Ibbotson and Ibbotson (Child support)

[2022] AATA 3513

Ibbotson and Ibbotson (Child support) [2022] AATA 3513 (15 August 2022)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2022/MC023817

APPLICANT:  Mr Ibbotson

OTHER PARTIES:  Child Support Registrar

Ms Ibbotson

TRIBUNAL:Member H Moreland

DECISION DATE:  15 August 2022

DECISION:

The decision under review is affirmed.

CATCHWORDS

CHILD SUPPORT – particulars of the administrative assessment – whether income estimate should be backdated – 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

1. Mr Ibbotson and Ms Ibbotson are the parents of [Child 1] and [Child 2], in respect of whom a child support assessment is in place.

2. This matter concerns a decision by Services Australia – Child Support (Child Support) to accept an income estimate of $7,081 from 2 February 2022 provided by Mr Ibbotson (the original decision to accept the income estimate was on 2 February 2022), which he later asked to have applied from an earlier date by raising an objection to the original decision. Child Support disallowed Mr Ibbotson’s objection on 20 April 2022. On 5 May 2022, Mr Ibbotson asked the Social Services & Child Support Division of the Administrative Appeals Tribunal (the Tribunal) for an independent review of the decision because he said it has resulted in him incurring a debt based on a higher income than he had earned.

3. The hearing was held on 15 August 2022 and Mr Ibbotson and Ms Ibbotson participated in the hearing by teleconference. Mr Ibbotson have evidence on affirmation, and Ms Ibbotson gave sworn evidence. In making its decision, the Tribunal considered the documents provided by Child Support (85 pages), which were also sent to Mr Ibbotson and Ms Ibbotson. Relevant aspects of the evidence and material before the Tribunal will be referred to in the Tribunal’s consideration of the issues to be decided.

CONSIDERATION

1. The legislation and regulations relevant to this review are the Child Support (Assessment Act) 1989 (the Act); and the Child Support (Assessment) Regulations 2018 (the Regulations).

2. The Tribunal also referred to policy as set out in the Guide to Social Policy Law – Child Support Guide (the Guide). The Guide sets out the approach taken by Child Support to its consideration of social security matters. It expresses policy and the Tribunal is not bound by such policy, however, in Drake v Minister for Immigration and Ethnic Affairs (1979) 2 ALD 60, the Full Court of the Federal Court held that a Tribunal should take into account relevant government policy which is not inconsistent with the provisions or objects of the relevant legislation. The Tribunal adopts this approach in the present matter.

3. According to section 58 of the Act, in cases where a parent has not lodged an income tax return, Child Support may make an estimate of the parent’s income for the purpose of a child support assessment. Methods of approximating income in such circumstances, according to section 58, can include indexation of previous years of income; or assessing a parent’s adjusted taxable income for the last relevant year of income based on an amount that is at least two-thirds of the annualised male total average weekly earnings (MTAWE).

4. Section 58A of the Act provides the following:

   Subsequently ascertaining components of a parent’s adjusted taxable income

   (1) The Registrar must immediately amend an administrative assessment of child support payable by or to a parent in relation to a child support period if:

   (a) the assessment was made on the basis of a determination under section 58; and

   (b) either:

   (i) the Registrar subsequently ascertains the amount of the parent‘s adjusted taxable income for the last relevant year of income; or

   (ii) the Registrar makes a later determination under section 58; and

   (c) either:

   (i) if subparagraph (b)(i) applies--the amount that was subsequently ascertained is different from the amount that was determined under section 58; or

   (ii) if subparagraph (b)(ii) applies--the later amount that the Registrar determines is different from the earlier amount determined under section 58.

   Retrospective determinations

   (2) If:

   (a) at the time the Registrar is to amend the administrative assessment under this section, the parent could lodge his or her tax return by the date required under Part IV of the Income Tax Assessment Act 1936(taking into account any deferral under section 388-55 in Schedule 1 to the Taxation Administration Act 1953 ); or

   (b) paragraph (a) of this subsection does not apply and:

   (i) the amount subsequently ascertained, as mentioned in subparagraph (1)(b)(i), is higher than the amount that was determined under section 58; or

   (ii) the later amount that the Registrar determines, as mentioned in subparagraph (1)(b)(ii), is higher than the earlier amount determined under section 58; or

   (c) neither paragraph (a) nor (b) applies, but circumstances prescribed by the regulations for the purposes of this section apply in relation to the parent;

   then the Registrar must immediately amend the administrative assessment for the child support period on the basis that the parent‘s adjusted taxable income for that year of income is, and has always been, the amount that was subsequently ascertained or later determined (as the case requires).

