Holcomb and Holcomb (Child support)

[2023] AATA 2659

Holcomb and Holcomb (Child support) [2023] AATA 2659 (12 July 2023)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2023/MC025477

APPLICANT:  Mr Holcomb

OTHER PARTIES:  Child Support Registrar

Ms Holcomb

TRIBUNAL:Member M Baulch

DECISION DATE:  12 July 2023

DECISION:

The decision under review is set aside and the matter is sent back to the Child Support Registrar (the Registrar) for reconsideration in accordance with the directions that:

• The Registrar is to calculate Mr Holcomb’s child support liability for the period 3 August 2022 to 2 November 2022 having regard to the percentages of care determined by this tribunal in the applications for review numbered 2023/MC025476 and 2023/MC025478; and

• The arrears of child support owed by Mr Holcomb for the period 3 August 2022 to 2 November 2022 are equal to the liability the Registrar has calculated in accordance with the above direction.

CATCHWORDS

CHILD SUPPORT – opt-in arrears – whether there were unpaid amounts – decision under review set aside and sent back for reconsideration

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 Holcomb and Ms Holcomb are the separated parents of three children.  Since 23 June 2022 Mr Holcomb has been assessed as liable, by Services Australia – Child Support (Child Support), to pay child support to Ms Holcomb in respect of the two youngest of those children.

2. On 3 November 2022, Ms Holcomb contacted Child Support and requested that Child Support collect the liability on her behalf.  Ms Holcomb is also recorded as having requested that Child Support collect outstanding child support amounts for the period 3 August 2022 to 2 November 2022.

3. On 4 November 2022, Child Support decided to accept the request to collect child support on Ms Holcomb’s behalf.  On 7 November 2022, Child Support accepted the request to collect arrears of child support for the period 3 August 2022 to 2 November 2022 that were determined to be the amount of $3,285.36 (the decision under review).

4. Mr Holcomb objected to that decision and that objection was disallowed.  On 24 January 2023, Mr Holcomb applied to this tribunal for an independent review of Child Support’s decision.

5. A hearing into the application for review was held by the tribunal on 12 July 2023. Mr Holcomb and Ms Holcomb both participated in the hearing by telephone, and both gave evidence during the hearing. A representative of the Child Support Registrar (the Registrar) did not participate in the hearing. The tribunal had before it relevant documents provided to it by the Registrar pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 (137 pages), copies of which Mr Holcomb and Ms Holcomb confirmed they had received prior to the tribunal hearing.

ISSUE

1. The statutory provisions relevant to this review application are found within the child support law, in particular the Child Support (Registration and Collection) Act 1988 (the Act).

2. The issue which arises in this case is whether or not Mr Holcomb owes child support to Ms Holcomb in respect of the period 3 August 2022 to 2 November 2022, and how much is owed.

CONSIDERATION

1. The Child Support (Assessment) Act 1989 (the Assessment Act) provides for an administrative assessment of the child support payable by one separated parent to the other. It uses a statutory formula which contains variables such as the parents’ incomes, the number of children, their ages and their percentages of care. Section 25 of the Assessment Act provides that a parent may make an application to the Registrar seeking such an administrative assessment. Ms Holcomb made such an application on 23 June 2022.

2. When making an application for a child support assessment, the payee may elect that the liability is not enforceable (that is, the child support is collected privately and not by Child Support), pursuant to section 24A of the Act.  At a later time, the payee may apply to Child Support for the liability to become enforceable (section 28A of the Act).  If the liability is “enforceable” then it will be collected by Child Support on the payee’s behalf.

3. Having regard to the evidence before me, I found, that:

   ·      There is a registered maintenance liability in respect of Mr Holcomb’s and Ms Holcomb’s two youngest children that has applied since 23 June 2022.

   ·      Ms Holcomb had initially elected that the liability was not to be enforced.

   ·      On 3 November 2022, Ms Holcomb made an application to Child Support for the liability to become enforceable.

4. The payee may also apply to Child Support for any unpaid amounts payable under the liability, in relation to a specified period, to be treated as an arrears amount.  The specified period ends on the day before the liability becomes enforceable (subsection 28A(3) of the Act).  If the specified period does not exceed three months, Child Support must grant the payee’s application (subsection 28A(4) of the Act). 

5. Having regard to Child Support’s records of Ms Holcomb’s contact with Child Support on 3 November 2022, I found that Ms Holcomb applied for any unpaid amounts for the period 3 August 2022 to 2 November 2022 (the specified period) to be treated as arrears amounts.  As the specified period did not exceed three months, Child Support was required by law to grant Ms Holcomb’s request.

