Hopkin and Conlee (Child support)

[2021] AATA 5189

Hopkin and Conlee (Child support) [2021] AATA 5189 (14 December 2021)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2021/SC021641

APPLICANT:  Mr Hopkin

OTHER PARTIES:  Child Support Registrar

Miss Conlee

TRIBUNAL:Member M Douglas

DECISION DATE:  14 December 2021

DECISION:

The decision under review is varied such that for the period 1 October 2020 to 16 August 2023 the annual rate of child support payable by Mr Hopkin is varied to $7,000.

CATCHWORDS

CHILD SUPPORT – departure determination – income, property and financial resources of the liable parent – a ground for departure established – decision to depart - 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

BACKGROUND

1. Mr Hopkin and Miss Conlee are the parents of [Child 1] and [Child 2], in regards to whom the Child Support Registrar has issued administrative assessments of child support. 

2. An assessment of child support is made in accordance with the provisions of Part 5 of the Child Support (Assessment) Act1989 (the Act).  Broadly speaking, those provisions prescribe formulae that apply to several variables to work out the amount of child support one parent must pay the other.  Those variables include the parents’ taxable incomes from the financial year before the start of the child support period to which the assessment relates, the level of care that each parent provides for their children and the cost of the children. 

3. If a parent believes there are special circumstances, the parent may apply to the Registrar under section 98B of the Act for a determination to depart from those provisions of the Act by which an assessment of child support is made.  The Child Support Registrar, who acts through Services Australia – Child Support (hereafter Services Australia), describes such an application as a “change of assessment application”.

4. On 13 March 2020 Miss Conlee made such an application to Services Australia, seeking a change to be made to the assessment for the period after 1 July 2020.  The assessment for that period was based on Mr Hopkin’s 2019 taxable income of $7,765 and Miss Conlee’s 2019 taxable income of $54,821. It was also based on Miss Conlee having care of [Child 2] all of the time and having care of [Child 1] for 219 days of the year and Mr Hopkin otherwise having care of [Child 1].  The assessment required Mr Hopkin to pay no child support to Miss Conlee.  

5. Briefly, Miss Conlee’s reason for making her change of assessment application, as articulated in her application form, was that Mr Hopkin was capable of earning a greater income than his 2019 taxable income of $7,765.  She made reference in her application to a prior decision of the Tribunal, differently constituted, dated 9 April 2018 and attached to her application an extract from that decision. The Tribunal in that prior decision found that the criteria of subsection 117(7B) of the Act had been established such that the Tribunal was able to find that Mr Hopkin had the capacity to earn an income of $148,037.  The Tribunal on that occasion decided that a departure determination should be made varying Mr Hopkin’s adjusted taxable income to $148,037 from 26 July 2016 to 30 June 2020 and also that a further departure determination should be made increasing the annual rate of child support payable by Mr Hopkin by $2,800 for the period 1 July 2018 to 30 June 2020. The intent behind that was to ensure a contribution from Mr Hopkin towards costs Miss Conlee had incurred to enable [Child 1] to have orthodontic treatment. 

6. On 22 May 2020 Services Australia decided, in response to the change of assessment application Miss Conlee made on 13 March 2020, that there should be a departure with respect to the assessment of child support and made the following determinations varying Mr Hopkin’s adjusted taxable income:

   For the period 1 July 2020 until 30 June 2021, Mr Hopkin’s adjusted taxable income shall be set at $150,110.

   For the period 1 July 2021 until 30 June 2022, Mr Hopkin’s adjusted taxable income shall be set at $153,713.

   For the period 1 July 2022 until 30 June 2023, Mr Hopkin’s adjusted taxable income shall be set at $157,402.

7. On 6 July 2020 Mr Hopkin lodged with Services Australia both an objection to that decision and a request for an extension of time within which he could make the objection.  An objection ordinarily is required to be made within 28 days from receipt of the primary decision.  Services Australia on 1 September 2020 refused Mr Hopkin’s application for an extension of time.  On 15 September 2020 he applied to the Tribunal for a review of that refusal decision and his application was heard and granted by the Tribunal on 28 October 2020.

