Hellier and Rutter (Child support)

[2018] AATA 541

Hellier and Rutter (Child support) [2018] AATA 541 (7 February 2018)

DIVISION:       Social Services & Child Support Division

REVIEW NUMBER:  2017/SC012343

APPLICANT:  Mr Hellier

OTHER PARTIES:    Child Support Registrar

Mrs Rutter

TRIBUNAL:    Member J Cuthbert

DECISION DATE:     7 February 2018

DECISION:

The tribunal varies the decision under review by varying Mr Hellier’s adjusted taxable income to $150,878 from 21 June 2016 to 31 December 2019 rather than from 4 July 2016 to 31 December 2018.

Catchwords

Child Support – Departure determination – Income and financial resources of parents – Business income – Education of child not in a manner expected by both parents – Period of departure – 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

HISTORY

1. This review concerns an application for a change to a child support assessment made by Mrs  Rutter on 21 June 2016.

2. Mrs Rutter and Mr Hellier are the parents of [Child 1] (born 2009) and [Child 2] (born 2011). There has been a child support assessment in place, made by the Department of Human Services – Child Support (the Department), since 2013. The child support assessment is currently based on Mrs Rutter having care percentages of 85% for both children and Mr Hellier having care percentages of 15%.

3. From 13 to 22 February 2016 Mr Hellier was assessed to pay child support of $10,444 a year based on his estimated income of $81,951 and a provisional income of $18,714 for Mrs Rutter.

4. From 23 February to 6 June 2016 the annual rate of child support payable by Mr Hellier reduced to $6,434 as Mr Hellier’s estimated income reduced to $59,025. On 7 June 2016 Mr Hellier amended his estimated income to $0, reducing the annual rate of child support to $0.

5. On 21 June 2016 Mrs Rutter applied to the Department for a departure from the assessment on the grounds that Mr Hellier’s income, property, financial resources and earning capacity were not properly reflected in the assessment and because of the cost of educating the children at a private school.

6. Mr Hellier lodged a cross-application on the grounds that Mrs Rutter’s income, property, financial resources and earning capacity were not properly reflected in the assessment.

7. Mr Hellier was assessed to pay an annual rate of child support of $18,490 from 1 July 2017 based on his 2014/15 adjusted taxable income of $150,878. However, he lodged an estimate of his income on 4 July 2016 of $10,880. As a consequence his annual liability to 12 May 2017 reduced to $0.

8. On 31 August 2016 a decision was made to depart from the child support assessment from 1 November 2016 to 12 August 2108 by varying Mr Hellier’s adjusted taxable income to $51,986.

9. Mrs Rutter lodged an objection to that decision on 11 January 2017. She was granted an extension of time in which to lodge her objection. On 30 March 2017 her objection was allowed. The objections officer decided to set aside the earlier decision and to vary Mr Hellier’s adjusted taxable income to $150,878 from 4 July 2016 to 31 December 2018.

10. On 15 May 2017 Mr Hellier lodged an application for a review of the objection decision with the tribunal.

11. The matter was heard on 7 February 2018. Mr Hellier attended the hearing in person. Mrs Rutter attended the hearing by telephone. The Child Support Registrar was not represented at the hearing.

12. The tribunal had access to the statement and documents provided by the Department (folios 1 to 777, 778 to 790 and 791 to 860), documents provided by Mr Hellier (folios A1 to A44) and documents provided by Mrs Rutter (B1 to B74). The tribunal also had regard to documents (folios D1 to D16) obtained from [Ms A] (or Hellier), director of [Company 1] and a company extract from the Australian Securities and Investment Commission obtained by the tribunal on 16 November 2017.

CONSIDERATION

1. The rate of child support payable by a liable parent is usually based on an administrative assessment under Part 5 of the Child Support (Assessment) Act 1989 (the Assessment 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.

