Ignacio and Henriquez (Child support)

[2020] AATA 3687

Ignacio and Henriquez (Child support) [2020] AATA 3687 (17 July 2020)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2019/SC017961

APPLICANT:  Mr Ignacio

OTHER PARTIES:  Child Support Registrar

Ms Henriquez

TRIBUNAL:Member F Staden

DECISION DATE:  17 July 2020

DECISION:

The tribunal sets aside the decision under review and, in substitution, decides that:

• For the period 7 July 2019 to 31 October 2022, Mr Ignacio’s adjusted taxable income is varied to $102,795.

This means that the application for review was partly successful.

CATCHWORDS

CHILD SUPPORT – departure determination – income, financial resources and earning capacity of both parents -  benefits derived from business – 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

1. Mr Ignacio and Ms Henriquez are the parents of [Child 1], born 2010, and [Child 2], born 2012 (the children). From 17 June 2019, the children have been assessed as being in the shared care of their parents, with a care percentage of 38% for Mr Ignacio from that date and a care percentage of 62% for Ms Henriquez from 15 January 2018. In the period from 15 January 2018 to 16 June 2019, Mr Ignacio was assessed as having a care percentage for the children of 14%.

2. There has been a child support assessment for this case from 16 August 2011. Mr Ignacio is the parent liable to pay child support. Ms Henriquez opted for collection of child support by Services Australia (then the Department of Human Services) – Child Support from 20 November 2012.

3. On 29 January 2019, Ms Henriquez applied for a change of assessment on the basis that the child support assessment did not correctly reflect Mr Ignacio’s income, property and financial resources (Reason 8A) or his earning capacity (Reason 8B). At that time the child support assessment in place was:

   ·     For the period 1 August 2018 to 31 October 2019, Mr Ignacio’s annual child support liability is $0, based on Mr Ignacio’s provisional 2017/18 adjusted taxable income of $21,014 and Ms Henriquez’s 2017/18 adjusted taxable income of $56,171.

4. Mr Ignacio did not provide a written response to Ms Henriquez’s application.

5. On 22 May 2019, the relevant child support assessment was revised as follows: 

   ·     For the period 1 August 2018 to 31 October 2019, Mr Ignacio’s annual child support liability is $1,616, based on Mr Ignacio’s 2017/18 adjusted taxable income of $43,491 and Ms Henriquez’s 2017/18 adjusted taxable income of $56,171.

6. Following the 17 June 2019 care change outlined above, on 12 July 2019 the relevant child support assessment was further revised as follows:

• For the period 1 August 2018 to 16 June 2019, Mr Ignacio’s annual child support liability is $1,616, based on Mr Ignacio’s 2017/18 adjusted taxable income of $43,491 and Ms Henriquez’s 2017/18 adjusted taxable income of $56,171; and

• For the period 17 June 2019 to 31 October 2019, Mr Ignacio’s annual child support liability is $776, based on Mr Ignacio’s 2017/18 adjusted taxable income of $43,491 and Ms Henriquez’s 2017/18 adjusted taxable income of $56,171.

1. On 6 August 2019, a primary decision maker found Reason 8A established in relation to Mr Ignacio and Reason 8B not established. The officer made the following decision, based on Mr Ignacio’s likely earnings from the employment he was about to commence:

   ·     For the period 7 July 2019 until 31 October 2020, the adjusted taxable income for Mr Ignacio is set at $118,000.

2. Mr Ignacio lodged an objection to the 6 August 2019 decision on 11 September 2019 on the basis that he could not afford to pay his assessed child support liability.

3. On 25 September 2019, Mr Ignacio applied for a change of assessment on the basis that he had out of the ordinary, necessary expenses to support himself (Reason 7) and that the child support assessment did not correctly reflect his income, property and financial resources (Reason 8A). In his application, Mr Ignacio noted that he had resigned from his employment.

4. Ms Henriquez responded verbally to Mr Ignacio’s objection on 8 October 2019.

5. On 25 November 2019, an objections officer decided to partly allow Mr Ignacio’s objection, finding Reason 8A and Reason 8B established in relation to Mr Ignacio and making the following decision:

   ·     From 7 July 2018 to 31 October 2022, Mr Ignacio’s adjusted taxable income is set at $119,177. This amount will be increased on 1 July 2020 and thereafter on 1 July by the Consumer Price Index Amount Weighted Average for the preceding March quarter.

6. On 3 December 2019, Mr Ignacio applied to the Social Services and Child Support Division of the Administrative Appeals Tribunal (the tribunal) for review of the objections officer’s decision.