8. On 25 May 2021 Services Australia considered his objection and “part allowed it” and decided to set aside the departure determinations it made on 22 May 2021 and replace them with the following determinations:

   For the period 1 July 2020 to 30 September 2020, Mr Hopkin’s adjusted taxable income is set at $32,237.

   For the period 1 October 2020 to 30 June 2022, Mr Hopkin’s adjusted taxable income is set at $95,025.

9. The departure determinations Services Australia made by way of its objection decision were based on it finding that the ground for departure listed in subparagraph 117(2)(c)(ia) of the Act had been established on account of Mr Hopkin having income and financial resources available to him that were greater than his 2019 taxable income.  Services Australia was not satisfied that the criteria of subsection 117(7B) of the Act had been fulfilled and hence it was unable to make a finding that Mr Hopkin had a capacity to earn an income beyond that which he was earning so as to enable a finding that the ground for departure listed in subparagraph 117(2)(c)(ib) had been established.

10. On 1 June 2021 Mr Hopkin applied to the Tribunal for review of that decision. The Tribunal conducted an audio hearing of his application using Microsoft Teams on 15 December 2021. Mr Hopkin participated and gave sworn oral evidence. No one from Services Australia participated. Miss Conlee also did not participate but in accordance with directions the Tribunal made on 26 October 2021, she provided the Tribunal with various documents relating to her financial situation and also provided the Tribunal with brief written submissions. Those documents are marked B1-B86. Mr Hopkin also provided the Tribunal with documents the Tribunal directed him to provide and they are marked A1-A35. Services Australia provided the Tribunal with a bundle of documents comprising 583 pages, in accordance with its obligation under subsection 37(1) of the Administrative Appeals Tribunal Act1975.

11. The Tribunal has had regard to the oral evidence of Mr Hopkin and to the documents just detailed.

THE REQUIREMENTS FOR THE DEPARTURE FROM AN ASSESSMENT

1. As already mentioned, a parent may, if there are special circumstances, apply to Services Australia under subsection 98B(1) of the Act for a determination to depart from the provisions of the Act relating to an assessment of child support.  Services Australia, or the Tribunal in its place, if satisfied that the criteria of subsection 98C(1) are met can make one or more of the determinations listed in subsection 98S(1) to depart from the provisions of the Act relating to an administrative assessment of child support. The criteria specified in subsection 98C(1) are that:

   i.A ground for departure exists;

   ii.It would be just and equitable as regards the child, the liable parent, and the carer entitled to child support to make a determination [under subsection 98S(1)]; and

   iii.It would be otherwise proper to make a determination [under subsection 98S(1)].

2. The grounds for departure are listed in subsection 117(2) of the Act. 

3. The matters that are to be considered in deciding whether it is just and equitable to make a determination to depart from the provisions of the Act are listed in subsection 117(4) of the Act.  Broadly speaking, consideration of those matters ensures that any departure will be fair for both parents and fair for the children. 

4. The matters to be considered regarding the third criterion are listed in subsection 117(5) of the Act, and broadly speaking consideration of those matters ensures that any departure reflects that the parents of children, rather than the Australian community through the social security system, have primary responsibility for the cost of their children’s care.

CONSIDERATION

1. As noted above, Services Australia found in its consideration of Mr Hopkin’s objection that the ground for departure listed in subparagraph 117(2)(c)(ia) of the Act was established.  The evidence in this case, which will shortly be discussed, makes it appropriate for the Tribunal also to consider whether this ground is established. That ground reads:

   …

   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 …

2. As noted above, in support of the change of assessment application Miss Conlee made on 13 March 2020 she contended that Mr Hopkin had the capacity to earn $148,037 a year.  As also noted, the Tribunal, differently constituted, found on 9 April 2018 that the criteria of subsection 17(7B) of the Act had been established and found that Mr Hopkin had a capacity to earn an income at that level.  Subsection 117(7B) of the Act stipulates, in substance, that a parent cannot be found to have a capacity to earn an income greater than what they actually earn unless three criteria are met. 