2. A liable parent or a carer may apply to the Child Support Registrar for a determination to depart from the child support assessment under Part 6A of the Assessment 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:

   (i) that one, or more than one, of the grounds for departure referred to in subsection 117(2) exists; and

   (ii)    that it would be:

   (A)just and equitable as regards the child, the liable parent, and the carer entitled to child support; and

   (B)otherwise proper;

   to make a particular determination under this Part; …

3. The grounds for departure from an administrative assessment of child support are set out in subsection 117(2) of the Assessment Act. If satisfied that a ground exists and that it would be just and equitable and otherwise proper to make a particular determination, the tribunal may make one of the determinations in section 98S of the Assessment Act. That section permits a range of determinations, including varying the annual rate of child support payable or a parent’s adjusted taxable income.

Issue One – Does a ground exist to depart from the administrative assessment?

1. Mrs Rutter sought a departure from the administrative assessment on the grounds that Mr Hellier’s income, financial resources, property and earning capacity were greater than reflected in the provisional income used for him in the assessment.

2. The grounds for departure are set out in subsection 117(2) of the Assessment Act. Subparagraphs 117(2)(c)(ia) and (ib) provide as grounds for departure:

   (c)    that, in the special circumstances of the case, application in relation to the child of the provisions of this Act relating to administrative assessment of child support would result in an unjust and inequitable determination of the level of financial support to be provided by the liable parent for the child:

   (ia)because of the income, property and financial resources of either parent; or

   (ib)because of the earning capacity of either parent

   … 

3. The term “special circumstances” is not defined in the Assessment Act. In Gyselman and Gyselman [1991] FamCA 93, the Full Family Court indicated that for there to be special circumstances, the facts of the case must establish something which is special or out of the ordinary.

Mr Hellier’s income, property and financial resources

1. Mr Hellier currently receives parenting payment single and family tax benefit. His 2017 adjusted taxable income of $17,475 is made up of parental leave pay of $10,761 and parenting payment single of $6,714.

2. His 2015/16 adjusted taxable income of $83,700 is made up of salary payments totalling $83,844, allowances of $4,000, interest of $80 and dividends of $388; less deductions totalling $4,612 including motor vehicle expenses of $3,300. A capital gain of $475 made on the sale of shares was offset by earlier capital losses. He told the tribunal that he no longer owns any shares.

3. Mr Hellier told the tribunal that he has more than 15 years’ experience[in a certain role]. He worked for [Company 1]; a company owned by [Ms A], until June 2016 and has been the full-time carer of his infant son since that time. However, he acknowledged that he has continued with full-time studies which he started in 2015. He expects to obtain a Bachelor [degree] of [Discipline 1]at the end of 2017 or 2018. He told the tribunal that he had been able to study full-time while working full-time but had reduced his study load to one subject for one semester in 2016 after [Child 3] was born. He said that he currently attends tutorials on two or three days a week.

4. Mr Hellier’s expenses, including rent of almost $1,000 a week, greatly exceed his income. He claims that he separated from his wife, [Ms A], in late January 2016 but that she continues to pay his rent even though she left the home in early February 2017. At the directions hearing Mr Hellier said that he was able provide a copy of the lease for the premises his wife had moved to. He did not provide the document as directed, claiming that he had overlooked doing so. The tribunal infers that the document does not exist. Mr Hellier said that [Ms A] also meets the cost of child care and nappies and clothing for [Child 3] in lieu of paying child support. He said that she does not usually have any overnight care of [Child 3] although she visits his home.

5. The tribunal notes that the expenses shown on Mr Hellier’s bank statements do not indicate that he meets household expenses such as electricity bills. The statements also do not indicate the purchase of grocery items to the extent that might be expected (Mr Hellier estimated that he spends $240 a week on groceries and household supplies). Mr Hellier was unable to provide any explanation but was adamant that he paid electricity bills of about $500 a quarter.

6. Mrs Rutter contends that Mr Hellier and his wife did not separate and that they still live together. She states that the children (who have contact with their father on alternate weekends and in holidays) continue to speak about [Ms A]’s presence in the house. She stated that when collecting and dropping off the children Mr Hellier does not have [Child 3] in his care. She contends that this indicates [Ms A] is caring for [Child 3] at those times. Mrs Rutter claims that Mr Hellier has orchestrated the situation to reduce his income, noting that prior to their separation she received income from[his company], which was used as a mechanism to split Mr Hellier’s income. Mr Hellier did not deny that he and Mrs Rutter had utilised a company structure and paid wages to Mrs Rutter in order to reduce his income.

