Harrison and Harrison (Child support)

[2023] AATA 4002

Harrison and Harrison (Child support) [2023] AATA 4002 (17 October 2023)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2023/BC025953

APPLICANT:  Mr Harrison

OTHER PARTIES:  Child Support Registrar

Mrs Harrison

TRIBUNAL:Member C Breheny

DECISION DATE:  17 October 2023

DECISION:

The decision under review is affirmed.

CATCHWORDS

CHILD SUPPORT – departure determination – whether there was a ground for departure – no ground for departure – application to depart is refused – decision 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. Mrs Harrison and Mr Harrison are the separated parents of [Child 1], born February 2008, and [Child 2], born June 2010. A child support case has been registered (for collection) with Services Australia – Child Support (Child Support) since 14 January 2018 and child support is payable on the basis that Mr Harrison and Mrs Harrison have shared care of the children. Mr Harrison was at all relevant times assessed as liable to pay child support to Mrs Harrison.

2. For the period 1 September 2022 to 17 June 2023 Mr Harrison’s child support liability had been administratively assessed as being $2,716 per annum based on his 2021/22 adjusted taxable income of $74,989 and Mrs Harrison’s provisional income of $54,125.

3. On 20 August 2022 the administrative assessment was updated, as Mrs Harrison had lodged her income tax return for 2021/22. Mr Harrison’s child support liability increased to $6,314 per annum, based on Mrs Harrison’s 2021/22 adjusted taxable income of $21,138.

4. On 11 September 2022 Mr Harrison contacted Child Support to apply for a change of assessment on the basis that Mrs Harrison’s earning capacity was not correctly reflected in the assessment. He noted that Mrs Harrison has the ability to earn a much higher income than $21,138.

5. On 22 December 2022, decision maker (DM) [deleted] decided that no ground to depart from the administrative assessment had been established and did not change the assessment. On 12 January 2023 Mr Harrison objected to the decision and on 24 March 2023 a Child Support objections officer disallowed the objection. The objections office found that Mrs Harrison had additional earning capacity, but it was not just and equitable to depart from the administrative assessment.

6. On 17 April 2023, Mr Harrison applied to the Social Services and Child Support Division of the Administrative Appeals Tribunal (the Tribunal) for an independent review of Child Support’s decision. A hearing into Mr Harrison’s application for review was held on 17 October 2023. Both Mr Harrison and Mrs Harrison attended the hearing by telephone and gave evidence on affirmation. 

7. I had before me the statement and documents provided by Child Support pursuant to subsection 37(1) and section 38AA of the Administrative Appeals Tribunal Act 1975, received on 8 May 2023 and 27 September 2023 respectively and numbered 1–200. I also considered additional documents provided by Mr Harrison (marked A1–A17) and Mrs Harrison (marked B1–B20) as a result of written directions issued on 5 September 2023.

LEGISLATIVE FRAMEWORK AND ISSUES

1. The legislation relevant to this review is contained in the child support law, in particular the Child Support (Assessment) Act 1989 (the Act) and the Child Support (Registration and Collection) Act 1988.

2. The rate of child support payable by a liable parent is usually based on an administrative assessment under Part 5 of the Act. This requires the application of a statutory formula, which takes into account factors such as the number of children, the level of care provided and the income of each parent. Either the liable parent or the carer entitled to child support 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 provides that the Registrar may make a determination to depart from the formula assessment and establishes a three-step process. The Registrar, and the Tribunal standing in place of the Registrar, must be satisfied that a ground for departure exists and that it is just and equitable and otherwise proper to make a departure determination.

3. The grounds for departure from an administrative assessment of child support are those set out in subsection 117(2) of the Act. If satisfied that a ground or grounds exist, and that it would be just and equitable and otherwise proper to make a particular determination, the Tribunal may make one of the determinations prescribed in section 98S of the Act.

4. In the legislation, each ground for departure is prefaced by the words, “in the special circumstances of the case”. Therefore, when considering whether one (or more) ground exists, the Tribunal must be satisfied that there are “special circumstances” in the case. The phrase “special circumstances of the case” is not defined in the Act. The Full Family Court, in the case of Gyselman and Gyselman (1992) FLC 92-279, stated that:

   It is intended to emphasise that the facts of the case must establish something which is special or out of the ordinary. That is, the intention of the Legislature is that the court will not interfere with the administrative formula result in the ordinary run of cases.

