Holcomb and Holcomb (Child support)

[2023] AATA 2665

Holcomb and Holcomb (Child support) [2023] AATA 2665 (12 July 2023)

DIVISION:Social Services & Child Support Division

REVIEW NUMBERS:  2023/MC025476 & 2023/MC025478

APPLICANT:  Mr Holcomb

OTHER PARTIES:  Child Support Registrar

Ms Holcomb

TRIBUNAL:Member M Baulch

DECISION DATE:  12 July 2023

DECISION:

The tribunal set aside both of the decisions under review and, in substitution, decided that:

• The percentages of care applying in the child support assessment from 23 June 2022 are to record Mr Holcomb as having 50% care of [Child 1] and [Child 2] and Ms Holcomb as having 50% care.

• The percentages of care applying in the child support assessment from 1 October 2022 are to record Mr Holcomb as having 28% care of [Child 1] and Ms Holcomb as having 72% care and Mr Holcomb as having 59% care of [Child 2] and Ms Holcomb as having 41% care.

• A determination is made pursuant to subsection 87AA(2) of the Child Support (Registration and Collection) Act 1988 that subsection 87AA(1) applies as if the reference to 28 days in paragraph (b) were a reference to a longer period, so Mr Holcomb’ objections are considered to have been lodged within that period.

CATCHWORDS

CHILD SUPPORT – percentage of care – whether there was a change to the likely pattern of care – existing percentage of care determinations revoked and new determinations made – decisions under review set aside and substituted

CHILD SUPPORT – percentage of care – date of effect provisions – whether there were special circumstances that prevented the objection being lodged in time – special circumstances exist

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. The Child Support (Assessment) Act 1989 (the 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’ adjusted taxable incomes, the number of children and their percentages of care. 

2. Mr Holcomb and Ms Holcomb are the separated parents of three children, including [Child 1] and [Child 2].  On 23 June 2022, Ms Holcomb applied to Services Australia – Child Support (Child Support) seeking an administrative assessment of child support.  On 7 July 2022, Child Support decided to accept the application for an administrative assessment and made child support assessments based upon Mr Holcomb having 25% care of [Child 1] and [Child 2] and Ms Holcomb having 75% care (the first decision under review).

3. On 12 October 2022, Mr Holcomb advised Child Support that there had been a change in the care arrangements applying for [Child 2], such that he had 72% care from 1 October 2022.  That information was considered by Child Support, who decided on 17 October 2022, that there was to be no change to the care percentages applying in the child support assessment for [Child 2] (the second decision under review).

4. On 16 November 2022, Mr Holcomb objected to those decisions, and on 23 January 2023, those objections were disallowed.  On 24 January 2023, Mr Holcomb applied to this tribunal seeking an independent review of Child Support’s decisions.

5. A hearing into the application for review was held by the tribunal on 12 July 2023.  Mr Holcomb and Ms Holcomb both discussed the application for review with the tribunal by telephone and both gave evidence during the hearing.  A representative of the Child Support Registrar (the Registrar) did not participate in the hearing.

6. The tribunal had before it relevant documents provided to it by Child Support pursuant to sections 37 and 38AA of the Administrative Appeals Tribunal Act 1975 (269 pages), copies of which both parents had received before the tribunal hearing.  The tribunal also had regard to additional material provided by Mr Holcomb (labelled A1), which was read aloud to Ms Holcomb by the tribunal at the start of the hearing.

ISSUES

1. The statutory provisions relevant to this review application are found within the Act and the Child Support (Registration and Collection) Act 1988 (the Registration and Collection Act).

2. The issues which arise in the application for review are what should be the percentages of care for [Child 1] and [Child 2] that apply in the child support assessment.

CONSIDERATION

1. Sections 49 and 50 of the Act require consideration of the actual, or likely, pattern of care that the parents will have in relation to their children during a care period.  This gives rise to the determinations about the percentages of care to be applied in the child support assessment.

2. Section 54A of the Act provides that the extent of care that a person is to have may be worked out on the number of nights that a child is likely to be in that person’s care in a care period.  I noted that the term “care” is not defined in the child support legislation.  However, I had regard to the decision of Federal Magistrate Hughes (as she then was) in Polec & Staker & Anor (SSAT Appeal) [2011] FMCAfam 959, where she stated at [53] and [56]:

   53.Given the lack of a relevant statutory definition of “care” of a child, all parties requested that the Court provided some guidance in relation to the matters that should be taken into account in considering whether and to what extent the first respondent continued to provide care for the child the subject of these proceedings.