3. The first criterion is that the parent does not work despite having ample opportunity to do so or that the parent has reduced the number of hours of employment below what is normal for full-time work within the occupation in which they are employed or that the parent has changed their occupation industry or working pattern.  The second criterion is that the parent’s decision not to work or to reduce their hours or to change their occupation was not justified on the basis of the parent’s care responsibilities or the parent’s state of health.  The third criterion is that the parent has not demonstrated that the major purpose of their decision not to work or to reduce their hours or to change their occupation was not to affect the administrative assessment of child support. 

4. As said, the Tribunal on the prior occasion found that all those criteria had been met.  That finding was of course made based on the evidence then presented to the Tribunal. With respect to the first criterion the Tribunal found that in July 2016 Mr Hopkin had resigned from a full-time job that he had with [Employer 1] from which he received in the 2016 year a taxable income of $148,037.  The Tribunal found that there was no reason, due to Mr Hopkin’s health or his responsibilities with respect to the care of the children, that necessitated he do that.  The Tribunal found that Mr Hopkin’s motivation to cease his job was to affect the administrative assessment of child support.  Accordingly, the Tribunal found that Mr Hopkin had the capacity to earn an income of $148,037.  After weighing up the matters it was required to do under subsections 117(4) & (5) it found that it was just and equitable or otherwise proper to make the departure determination it did. 

5. Mr Hopkin’s evidence to the Tribunal with respect to the objection decision the Tribunal is presently reviewing was that he now only works casually.  His principal employer is located at [Suburb 1].  He resides at [Suburb 2] in Sydney.  His evidence was to the effect that for several reasons his capacity to undertake full-time employment is now inhibited.  This is because of the distance between his place of residence and the place of his employment, and the fact that this employer may require him to works shifts.  Further, he has care of his children, who reside in [City 1], every Wednesday evening, collecting them when they finish school and taking them to school on the Thursday morning.  He also said that has not been vaccinated for COVID-19, and does not intend to get vaccinated, as that is his choice as an Australian citizen, and that also limits his capacity to obtain any employment generally. 

6. His evidence to the Tribunal was that his income from employment now and into the future will be in the region of $35,000 to $40,000 a year.  He produced to the Tribunal his tax return for the 2021 year which revealed that he received income from numerous employers and also received Government allowances.  His total gross income in the year was $34,567 which after deductions for work-related expenses resulted in him being assessed with a taxable income in that financial year of $31,564. 

7. Mr Hopkin also produced his bank statements, as he was required to do in accordance with directions the Tribunal made, for the period 1 July 2021 to 30 September 2021.  His principal account, being a [transaction] account he holds with [Bank 1], revealed that he received in that three month period wages amounting to $5,018 from [Employer 2] and [Employer 3].  The wages deposited into his bank account were of course net of tax that the employers would have remitted to the Australian Taxation Office from his gross wage.

8. Mr Hopkin also produced payslips that had been issued to him in the current financial year by [Employer 3], which revealed that his hourly rate of pay for his employment with that employer is $60 an hour. 

9. His [Bank 1] statements revealed that in that three month period from 1 July 2021 to 30 September 2021 he received several payments of $750 from Centrelink. The Tribunal understands these were COVID-19 disaster payments that the Commonwealth Government provided employees resident in New South Wales during the lockdown, in the period prior to New South Wales reaching 80% of its citizens being fully vaccinated, where an employee had lost 20 or more hours of work a week.  The inference to be drawn from that is that ordinarily Mr Hopkin could expect to work at least 20 hours a week.  Given that, and noting that his hourly rate of pay with [Employer 3] is $60, the Tribunal considers that Mr Hopkin from his casual employment with that employer could in future expect to earn around $55,000 a year.  That makes allowance for any leave he would take for holiday or illness, during which he would not receive income.

10. His [Bank 1] statements also revealed that within the period 1 July 2021 to 30 September 2021, he received $1,150 from his mother. 

