Hiern and MacTavish (Child support)

[2023] AATA 4279

Hiern and MacTavish (Child support) [2023] AATA 4279 (14 November 2023)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2023/BC026185

APPLICANT:  Mr Hiern

OTHER PARTIES:  Child Support Registrar

Ms MacTavish

TRIBUNAL:Member S Irvine

DECISION DATE:  14 November 2023

DECISION:

The decision under review is affirmed.

CATCHWORDS

CHILD SUPPORT – particulars of the administrative assessment – estimate of income - whether the estimated income is less than the amount likely to be the actual income - estimate of income correctly refused - 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 Hiern and Ms MacTavish are the parents of one child, born in 2006, for whom a child support assessment has been in place since 28 April 2008.

2. On 29 March 2023 Mr Hiern elected to estimate his income for the period 29 March 2023 to 30 June 2023. Prior to his election, the child support assessment used an adjusted taxable income for Mr Hiern of $71,022, which was his taxable income for the 2021/22 financial year, and his estimate election.

3. On 29 March 2023 Services Australia – Child Support (Child Support) made a decision to accept Mr Hiern’s estimate election, which resulted in the child support assessment being based on an adjusted taxable income for Mr Hiern of $46,928 for the period from 29 March to 30 June 2023.

4. Ms MacTavish objected to Child Support’s decision on 5 April 2023, and on 23 May 2023 a Child Support objections officer allowed the objection and decided to refuse Mr Hiern’s estimate election. This resulted in the child support assessment again using an adjusted taxable income for Mr Hiern of $71,022 for the period in question.

5. On 31 May 2023 Mr Hiern applied to the Administrative Appeals Tribunal (the Tribunal) for a review of Child Support’s decision. A hearing was held on 3 November 2023. Mr Hiern and Ms MacTavish attended the hearing by telephone and gave affirmed evidence. The Tribunal had regard to the documents submitted by Child Support, and also to the oral evidence of Mr Hiern and Ms MacTavish. Ms MacTavish confirmed that she had received the documents submitted by Child Support and had had an opportunity to review them. Mr Hiern advised that he had not received the documents from Child Support.

6. Following the hearing the matter was adjourned to allow the Tribunal to obtain some additional information from Child Support, and to allow Mr Hiern an opportunity to view and consider the documents submitted by Child Support in relation to this review, as he had not received those documents prior to the hearing. No further submissions were received from Mr Hiern. The additional information provided by Child Support, being a copy of a Client Income screen showing Mr Hiern’s taxable income for the 2022/23 financial year, was received by the Tribunal on 9 November 2023. As this information confirmed evidence that was given orally at the hearing, the document was not sent to the parties prior to the decision being made, but a copy is enclosed with this decision.

ISSUES

1. The statutory provisions relevant to this review are contained in the Child Support (Assessment) Act 1989 (the Act) and the Child Support (Registration and Collection) Act 1988.

2. The issues which arise in this case are:

   ·      Whether Mr Hiern elected to estimate his adjusted taxable income in the 2022/23 financial year; and if so

   ·      Whether that election should have been accepted.

CONSIDERATION

1. Mr Hiern explained in the hearing of this matter that he was seeking a review because as far as he was concerned he had discussed his estimate with Child Support and had given them everything they had asked for, and they told him he had done everything right. So he doesn’t understand why he has still ended up in trouble.

2. Mr Hiern said that he rang Child Support because he had a new job and he needed to let them know. He went through everything with the person on the phone, including going through his payslips, and did everything they wanted. He didn’t really know how much to estimate, he just did what Child Support told him he needed to do. From his point of view, $1,800 per fortnight was what he was getting. But he did tell Child Support it could sometimes go up a bit, around $100 or $150 per fortnight.

3. In response to questions about his bank account statements, Mr Hiern confirmed that he had received the payments referenced in the objection decision, which were:

   ·     A payment on 26 April 2023 of $1,520.96 from [Employer 1]

   ·     A payment on 24 April 2023 of $479.26 from [Employer 2]

   ·     A payment on 13 April 2023 of $471.07 from [Employer 2]

   ·     A payment on 12 April 2023 of $1,602.60 from [Employer 1].

4. Mr Hiern stated that the payments from [Employer 2] were from his second job, which he only did occasionally. In the period from the end of March to the end of June 2023 Mr Hiern said he only did those two shifts, or possibly there might have been a third shift, but he didn’t do much work for them.

5. Mr Hiern confirmed that he had done his tax return for the 2022/23 year, but he didn’t know what his taxable income for the year was. Ms MacTavish gave evidence that she had received a new child support assessment that used Mr Hiern’s 2022/23 income, and according to that his income was $72,241. This was not disputed by Mr Hiern.