   …

   56.In my view, in determining whether and to what extent a person has care of a child for the purpose of the Child Support (Assessment) Act 1989 and the Child Support (Registration and Collection) Act 1988, it is necessary to consider the following:

   a.     To what extent does the person meet the needs of the child by providing the child with accommodation, clothing, food, child care, education, health care, emotional support, supervision, transport and extra curricular activities?

   b.    To what extent does the person make arrangements for others to meet the needs of the child?

   c.     To what extent does the person pay for the costs of meeting the needs of the child?

   d.    To what extent does the person otherwise provide financial support for the child?

   e.     To what extent does the child provide for his or her own needs or have those needs met from another source?

   f.     To what extent is the child financially independent or financially supported from another source?

Care for the period 23 June 2022 to 30 September 2022

1. When Ms Holcomb applied for a child support assessment on 23 June 2022, she and Mr Holcomb continued to reside, with [Child 1], [Child 2] and their adult son [named], in the same home.  The arrangement continued until approximately 30 September 2022, when the settlement for the sale of the family home occurred.

2. Ms Holcomb submitted at hearing that during this time, she committed more time than Mr Holcomb to providing care for [Child 1] and [Child 2].  She transported them to school or other activities or appointments, and she provided the greater proportion of care, supervision and emotional support for the children.  This had been the arrangement since the children were young, and she returned to full-time work when they were both of school age.  Child Support has reflected this by accepting Ms Holcomb’s claims about the percentages of care; 25% for Mr Holcomb and 75% for herself.

3. Ms Holcomb did not dispute that Mr Holcomb was the higher income earner and contributed more financially to the running of the household while she and Mr Holcomb resided in the family home after separation.

4. It was my view that there are two aspects to a parent providing care for their child.  There is the commitment of time by the parent providing for the child’s needs, and then there is a financial commitment to pay for things like shelter, food, clothes, transport, schooling and the like.  The definition of “care” enunciated by FM Hughes reflects this duality.

5. If weight is given to Mr Holcomb’s greater financial contribution to the household, I concluded that percentages of care of 25% for Mr Holcomb and 75% care of Ms Holcomb are not appropriate.  Both parents resided in the same home, and both contributed to the running of the household, whether by the commitment of time or by financial contributions.  I concluded that the pattern of care for the period Mr Holcomb and Ms Holcomb resided in the same home is more likely to be 50%–50%.

6. I therefore decided that, from 23 June 2022, the percentages of care applying in the child support assessment should record, pursuant to section 50 of the Act, Mr Holcomb as having 50% care of [Child 1] and [Child 2] and Ms Holcomb as having 50% care. 

7. Therefore, I would have allowed Mr Holcomb’s objection to the decision made on 7 July 2022 in respect of the percentages of care applying in the child support assessment from 23 June 2022.

Care from 1 October 2022

1. There is no dispute that from 1 October 2022, the parents ceased living in the former family home and had established their own separated residences. 

2. It was also not disputed that from 1 October 2022 the care arrangements for [Child 1] had him spending time with Mr Holcomb for two nights each week and for five nights per week with Ms Holcomb.  Applying the rounding rules set out in section 54D of the Act (percentages less than 50 are rounded down and percentages greater than 50 are rounded up), I determined that Mr Holcomb had 28% care of [Child 1] from 1 October 2022 and Ms Holcomb had 72% care. 

3. On 3 November 2022, Child Support made a decision that reflected Mr Holcomb as having 72% care of [Child 2] from 1 November 2022 and Ms Holcomb having 28% care.  In light of this subsequent decision about [Child 2’s] care, I confined my consideration to what care occurred for [Child 2] during the period 1 October 2022 to 31 October 2022.

4. The evidence suggests that during the period 1 October 2022 to 31 October 2022, the care arrangements for [Child 2] were in a state of flux.  Initially it was envisioned that [Child 2] would spend two nights per week with Mr Holcomb and then five nights per week with Ms Holcomb.  However, part way through the month, this changed so that [Child 2] was spending five nights with Mr Holcomb and two nights with Ms Holcomb.  The point in time at which this change occurred is disputed by the parents.  Mr Holcomb claims it was 1 October 2022 and Ms Holcomb claims discussed mid-way through October and did not commence until 1 November 2022. 

5. What is not disputed is that care occurred in accordance with the care recorded in the calendar for October 2022 provided by Ms Holcomb, signed by both parents and found in the documents at page 79.  Having regard to this calendar, I identified that Mr Holcomb had care of [Child 2] for 18 nights and Ms Holcomb had care for 13 nights during October 2022.  This equates to a percentage of care for Mr Holcomb of 59% and for Ms Holcomb of 41%.