7. On 31 March 2020, Mr Ignacio lodged another change of assessment application related to the impact of COVID-19 on his businesses.

8. On 8 April 2020, a telephone directions hearing was conducted with Mr Ignacio and Ms Henriquez. Mr Ignacio did not fully comply with the directions issued on that day.

9. A hearing was held on 5 June 2020 in [City 1]. Mr Ignacio and Ms Henriquez gave sworn evidence by telephone. The tribunal also had before it papers provided by Child Support (717 pages in total - 570 pages were sent in December 2019 and an additional 147 supplementary pages in May 2020), Mr Ignacio (pages A1 to A71) and Ms Henriquez (pages B1 to B12). Copies of these documents were provided to all parties.

10. At hearing, Mr Ignacio stated that he did not have the initial Child Support papers with him and had not received any other material. It subsequently transpired that Mr Ignacio had received the A documents and B documents by email with his consent. It is not clear whether and/or why Mr Ignacio did not receive the Child Support supplementary papers. However, as Mr Ignacio had already had an opportunity to consider the original Child Support papers and as the supplementary papers mostly consisted of material known to Mr Ignacio (Mr Ignacio’s bank statements, records of his contacts with Child Support, and his 31 March 2020 change of assessment application), the tribunal decided to proceed with Mr Ignacio’s agreement.

11. Post hearing, Mr Ignacio provided additional material (pages A72 to A91). This material was provided to Ms Henriquez and Child Support. The tribunal also took evidence by telephone from [name], Mr Ignacio ‘s accountant

12. Relevant aspects of the evidence are referred to in the consideration below.

ISSUES

1. The rate of child support payable by a liable parent is usually based on an administrative assessment under the Child Support (Assessment) Act 1989 (the Assessment Act). The formula used to calculate the rate takes into account factors such as the number of children, the levels of care provided and the income of each parent.

2. Under section 98B of the Assessment Act, a liable parent or a carer receiving child support can apply to the Child Support Registrar for a determination to depart from the administrative assessment. This is known as a change of assessment.

3. Under section 98C of the Assessment Act, the Child Support Registrar, here the tribunal, may change the assessment if the case meets the following three criteria:

   · There is a ground to depart from the assessment (subsection 117(2) of the Assessment Act lists those grounds). Only one ground has to be established for the tribunal to proceed to consider the next criterion (Marsh & Eccles [2008] FMCAfam 1417);

   ·     It is “just and equitable” to make particular changes to the assessment; and

   ·     It is “otherwise proper” to make those changes to the assessment.

Issue 1: Is there a ground to depart from the administrative assessment?

1. Subparagraph 117(2)(c)(ia) of the Assessment Act provides a ground for departure exists where, in the special circumstances of the case, the use of the administrative assessment would result in an unjust and inequitable determination of a parent’s child support liability because the income, property and financial resources of either parent are not properly taken into account.

2. The term “special circumstances” is not defined in the Assessment Act. In Gyselman and Gyselman [1991] FamCA 93, the Full Family Court indicated that for there to be special circumstances, the facts of the case must establish something which is special or out of the ordinary.

Mr Ignacio’s income, property and/or financial resources

1. Mr Ignacio was employed by [Business 1] for 11 weeks, from 8 July 2019 to 20 September 2019, and then resigned. His annual salary was $102,795. Thus, he earned approximately $21,750 while he worked there.

2. Before, during and after his period of employment with [Business 1], Mr Ignacio was running a [children’s activities business], most commonly referred to as [Business 2]. His [service] company, [Business 3] was doing little in the period immediately prior to his [Business 1] employment but was active in the period after.

3. It is a well-established principle in the Family Court that the taxable income of a person who is self-employed, such as Mr Ignacio, may not be an accurate reflection of their financial resources for child support purposes (DJM and JLM [1988] FamCA 97; Scott v Scott FLC (1994) 92-457; Carey v Carey (1994) FLC 92-489). Self-employed people can derive additional benefits from their businesses and have greater control over the structure of their finances than a PAYG employee. In making findings on such matters, the tribunal is not required to undertake a major audit or investigation into the affairs of the parties, but only needs to be reasonably satisfied, on the balance of probabilities, about the state of their income, property and financial resources.

