Hummasset and Hesbedge (Child support)

[2025] ARTA 944

Hummasset and Hesbedge (Child support) [2025] ARTA 944 (25 March 2025)

Applicant/s:  Ms Hummasset

Respondent:  Child Support Registrar    

Other Parties:       Mr Hesbedge

Tribunal Number:   2024/SC028831 

Tribunal:  Member I Sheck

Place:Melbourne

Date:25 March 2025

Decision:The Tribunal affirms the decision under review.

CATCHWORDS

CHILD SUPPORT – error in child support assessment – father’s adjusted taxable income – amount for later year used to calculate liability for earlier year – overpayment needing to be repaid by mother – amounts spent on children – passage of time – mother’s health and reduced ability to work and repay – care for elderly mother – father’s health and inability to work – policy in Child Support Guide supports discretion to correct error – 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 pursuant to subsection 16(2AB) of the Child Support (Registration and Collection) Act 1988.

Statement of Reasons

BACKGROUND

1. Ms Hummasset and Mr Hesbedge are the parents of [Child 1] (born [October] 1992), [Child 2] (born [August 1994]) and [Child 3] (born [October] 1997).  A case was registered with Services Australia – Child Support (Child Support) for the assessment of child support on 23 November 2005.  From the commencement of the child support period 1 July 2011 to 29 August 2012, Mr Hesbedge was assessed to pay Ms Hummasset $842.83 per month ($10,114 annual) in child support.  This rate was based on the provisional incomes of $56,019 for Mr Hesbedge and $41,187 for Ms Hummasset and the care percentages of 100% for Ms Hummasset and 0% for Mr Hesbedge.[1]

   [1] Hearing papers, page 42

2. On 10 September 2015, Child Support received updated income details for Mr Hesbedge, following the lodgement of his income tax returns for several years.  The parties were notified by letters dated 10 September 2015 that the rate of child support payable by Mr Hesbedge had been reassessed for the period 1 April 2010 to 20 October 2015 to take into account the new income amounts provided. The new rate payable by Mr Hesbedge in the period 1 July 2011 to 30 September 2012 had been amended to $1,375.83 a month ($16,510 annual) based on Mr Hesbedge’s provisional income of $80,198 and Ms Hummasset’s 2010–11 adjusted taxable income of $41,160. [2]

   [2] Hearing papers, page 174

3. On 16 September 2015, the parties were both notified by letter that the child support assessment would end on 31 October 2015, as the youngest child of the assessment had turned 18 and would be ceasing secondary studies.

4. On 12 February 2023, Child Support identified that there had been an error in the child support assessment for the period 1 July 2011 to 30 September 2012 and this had resulted in Mr Hesbedge’s assessed income being higher than it should have been in that period.  As a result, Mr Hesbedge’s child support liability had been incorrectly increased by a total of $7,995.  The parties were notified by letters dated 1 May 2014 that Ms Hummasset had been overpaid $7,969.83 in Child Support and this amount needed to be repaid by her. 

5. Ms Hummasset lodged a number of objections to the decision of 1 May 2024.  On 30 October 2024, an objections officer of Child Support disallowed the objection, which had the effect of affirming the original decision.

6. By application received on 11 November 2024, Ms Hummasset asked this Tribunal to review the decision of the objections officer.  On 20 March 2025, the Tribunal conducted a hearing at which Ms Hummasset gave evidence by MS Teams audio and Mr Hesbedge by MS Teams video.  Ms Hummasset was represented by Mrs Paduch of Child Support Consultants.  The Tribunal had before it the relevant documents from Child Support, which had been copied to the parties.

CONSIDERATION

1. The legislative provisions relevant to this decision are contained in the Child Support (Assessment) Act 1989 (the Act). The Act sets out the statutory formula for the calculation of child support, which takes into account each parent’s adjusted taxable income and the level of care they provide for each child of the assessment.

2. Generally the adjusted taxable income of a parent is the amount assessed by the Australian Taxation Office for the last relevant year.  Where a person has not lodged a tax return for that year, section 58 of the Act provides that Child Support may work out “a reasonable approximation of the parent's adjusted taxable income for that year” to be used in the assessment.  This amount is known as the provisional income.  Section 58A then sets out how the rate is reassessed when a parent subsequently lodges their income tax return for the relevant year.  If the income tax return has not been lodged by the date required under the tax law, then their adjusted taxable income for the relevant period is to be retrospectively reassessed as the higher of their actual adjusted taxable income for that year (as assessed) or the provisional income used at the time.

3. In Mr Hesbedge’s case, it is common ground, and the Tribunal finds, that his actual adjusted taxable income for the 2010–11 year, as assessed by the Australian Taxation Office, was $49,020.  He did not lodge his income tax return for that year until 2015, which was well after the due date required by the Australian Taxation Office.  The provisional income that had been used in the assessment from 1 July 2011 to 30 September 2012 was $56,019, therefore this should have remained the income used in the assessment as it was higher than his actual income.  Due, however, to a Child Support computer error, when the child support liability was reassessed on 10 September 2015 an income amount of $80,198 was used as Mr Hesbedge’s adjusted taxable income for the relevant period.  This incorrectly inflated the amount he was assessed to pay Ms Hummasset by $7,995.  Mr Hesbedge paid the full liability by 29 January 2016.

