Havertz and Sanson (Child support)

[2020] AATA 4402

Havertz and Sanson (Child support) [2020] AATA 4402 (14 August 2020)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2020/PC019436

APPLICANT:  Mr Havertz

OTHER PARTIES:  Child Support Registrar

Ms Sanson

TRIBUNAL:Member S Brakespeare

DECISION DATE:  14 August 2020

DECISION:

The decision under review is affirmed.

CATCHWORDS

CHILD SUPPORT – particulars of the administrative assessment – whether the adjusted taxable incomes declared by the liable parent should be backdated – conditions for changing the income to lower amount from an earlier date are not met – 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 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 Havertz is the parent liable to pay child support to Ms Sanson in respect of their three children.

2. On 13 June 2020 an objections officer disallowed an objection by Mr Havertz to a decision made by an officer of the Child Support Agency on 9 March 2020 to apply a provisional income for Mr Havertz, of $191,605, to the administrative assessment for the child support period 1 October 2019 to 31 December 2020. The basis of the decision was that Mr Havertz’s taxable income for the last relevant year of income, the 2018/19 financial year, had not been assessed.

3. Mr Havertz lodged an application for review of the decision with the tribunal. A hearing was held on 14 August 2020. Mr Havertz and Ms Sanson 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 (158 pages).

4. 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.

ISSUES

1. The statutory provisions relevant to this review are found in the Child Support (Assessment) Act 1989 (the Act)

2. The issue which arises in this case is whether it was appropriate to use a provisional income in the administrative assessment.

CONSIDERATION

1. Section 58 of the Act allows the Child Support Agency to determine a person’s adjusted taxable income for a child support period where either the person’s taxable income for the last relevant income year has not been assessed under the Income Tax Assessment Act 1997 or the Child Support Agency is unable to ascertain whether or not the person’s taxable income for that year has been so assessed.

2. Section 58A of the Act applies if the Child Support Agency subsequently ascertains components of a person’s adjusted taxable income and the amount is different than the amount determined under section 58.

3. The tribunal finds the last relevant year of income for the child support period commencing 1 October 2019 is the 2018/19 financial year. The tribunal is satisfied that when the Child Support Agency made the decision to use a provisional income for Mr Havertz of $191,605 from 1 October 2019, an assessment of Mr Havertz’s adjusted taxable income for the 2018/19 financial year had not been made under the Income Tax Assessment Act 1997. This means that an assessment using the provisions of section 58 was open to the Child Support Agency.

4. On 16 March 2020 Mr Havertz lodged an Income Tax Declaration (ITD) of $142,380 and the Child Support Agency applied this amount to the remaining Child Support period, once again in accordance with section 58 of the Act. On the same date Mr Havertz lodged an income estimate of $91,102 and this was applied to the period 16 March 2020 to 30 June 2020.

5. On 19 March 2019 Mr Havertz’s 2018/19 adjusted taxable income of $141,653 replaced the provisional income for the periods 1 October 2019 to 15 March 2020 and 1 July 2020 to 31 December 2020. (His income estimate remained in place for the period 16 March 2020 to 30 June 2020).

6. Mr Havertz told the tribunal that the decision of 9 March 2020 had resulted in him owing substantial arrears. Those arrears were reduced when the income of $141,653 replaced the provisional income of $191,605; however the arrears were subsequently increased again. He acknowledged that some of the arrears were generated where a previous income estimate was replaced; however he still believes that some of the arrears relate to the provisional income of $191,605.

7. Ms Sanson was of the view that the arrears were correctly calculated.

8. The tribunal made the following observations:

• Prior to 9 March 2020 a provisional income of $107,734 was being used in the administrative assessment from 1 October 2019, resulting in a monthly liability for Mr Havertz of $1,511.75.

• On 9 March 2020 the provisional income of $107,734 was replaced by a provisional income of $191,605 with effect from 1 October 2019. This resulted in a monthly liability for Mr Havertz of $2,860.75 and generated arrears of $6,745.

• On 16 March 2020 the provisional income of $191,605 was replaced by Mr Havertz’s 2018/19 adjusted taxable income of $141,653 with effect from 1 October 2019. This generated a credit of $3,845. (Some arrears remained, being the difference between the assessments arising from the provisional income of $107,734 and the adjusted taxable income of $141,653).

• On 19 March 2020 the Child Support Agency made a separate decision to replace Mr Havertz’s income estimate for the 2018/19 year of $120,319 with his actual adjusted taxable income of $141,653. That decision created arrears of $3,906 for the child support period 1 July 2018 to 30 June 2019.

1. The tribunal is satisfied that the decision to use a provisional income of $191,605 from 1 October 2019 was correct. The tribunal is also satisfied that that income was replaced by Mr Havertz’s 2018/19 adjusted taxable income of $141,653 with effect from 1 October 2019 and that the assessment of arrears and credits is correct.

DECISION

The decision under review is affirmed.