4. Before considering Mr Ignacio’s income in relation to [Business 2] and [Business 3], two points should be noted. First, Mr Ignacio did not comply with the tribunal’s request for, among other things, bank statements for these entities for the period 9 October 2019 to 31 January 2020, 9 July 2019 to 9 October 2019 being already available through Child Support. However, the tribunal did have the benefit of Child Support obtained bank statements for the period 17 December 2019 to 17 March 2020 and so was able to proceed. Second, Mr Ignacio is not a careful account keeper in relation to either of his businesses and admits to confusing personal and business expenses. He also moves money between the businesses and then pays it back. He told the tribunal that for tax purposes he hands everything over to his accountant and lets her sort it out. Mr Ignacio’s accountant confirmed Mr Ignacio’s lack of organisation in relation to his accounts.

[Business 2]

1. [Business 2] is a sole trader business in Mr Ignacio’s name, with an active ABN since [October] 2017. However, there is another person involved in the business, [Ms A], who is based in [another city]. Mr Ignacio states that he is not in a personal relationship with [Ms A]; Ms Henriquez disputes this. Mr Ignacio variously referred to [Ms A] as an employee, as the manager of [Business 2] and as his business partner. In a submission to the tribunal, Mr Ignacio referred to the possibility of handing the business over to [Ms A] in future. It is to be assumed that Mr Ignacio would not do so without first having the business valued and receiving appropriate recompense.

2. [Ms A] is a signatory on the [Business 2] bank account and has a card which allows her to draw from that account. Mr Ignacio’s accountant stated that she puts together all the various amounts [Ms A] spends on the card, essentially personal expenses including her health insurance, and that is what constitutes the $20,000 [Business 2] salary and wage expense in Mr Ignacio’s 2018/19 income tax return. Mr Ignacio said that all the motor vehicle expenses of [Business 2] ($12,767) are also those of [Ms A].

3. Mr Ignacio initially told Child Support that he made no money at all from [Business 2]. This is not the cases as the $47,417 he received in 2018/19 taxable supplementary income from the business shows. Mr Ignacio told the tribunal that he receives no personal benefit from [Business 2] other than that attributed to him as income. The tribunal found this to be unlikely. At the least, the children receive free tuition and Mr Ignacio makes his car loan repayments through [Business 2], paying the money in from his personal account.

4. Mr Ignacio’s 2018/19 income tax return shows that a major expense for [Business 2] in that year was depreciation of $32,329 for low cost assets including [specified equipment]. The tribunal found that these purchases were all made in 2018/19 and were necessary expenses for the setup of a [children’s activities business]. This amount was therefore not a financial resource to Mr Ignacio in 2018/19. However, it will also not be a major expense in 2019/20 and so Mr Ignacio’s income from the business could be expected to increase.

5. As Mr Ignacio noted in his 31 March 2020 change of assessment application, the [premises] from which [Business 2] operates was forced to close at around that time. He applied for job keeper in relation to the business in May 2020. The tribunal noted that the [premises] opened again in mid-June 2020 and classes have recommenced. For example, [Business 2’s] [social media] page shows [an event] to be held at the [premises] on [dates in] July 2020 at a cost of [amount] a day, to be paid in cash on arrival.

[Business 3]

1. Mr Ignacio stated that [Business 3] was not operating in the first quarter of 2019/20 and this is confirmed by the relevant bank statements for the business. However, it emerged that business-related payments totalling $4,000 were made into Mr Ignacio’s personal account in July 2019.

2. Although Mr Ignacio said that one of the reasons he resigned from [Business 1] was its poor treatment of contractors, after his resignation he then became a contractor for [Business 1]. Subsequently, he took on work for other organisations and individuals.  Mr Ignacio told the tribunal that he paid himself $1,000 a week and that this continued until he applied for job keeper, a period of around 28 weeks. Thus, Mr Ignacio’s 2019/20 direct income from [Business 3] was at least $28,000.

3. The tribunal observed that [service] work was continuing in [City 1] despite the impact of the COVID-19 situation. Mr Ignacio stated at the telephone directions hearing that he had a [medical] condition which could impact his ability to work and also that he did not have the necessary qualifications to get some jobs. The tribunal gave Mr Ignacio an opportunity to provide evidence on these matters and on anything else he wished to draw the tribunal’s attention to about the impact of the COVID-19 situation on his sector of the [City 1] [service] industry. He did not do so.

4. A bank statement for the period 18 March 2020 to 17 April 2020 shows a rapid decrease in the balance of Mr Ignacio’s main [Business 3] account from $5,170 to $18 overdrawn. More than half of the funds are directed to [a brand] credit card account, likely that referred to in Mr Ignacio’s Statement of Financial Circumstances (SoFC) as being at its limit of $9,000. Requested statements for Mr Ignacio’s credit card accounts were not provided and so it is not possible to ascertain whether the expenses paid for through the [brand] card are business or personal.