7. Mrs Rutter also referred to an undated letter from [Ms B] which was provided to the Department by Mr Hellier. The letter states that Mr Hellier worked for an unnamed employer from 16 November 2015 to 6 June 2016. Mr Hellier denies telling the objection’s officer that [Ms B] was his partner. He told the tribunal that [Ms A] provided him with the letter and that he had never met [Ms B]. He suggested that [Ms B] may have been doing administrative work for [Company 1]. However, the tribunal notes no indication that [Company 1] had employees other than [Ms A] and Mr Hellier. The tribunal infers that the letter was provided to the Department in an attempt to distance Mr Hellier from the operation of [Company 1].

8. Mrs Rutter also noted discrepancies in the information Mr Hellier provided. In a Statement of Financial Circumstances (SFC) form completed by Mr Hellier on 1 September 2017 Mr Hellier stated that he has a 50% share in [Car 1]worth $20,000. A Centrelink statement dated 28 December 2017 records that Mr Hellier has a 100% share in a motor vehicle worth $15,000. Centrelink also record that Mr Hellier has an 80% share in one bank account #[number 1] The tribunal accepts that the information in the Centrelink statement may indicate that Mr Hellier has not provided an update of his assets since he made a claim for payment in early 2017. The tribunal has evidence of a joint bank account #[number 1] with Ms Hellier held with [Bank 1]as late as 24 March 2017.

9. Mr Hellier told the tribunal that the only bank account he now holds is [Bank 2]# [number 2], an account he opened some time in the period March to June 2017. He provided copies of statements for that account to the tribunal but did not provide the statements for June 2017 as directed. Mr Hellier said that the omission was unintentional. He said that he has only one account.

10. The Department obtained bank statements for #[number 3], an account held by [Company 1]. The bank stated that both [Ms A] and Mr Hellier were signatories to the account to which regular credits were made by [Company 2] . Mr Hellier said that he has no role in this account and that he had taken this up with the bank. He denies being a signatory and stated that he was not aware that he ever had access to the account.

11. Mr Hellier did not deny Mrs Rutter’s suggestion that the $70 paid for flowers from his bank account on 15 September 2017 were for [Ms A]’s [birthday]. He provided the tribunal with copies of a small number of rental applications made in the period August to December 2017. At the hearing he said that he had not made any applications since December 2017. The applications show attempts to lease properties which are renting for about $500 when Mr Hellier’s stated income is less than $600 a week.

12. Mr Hellier claims that he is unaware how much his wife earns. Towards the end of the hearing he stated that she had a Bachelorof [Discipline 2]degree but that she did some  [Discipline 3] subjects. The tribunal notes that he had previously stated to the tribunal that [Ms A] had a background in [Discipline 3]  although her qualifications were in[Discipline 4]. In a written response to the Department on 21 February 2017 he stated:

    My estranged wife has a degree in [Discipline 3]  which was completed in September 2014 and has worked in the industry for over 10 years. My estranged wife is more qualified than I am  to work in [this]  industry given that she has an [Discipline 3]  degree and I do not.

13. Mr Hellier acknowledged that the statement in his 2016/17 income tax return that his wife’s 2016/17 taxable income was $10 was intentionally incorrect. The tribunal notes that contract payments continue to be made to [Company 1] by [Company 2], which appears to be the only contract held by the company. The tribunal has no evidence from [Company 2] concerning the persons performing the contracts on behalf of [Company 1].

14. The tribunal finds that Mr Hellier’s adjusted taxable income for 2016/17 was less than the self-support amount used in the child support assessment.  It is unclear whether he continues to have income or financial resources from the operation of [Company 1]. Although ordered to do so, [Ms A] did not provide the tribunal with copies of financial statements for [Company 1] for the 2015/16 and 2016/17 years. She stated that the documents do not exist. A business activity statement for the period July to September 2017 indicates sales of $59,544, or a turnover of close to $240,000 a year.