11. Services Australia, as part of the process of its consideration of Mr Hopkin’s objection to the change of assessment decision it made 22 May 2020, obtained statements from [Bank 1] for Mr Hopkin’s account for the period 13 November 2020 to 30 March 2021.  Copies of those statements are within the documents that Services Australia provided to the Tribunal.  Services Australia established from that that Mr Hopkin had received $19,350 in that period from a family member. 

12. Mr Hopkin’s evidence to the Tribunal was that his mother transfers money into his account so that he can pay her bills.  The Tribunal does not accept that is the purpose behind the deposits Mr Hopkin’s mother makes into his account.  This explanation is unsatisfactory.  Insofar as his mother has the competence and the capacity to transfer electronically money into Mr Hopkin’s account, then she would have the competency to pay her bills electronically.  Further, there is no documentary evidence Mr Hopkin has produced to reveal that he has settled any bills on his mother’s behalf from monies that she has deposited into his account.

13. In her written submissions to the Tribunal Miss Conlee said that Mr Hopkin had established a company known as [Company 1] in which Mr Hopkin’s mother is a company director.  She contended that this was so Mr Hopkin could hide his assets and income from Services Australia.  The company, however, was recently de-registered.  A search on the Federal Government’s ABN Look Up indicates that it never had an ABN number assigned to it, which indicates that it never conducted business.  Mr Hopkin’s evidence was that he had nothing to do with that company and had never received any income from it.  There is no evidence presented by Miss Conlee, or evidence from other sources, to contradict that.

14. Miss Conlee also stated in her submissions that Mr Hopkin owned a house at [Suburb 3] that he sold in June 2021 for $570,000.  Within the documents Services Australia provided the Tribunal is a copy of a statement for the period September to October 2019 that [Bank 2] issued with respect to a home loan account that Mr Hopkin had with it. That statement revealed that in that period payments of $400 described as “rent” were regularly deposited into the account.  It also revealed that Mr Hopkin was making regular instalments of $860.31 a month to reduce the outstanding balance of the loan. 

15. Mr Hopkin’s evidence to the Tribunal was that “family members and a group of friends” took over his ownership of the house at [Suburb 3] in 2017 and he has had nothing to do with that house thereafter. Paragraph 33(1)(c) of the Administrative Appeals Tribunal Act1975 allows the Tribunal to inform itself on any matter in such manner as the Tribunal thinks appropriate.  During the hearing the Tribunal had reference to the websites realestate.com.au (Realestate) and domain.com.au (Domain), both of which revealed that the [Suburb 3] property was sold in June 2021 for $570,000, and that the most recent sale preceding that was in November 2009 for an amount of $355,000.  That evidence and the evidence in the form of [Bank 2] statement, which revealed that Mr Hopkin was making payments to reduce a home loan he had with the bank, is inconsistent with his having transferred his ownership of the house in 2017 to “family members and a group of friends”. 

16. The Tribunal referred Mr Hopkin during the hearing to this information on the Domain and Realestate websites and notified him that it indicated that there was no transfer of ownership of the property between 2009 and June 2021.  He could not give an explanation for that.

17. The Tribunal infers from that evidence that Mr Hopkin was receiving rental income from that property until June 2021 and that he sold the property in June 2021 receiving the proceeds therefrom.  The evidence in the form of his [Bank 1] statements for the three months between 1 July 2021 and 30 September 2021 did not indicate that the proceeds of sale were deposited into his account.  The Tribunal nevertheless infers that whoever presently holds the proceeds from the sale of the house, holds them for the benefit of Mr Hopkin.

18. The Tribunal also observed from [Bank 1] statements that Mr Hopkin had within the period 1 July 2021 to 30 September 2021 transferred $900 to a TAB account.  When asked about this during the hearing Mr Hopkin advised that he and a group of friends are part of a punter’s club and that these amounts represent his contribution to the club.

