Hatlestad and Hatlestad (Child support)

[2020] AATA 1403

Hatlestad and Hatlestad (Child support) [2020] AATA 1403 (1 April 2020)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2020/PC018417

APPLICANT:  Mr Hatlestad

OTHER PARTIES:  Child Support Registrar

Ms Hatlestad

TRIBUNAL:Member S Brakespeare

DECISION DATE:  1 April 2020

DECISION:

The decision under review is varied so that the amount that is to be credited against Mr Hatlestad’s enforceable maintenance liability is $182.53.

CATCHWORDS

CHILD SUPPORT – non-agency payment – whether payment made to a third party in lieu of child support – intention of both parents – decision under review varied

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. Mr Hatlestad is the parent liable to pay child support to Ms Hatlestad in respect of their two children. The case commenced on 16 September 2019. At all relevant times the children were recorded by the Child Support Agency as being in Mr Hatlestad’s 14% care and Ms Hatlestad’s 86% care.

2. On 6 November 2019 Mr Hatlestad advised the Child Support Agency that he had paid  mortgage payments on the family home that Ms Hatlestad and the children live in and he asked that 30% be credited against his child support.

3. On 8 November 2019 an officer of the Child Support Agency decided that an amount of $608.44 could be credited against Mr Hatlestad’s child support liability (the original decision). The amount credited represented 50% of a payment of $1,216.88 that Mr Hatlestad had made toward the mortgage jointly held by Mr Hatlestad and Ms Hatlestad.

4. Ms Hatlestad lodged an objection to the original decision. On 7 February 2020 an objections officer partly allowed the objection and decided that an amount of $425.91 was to be credited against Mr Hatlestad’s child support liability (the objection decision).

5. Mr Hatlestad lodged an application for review of the objection decision with the tribunal. A hearing was held on 1 April 2020. Mr Hatlestad and Ms Hatlestad gave evidence on affirmation to the tribunal via conference telephone. The Child Support Agency provided the tribunal and the parties with a bundle of papers relevant to the review (326 pages).

6. Relevant aspects of the evidence and material before the tribunal will be referred to in the tribunal’s consideration of the issues which it has to decide.

ISSUE

1. The statutory provisions relevant to this review are contained in the Child Support (Registration and Collection) Act 1988 (the Act).

2. The issue which arises in this case is whether an amount or part thereof of a payment Mr Hatlestad made to a third party can be credited against Mr Hatlestad’s child support liability.

CONSIDERATION

1. When the Child Support Agency registers a child support liability for collection the amounts payable become a debt due to the Commonwealth and are payable to the Child Support Registrar under section 30 of the Act. In some circumstances the Child Support Agency may credit payments made directly to the payee or to a third party.

2. Section 71A of the Act provides for payments made by a payer of an enforceable maintenance liability to a third party to be credited against the payer’s enforceable maintenance liability if the payment is made to partially or wholly pay a debt owed by the payee, payer, or both parties and the intention of both parties was that the payments (or part of the payments) be credited against the payer’s child support liability. The Child Support Agency refers to these types of payments as non-agency payments.

3. Section 71C of the Act provides, subject to section 71D, for an amount to be credited against a payer’s child support liability regardless of the intention of the parents at the time the payment was made provided that it does not exceed 30% of the payer’s enforceable ongoing liability and that the balance of child support is paid as it becomes due and payable. Section 71C also requires that at the time the payment was made, or at the time the payment is to be credited, that the payer must not have at least regular care (14%) of any of the children to whom the assessment applies.

4. The tribunal finds that  at the time the payment was made, and at the time the application for a credit was made, Mr Hatlestad had 14% care if the children. This means that section 71C does not apply in this case. 

5. The tribunal must therefore be satisfied that there was an intention on behalf of both parties for the payment, or part of the payment, to be credited against the child support liability.

6. The payment in question was a mortgage payment of $1,216.89 made by Mr Hatlestad for a mortgage held jointly by Mr Hatlestad and Ms Hatlestad in respect of the home in which Ms Hatlestad resides.

7. Mr Hatlestad told the tribunal that he believes the agreement that he and Ms Hatlestad had in respect of the mortgage was that he would pay the mortgage and receive a credit of 30% of his child support payment, being $289 per month. It was his contention that the agreement meant that Ms Hatlestad would also have to pay the remaining portion of her half of the mortgage. Mr Hatlestad said that when it came to calculating the actual amount, as per the text message they exchanged on 16 October 2019, there was a miscalculation by him and Ms Hatlestad as the figures were based on 30% of the mortgage, not 30% of the child support.

8. Mr Hatlestad said that when he applied to the Child Support Agency to have the payments credited he was told he could claim 50% of the mortgage payments and this was what the original decision was based on.

9. In a letter to the Child Support Agency Ms Hatlestad said that the agreement was for Mr Hatlestad to pay the full mortgage payment; however he could only claim 30% of her share of the mortgage payment against his child support liability. Her share of the mortgage was $608.44 per month. In her view the amount he could claim was $182.55 leaving him to pay $425.90 in child support payments.

10. The tribunal notes that Ms Hatlestad’s calculation do not add up; as the child support liability was $965 per month. If Mr Hatlestad was able to claim $182.55 against his child support liability he would still be required to pay child support of $782.45.  However at hearing Ms Hatlestad said that it was her intention that 30% of her half of the mortgage payment could be deducted from the child support payment.

11. The tribunal had access to numerous text messages and emails that the parties exchanged before and after the mortgage payment was made and the application for a credit was lodged.

12. The tribunal notes that there was obvious confusion and disagreement between the parties as to how the figures were calculated and what had actually been agreed to. There is no one document the tribunal can rely upon to ascertain a figure. It is the tribunal’s view that the parties never ended up agreeing on the specific amount that should be claimed. Both parties were using as their starting point the 30%-70% calculation, which appears to be based on the formula used for prescribed non-agency payments. Under that formula 30% refers to 30% of the child support liability; not 30% of the third party payment. Using that formula the amount that could be claimed would be 30% of the child support amount of $965.00; which is $289.50 monthly. (Mr Hatlestad’s contention that Ms Hatlestad should also have to pay a portion of the mortgage is not an agreement that could be taken into account by section 71A).

13. Alternatively, if the tribunal accepts Ms Hatlestad’s claim that she only intended for 30% of her share of the mortgage payment to be deducted from Mr Hatlestad’s child support liability, then the amount becomes $182.53.

14. The tribunal is satisfied that there was an agreement that a portion of the payment Mr Hatlestad made to the joint mortgage would be credited against his child support liability. Given the difficulty in establishing an agreed amount, the tribunal concluded that it was preferable to credit the lower amount as contended by Ms Hatlestad.

15. The tribunal therefore determines that an amount of $182.53 is to be credited against Mr Hatlestad’s enforceable maintenance liability.

DECISION

The decision under review is varied so that the amount that is to be credited against Mr Hatlestad’s enforceable maintenance liability is $182.53.