15. The tribunal did not find Mr Hellier to be a credible witness. On the evidence available the tribunal finds that he is not separated from his wife, but that he has organised his affairs in a way which seeks to minimise his child support liability. In order to do so he had made false statements to the Australian Taxation Office and Centrelink. For reasons set out below the tribunal did not consider it necessary to determine whether Mr Hellier continues to work for [Company 1] providing services for [Company 2].

Mr Hellier’s earning capacity

1. The tribunal also considered Mr Hellier’s earning capacity and the three criteria in subsection 117(7B) of the Assessment Act.

2. He told the tribunal that he has wanted to be [an occupation]for some time and anticipates continuing his studies with a Masters degree. However, Mr Hellier told the tribunal that it was never his plan to stop work while he was studying.

3. [Child 3] has attended child care since December 2016. He initially attended for three or four days a week, but now attends five days a week. Mr Hellier did not provide the tribunal with copies of child care sign out sheets from December 2016 onwards but provided five sheets for the period before the date that he states that he and [Ms A] separated. His evidence that the child care centre stores documents off site and only had sign in sheets from December 2016 and January 2017 was not credible. Clearly the most recent documents should have been available. The tribunal infers that the information in the documents would have been adverse to Mr Hellier, perhaps showing that he is not the only person picking [Child 3] up and dropping him off.

4. Mr Hellier contends that he is no longer able to work and study as he did previously because his current subjects require a lot of reading and writing. He said that he would get sick after exams and could not sustain both work and study. He said that he had considered part-time work but that there were no jobs available in [his current] industry. He said that he had not considered work in other areas. He did not provide any evidence to suggest that he has a health condition which affects his capacity to work.

5. In evidence to the Federal Circuit Court in March 2016 Mr Hellier had stated that his hours of work in [his current] industry were extremely flexible which allowed him to “spend additional time with my children and allows me much flexibility to schedule my work commitments around my children and my studies”.

6. The tribunal notes that [Company 1] was registered by [Ms A] in August 2015. She is the sole shareholder and director. Mr Hellier told the tribunal that the intention in setting up [Company 1] was “for us both to build a business together and to grow it”. He said that it was expected to provide freedom which is not available when working for an employer and that he expected to have a lower income initially but to build up to more than his previous income level within two years. Mr Hellier said that he did not become a shareholder of director of [Company 1] as [Ms A] managed the money and he “was not interested in the financial side”. He said that he and [Ms A] married in January 2016. Mr Hellier told the tribunal that although his income had reduced Mrs Rutter had income and was capable of providing for [Child 1] and [Child 2].

7. The tribunal notes finds that Mr Hellier changed his working pattern when he became employed by [Company 1] and expected a reduction in income. There is no suggestion that the change to his work pattern at that time was justified on the basis of any health condition or caring responsibilities.

8. Mr Hellier advised the Department that he had ceased work and would be the full-time carer for his child before [Child 3] was born. He said that he and [Ms A] had decided that he would be the baby’s carer as [Ms A] had been advised by her [treating medical practitioner]that it was likely that she would be unable to care for the baby due to[ a medical condition]triggered by her pregnancy. Mr Hellier said that he had a copy of a letter from the [treating medical practitioner]but did not provide it to the tribunal. He stated that [Ms A] returned to full-time work the week after [Child 3] was born. Mr Hellier stated that [Ms A] was able to work full-time as she could take medication and lie down at work for an hour if she had an episode.

9. In the absence of medical evidence and in light of the tribunal’s earlier findings about his credibility and the manner in which he has arranged his circumstances, the tribunal does not accept that Mr Hellier’s decision not to work from June 2016 was justified by reason of his caring responsibilities for [Child 3].

10. The tribunal considered Mr Hellier’s motivations for changing his work pattern and subsequently stopping work. The tribunal is not satisfied that he did not alter his position in order to effect the child support assessment. To the contrary, the tribunal has evidence to support a finding that Mr Hellier has arranged his circumstances in order to affect his child support liability.