6. Section 54F of the Act provides that an existing care percentage decision must be revoked if Child Support is notified, or becomes aware, that the actual care that is taking place does not correspond with the existing percentages of care recorded and that change would alter the cost percentage used for the parent in the administrative assessment. 

7. Section 55C of the Act contains a table that is used to work out a person’s cost percentage:

Cost percentages
Item	Column 1 Percentage of care	Column 2 Cost percentage
1	0 to less than 14%	Nil
2	14% to less than 35%	24%
3	35% to less than 48%	25% plus 2% for each percentage point over 35%
4	48% to 52%	50%
5	more than 52% to 65%	51% plus 2% for each percentage point over 53%
6	more than 65% to 86%	76%
7	more than 86% to 100%	100%

1. I was satisfied that the care arrangements that have applied since 1 October 2022 for [Child 1] and [Child 2] would result in a change to the cost percentages used in the child support assessment.  Therefore, the existing care determinations that have applied for [Child 1] and [Child 2] since 23 June 2022 (50% for Mr Holcomb and 50% for Ms Holcomb) must be revoked.

2. Subsection 54F(3) of the Act prescribes when a care percentage revocation takes effect.  If Child Support is advised, or otherwise becomes aware, of the change in the care arrangements within 28 days of that change occurring, the revocation takes effect on the day before the change in care. 

3. The care occurring for [Child 1] and [Child 2] changed on 1 October 2022 and Mr Holcomb advised Child Support about the care arrangements for [Child 2] on 12 October 2022, which is within 28 days.  I also found that Child Support would have otherwise become aware that the care for [Child 1] had changed on the same date.  Therefore, the existing care percentage determinations are revoked from the date before the day on which the care arrangements changed; in other words, from 30 September 2022.

4. As I have revoked the existing care percentage determinations that applied in respect of [Child 1] and [Child 2], I must make new care percentage determinations that reflect the pattern of care occurring from 1 October 2022.  Accordingly:

   ·      Pursuant to section 50 of the Act, I determined that Mr Holcomb’s percentage of care for [Child 1] was 28%.

   ·      Pursuant to section 50 of the Act I determined that Ms Holcomb’s percentage of care for [Child 1] was 72%.

   ·      Pursuant to section 50 of the Act, I determined that Mr Holcomb’s percentage of care for [Child 2] was 59%.

   ·      Pursuant to section 50 of the Act I determined that Ms Holcomb’s percentage of care for [Child 2] was 41%.

   According to section 54B of the Act, the new care determinations apply from the day after the previous care determinations were revoked, which is from 1 October 2022.

5. I therefore would have allowed Mr Holcomb’ objection to the decision made on 17 October 2022 to refuse to change the percentages of care for [Child 2].

Date of effect of these decisions

1. I would have allowed both of Mr Holcomb’s objections and therefore need to consider from which date the decisions on those objections should take effect.

2. There is no time limit within which a person must lodge an objection against a care percentage decision. However, if the person makes their objection more than 28 days after the date the notice of the decision is served upon them, and they are successful in their objection, the objection decision has effect from the date they made their objection pursuant to subsection 87AA(1) of the Registration and Collection Act.

3. This is the case unless there are special circumstances that prevented the person from lodging the objection within 28 days, in which case the Registrar (or myself standing in the Registrar’s shoes) may treat the reference to 28 days in subsection 87AA(1) of the Registration and Collection Act as a reference to a longer period as determined by the Registrar to be appropriate (subsection 87AA(2) of the Registration and Collection Act).

4. In this case, Mr Holcomb lodged his objections to the decisions made on 7 July 2022 and 17 October 2022 on 16 November 2022. 

5. Mr Holcomb receives his correspondence from Child Support electronically and is thus taken to have been given the letters about the care decisions on the date the letters were available to access online (see section 161 of the Evidence Act 1995).  Therefore, Mr Holcomb made his objections more than 28 days after he was served notice of the decisions in respect of which he wishes to object. 

6. This means that unless special circumstances prevented Mr Holcomb making his objection earlier, the percentages of care I have determined would apply from 16 November 2022, essentially rendering my decisions nugatory.

