff
Tribunal Number: 2024/MC028741
Tribunal: Senior Member A Suthers
Place:Sydney
Date:25 February 2025
Decision:The Tribunal affirms the decision under review.
CATCHWORDS
CHILD SUPPORT – particulars of the assessment – deciding if the estimate election should have been accepted or refused – income accepted – 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 Child Support (Assessment) Act 1989 (the Act) provides for Services Australia – Child Support (Child Support) to make an administrative assessment of child support. The assessment is made using a formula containing variables such as the parents’ adjusted taxable incomes and the respective percentages of care the parties to the assessment provide, or are likely to provide, to their children.
When a child support assessment is in place, a party to the assessment may, subject to meeting certain preconditions, elect to estimate their current income in place of their adjusted taxable income for the last relevant year of income, which would otherwise be used in the administrative assessment: subsection 60(1) of the Act. That may, relevantly, be an estimate for only part of a year of income: subsection 60(3) of the Act. In that event, the estimating party must tell Child Support their actual income in the year to date, as well as their forward estimate. A parent may also subsequently revoke and replace an income estimate: sections 62 and 62A of the Act.
In those circumstances, the estimating parent’s income estimate amount generally becomes their adjusted taxable income amount for the purposes of assessing the annual rate of child support payable in the application period: section 63 of the Act.
Later, after the end of the year of income, Child Support will compare the estimating party’s estimated income with their actual income for the year. If the actual adjusted taxable income is more than the estimated income, the assessment will be amended using the actual adjusted taxable income: Division 7A of Part 5 of the Act. This is known as an estimate reconciliation.
However, Child Support retains a discretion as to whether even a legally compliant estimate should be accepted, subject to a jurisdictional precondition. Subsection 63AA(2) of the Act provides, relevantly, that:
The Registrar may refuse to accept a parent’s income election to which subsection 60(3) applies if the Registrar is satisfied that:
(a) the partial year income amount for the income election is less than the amount that the Registrar considers is likely to be the parent’s actual adjusted taxable income for the remaining period in relation to the income election; or …
Subsection 63AA(4) of the Act provides:
(4) In making the decision as to whether to refuse to accept the income election, the Registrar:
(a) may act on the basis of information that the Registrar has received or obtained as to the financial circumstances of the parent; and
(b) may, but is not required to, conduct an inquiry into the matter.
By a decision of Commissioner of Taxation v Douglas [2020] FCAFC 220 (Douglas), the Full Court of the Federal Court determined, by dismissing appeals challenging first instance decisions, that certain invalidity benefits received by Australian military veterans through superannuation were not assessable taxable income.
Ms Hargraves and Mr Fischhoff are the parties to a child support assessment (parties) in respect of their three children.
Mr Fischhoff is an [occupation] and is in receipt of invalidity benefits through superannuation.
On 7 September 2023, Child Support accepted an income estimate revocation and replacement made by Mr Fischhoff for part of the 2023/24 financial year. Mr Fischhoff estimated that his income from 1 September 2023 to 30 June 2024 would, on an annualised basis, be $14,130.
It is apparent that the estimate lodged came about through Mr Fischhoff becoming aware of the effect of the decision in Douglas. His estimate had the effect of excluding the invalidity benefits he was receiving from his estimated income.
Ms Hargraves objected to the decision to accept the estimate.
On 31 July 2024, the Australian Taxation Office notified Child Support that Mr Fischhoff’s 2023/2024 assessed adjusted taxable income was $9,404.
On 25 September 2024, Ms Hargraves’s objection was disallowed. Relevantly, the objection decision advised the parties that:
Parents can apply to have their assessment changed if their special circumstances are not adequately reflected in their child support assessment. An application to change your assessment (special circumstances) must be lodged on the approved Application to Change Your Assessment in Special Circumstances form, signed and lodged by either mail, fax or electronically. This form can be accessed at servicesaustralia.gov.au.
Ms Hargraves then sought review of the decision in the Tribunal, within time.
I heard the matter on 17 January 2025 and heard evidence and submissions from Ms Hargraves and Mr Fischhoff. Child Support elected not to participate in the hearing. I also had regard to the 212 numbered pages lodged by Child Support in the application.
For the reasons that follow, I will affirm Child Support’s decision in respect of Mr Fischhoff’s income election.
Summary of the law, relevant policy, and the issue to be determined
As this is a ‘statement of reasons’ I am required, amongst other things, to explain the reasons for the decision. To do so, it is necessary to set out, to an extent, the law and relevant policy to be considered.
'Adjusted taxable income' is defined in section 43 of the Act and includes, primarily, the parent's taxable income for the last relevant year of income in relation to the child support period.
If the Registrar makes a decision about an estimate election, including a decision to refuse to accept an estimate election, it is a decision ‘as to the particulars of an administrative assessment’ (item 11 of the table in subsection 80(1) of the Child Support (Registration and Collection) Act 1988 (the R&C Act)). Either parent may object to the decision and then seek review by the Tribunal.
I ‘stand in the shoes’ of the original decision maker, in that I am to determine for myself on the material before me the decision which can, and which I consider should, be made in the exercise of the power or powers conferred on the original decision maker for the purpose of making the original decision. However, as section 9 of the Administrative Review Tribunal Act 2024 makes clear, the Tribunal makes its decision on review independently of the parties, and the original decision maker. The Tribunal is also subject to the same constraints as the original decision maker: Frugtniet v Australian Securities and Investments Commission [2019] HCA 16 at [51] discussing relevantly indistinguishable provisions of the, now repealed, Administrative Appeals Tribunal Act 1975.
In reviewing Child Support’s decision, I am deciding if the estimate election should have been accepted or refused. Whilst a considerable period has now elapsed since the original decision was made, and the relevant financial year has now ended, the question is whether, at the time of the election, the estimated amount was likely to have been less than the actual adjusted taxable income for the financial year, and if so, how the discretion should have been exercised.
There is no dispute, and I am satisfied, that the statutory preconditions to making a valid income estimate for part of the 2023/24 financial year were met by Mr Fischhoff. The issue in this case is whether, on the information available to Child Support at the time about Mr Fischhoff’s financial position, his estimate should have been accepted.
CONSIDERATION
Whilst Ms Hargraves clearly disagrees with the effect that the decision in Douglas has upon her administrative assessment, she does not suggest that Child Support was unreasonable in accepting that it would apply to Mr Fischhoff’s income. It clearly does. On that basis, there is no reason why Child Support should have concluded that Mr Fischhoff’s adjusted taxable income was likely to be higher than he estimated.
Once that is detrmined, the acceptance of the income estimate election was mandated. The decision to accept it was the correct or preferable one and must be affirmed.
Of course, Part 6A of the Act does make provision for changes to a child support assessment where the special circumstances of the case make it just and equitable to depart from the application of the formulae. That is the process referred to by Child Support in the objection decision and quoted at paragraph [14] above. It is a matter for Ms Hargraves to consider whether that process is available to her and appropriate.
DECISION
The Tribunal affirms the decision under review.
| Date(s) of hearing: | Friday, 17 January 2025 |
| Representative for the Applicant: | Self-represented |
| Representative for the Other party: | Self-represented |
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