Healey and Ripley (Child support)

[2017] AATA 2955

Healey and Ripley (Child support) [2017] AATA 2955 (14 December 2017)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2017/SC012409

APPLICANT:  Ms Healey

OTHER PARTIES:  Child Support Registrar

Mr Ripley

TRIBUNAL:Member K Dordevic

DECISION DATE:  14 December 2017

DECISION:

The tribunal sets aside the decision under review and, in substitution, decides that the minimum annual rate is to be applied to the child support assessment from 1 January 2016.

CATCHWORDS
Child support – Particulars of the administrative assessment – Fixed annual rate – Unjust and inequitable – Decision under review set aside and substituted

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. Ms Healey and Mr Ripley are the parents of [Child 1] (born 2005) and [Child 2] (born 2008). Mr Ripley has been liable to pay child support in accordance with a child support assessment made by the Department of Human Services – Child Support (the Department) since 2014. At relevant times the assessment was based on Mr Ripley having a care percentage of 100% from 1 January 2016 to 10 June 2016 and 73% for both children from 11 June 2016.

2. From 1 January 2016 Ms Healey was assessed to pay an annual rate of $2,746 (the fixed annual rate payable for two children).

3. On 26 October 2016 the Department accepted Ms Healey’s application for the fixed annual rate not to apply to the assessment from 1 January 2016.

4. On 25 November 2016 Mr Ripley objected to the decision. On 24 January 2017 his objection was allowed.

5. Ms Healey lodged an application for a review of that decision with this tribunal on 28 February 2017. Due to an administrative error it was not registered until 29 August 2017.

6. Documents provided by the Department (folios 1 to 254) were made available to the tribunal and to Mr Ripley and Ms Healey along with documents provided by Ms Healey (folios A1 to A55). Ms Healey’s request to be represented by her father at hearing was refused on 3 November 2017.

7. Ms Healey and Mr Ripley attended a hearing by telephone on 7 December 2017. The Child Support Registrar was not represented at the hearing. Following the hearing the matter was deferred to allow Ms Healey to provide additional documents relevant to the review by no later than 11 December 2017. Ms Healey provided additional documents on 11 December 2017 (folios A56 to A81). These documents were exchanged with Mr Ripley, who provided a written response on 13 December 2017 (folio B1). The matter was decided on 14 December 2017.

ISSUE

1. The issue to be decided is whether Ms Healey’s application of 26 October 2016 should be granted and her annual rate of child support reduced to the minimum annual rate.

CONSIDERATION

1. The law relevant to this review is contained in the Child Support (Assessment) Act1989 (the Act) and the Child Support (Assessment) Regulations 1989. 

10.  If a parent has an adjusted taxable income of no more than the relevant parenting payment (single) amount (in this case $19,011) but did not receive income support payments during the last relevant year of income a fixed annual rate of child support applies (section 65A of the Act). A prescribed amount applies for up to three children. As Ms Healey’s taxable income for the 2015 financial year was $10,220 she is liable to pay a fixed annual rate of $2,746 from 1 January 2016.

11.  Subsections 65B(2) and 65B(4) of the Act state that in order for Ms Healey to succeed in her application for the fixed annual rate not to apply she must demonstrate:

a)That her current annual income is less than parenting payment single maximum basic amount, in this case being $19,011. A taxation notice of assessment is not sufficient to demonstrate this fact; and

b)That it would be unjust and inequitable to expect her to pay the amount assessed.

12.  Subsection 66A(4) states that income means any money derived, earned or received or the regular receipt of a gift or allowance for the benefit of the parent, with certain exceptions which are not relevant in this case.

13.  At hearing Mr Ripley cautioned the tribunal to question the accuracy of all information provided by Ms Healey. He went on to state that he is not privy to any financial information that is not before this tribunal, nor that he has any evidence to suggest that Ms Healey has any income or financial resources that she has not disclosed to the tribunal.

14.  Ms Healey stated that when lodging her application she was in receipt of rental income, some business income and was also supported by loans from her parents. The tribunal understands that in 2016 Ms Healey was undertaking university studies. There is in evidence a rejection letter which indicates that an austudy claim was rejected on the basis that she was not studying on a full-time basis. The documentary evidence also suggests that a subsequent application for an unknown payment was rejected on the basis that her assets (being her investment property) exceeded the asset test limit. The tribunal notes that she was qualified for low income and health care cards during the relevant period.

15.  After carefully considering the financial evidence before it, the tribunal makes the following findings in regards to Ms Healey’s income and financial resources. During the period 18 December 2015 to 30 June 2016 the following deposits were made into Ms Healey’s savings accounts: rental deposits of $10,131.62, business income of $2,398, as well as deposits of $2,364.44 from her father. Further deposits totalling $2,700 were made into the account. Ms Healey’s evidence is that the deposits of $2,700 were loans from her father; she did not provide documentary evidence in support of her assertion. It is noted that the objections officer was in error in considering transfers between accounts as income (so leading to double counting) and also failed to take into consideration expenses associated with her investment property. Therefore, the objections officer did not consider her net rental income.

16.  Ms Healey’s 2016 income tax return indicates her total income was $13,992. Her total business income was $2,398. She reported business losses of $6,353, taking into account motor vehicle expenses of $1,852 and other expenses of $6,899. Gross rental income was $21,183 expenses were $7,197 resulting in net income of $13,986. Her income tax return is generally consistent with the bank accounts in evidence. Even if the tribunal were to accept the deposits of $2,700 which have not been accounted for was income, Ms Healey’s relevant income was about $16,686. On this basis the tribunal is satisfied that, pursuant to paragraph 65B(2)(a) of the Act, at the time of making her application Ms Healey’s income fell below the applicable parenting payment single amount of $19,011.

17.  Next, the tribunal must establish whether Ms Healey satisfies paragraph 65B(2)(b) of the Act – that in all the circumstances it would be unjust and inequitable to expect her to pay the assessed amount. The tribunal notes the legislation states that Ms Healey’s highest priority is the maintenance of her children and that it has priority over all her commitments other than her commitment to support herself. It would be only in unusual circumstances that the tribunal could find that it would be unjust and inequitable for her to pay the assessed amount.

18.  Ms Healey’s financial circumstances are not particularly favourable. At the time of making her application for the fixed annual rate not to apply her claims for income support payments were rejected. Though she owns an unencumbered investment property, it generates only about $14,000 in net income per annum. She has no savings, and the financial evidence before the tribunal suggests that in order to meet her self-support requirements she requires financial assistance from her parents. The tribunal concludes that she finds herself in a difficult position, lacking the resources to satisfy all of her highest priorities.

19.  Ms Healey asserts that it would be unjust for her to pay the assessed amount. She claims that immediately before lodging her application she was required to pay $65 per hour to have supervised contact with her children, which placed her under financial stress. She also submits that her travel costs to facilitate contact with the children were significant as the contact visits were usually held in [certain suburbs]. She also submitted that she has an impaired capacity to work and that she was undertaking further studies.

20.  Taking all the evidence before it into account, the tribunal is persuaded that Ms Healey’s circumstances are so unusual that paying the fixed annual assessment would be unjust and inequitable. Therefore, she should be relieved of the responsibility to contribute to the maintenance of her children at the fixed annual rate from 1 January 2016.

21.  Accordingly the tribunal has decided to set aside the decision under review and find that the minimum annual rate is to be applied to the child support assessment from 1 January 2016.

DECISION

The tribunal sets aside the decision under review and, in substitution, decides that the minimum annual rate is to be applied to the child support assessment from 1 January 2016.