7. The legislation does not define special circumstances.  For assistance, I had regard to the Child Support Guide, which describes special circumstances thus:[1]

   [1] Child Support Guide 4.1.8, Guides to Social Policy Law, the Department of Social Services, version 4.72, can be found at align="left">Special circumstances

   In considering special circumstances the Registrar will look at the particular circumstances of the applicant. The applicant must show that their particular circumstances prevented them from lodging an objection within the required timeframe. They must explain why there was a delay in lodging the objection and that the circumstances are sufficiently special for the applicant to receive the benefit of an extension to the period in which to lodge an objection, in order for the objection decision to have effect from an earlier date. Some examples of special circumstances may include:

   ·the parent was seriously ill or had an accident that stopped them from lodging an objection

   ·the parent suffered a personal trauma such as a death in the family or a natural disaster that caused damage to the parent's property

   ·the parent had communication difficulties, including isolation, illiteracy or poor English-language skills

   ·the parent reasonably relied upon inaccurate or misleading information.

   I noted that I am not bound by policy as set out in the Guide.  However, in Drake v Minister for Immigration and Ethnic Affairs [1979] FCA 39, the Federal Court held that a tribunal should take into account relevant government policy which is not inconsistent with the provisions or objects of the legislation. In this instance, I accepted the policy is unobjectionable and, in the interests of consistency of decision-making under the Act, considered that this policy should be applied.

8. Evidence of both parents was that Ms Holcomb would not seek to enforce the child support liability against Mr Holcomb while they continued to reside in the former family home, and that Mr Holcomb would commence paying child support from 1 October 2022.  However, a dispute arose between the parents after 1 October 2022.  Mr Holcomb was seeking to have the percentages of care for [Child 2] amended and Ms Holcomb was seeking to have Mr Holcomb pay child support on a higher income. 

9. As a consequence, Mr Holcomb did not pay child support as agreed, from 1 October 2022 and, on 3 November 2022, Ms Holcomb applied to Child Support for it to collect the liability.  Due to the dispute about Mr Holcomb paying child support on a higher income, Ms Holcomb decided that she was justified to seek to collect arrears from 3 August 2022 and Child Support granted this request on 7 November 2022.  This precipitated Mr Holcomb’s objections on 16 November 2022.

10. I accepted that Mr Holcomb reasonably relied on the understanding between the parents that he was not required to pay child support while he and Ms Holcomb continued to live in the former family home and thus did not object earlier to the decision of 7 July 2022 to assess him as having 25% care of [Child 1] and [Child 2], rather than 50%. 

11. I also accepted that Mr Holcomb reasonably relied upon the liability not being enforceable at the time the care decision of 17 October 2022 was made and did not make an objection to this decision earlier. 

12. This reliance by Mr Holcomb, which was reasonable in the circumstances applying at the time, was then affected by Ms Holcomb’ action when, she sought to enforce child support arrears from 3 August 2022, a period that included the time she and Mr Holcomb resided in the family home and when the care percentages for [Child 2] were in dispute.

13. I was therefore satisfied that special circumstances prevented Mr Holcomb from making his objections within 28 days.  I noted that Mr Holcomb’s objections were made shortly after Ms Holcomb sought to enforce the child support arrears and I was satisfied that Mr Holcomb has not rested on his rights. 

14. When deciding whether or not to exercise the discretion provided for in subsection 87AA(2) of the Registration and Collection Act, I must have regard to the impact of my decision on Ms Holcomb. I noted that my decision will potentially reduce the arrears owed by Mr Holcomb for the period 3 August 2022 to 2 November 2022. Depending on the extent to which Mr Holcomb has paid those arrears, my decision might result in Ms Holcomb having a child support overpayment. However, if this outcome was the result of the correct or preferable decision being made, I did not view the potential overpayment as being significant in this case.

1. It was my view that the circumstances of this case warrant exercise of the discretion under subsection 87AA(2) of the Registration and Collection Act and Mr Holcomb should be permitted until 16 November 2022 to lodge his objections.

Conclusion

1. Therefore, and for these reasons, I decided to set aside the decisions under review and substituted my own decisions.

DECISION

The tribunal set aside both of the decisions under review and, in substitution, decided that:

• The percentages of care applying in the child support assessment from 23 June 2022 are to record Mr Holcomb as having 50% care of [Child 1] and [Child 2] and Ms Holcomb as having 50% care.

• The percentages of care applying in the child support assessment from 1 October 2022 are to record Mr Holcomb as having 28% care of [Child 1] and Ms Holcomb as having 72% care and Mr Holcomb as having 59% care of [Child 2] and Ms Holcomb as having 41% care.

• A determination is made pursuant to subsection 87AA(2) of the Child Support (Registration and Collection) Act 1988 that subsection 87AA(1) applies as if the reference to 28 days in paragraph (b) were a reference to a longer period, so Mr Holcomb’s objections are considered to have been lodged within that period.