Hopson and Firmin (Child support)

Mr Hopson and Ms Firmin are the parents of a child in respect of whom a child support assessment has been in place. Mr Hopson sought a departure from this assessment, arguing that it was unjust and inequitable due to his income and financial resources, particularly as his assessed income included capital gains from asset sales. Ms Firmin opposed the change, asserting that Mr Hopson's financial resources were greater than disclosed. The Child Support Registrar's delegate initially changed the assessment, but in a manner adverse to Mr Hopson, which was then maintained on objection. Mr Hopson applied to the Social Services and Child Support Division of the Administrative Appeals Tribunal (AATA) for a review of these decisions.

The Tribunal was required to determine whether the grounds for a departure from the administrative assessment existed under the *Child Support (Assessment) Act 1989* (the Act), and if so, whether it would be just, equitable, and otherwise proper to make a particular determination to depart from the assessment. A significant issue was the statutory limitation on retrospective application of any determination, meaning changes could not be made to Mr Hopson's liability for periods more than 18 months prior to his application date of 1 March 2019, unless leave was granted by a court, which had not occurred. The Tribunal also had to consider Mr Hopson's bankruptcy, which occurred in May 2020, and the complexity and opaqueness of his financial arrangements prior to that event.

The Tribunal found that a ground for departure existed under subparagraph 117(2)(c)(ia) of the Act, as the application of the legislative provisions relating to administrative assessment resulted in an unjust and inequitable determination of financial support due to Mr Hopson's income, property, and financial resources. While acknowledging the difficulty in forming a clear picture of Mr Hopson's financial capacity, particularly before his bankruptcy, the Tribunal noted that his declared taxable income from 2017 onwards, and his income from employment prior to that, did not reflect his actual financial capacity or the expenses he was meeting. The Tribunal expressed a lack of confidence in Mr Hopson's full and frank disclosure of his complex financial circumstances, citing instances of misleading evidence regarding his access to funds and use of vehicles. However, the Tribunal accepted that his bankruptcy demonstrated that his liabilities ultimately outpaced his financial resources, and therefore, an approach of "grossing up" expenditure to calculate child support liability was inappropriate. The Tribunal also considered the income generated from a granny flat at a property owned by Mr Hopson, which it inferred was received in cash and not disclosed, estimating this income to be approximately $19,200 per annum prior to his bankruptcy.

The Tribunal set aside the decision under review and, in substitution, allowed the objection. The Tribunal varied Mr Hopson’s annual rate of child support to $15,500 per annum from 1 September 2017 to 31 March 2020, and to $4,000 per annum from 1 April 2020 to 30 September 2020. Furthermore, the Tribunal varied Mr Hopson’s adjusted taxable income to $110,000 per annum from 1 October 2020 to 30 June 2023.