   Prospective determinations

   (3) If subsection (2) does not apply, then the Registrar must immediately amend the administrative assessment for the child support period on the basis that for each later day in the period the parent‘s adjusted taxable income for that year of income is the amount that was subsequently ascertained or later determined (as the case requires).

   (3A) If, after an administrative assessment of child support is amended under subsection (2) or (3) because of subparagraph (1)(b)(i), the assessment (the tax assessment ) of a parent‘s taxable income is amended (whether or not because of an objection, appeal or review), the Registrar may further amend the administrative assessment to take account of the amendment to the tax assessment.

…

1. This means that in cases where a tax return has not yet been lodged and a parent estimates that their income is lower than previously estimated and they want this lower amount retrospectively applied to the child support assessment, certain conditions, prescribed by regulations must apply for any retrospectivity to apply.

2. These conditions are set out in section 11 of the Regulations and they state the following:

   11 Adjusted taxable income—prescribed circumstances

   (1) For the purposes of section 58A of the Act, the following circumstances are prescribed in relation to a parent who was unable to provide information about the parent’s adjusted taxable income to the Registrar at the time the relevant administrative assessment was made:

   (a) one or more of the following applied in relation to the parent at that time:

   (i) the parent did not know that an application for the assessment had been made and accepted;

   (ii) the parent had a serious illness or injury;

   (iii) the parent was under detention or imprisonment;

   (iv) the parent resided in a remote location which made it difficult to contact the Registrar;

   (v) a natural disaster prevented the parent from being able to contact the Registrar;

   (vi) there was some other exceptional circumstance that prevented the parent from providing the information;

   (b) the Registrar confirms that the parent was unable to provide the information at that time because of a circumstance mentioned in paragraph (a);

   (c) the parent later provides the information to the Registrar as soon as is practicable in the circumstances.

   (2) For the purposes of section 58A of the Act, the following circumstances are prescribed in relation to a parent who resided overseas during the last relevant year of income for the child support period for which the Registrar made the relevant administrative assessment:

   (a) the parent was not required to lodge a tax return under the Tax Act;

   (b) the parent provides the information about the parent’s adjusted taxable income to the Registrar within a reasonable time in the circumstances.

3. The Guide, at 2.4.4.60,[1] explains the law as follows:

   2.4.4.60 New information about adjusted taxable income

   Introduction

   The Registrar may receive new information about a parent's adjusted taxable income. There are rules about whether this new information can be used to amend a parent's child support assessment.

   Description

   The action to be taken by the Registrar when new information about taxable income becomes available will depend upon the dates where the income has been used. The scheme reforms legislative changes from 1 July 2008 introduced new rules for assessments after that date. The Family Assistance and Child Support Legislation Amendment (Protecting Children) Act 2018 amended the rules from 23 May 2018 for child support periods that commenced before 1 July 2008, to align with the rules used for child support periods that commenced on or after 1 July 2008.

   The changes introduced by the Families, Housing, Community Services and Indigenous Affairs and Other Legislation Amendment (Further Election Commitments and Other Measures) Act 2011 apply to child support periods starting on or after 1 July 2011. Where new information about the parent's income is as a result of an amended tax assessment issued by the ATO, different rules apply. For information about when a child support assessment can be amended to take into account an amended tax assessment, see 2.4.4.30 Amended tax assessments.

   [1] information about adjusted taxable income

   Where the Registrar has made a determination of a parent's adjusted taxable income for a particular year and subsequently ascertains the parent's actual taxable income for that year (when a tax assessment issues for the parent), the child support assessment must be amended immediately (CSA Act section 58A). The assessment must also be amended if the Registrar obtains other new information about a parent's adjusted taxable income and makes a later determination of the appropriate adjusted taxable income amount (CSA Act section 58A). The later determination of adjusted taxable income will be subject to the different rules pre- and post-1 July 2011, depending on which financial year the later determination relates to.