6. The evidence of both parents was that they lived as separated under the same roof until 1 October 2022.  Both parties agreed that they had an understanding that Ms Holcomb would not seek to collect child support from Mr Holcomb during this period they lived under the same roof.  However, I noted that by law Mr Holcomb was always liable to pay child support to Ms Holcomb from 23 June 2022, notwithstanding their living arrangements and any understanding between them.  Ms Holcomb has the option, subject to statutes of limitation, to take legal action through the courts to enforce the liability against Mr Holcomb.  That the liability existed, that it should have been collected by Ms Holcomb (I noted that her family tax benefit entitlement is predicated on her taking reasonable action to collect child support) or could be enforced by Ms Holcomb taking legal action appears to be something that the parents neither understood nor appreciated.

7. From 1 October 2022 it was envisaged that Mr Holcomb would commence paying child support to Ms Holcomb as they were no longer living in the same home due to its sale being settled.  Both parties seemed to consider that the amount of the liability was something that they could determine themselves using an online calculator without reference to any formal administrative assessments being made by Child Support.  Ms Holcomb asserts that Mr Holcomb undertook to pay a higher amount than had been determined by Child Support because his income was higher than the $84,636 used in that assessment.  That there was ever such an agreement was disputed by Mr Holcomb during the hearing.

8. It was my view that whether or not there was agreement for Mr Holcomb to pay a higher rate of child support is not relevant in the context of this application for review.  Even if Mr Holcomb agreed with Ms Holcomb to pay a higher rate of child support, it was not an arrangement that had any legal standing and Ms Holcomb would not be able to enforce a higher liability against Mr Holcomb, whether by making an application for collection by Child Support or by instituting her own enforcement proceedings through the courts. 

9. At law, Mr Holcomb was only ever liable to pay the amount of child support that had been determined by Child Support. If Ms Holcomb considered the child support assessment unfair due to Mr Holcomb’s income, she had the option of making an application for a departure determination under Part 6A of the Assessment Act (referred to by Child Support as a Change of Assessment). I noted this is something that she ultimately did, with Child Support making a departure determination setting Mr Holcomb’s adjusted taxable income as $103,000 per annum from 7 December 2022.

10. I found that any understanding that Mr Holcomb would not have to pay child support prior to 1 October 2022, or any agreement that Mr Holcomb would pay a higher rate of child support than had been determined by the Registrar from 1 October 2022 due to his income, had no basis in the legislation and cannot be given effect to by this tribunal in its decision making.

11. As Ms Holcomb had applied, on 3 November 2022, for the collection of unpaid amounts for a period not exceeding three months, subsection 28A(4) of the Act requires her request must be granted.  The next step is to determine the amount of Mr Holcomb’s liability to pay child support for that specified period, 3 August 2022 to 2 November 2022, and determine how much of that liability has not been paid.

12. Child Support had calculated that Mr Holcomb’s child support liability was $3,258.36 for the specified period.  In determining that amount, Child Support has used determinations about percentages of care that I have set aside in applications for review numbered 2023/MC025476 and 2023/MC025478.  If the percentages of care were those that I have concluded should apply in the child support assessment, I estimated that it is likely that the liability for the period 3 August 2022 to 2 November 2022 would be less than $3,258.36.  I considered it appropriate that the Registrar be required to determine the exact amount.

13. There is no dispute that Mr Holcomb made no payments of child support directly to Ms Holcomb in respect of the period 3 August 2022 to 2 November 2022.  Therefore, the arrears owed for the specified period will be the same as the liability for that period, which is to be recalculated by the Registrar.

14. I therefore decided that Mr Holcomb is required to pay arrears of child support for the period 3 August 2022 to 2 November 2022 in an amount which I will direct the Registrar to recalculate.

DECISION

The decision under review is set aside and the matter is sent back to the Child Support Registrar (the Registrar) for reconsideration in accordance with the directions that:

• The Registrar is to calculate Mr Holcomb’s child support liability for the period 3 August 2022 to 2 November 2022 having regard to the percentages of care determined by this tribunal in the applications for review numbered 2023/MC025476 and 2023/MC025478; and

• The arrears of child support owed by Mr Holcomb for the period 3 August 2022 to 2 November 2022 are equal to the liability the Registrar has calculated in accordance with the above direction.