5. Subsection 98C(3) of the Act provides that subsections 117(4) to (9) of the Act apply and the Tribunal must consider these when deciding whether it would be just and equitable or otherwise proper to make the departure decision.

6. In this case there is no dispute that Mr Harrison is working full-time for [Employer 1]. He lodges regular tax returns. His 2021/22 adjusted taxable income was $74,989 and his 2022/23 adjusted taxable income is $80,120 (which includes reportable employer super contributions of $9,619). Neither party submitted that Mr Harrison’s adjusted taxable income was incorrect or that he has additional earning capacity.

7. There is also no dispute that Mrs Harrison’s 2021/22 adjusted taxable income was $21,138. Mr Harrison did not submit that the income amount was incorrect.  He argued that Mrs Harrison could earn a much higher income and asked for a departure from the administrative assessment on the basis that the assessment did not correctly reflect Mrs Harrison’s earning capacity (also known as Reason 8B).

8. The issue for me to consider is therefore whether Mrs Harrison has additional earning capacity, and it is just and equitable to depart from the administrative assessment on this basis.

CONSIDERATION

Mrs Harrison – earning capacity

1. Mr Harrison submitted that Mrs Harrison reduced her working hours to affect the administrative assessment. She has not been working since January 2022 and she had said that “she did not have to work if she did not want to”. Mr Harrison further noted that he had tried to resolve this review application prior to a hearing by offering to pay a “reasonable amount of child support” but his proposal was ultimately rejected by Mrs Harrison, indicating that she was “deliberately not working to obtain increased amounts of child support from him”.

2. The relevant legislative provisions for consideration of a parent’s earning capacity are provided for in subparagraph 117(2)(c)(ib) and also in subsection 117(7B) of the Act. Essentially, the provision restricts the circumstances in which a person’s earning capacity can be used as a basis to depart from a formula assessment.

3. There are three essential matters to be considered in determining whether the administrative assessment should be departed from on the grounds of earning capacity. In simple terms, they can be explained as follows:

   ·did the parent not work (despite ample opportunity to do so), reduce their hours of work or change their occupation, industry or working pattern; and

   ·was the parent’s decision not to work (despite ample opportunity to do so), to reduce their hours of work or change their occupation, industry or working pattern not justified because of caring responsibilities or their state of health; and

   ·has the parent not demonstrated that it was not a major purpose of their decision (not to work (despite ample opportunity to do so), to reduce their hours of work or change their occupation, industry or working pattern) to affect the administrative assessment of child support.

4. All three of the above criteria must be met before a change of assessment can be made to take into account whether the parent has a greater earning capacity.

5. Mrs Harrison stated that she is employed by [Employer 2]. She is an “[Occupation 1]”. The [employer] runs a small farming operation for [specified] purposes, and she is responsible for looking after the farm. Mrs Harrison said that she changed her hours from full-time to permanent part-time in about late 2020. Her 2019/20 full-time salary was $44,511 (folio 195). Mrs Harrison was working part-time in the 2020/21 financial year and her taxable income was $30,850 (folio 195).

6. Mrs Harrison provided evidence that [Employer 2] required mandatory COVID-19 vaccinations for workers in high-risk environments from late 2021 and a direction was issued for workers to receive the first COVID-19 vaccination by 17 December 2021 (folios B14-B15). Mrs Harrison did not comply with that direction, and she was suspended from work from 15 January 2022, initially with pay, but from 18 March 2022 without pay (folio 150). I note Mrs Harrison’s 2021/22 adjusted taxable income was $21,138 (folio 195), which would have represented her part-time salary for a period of about eight and a half months (to 17 March 2022). I estimate that the equivalent “full-year” salary would have been about $30,000 for the 2021/22 financial year. Mrs Harrison has not returned to her workplace, and she continues to be on leave without pay until January 2024 (folio B2).

7. Mrs Harrison provided evidence that she broke her foot in April 2022. She told the objections officer that she was in a “moonboot” for six weeks and then required physiotherapy. She had to wait for her first physio appointment until 12 July 2022 (folio 146). The objections officer accepted that Mrs Harrison was probably incapacitated until the beginning of September 2022 and her absence from work was justified on this basis (folio 163). Mrs Harrison said that she was unable to work because of her injury, as she is required to do a lot of walking and heavy physical work in her role on the [farm].