   If more recent income information becomes available that would allow the Registrar to determine a more current indexed income for the parent, another adjusted taxable income will be determined and the assessment will be amended to use the more recent information.

   a)    The date of effect of the amendment to the child support assessment will be the beginning of the relevant child support period where (CSA Act section 58A(2)):

   the parent lodged their tax return on time, or still has time to lodge, his or her tax return on time as required under the income tax legislation (e.g. under a relevant tax agent lodgement program)

   b)    paragraph (a) does not apply and the adjusted taxable income subsequently ascertained or later determined by the Registrar is higher than the amount previously determined

   c)     paragraphs (a) and (b) do not apply and the parent was genuinely unable to provide the Registrar with timely information due to the parent being unaware that an assessment had been made; serious ill health or injury; natural disaster; remote location; imprisonment; or other exceptional circumstances and the parent provided income information as soon as was practicable in the circumstances, or

   d)    paragraphs (a) and (b) do not apply and the parent resided overseas, was not required to lodge a tax return and the parent provided information about his or her income to the Registrar within a reasonable time in the circumstances.

   If the Registrar is satisfied that one or more of the above apply, the date of effect can be applied retrospectively.

   When making a decision about whether the circumstances prescribed by CSA Regs section 11 apply, the Registrar must consider all the relevant facts of the parent's particular circumstances and the extent to which they contributed to the parent's delay in providing information about their income to the Registrar.

   For the purposes of section 11(1)(c) of the CSA Regs, the Registrar will consider a person provided their income information to the Registrar as soon as was practicable if they provided that information within a reasonable period of time after the special or exceptional circumstances ceased to affect them. A decision about whether the parent provided their income information to the Registrar as soon as was practicable will require an examination of the parent's individual circumstances.

   Otherwise, the amendment to the assessment will take effect from the day after the assessment was amended, for the remainder of the child support period.

4. All of this means that to have Mr Ibbotson’s income tax declaration of $7,081 applied to his Child Support assessment prior to 2 February 2022, one of the following circumstances must apply:

a)Mr Ibbotson must have lodged his income tax return on time, or still have time to lodge his income tax return online, under the income tax legislation; or

b)Mr Ibbotson’s updated adjusted taxable income must be higher than the previous amount; or

c)Mr Ibbotson was genuinely unable to provide Child Support with timely information due to circumstances out of his control; or

d)Mr Ibbotson lived overseas and was not required to lodge an income tax return and provided the updated information about his income to Child Support within a reasonable time, as soon as was practicable in the circumstances.

1. According to Child Support, options a, b and d did not apply in Mr Ibbotson’s case. Child Support said that Mr Ibbotson was required to lodge an income tax return and had not done so. For this reason, Child Support determined whether option c applied in Mr Ibbotson’s case. Child Support said:

   In this case we are satisfied, Mr Ibbotson was required to lodge a tax return and did not lodge his tax return on time. The subsequent income provided by Mr Ibbotson was lower than the amount previously determined meaning paragraph a, b and d do not apply. Therefore in order to apply Mr Ibbotson’s income tax declaration retrospectively from 1 May 2021, we need to consider if Mr Ibbotson] was genuinely unable to provide the Registrar with timely information due to one of the circumstances listed in paragraph c. Exceptional circumstances are not limited to the above lift, however they must be unusual or out of the ordinary compared to those of other child support customers.

   Details of Objection Decision
   On objection, Mr Ibbotson advised he was stuck overseas and could not return to Australia due to border closures. Mr Ibbotson advised he left Australia on 03 January 2021 and returned back on 10 January 2022.

   We do not consider Mr Ibbotson was affected by a prescribed circumstance. We have considered Mr Ibbotson has had a Child Support case since 2018, and is aware of the requirement to provide income information. Our records indicate Mr Ibbotson contacted us on 25 November 2020 and successfully linked Child Support online services. We have considered at the time Mr Ibbotson left Australia, there was an established risk of a delayed return date, this circumstance was not exceptional. Updated income information can be provided in writing, online or by phone regardless of the customer’s location.

   We have made the decision to apply Mr Ibbotson's 2019/2020 income tax declaration of $7,081.00 from 2 February 2022.[2]

   [2] Child Support papers, pp 12–13.

2. The Tribunal considered whether Mr Ibbotson was genuinely unable to provide Child Support with timely information (i.e. whether Option C applied in his case).

3. Mr Ibbotson was issued a notice on 20 March 2021 which informed him that for the child support assessment period from 1 May 2021 to 31 July 2022, his income was to be based on a provisional income of $52,638.[3]

   [3] Child Support papers, p 15.

4. According to the Child Support papers, Mr Ibbotson contacted Child Support on 2 February 2022 and informed them that his income for 2019/20 was $7,081.00; that he was not working at the time; and that he disagreed with an income estimate of $52,638 being used in the child support assessment.