6. I note that the documents submitted by Child Support do include a Client Income screen showing incomes for Mr Hiern, however information about his 2022/23 taxable income was redacted from that document by Child Support – presumably on the mistaken assumption that the information was not relevant to the decision under review.

7. Following the hearing, I requested an unredacted copy of that document. On 9 November 2023 Child Support provided a new copy of that document which does show that according to Child Support’s records, Mr Hiern’s 2022/23 taxable income as reported to Child Support by the Australian Taxation Office is $72,241. For reasons that are not clear to me, Child Support has redacted other information from this copy of the document, including information that was not redacted in the original documents submitted to the Tribunal and that is clearly relevant to the decision under review. A copy of that document is included with these reasons for the information of the parties.

Did Mr Hiern elect to use an income estimate in the assessment?

1. The income that is ordinarily used in a child support assessment is that parent’s adjusted taxable income based on the parent’s taxable income for the last relevant year of income, in accordance with section 43 of the Act. The last relevant year of income is defined in section 5 of the Act as the last year of income that ended before the start of the child support period.

2. On the basis of the documents submitted by Child Support in this matter I am satisfied that the child support period relevant to this decision is the period that commenced on 1 August 2022. The last relevant year of income is therefore the 2021/22 financial year.

3. Section 60 of the Act provides that a parent may elect to estimate a lower amount to be used as their adjusted taxable income in a particular period, provided that the estimated income is not more than 85% of the adjusted taxable income that would otherwise apply.

4. Subsection 60(3) of the Act provides that if the parent makes such an election during a year of income but not on the first day of the year of income, the parent must estimate their income for the period from the day the election is made until the end of that income year. It also provides that the amount must be annualised by dividing the total income to be earned in that period by the number of days in the period, and then multiplying that by 365.

5. Subsection 60(3) also provides that the parent must estimate their adjusted taxable income from the first day of the year in question to the day before the beginning of the estimate period (generally known as a “year to date” amount).

6. I am satisfied that Mr Hiern’s adjusted taxable income in the applicable last relevant year of income (being 2021/22) was $71,022. I am also satisfied that on 29 March 2023 Mr Hiern made an election to child support to use an estimated income of $1,800 per fortnight, or $12,085.71, in the period 29 March 2023 to 30 June 2023, which annualised over that period is equivalent to an annual income of $46,982.

7. I am also satisfied that Mr Hiern provided a “year to date” amount – that is, an estimate of his adjusted taxable income up for the period 1 July 2022 to 28 March 2023 – in the amount of $46,044.

8. As Mr Hiern provided an estimate equivalent to an annual income of $46,982, which is less than 85% of $71,022, I find that Mr Hiern did elect to estimate his adjusted taxable income for the period from 29 March 2023 to 30 June 2023, and that it was an income election to which subsection 60(3) applied.

Should Mr Hiern’s estimate have been accepted?

1. Subsection 63AA(2) of the Act provides that the Child Support Registrar (or in this matter the Tribunal standing in the shoes of the Registrar) may refuse to accept a parent’s income election to which subsection 60(3) applies if, relevantly, the income amount elected by the parent is less than the actual income the parent is likely to earn.

2. In this case, Mr Hiern’s evidence is that he relied on Child Support to assist him to calculate his estimate of income, and that in his view he had done everything that Child Support had asked him to do. I accept that he did attempt to ensure that his estimate was accurate according to his understanding of the system, and that he relied on officers at Child Support to assist him. However, I am also satisfied that Mr Hiern did estimate that his taxable income would be $1,800 per fortnight over the period. It is understandable that a parent may need to rely on advice from Child Support officers to navigate the system, but ultimately it is the responsibility of the parent making the estimate election to ensure the estimate is accurate.

3. I am satisfied that Mr Hiern’s actual income in the period from 29 March 2023 to 30 June 2023 was more than $1,800 per fortnight. Mr Hiern confirmed at the hearing that his income could be a bit higher from fortnight to fortnight, and he also confirmed that he had a second job from which he earned at least some income in the period, which was not included in his estimate.

4. I also note that Mr Hiern has now lodged his tax return for the 2022/23 tax year, and that his actual taxable income for the year was $72,241. Assuming that the year to date information provided by Mr Hiern when he lodged his estimate was correct, that is, that up to 28 March 2023 he had earned $46,044, that would mean that during the period from 29 March 2023 to 30 June 2023 he must have earned an amount of approximately $26,197 during the estimate period, or an average amount of approximately $3,900 per fortnight, which is significantly more than the amount he nominated in his estimate election.

5. On the basis of that evidence, I find that the amount nominated by Mr Hiern in his estimate election was less than the amount he could reasonably be expected to have earned in that period, and on that basis the estimate should be refused.

6. As I have reached the same conclusion as the objections officer, the decision under review is affirmed.

DECISION

The decision under review is affirmed.