19. Mr Hopkin’s bank statement also revealed that he paid amounts totalling $647 in the three month period for a subscription to Xbox and PlayStation and also paid $100 for other subscriptions to Microsoft bearing the descriptions “Ultimate” and “Fortnite”.  As the Tribunal understood Mr Hopkin’s evidence, that was to enable him to participate in gaming activities.  The Tribunal is of the view that an annual income of the order of $35,000 to $40,000 a year, which is what Mr Hopkin contends is the extent of his earnings from employment, would be insufficient to support pastimes involving a punter’s club, gaming, X-Box and PlayStation, which, based upon what Mr Hopkin spent in the three month period from 1 July 2021 to 30 September 2021 would involve an outlay by him of $6,588 a year.

1. The Tribunal infers from all this, and from the fact that Mr Hopkin’s mother is regularly transferring money into his account, that Mr Hopkin has, most likely, a financial resource available to him either through or involving his mother and involving the proceeds of sale from the [Suburb 3] property, on which he can rely to meet his commitments including his commitments with respect to his pastimes, and which he could also rely to contribute towards the cost of supporting his children.

2. It is hard to quantify, based on the evidence before the Tribunal, what the exact worth of that financial resource is to Mr Hopkin.  Doing the best it can on the evidence, the Tribunal considers that Mr Hopkin’s income from employment plus the financial resource available to him would be the equivalence of the after tax earnings of a resident taxpayer with a taxable income of $65,000 a year.  That is far greater than Mr Hopkin’s 2019 taxable income.  The Tribunal is satisfied that this amounts to a special circumstance.  The Tribunal is also satisfied that as a consequence of Mr Hopkin’s income and financial resources, the assessment of his child support obligation in accordance with the usual provisions of the Act does result in an unfair determination of the level of financial support to be provided by him for the children.

3. Consequently, the Tribunal finds that this ground for departure is established. 

4. The Tribunal does not on the evidence before it consider that Mr Hopkin presently has the capacity to earn the income he did in the job from which he resigned in June 2016.  The Tribunal accepts his uncontradicted evidence that he travels from Sydney to [City 1] every Wednesday so as to have contact with his children.  Further, he also goes to [City 1] every alternate weekend for that purpose.  Mr Hopkin’s evidence was to the effect that this inhibits his capacity to undertake full-time employment, and the Tribunal accepts that that is the case.  In other words, having to collect the children after school on Wednesday and see them every alternate weekend would, in the Tribunal’s view, inhibit his ability to take on full-time employment.

Is it just and equitable to make a determination?

1. As already mentioned, the matters the Tribunal must take into account when considering whether it is just and equitable to depart from the provisions of the Act with respect to the assessment of child support are listed in subsection 117(4) of the Act. The Tribunal is not required to go slavishly through each of those matters but must have regard to those that are relevant to the particular circumstances of this case and do so in a practical and flexible way.[1]

   [1] Gyselman and Gyselman (1992) FLC 92-289; Ross v McDermott (1998) FLC 98-003; and Lawson and Edney [2017] FCWA 77

2. Mr Hopkin completed a Statement of Financial Circumstances dated 11 October 2021 declaring the contents to be complete and correct.  In that he declared that his average weekly wage before tax is $400.  As discussed above, the Tribunal considers that Mr Hopkin’s annual income is more likely to be in the range of $55,000. 

3. Mr Hopkin indicated in his Statement of Financial Circumstances that his only assets of significance are household contents of which he estimated the value to be $2,000 and personal property of which he estimated the value to be $2,000. 

4. As discussed above, the Tribunal considers that he would have benefited from the recent sale of the [Suburb 3] property and preceding that would have benefited from the rental income received with respect to that property.  It would seem that he does not personally retain the proceeds from the sale of that property, and another person or party is holding it on his behalf.  The proceeds from the sale of the property are nevertheless to be treated as a financial resource available to him.  As indicated above, the Tribunal considers that when account is had to that, Mr Hopkin’s situation would be similar to someone with an income from employment of around $65,000 a year. 

