Hyde and Hyde (Child support)

[2020] AATA 2169

Hyde and Hyde (Child support) [2020] AATA 2169 (27 May 2020)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2019/MC018112

APPLICANT:  Mr Hyde

OTHER PARTIES:  Child Support Registrar

Miss Hyde

TRIBUNAL:Member F Hewson

DECISION DATE:  27 May 2020

DECISION:

The tribunal decided to set aside the decision under review and substitute its decision that no arrears are payable by Mr Hyde for the period from 28 July 2019 to 27 October 2019.

CATCHWORDS

CHILD SUPPORT – application for collection of child support – whether application should have been accepted - opt-in arrears - whether there were unpaid amounts - decision under review set aside and substituted

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 Hyde and Miss Hyde are the parents of two children, aged five and seven. A child support case in respect of the children was registered in September 2016 and the child support was recorded as being collected privately.

2. On 28 October 2019 Miss Hyde contacted Services Australia—Child Support (the Department) and requested that it collect child support on her behalf from Mr Hyde, who was assessed to be the parent liable to pay child support.  She also requested that arrears be collected for the period from 28 July 2019 to 27 October 2019 (the arrears period).

3. On 29 October 2019, the Department accepted Miss Hyde’s application for collection of the child support from 28 October 2019, and for the collection of child support for the arrears period (an amount of $481.81).

4. Mr Hyde lodged an objection to the decision and on 6 December 2019 an objections officer disallowed the objection.

5. On 23 December 2019 Mr Hyde applied to the Social Security and Child Support Division of the Administrative Appeals Tribunal for an independent review of the objections officer’s decision.

6. On 25 February 2020 the tribunal conducted a hearing at which Mr Hyde gave evidence by conference telephone.  Miss Hyde also gave evidence by conference telephone. The Child Support Registrar did not attend the hearing.

7. As well as the evidence of Mr Hyde and Miss Hyde, the tribunal also had regard to documents provided by the Department, a copy of which was provided to the parties.

ISSUES

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

2. The issues in this case are whether the Department should have accepted Miss Hyde’s application for collection of child support, and whether she is owed arrears of child support for the arrears period from 28 July 2019 to 27 October 2019.

CONSIDERATION

Application for collection of child support

1. As noted above, the child support case between Mr Hyde and Miss Hyde commenced in September 2016. It was not, however, registered for collection by the Registrar at that time (i.e. any liability was to be collected privately).

2. A payee may apply under subsection 25(1) of the Act for registration of a registrable maintenance liability that was not registered for collection. An application under subsection 25(1) is sometimes referred to by the Department as an application to “opt-in” for collection of child support payments by the Registrar. Where the application to opt-in is the first such application made by the payee, the Registrar must accept the application.

3. In this case, Miss Hyde applied under subsection 25(1) of the Act for the registrable maintenance liability to be registered for collection by the Registrar. The tribunal was satisfied that as this was her first application to opt-in for collection of child support, the application must be accepted.

Application for collection of arrears of child support

1. A payee may also apply under subsection 28A(3) of the Act for any unpaid amounts payable under the liability in relation to a specified period prior to the registration of the liability for collection (commonly a three month period but not more than nine months) to be treated as arrears amounts. Where the Registrar grants an application under subsection 28A(3), the unpaid amounts become child support debts payable to the Registrar, despite having accrued during a period when the liability was not registered for collection.

2. The Registrar must determine what amounts, if any, are unpaid amounts payable under the liability, taking into account what amounts are payable under the liability in relation to the specified period and whether any payments have been made in respect of the liability.

3. Miss Hyde asked the Department to collect unpaid amounts of child support for the three month arrears period. Subsection 28A(4) of the Act states that if the period applied for does not exceed three months, the Registrar must grant the payee’s application.

4. The tribunal considered whether any child support was owed by Mr Hyde for the arrears period.

5. At the hearing Mr Hyde agreed that he did not pay any child support to Miss Hyde during the arrears period. He said this was because he had overpaid child support for an earlier period, as a result of an incorrect estimate of her income lodged by Miss Hyde. He said he was owed about $3,300. He contacted the Department and discussed the matter. He was advised he would have to work it out with Miss Hyde. He said it was his intention to stop making payments until the amount was recovered. Mr Hyde said he contacted Miss Hyde about the matter by email, about having the monies repaid, but she was not receptive to the idea. He therefore stopped making payments in May 2019. He considered the decision to accept Miss Hyde’s application for collection was unfair, because it meant he was not able to recover the overpaid child support from Miss Hyde (i.e. by not making any payments until it was recovered).

6. Miss Hyde acknowledged that she had been overpaid child support, due to an issue with her income. As a result she also had a debt to the Australian Taxation Office. She said she does not object to repaying the money, but the money had been spent and she didn’t have a lump sum that she could give to Mr Hyde. She said Mr Hyde’s decision to stop paying any child support at all was not the answer. In relation to the $481.81 paid to her for the arrears period, Miss Hyde said she has that money and can repay it to Mr Hyde if necessary.

7. The tribunal considered whether there were any unpaid amounts of child support in the arrears period. The legislative scheme provides flexibility, allowing parents to make their own arrangements for the payment of child support during periods of private collection. Collection of those amounts, however, are not enforceable by the Registrar. The only exception to this is where, as in this case, the Registrar has accepted an application for the liability to be collected by the Registrar, whereby the liability becomes enforceable, including any unpaid amounts payable under the liability in relation to the arrears period.

8. In this case, Mr Hyde considers that there were no unpaid amounts of child support in the arrears period because he had overpaid child support for an earlier period and was, in effect, in credit. Miss Hyde acknowledged that she had been overpaid and has retained the amount collected for the arrears period. The Department’s records indicate that the overpayment was identified when Miss Hyde’s estimate of her 2018/19 income was reconciled.

9. Mr Hyde’s view that he was in credit during the arrears period is not unreasonable, particularly as there is no dispute that Miss Hyde was overpaid child support in an earlier period, as calculated by the Department. The tribunal concluded that, in the circumstances, it is appropriate to treat the liability for the arrears period as having been received by Miss Hyde.  The tribunal determined, therefore, that there were no unpaid amounts payable under the liability in relation to the arrears period.

DECISION

The tribunal decided to set aside the decision under review and substitute its decision that no arrears are payable by Mr Hyde for the period from 28 July 2019 to 27 October 2019.