5. In his application for review, Mr Ibbotson said:

   I left the Country on Sat 02 Jan 2021, heading to [Country] my family sugested me to go away and spend some time for calm, after I arrived there about one week later the Australian government closed the borders due to the COVID19 pandemic, I could not return to Australia in my scheduled time till 11 Jan 2022.
   * I supprised from the letters from the CSA saying that I have to pay my Ex over $5000, based on my earning the time I been away ($52,638)
   * I contacted CSA on 02 Feb 2022 to disscuss the matter, but they said I have to pay the ammount to my ex despite proving all evedence required from me that my family been supporing me while I been away ( the bording passes, Bank statement show all transactions by my wife, C.link payment sumary for the previous year ....) but the decision was already made even before I sent the documents.
   * the last CSA officer I contacted on 03 Mar 2022 suggested to lodge an objection form, it been rejected on 20 Apr. 2022
   * I think the decision is not fair and need reveiw by the AAT.

1. The Tribunal considered whether Mr Ibbotson met any of the conditions set out in section 11 of the Regulations (as outlined in paragraph 9 above).

Did Mr Ibbotson not know that an application for the assessment had been made and accepted?

1. The Tribunal finds that Mr Ibbotson was aware that an application for the Child Support assessment has been made and accepted in 2018.

Did Mr Ibbotson have a serious illness or injury?

1. There is no evidence before the Tribunal that Mr Ibbotson experienced a serious illness or injury that prevented him from updating Child Support about his income at an earlier date.

Was Mr Ibbotson under detention or imprisonment?

1. Mr Ibbotson told the Tribunal that he was not under detention or imprisonment.

Did Mr Ibbotson live in a remote location which made it difficult to contact the Registrar?

1. Mr Ibbotson told the Tribunal that he was in [Country], where the communication systems are very difficult and expensive to access. Mr Ibbotson told the Tribunal that to access more data to contact Child Support, he would need to go to a supermarket and purchase more data for his phone. Mr Ibbotson told the Tribunal that he did not have enough data on his phone, and that it would be difficult for him to purchase extra data, so that he could wait long enough on hold to speak to Child Support.

2. Mr Ibbotson however, also told the Tribunal that he was able to use data to contact his family to thank them for the funds they were sending to him to live on, and to provide brief updates. The Tribunal also acknowledges the findings of Child Support (paragraph 12) that: “Updated income information can be provided in writing, online or by phone regardless of the customer’s location”.

3. The Tribunal does not accept that Mr Ibbotson was prevented from providing Child Support with updated income information due to living in a remote location.

Did a natural disaster prevent Mr Ibbotson from being able to contact the Registrar?

1. Mr Ibbotson told the Tribunal that he regarded the pandemic as a natural disaster.

2. The Tribunal, however, concludes that natural disasters are weather-related events. Further, the Tribunal concludes that the pandemic did not prevent Mr Ibbotson from updating Child Support about his income.

Did some other exceptional circumstance apply in Mr Ibbotson’s case that prevented him from providing the information?

1. The Tribunal concludes that there are no other exceptional circumstances in Mr Ibbotson’s case that prevented him from providing the updated income information to Child Support.

Conclusion

1. The Tribunal concludes that Option C does not apply in Mr Ibbotson’s circumstances.

Does Option D apply in Mr Ibbotson’s circumstances?

Did Mr Ibbotson provide the information to the Registrar as was practicable in the circumstances?

1. While Child Support maintain that Option D does not apply in Mr Ibbotson’s case, Mr Ibbotson told the Tribunal that it does, as his income is below the threshold required to lodge a tax return.

2. In order for Option D to apply however, even if Mr Ibbotson was not required to lodge an income tax return, the Tribunal would need to find that Mr Ibbotson, in the circumstances of his case, provided his updated income information as soon as was practicable in the circumstances.

3. The Tribunal concludes that Mr Ibbotson did not provide his updated income information as soon as was practicable in the circumstances. As was noted by Child Support, Mr Ibbotson has had Child Support online services linked to his myGov account since 25 November 2020.[4] The Tribunal finds that from the time Child Support wrote to Mr Ibbotson on 20 March 2021 to 2 February 2022, when Mr Ibbotson contacted Child Support to update his income, it was not only practicable but it was reasonable in the circumstances for Mr Ibbotson to contact Child Support to provide updated information about his income over the phone but in particular, in writing, using Child Support’s online services.

Conclusion

[4] Child Support papers, p 13.

1. The Tribunal concludes that the provisions that provide for retrospective applications of an income estimate do not apply in Mr Ibbotson’s case.

DECISION

The decision under review is affirmed.