5. In his Statement of Financial Circumstances Mr Hopkin detailed his weekly expenses.  They included an amount of $200 a week for rent.  There was, however, no evidence in his bank statements of him paying that rent.  At the hearing his evidence was that he has not paid rent for 12 months. 

6. His Statement of Financial Circumstances also detailed that he only spent $10 a week on entertainment and hobbies, but that, as discussed above, is inconsistent with his oral evidence at the hearing which was that he spends significant sums to ensure his membership of a punter’s club and to ensure that he can engage in gaming activities and the like.  Further, he maintains a membership at [a sports club].

7. He otherwise listed modest weekly household and personal expenses. 

8. Miss Conlee provided the Tribunal with a Statement of Financial Circumstances that she signed on 22 November 2021 declaring the contents to be true and correct.  She stated in that that her weekly income is, before tax, $1,000.  She produced a copy of her payslip for the week ending 17 November 2021, which revealed that her year to date gross earnings in the year to that date were $19,399.  That was the 20^th weekly pay period in the year and when that amount is extrapolated to an annual figure it produces an amount of $50,437 which averages to just less than $1,000 a week.

9. Miss Conlee listed in her Statement of Financial Circumstances that she owns her home of which she estimates the value to be $430,000.  She has modest amounts of money held on deposit with banks.  She also owns a vehicle of which she estimates the value to be $20,000.  She estimated the value of her household contents to be $50,000.  She also listed that she has a home loan with an outstanding balance of $291,087.

10. The Tribunal is satisfied that Miss Conlee does not have any assets that are surplus to her needs that she could readily or reasonably sell so as to assist with the task of financing the cost of the care of the children.

11. Her weekly expenses as listed in her application form were modest, and that reflects the fact that she has a relatively modest income and would incur costs with respect to the care of the children.

12. There is no evidence to indicate that the children have any special needs or have any property or financial resources. 

13. The Tribunal observes that if Mr Hopkin’s child support obligation were to be assessed by reference to an income amount for him of $65,000 then he would be required to pay child support at an annual rate of around $7,000, based on Miss Conlee’s current adjusted taxable income. 

14. Weighing the matters discussed above, and also weighing the relative hardships between the parties that would be caused by making a determination varying the annual rate of child support payable by Mr Hopkin to that level, the Tribunal considers it would be just and equitable to do so but for the period 1 October 2020 to the date preceding [Child 2]’s 18^th birthday, namely [in] August 2023.  The Tribunal has considered that to be an appropriate time to end the determination to depart from the provisions of the Act with respect to the assessment of child support which will ensure some certainty with respect to their obligation and entitlement for a reasonable period of time.  The Tribunal notes that at the end of that time if either party considers the assessment that is then generated under the usual provisions of the Act, then either party can then make a further application for a departure determination.

Is it otherwise proper to change the assessment?

1. In deciding whether it is otherwise proper to depart from the administrative assessment, the Tribunal must have regard to the fact that the primary obligation to support the children rests with Mr Hopkin and Miss Conlee, and to whether, and if so how, any determination it makes would affect the entitlement of Miss Conlee or the children to an income tested pension, allowance or benefit. 

2. The Tribunal understands that none of the children receive an income tested pension, allowance or benefit and, also, that circumstance will not change whatever determination the Tribunal makes. 

3. In her Statement of Financial Circumstances Miss Conlee stated she did not receive a family tax benefit from the Commonwealth Government. The Tribunal notes from her Statement of Financial Circumstances that she resides with her partner who earns an income.  The Tribunal assumes that the income of Miss Conlee’s household is such that she does not qualify for family tax benefit for the children.  In that circumstance, the Tribunal understands that the departure determination it considers it is just and equitable to make will not change that situation. 

4. The Tribunal takes into account that both Mr Hopkin and Miss Conlee have a primary duty to maintain their children.

5. Given all that, the Tribunal considers that the departure determination it considers it is just and equitable to make is also otherwise proper to make.

DECISION

The decision under review is varied such that for the period 1 October 2020 to 16 August 2023 the annual rate of child support payable by Mr Hopkin is varied to $7,000.