8. I have considered the evidence before me. There is no dispute that Mrs Harrison reduced her working hours to nil from January 2022. I note, however, that she was on leave “with pay” until 17 March 2022. I accept Mrs Harrison’s evidence that she sustained an injury in April 2022 and would not have been able to return to work until the foot was healed, in about early September 2022.

9. Mrs Harrison did not return to work from early September 2022, and I find that her decision not to work from September 2022 was not justified by the state of her health. This means that paragraphs 117(7B)(a) and 117(7B)(b) of the Act are satisfied from early September 2022.

10. Mr Harrison argued that Mrs Harrison is not working to affect the child support assessment. She used to earn about $44,500 per year but progressively reduced her income. She did so deliberately to increase the amount of child support she is able to receive from him. Mr Harrison noted that Mrs Harrison also refused to assist him with payments for orthodontic costs for [Child 2] and other expenses that the children may have. Mrs Harrison said that she paid $4,000 for the braces and she also bought a lot of things for the children. She has numerous receipts to prove her purchases.

11. Mrs Harrison further stated that the oldest child, [Child 1], had been in her care since February 2023. [Child 1] had only recently returned to Mr Harrison’s care. Mrs Harrison said that she would have been entitled to additional child support payments from Mr Harrison for that period, but she did not report the care change to Child Support because she is not concerned about the amount of Mr Harrison’s child support payments. I note she told Child Support in January 2023 that she “did not want child support” from Mr Harrison and she was advised that she could opt out of collection if she wished (folio 122).

12. Mrs Harrison said that she may or may not return to her employment with [Employer 2] in January 2024. She has been thinking about leaving her job since late 2020 because of serious conflict with her [supervisor] at the [workplace]. She took five weeks’ annual leave at the end of 2020 to think about this. She was working part-time in 2021 and the suspension from work in late 2021 offered further time to consider whether she wanted to return to her position. Mrs Harrison said that she tried to establish her own business during that time, growing vegetables at home for sale at farmers markets. She was hoping that this would provide her with an alternative source of income, but unfortunately the business was not successful.

13. As noted above, the third criterion in relation to a person’s earning capacity represents a rebuttable presumption. The onus of proving a major purpose for the decision about their work is on the person who made the choice and: “If the Tribunal is not satisfied one way or the other, the person with the onus fails.”[1]

    [1] Carlson & Acuff & Anor (SSAT Appeal) [2010] FMCAfam 677, at [68]

14. I have carefully considered the evidence before me. I accept Mrs Harrison’s statement regarding the conflict with her supervisor, which has been an ongoing issue since late 2020. I further note that child support payments have been based on higher, “provisional” income amounts for Mrs Harrison since (at least) 1 September 2020, resulting in an annual child support liability of $1,600-$1,900 for Mr Harrison since that time (folio 174). The assessment was only updated in August 2022 when Mrs Harrison lodged her tax return.

15. I would have expected Mrs Harrison to lodge a lower income estimate for 2020/21 in about July/August 2020 (when she switched to part-time work) and to lodge her tax return for that year on time if she wanted to maximise child support payments from Mr Harrison. Mrs Harrison did not do so, and I thus accept her evidence that child support payments from Mr Harrison are not a major concern for her.

16. Based on the evidence before me, Mrs Harrison has demonstrated to my satisfaction that it was not a major purpose of her decision to continue to be on leave without pay from her employment to maximise child support payments from Mr Harrison, but rather she is avoiding returning to work because of conflict with her supervisor. This means paragraph 117(7B)(c) of the Act is not satisfied in this case.

17. As all three criteria provided for in subsection 117(7B) of the Act are not met, I cannot consider Mrs Harrison’s earning capacity further. I therefore find that the ground for departure in relation to Mrs Harrison’s earning capacity has not been established.

18. As noted above, neither party submitted that any other reason to change the administrative assessment applied in this case and because no ground for departure has been made out in this case, I am unable to depart from the administrative assessment of child support.

19. I have reached the same conclusion as the objections officer, albeit for different reasons, and I therefore affirm their decision.

DECISION

The decision under review is affirmed.