11. The tribunal finds that the three criteria of subsection 117(7B) of the Assessment Act are satisfied. The tribunal notes that Mr Hellier’s adjusted taxable incomes were $154,342 for 2013/14 and $150,878 for 2014/15. Having regard to Mr Hellier’s evidence about his expected future earnings, the tribunal is satisfied that he could have continued to earn at least the same amount as he earned in 2014/15.

Do the existing assessments provide a result which is unjust and inequitable?

Mrs Rutter’s income, property, financial resources and earning capacity

1. In order to determine whether Mr Hellier’s earning capacity results in child support assessments which are an unjust and inequitable determination of the financial support he should provide for [Child 1] and [Child 2], the tribunal considered whether Mrs Rutter’s adjusted taxable income is indicative of her income, property, financial resources and earning capacity.

2. Mrs Rutter is employed by her father as a [occupation]for two days a week. She told the tribunal that her hours of work vary, but that she is paid $100 a day, based on an hourly rate of $25. Mrs Rutter also received parenting payment single until she moved to live with her partner in 2016. Although the payslips provided are irregular in some respects the tribunal finds no evidence that Mrs Rutter also works for cash in hand as Mr Hellier suggests.

3. Mr Hellier noted that Mrs Rutter had not provided copies of bank statements for accounts held in the children’s names. He suggested that there were thousands of dollars invested. Mrs Rutter noted that payments of $20 a month are made from her account to the children’s accounts.

4. Mr Hellier also suggested that Mrs Rutter has income from the operation of a business. However, the tribunal accepts Mrs Rutter’s evidence that the business ceased to operate prior to the parties’ separation. While Mrs Rutter provided the tribunal with copies of her notices of assessment and not her income tax returns for the 2015/16 years and 2016/17 years as directed, the tribunal accepts that she has no other income. Mrs Rutter’s 2015/16 adjusted taxable income was $23,160. Her adjusted taxable income reduced to $11,904 in 2016/17 due to the cessation of parenting payment.

5. On the evidence available the tribunal finds that Mrs Rutter has no other financial resources or property which are capable of providing her with income. The tribunal is satisfied that her current income is less than the self-support amount used in the child support formula.

6. The tribunal also considered Mrs Rutter’s earning capacity. For two years prior to [Child 2]’s birth she worked as a [occupation], earning about $70,000 a year. She did not return to work after taking maternity [leave]. She told the tribunal that she had intended to return to part-time work once [Child 2] started school but had always wanted to be a stay-at-home mother.  While Mr Hellier stated that before they separated he had envisaged that Mrs Rutter would return to full-time work once [Child 2] started school, he acknowledged that they had not discussed whether she would work full-time or part-time and that she may have had part-time work in mind.

7. For more than two years Mrs Rutter has been working for her father. She said that although the work involves travel the days and hours are flexible and allow her to drop off and collect the children and her step-children as well as to take them to extra-curricular activities. She told the tribunal that the cost of before and after school care for three of the children would not make full-time work viable. She said that she was not aware of any suitable part-time work [in her industry]in her area and that, in the event that she could obtain work, she would be unlikely to be able to earn more than $30,000 for two days work.

8. The tribunal finds that Mrs Rutter is not working full-time hours and that her ability to work is not affected by her caring responsibilities as she could utilise before and after school child care. However, the tribunal is satisfied that Mrs Rutter has not made the decision to work part-time for her father in order to affect the child support assessment. The tribunal accepts her evidence that she always intended to seek part-time work which would allow her to be available for the children before and after school. The tribunal finds that the third criterion of subsection 117(7B) of the Assessment Act is not satisfied and therefore the tribunal is unable to determine that Mrs Rutter’s earning capacity is greater than her actual income.
   

Are there special circumstances for which to depart from the assessment?

