Hutton and Hutton (Child support)

[2020] AATA 5097

Hutton and Hutton (Child support) [2020] AATA 5097 (21 October 2020)

DIVISION:Social Services & Child Support Division

REVIEW NUMBERS:  2020/SC019400; 2020/SC019426; 2020/SC019427

APPLICANT:  Mr Hutton

OTHER PARTIES:  Child Support Registrar

Mrs Hutton

TRIBUNAL:Member F Hewson

DECISION DATE:  21 October 2020

DECISION:

The Tribunal decided to affirm the decisions under review.

CATCHWORDS

CHILD SUPPORT – non-agency payment – whether certain payments should be credited – no mutual intention – condition for crediting as prescribed payments not satisfied – refusal to credit non-agency payments – 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 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 Hutton and Hutton are the parents of children in respect of whom there is a child support assessment. This application for review is about whether payments made by Mr Hutton can be credited against his child support liability.

2. On 21 December 2019, 26 January 2020 and 9 February 2020 Mr Hutton applied to Services Australia – Child Support (the Department) for payments he made to be credited as non-agency payments against his child support liability. On 21 February 2020 decisions were made to refuse to credit the following amounts against the child support liability; $4,310.55, $504.24 and $254.

3. Mr Hutton lodged an objection to the decisions to refuse to credit the non-agency payments and on 22 June 2020 his objection to the decision to refuse to credit $4,310.55 was disallowed and on 23 June 2020 his objections to the decisions to refuse to credit $504.24 and $254 were disallowed.

4. On 6 July 2020 Mr Hutton lodged an application for review by the Social Services and Child Support Division of the Administrative Appeals Tribunal (the Tribunal) of the decision to refuse to credit $4,310.55 against his child support liability. Further applications in relation to the decisions to refuse to credit $504.24 and $254 against his child support liability were lodged on 8 July 2020. The applications were heard on 2 September 2020. Mr Hutton spoke to the Tribunal by conference telephone. Mrs Hutton also spoke to the Tribunal by conference telephone. The Child Support Registrar did not attend the hearing. As well as the evidence of Mr Hutton and Mrs Hutton, the Tribunal also had regard to documents provided by the Department, a copy of which was given to the parties. It also had regard to documents provided by Mr Hutton after the hearing, which Mrs Hutton was given an opportunity to respond to.

ISSUES

1. The relevant legislation in this case is in the Child Support (Registration and Collection) Act 1988 (the Act) and in the Child Support (Registration and Collection) Regulations 1988 as then in force.

2. When the Department registers a child support liability for collection the amounts payable become a debt due to the Commonwealth and are payable to the Child Support Registrar, pursuant to section 30 of the Act. In some circumstances payments made directly to a payee or to a third party may be credited against a child support liability that is registered for collection by the Department (sections 71, 71A and 71C of the Act). The Department refers to these credits as “non-agency payments” or “prescribed non-agency payments”. Section 71D of the Act provides that the Registrar may refuse to credit an amount under sections 71, 71A or 71C if satisfied that in the circumstances of the case the amount should not be credited.

3. In this case, the Tribunal must determine:

   ·     whether Mr Hutton made the payments which he has asked to be credited against his child support liability;

   ·     whether the payments were made during a period when the maintenance liability was enforceable by the Department;

   ·     whether the payments are non-agency payments or prescribed non-agency payments;

   ·     whether both the payer and the payee intended that the payments were paid in complete or partial satisfaction of an amount under the maintenance liability;

   ·     whether the payments can be credited against Mr Hutton’s registered and enforceable maintenance liability; and

   ·     if the payments can be credited against Mr Hutton’s registered and enforceable maintenance liability, whether or not in the circumstances of this particular case, the amount ought to be credited.

CONSIDERATION

1. The child support case between Mr Hutton and Mrs Hutton was registered for collection from 15 November 2019 and, therefore, an enforceable maintenance liability has been in place from that date. The payments Mr Hutton is seeking to have reviewed are as follows:

   ·     $4610.55, comprising payments as follows:

   o   23 July 2019  childcare  $23.90

   o   31 July 2019  childcare  $100

   o   1 November 2019               utility bill  $1850

   o   16 November 2019             cash payment            $200

   o   28 November 2019             utility bill  $1,993.55  

   o   1 December 2019               childcare  $193.10

   o   14 December 2019             cash payment            $250

   Of these payments, the registrar credited $300 (a portion of the payments made on 16 November 2019 and 14 December 2019) as non-agency payments.

   ·     $426, comprising payments for utilities on 13 January 2020 and 6 February 2020 of $252.70 and $251.54 respectively.

   ·     $254 on 13 January 2020 for purchase of a microwave oven.

2. At the hearing Mr Hutton said he understood that payments made before the child support case was registered for collection could not be credited against his child support liability. The Tribunal went through each of the payments recorded as having been made on or after 15 November 2019 with the parties. 

3. In relation to the cash payment of $200 on 16 November 2019, Mr Hutton said it included $125 transferred to his daughter’s account and $91 paid through [a website] for his daughter’s school jersey. Mrs Hutton said she agreed to $100 of this payment, as she believed Mr Hutton had given her $100. She said she was not aware of a transfer of $125 in November 2019, but was aware of a transfer in July 2019.