4. This brings us to the matter at issue.  Section 75 of the Act provides that Child Support, and the Tribunal standing in the shoes of the Child Support Registrar, “may, at any time, amend any administrative assessment by making such alterations and additions as the Registrar considers necessary to give effect to this Act or the Registration and Collection Act.”  Use of the term “may” indicates that there is a discretion involved: it is not mandatory for the error to be corrected.

5. Ms Hummasset submits that the error should not be corrected and she should not be liable to repay Mr Hesbedge the amount assessed.  Her reasons for this are set out in her comprehensive objections to Child Support lodged in May and June 2024.  In summary, Ms Hummasset states that the amounts paid by Mr Hesbedge were used for the benefit of the children when they were in her care.  She further submits that recovery of the amount overpaid nearly 10 years after the termination of the child support assessment is unjust and is affecting her both financially and emotionally.  At the hearing, Mrs Paduch made submissions on behalf of Ms Hummasset.  She submitted that Ms Hummasset’s ability to work is affected as she suffers from an auto-immune disease and this also results in additional expenses for investigation and treatment.  Further to this, she is providing care for her mother, who is in her 80s.  She has entered into a payment plan with Child Support but is frequently unable to meet the monthly repayment due to her other necessary costs of living.  Mrs Paduch submitted that Mr Hesbedge had already paid the amount that had been incorrectly assessed many years ago and failure to recover this amount would not cause him hardship.  The Tribunal asked Mrs Paduch whether she was aware of any case law on this issue and she responded that she was not.

6. Mr Hesbedge told the Tribunal that he did not consider it unjust that Ms Hummasset should repay the amount of child support that had been overpaid.  At the time of the initial assessments he had been in hardship and this had led to the delay in lodgement of his income tax returns.  He had not agreed with the assessment of the child support rate at the time and had lodged an application for a change of assessment on 9 September 2010.  This application was refused by Child Support and he did not take the matter further.  Ms Hummasset has already benefitted from the late lodgement of his income tax returns as the amount used in the reassessment is $56,019, rather than his actual adjusted taxable income of $49,020.  He is also in hardship and has been unable to work for around a year due to stress and anxiety.

7. The Tribunal acknowledges the concerns raised by both parties and accepts their evidence as accurate.  In determining whether to exercise the discretion contained in section 75 to correct the error that has occurred in this case, the Tribunal has had regard to the Child Support policy as set out in the Child Support Guide (the Guide).  The Guide contains governmental guidelines and policy as to how the legislation is to be applied. The Tribunal acknowledges that, whilst it may be guided by policy, it is not bound to follow it: Re Drake and Minister for Immigration and Ethnic Affairs(No 2) (1979) 2 ALD 634. In the more recent case of G v MIBP [2018] FCA 1229, the Federal Court observed that it is clear from earlier authorities, that in the absence of any statutory indication to the contrary, any lawful executive policy enacted to guide the exercise of a statutory power is a relevant factor for the Tribunal to take into account in performing its review task. A lawful approach allows the adoption of appropriate policy as a guide but not so as to control the making of the decision and the Tribunal adopts that approach. The relevant part of the Guide in this matter is set out in point 11.3 as follows:

   Deciding whether or not to correct an error

   When deciding whether to correct (or not) an error, the Registrar will consider the objects of the Acts and the legislative requirements of the decision affected by the error. The Registrar can also consider circumstances including, but not limited to, the wishes of the affected parents, the integrity of the child support (1.1.C.60) scheme, and the impact on each parent of correcting or not correcting the error.

   Error correction decisions are made in the context of the particular circumstances of each case. The circumstances in one case may mean it is appropriate to correct an error in that case, but it may not be appropriate to correct a similar error in another case.

   The Registrar may be more likely to decide to correct an error where:

   ·     it is an obvious error of fact, and can be fixed simply

   ·     it impacts the current assessment or liability

   ·     both parents want the error corrected

   ·     one parent wants the error corrected and the other parent does not want it corrected

   ·     the Registrar caused the error or substantially contributed to it

   ·     one parent wants the error corrected and the other parent cannot be contacted.

   The Registrar may be less likely to decide to correct an error where:

   ·   neither parent wants the error to be corrected

   ·   there will be no material change to an assessment or financial impact as a result of correcting the error

   ·   only one of the affected parents is contactable and they do not want the error corrected

   ·   there is no utility to correcting the error, or it would be inappropriate to correct – such as when the error is the subject of merits or judicial review proceedings (whether internal or external to Services Australia).

8. In this case, the error is an obvious error of fact, the Registrar caused the error and one parent (Mr Hesbedge) wants the error corrected while the other (Ms Hummasset) does not.  The Tribunal accepts that the policy as set out above is in accordance with the objects of the legislation and concludes that it should be followed in the interests of consistent decision-making.  As the majority of the points set out in point 11.3 of the Guide support exercising the discretion to correct the error, the Tribunal determines that the decision to apply section 75 in this matter was correct.

DECISION

The Tribunal affirms the decision under review.

Date(s) of hearing:	Thursday, 20 March 2025
Representative for the Applicant:	Mrs Paduch of Child Support Consultants P/L