1. Taking into account the objects of the Assessment Act (section 4), including that children should share in the standard of living of both their parents, the tribunal finds that the earning capacity of Mr Hellier provides special circumstances for which to depart from the assessment. Mr Hellier would be liable to pay far more child support if the assessment was based on his earning capacity rather than his adjusted taxable income. The tribunal finds that the assessment is unfair to Mrs Rutter and to the children for that reason and that a ground is established to depart from the assessment under subparagraph 117(2)(c)(ib) of the Assessment Act.

Issue Two – Would a departure from the administrative assessment be just and equitable?

1. As the tribunal is satisfied that there is a ground to depart from the administrative assessment of child support, the next step is to consider whether it is just and equitable to depart from the assessment having regard to the matters set out in subsection 117(4) of the Assessment Act.

2. Section 3 of the Assessment Act states that it is the duty of both parents to financially support their children. In accordance with the objects set out in section 4 of the Assessment Act, [Child 1] and [Child 2] should receive a proper amount of financial support from their parents in accordance with their capacity to contribute.

The children’s needs

1. [Child 1] is eight years old and [Child 2] is six. They both attend [School 1]. [Child 1] is in Year 3 in 2018 and [Child 2] is in Year 1.

2. Mr Hellier does not dispute that he signed an enrolment form for [Child 1] to attend [School 2]in 2015. He told the tribunal that he had tried to discuss the idea of [Child 1] changing to a public school in late 2015 or early 2016, prior to Mrs Rutter’s move to [another area]in September 2016. In emails to Mrs Rutter in March and June 2016 Mr Hellier stated that his financial circumstances had changed and that he saw “no reason to continue to send out (sic) children to a religious school”. He said that he would not be signing [Child 2]’s enrolment form and would not pay school fees in 2017. Just before Mrs Rutter moved she enrolled both children at[School 1]. [Child 2] started school in 2017.

3. The tribunal is satisfied that despite Mr Hellier’s change of mind, at the time of separation he expected that [Child 1] would be educated at a Catholic primary school. He told the tribunal that while he subsequently wanted both children to attend a public primary school he had no intention that the children would attend different schools. For that reason, the tribunal finds that, despite his opposition, Mr Hellier had also expected that [Child 2] would be educated at a Catholic primary school.

4. The school fees for [Child 1] for 2016 (excluding the cost of excursions) were $2,374. Mr Hellier met 50% of those fees. The tribunal notes that the children’s school fees at St Paul’s are less than they would be at[School 2]. The fees are payable for [Child 1], [Child 2] and one of Mrs Rutter’s step-children. For 2017 the family fees (which exclude excursions and other expenses that parents would meet whether their child attended a public or private school) were $2,410. The tribunal accepts Mrs Rutter’s evidence that they are $2,529 in 2018. As the fees are payable for three children, the tribunal finds that the cost of each child’s attendance is $803 for 2017 and $843 for 2018.

5. Other than the costs of school fees (discussed below), the tribunal finds that the costs related to the care of [Child 1] and [Child 2] are not out of the ordinary range of expenses for children of their ages.

The children’s income, property, financial resources and earning capacity

1. The tribunal has no evidence that either [Child 1] or [Child 2] has any income, property or financial resources or any unused earning capacity that needs to be taken into account in the child support assessment.

The income, property, financial resources and earning capacity of Mrs Rutter

1. The income, property, financial resources and earning capacity of Mrs Rutter have been discussed above.

Mrs Rutter’s necessary commitments

1. Mrs Rutter lives with her husband, her two children and two step-children, in a house they own, which is subject to a mortgage. She receives family tax benefit for her children and step-children. She did not provide a break-up of her expenses for the children but has household expenses of about $1,700 a week. After reviewing the bank statements Mrs Rutter provided, the tribunal is satisfied that she is only able to meet the reasonable and necessary expenses she has for herself and her children because of her husband’s contribution to the household income. Mrs Rutter’s husband does not have a duty to support [Child 1] or [Child 2].

The income, property, financial resources and earning capacity of Mr Hellier

1. The income, property, financial resources and earning capacity of Mr Hellier have been discussed above.

Mr Hellier’s necessary commitments

1. Mr Hellier lives in rented accommodation. He claims to live alone and that he would be unable to meet his reasonable and necessary expenses if it were not for the assistance of his estranged wife. The tribunal notes that, apart from rent payments of almost $1,000 a week, Mr Hellier’s expenditure appears modest. He has regular appointments with a psychologist, but the out of pocket cost is $15 a session.