4. In relation to the payment of $1,993.55 on 28 November 2019, Mr Hutton said it included payment for a [Bank 1] loan for renovations to the family home prior to separation; credit card payments in relation to credit card debt accrued prior to separation, which was transferred from a [Bank 2] Mastercard to a [Bank 1] Credit Card; payment for house insurance for the family home, which Mrs Hutton occupies with the children. Apart from the house insurance, which Mr Hutton said he believes is in joint names, the loan and credit card liabilities are in his name only.

5. In relation to the payment of $193.10 on 1 December 2019, Mr Hutton said it was a payment of $173.98 for Mrs Hutton’s car insurance, made on 29 November 2019. Mrs Hutton said the $193.10 is the amount for [a food service], including payments before the child support case was registered. She noted, also, that her car insurance payments are $130 a month, and she is not aware that Mr Hutton has made any such payments. If he were to provide evidence that he had paid her car insurance premium for a period after the child support liability was registered, she would expect that this would be credited against the child support liability. She has not seen any such evidence. Mr Hutton said he has removed the [food service] expenses from his spreadsheet of payments, and the payment for the car insurance was paid to [the insurance company]. The Tribunal noted that this is a payment that has not been considered by the Child Support Agency, and it may not be able to consider whether it can be credited against the child support liability.

6. In relation to the payment of $250 on 14 December 2019, Mr Hutton said it was a cash payment given to Mrs Hutton. Mrs Hutton agreed that Mr Hutton made a cash payment at that time, but it is her recollection that the amount was $200, which she agreed should be credited against the child support liability.

7. In relation to the payments of $252.70 and $251.54 on 13 January 2020 and 6 February 2020 respectively, Mr Hutton said the payment was for $625 paid to [a named school] for his share of his daughter’s school fees. Mr Hutton indicated that the $625 was an aggregate of the payments of $252.70 and $251.54 and another payment. He said the [named] school fees are about $38,000 in arrears. He said he made the $625 payment following discussion with the school about the arrears, but he was only able to make the one monthly payment. Mrs Hutton said she also made a payment of $625 towards the school fees at about the same time and has been paying 100% of the school fees for their son.

8. In relation to the payments of $254 on 3 January 2020 (as shown in the [retailer] receipt) Mr Hutton said this was for a new microwave oven for the family home. Mrs Hutton agreed that Mr Hutton purchased the microwave oven, to replace the microwave oven which was faulty. She said he did this, however, while she was away and he was at the property to do some work outside. She said she did not need the microwave oven and she asked Mr Hutton to return it. Mr Hutton agreed that he did not speak to Mrs Hutton about purchasing the microwave oven.

9. Mr Hutton said he could not understand how all the payments he is making in relation to liabilities accrued during the marriage can be ignored when it comes to the payment of child support. He said he derives no benefit from those payments, which were related to the family home, and he is also paying rent. He said the situation has caused him financial stress and he has had to borrow from family to meet his expenses. Mr Hutton said he and Mrs Hutton have not finalised their property settlement.

10. Mrs Hutton referred to Mr Hutton’s records of the payments he states he has paid and should be credited as child support. She disagreed that all those payments were for the benefit of her and/or the children. As noted above, she agreed that where there was evidence that Mr Hutton had made payments after the child support assessment commenced, for things like utilities or insurance, they should be credited against his child support liability. She noted that some of the pre-separation debt Mr Hutton is servicing will be considered in their financial settlement. She noted that she is meeting many expenses for the children without assistance from Mr Hutton.

11. The Tribunal gave Mr Hutton the opportunity to provide further evidence, to support his claim in relation to payments made after the child support case commenced. Mr Hutton subsequently submitted further written submissions, which did not expand on earlier written submissions and his evidence at the hearing, and a spreadsheet of the payments he states he has made post-separation. He did not provide any further evidence of those payments having been made or of any mutual intention that they were for child support. In her response to those documents, Mrs Hutton disputed Mr Hutton’s characterisation of the payments, and how they came about, but did not provide any additional evidence that was not discussed at the hearing and is relevant to the decisions before the Tribunal.

12. While Mr Hutton disputes the decisions made in relation to the individual claims for NAPS, as set out above, he agreed that his broader issue is with the failure to take into account the liabilities accrued during the marriage, which he is meeting, but from which he considers he derives no benefit. The Tribunal notes that according to Mr Hutton’s evidence the liabilities are in his name only. As discussed at the hearing, this is an issue better addressed in the parties’ financial settlement. If Mr Hutton is in financial hardship, his overall circumstances and those of Mrs Hutton and the children can be considered through a change of assessment process. 

13. Section 71 of the Act applies in relation to payments made directly to a payee and is the basis on which the amount of $300 was credited against Mr Hutton’s child support liability. Section 71A concerns payments made to third parties. Both provisions require that the payment was made by the payer of a child support liability collectable by the Department and the payment was intended by both child support parties, at the time it was made, to be a payment in satisfaction of the child support liability.

14. Section 71D of the Act provides that the Registrar may refuse to credit an amount under sections 71, 71A or 71C if satisfied that in the circumstances of the case the amount should not be credited.

15. Having regard to the available evidence, the Tribunal was not satisfied that it was the intention of both parents that the disputed payments in this case were paid in lieu of child support, apart from the $300 already credited, as discussed above. In relation to the $625 payment for school fees, the Tribunal was satisfied that the payment made by Mr Hutton was for his share of the liability for school fees, and Mrs Hutton also made a payment in that amount. There is no basis for crediting the payment of $625 paid by Mr Hutton against his child support liability under section 71C. That being the case, I decided to affirm the decisions under review.

DECISION

The Tribunal decided to affirm the decisions under review.