2. On the basis of the findings made above, the tribunal is satisfied that Mr Hellier should be able to meet his reasonable and necessary expenses.

The parents’ duty to support others  

1. The tribunal finds that Mrs Rutter does not have a duty to support any other person apart from [Child 1] and [Child 2]. Mr Hellier’s duty to support [Child 3] is taken into account in the assessment.

Terms and period of departure

1. Mrs Rutter made her departure application on 21 June 2016. She told the tribunal that a decision to increase Mr Hellier’s liability should be backdated as she had previously given him the benefit of the doubt about his reduction in income and wasn’t aware that she could seek an increase. The tribunal notes that an application for a departure from the assessment made by Mrs Rutter on 23 April 2015 in relation to Mr Hellier’s income was refused on 19 June 2015. Mrs Rutter did not object to that decision and did not make another application prior to June 2016, although she did lodge an objection in September 2015 to a decision to exclude some of Mr Hellier’s post separation income.  In those circumstances the tribunal proposes to depart from the assessment from 21 June 2016, the date of Mrs Rutter’s application, and not from any earlier date. The tribunal considers that it would not be just and equitable to cause any further arrears or an overpayment for any earlier period.

2. The tribunal finds that it would be just and equitable to depart from the assessment by varying Mr Hellier’s adjusted taxable income to $150,878.

3. The tribunal does not consider that it would be just and equitable to increase Mr Hellier’s child support liability to include a contribution to the children’s school fees as the amounts payable are modest in comparison to the overall costs Mrs Rutter has for each of the children and the child support that Mr Hellier will be liable to pay under the proposed decision (about $350 a week). The fees at [School 1] are also not considerably more than voluntary fees that parents may pay for their children to attend a public primary school.

4. Mrs Rutter stated that a departure from the assessment should be made for as long a period as possible. Taking into account the history of the matter and to provide some certainty, the tribunal proposes to extend the variation to Mr Hellier’s adjusted taxable income to 31 December 2019 at which time Mr Hellier may have completed his studies.

5. The tribunal finds that the proposed variation results in a child support liability which reflects a reasonable level of support for [Child 1] and [Child 2] given the differences between their parents’ incomes, property, financial resources and earning capacities and Mr Hellier’s duty to support [Child 3].

Hardship

1. The child support payable on the basis of the decision proposed should assist Mrs Rutter to meet the children’s proper needs.

2. On 23 January 2018 Mr Hellier owed child support arrears of almost $28,000. The proposed decision will result in some increase to the arrears. However, in light of the findings about his earning capacity the tribunal considers that the proposed decision will not result in hardship to him or to his children.

Issue Three – Is it otherwise proper to depart from the administrative assessment?

1. The final step for the tribunal to undertake is to determine whether it is “otherwise proper” to depart from the administrative assessment. Subsection 117(5) of the Assessment Act requires the tribunal take into consideration the following matters:

   (a) the nature of the duty of a parent to maintain a child (as stated in section 3) and, in particular, the fact that it is the parents of a child themselves who have the primary duty to maintain the child; and

   (b)    the effect that the making of the order would have on:

   (i)any entitlement of the child, or the carer entitled to child support, to an income tested pension, allowance or benefit; or

   (ii)the rate of any income tested pension, allowance or benefit payable to the child or the carer entitled to child support.

2. The child support law recognises that each parent has a primary duty to maintain their children. Mrs Rutter receives family tax benefit for [Child 1] and [Child 2]. The tribunal is satisfied that it is otherwise proper to depart from the administrative assessment in this matter and to properly reflect Mr Hellier’s earning capacity.

DECISION

The tribunal varies the decision under review by varying Mr Hellier’s adjusted taxable income to $150,878 from 21 June 2016 to 31 December 2019 rather than from 4 July 2016 to 31 December 2018.