5. Available bank statements do show that Mr Ignacio pays some personal expenses through [Business 3]. [His accountant] agreed that this was the case. When she prepares the financial statements for [Business 3], she allocates such spending to the “Loans to Directors” category. In 2017/18 Loans to Directors was $15,714 and in 2018/19 it increased to $25,333, indicating that Mr Ignacio derived around $10,000 in personal expenses from the company in 2019/20. Allowing that the [Business 3] account was only active for around half of 2019/20, it seems reasonable to assume that Mr Ignacio received at least $5,000 from [Business 3] in personal expense payments in that time.

Conclusion

1. Taking all the elements of Mr Ignacio’s income into account, [Business 1], [Business 2] and [Business 3], and allowing for reasonable deductions and business expenses, the tribunal found that Mr Ignacio’s 2019/20 adjusted taxable income was likely to be more than $100,000. This amount is considerably more than the $43,491 used in the assessment and the tribunal further found that this difference constated a special circumstance in this case. As the application of the administrative assessment would therefore result in an unjust and inequitable determination of financial support for the children, in that Mr Ignacio would be assessed to pay less child support than warranted on the basis of his income, property and financial resources, the tribunal found that a ground for departure was established.

Issue 2: Is it just and equitable to depart from the administrative assessment?

1. To decide whether it is just and equitable to depart from the administrative assessment, the tribunal must consider the matters required by subsection 117(4) of the Assessment Act, plus any other matters raised in the change of assessment application.

Duty of a parent to maintain a child

1. Section 3 of the Assessment Act makes it clear that the parents of a child have the primary duty to maintain the child, and that this duty has priority over all commitments of the parents other than commitments necessary for self-support or the support of another person the parent has a duty to maintain.

2. Mr Ignacio and Ms Henriquez each have the primary duty to financially support the children. Neither has any other child.

The proper needs of the child

1. In determining the proper needs of a child it is necessary to consider the manner in which the parents expected the child to be cared for, educated or trained, and any special needs of the child.

2. Mr Ignacio raised the issue of costs associated with the special talents of the children. He has previously been given opportunities to provide evidence about this but has not done so. He stated that he has struggled to understand what that evidence could be. The tribunal explained to Mr Ignacio the sorts of things which constitute such evidence. On 3 July 2017, Mr Ignacio provided a submission setting out the special talents of the children in relation to [their children’s activities], in particular [Child 1’s] [activities] and [Child 2’s] [related activities]. The submission listed the many competition successes of the team/groups to which the children belong and the many costs associated with their participation in events. No receipts for costs were provided.

3. Ms Henriquez stated that while the children enjoy [these activities] as an extracurricular activity, she was not convinced that they have a special talent for it. She thinks they are too young (currently 9 and 7) for it to be possible to assess their talent.

4. On balance the tribunal was not satisfied that there was a need to take the costs of the children’s [activities] into account in the assessment: Both children are young; Mr Ignacio subsidises their costs as the [children’s activities] business belongs to him; and the travel costs of the children are no longer an issue because of the COVID-19 situation.

5. Both children attend a government primary school and there are no unusual expenses associated with their education.

Income, earning capacity, property and financial resources of the children

1. Mr Ignacio and Ms Henriquez agree that the children have no income, property or financial resources that they can use to support themselves and that the earning capacity of the children is not at issue here.

Mr Ignacio’s earning capacity

1. Subsection 117(7B) of the Act requires the tribunal to consider three criteria in determining whether a parent’s earning capacity is greater than that reflected in their income as used in the administrative assessment.  All three criteria must be satisfied before a departure determination can be made. Those three criteria are:

   (a) one or more of the following applies:

   ·the parent does not work despite ample opportunity to do so (subparagraph 117(7B)(a)(i));

   ·the parent has reduced the number of hours per week of his or her employment or other work below the normal number of hours per week that constitutes full-time work for the occupation or industry in which the parent is employed or otherwise engaged (subparagraph 117(7B)(a)(ii));

   ·the parent has changed his or her occupation, industry or working pattern (subparagraph 117(7B)(a)(iii)); and

   (b)   the parent's decision not to work, to reduce the number of hours, or to change his or her occupation, industry or working pattern is not justified on the basis of:

   ·the parent's caring responsibilities (subparagraph 117(7B)(b)(i)); or

   ·the parent's state of health (subparagraph 117(7B)(b)(ii)); and

   (c)   the parent has not demonstrated that it was not a major purpose of that decision to affect the administrative assessment of child support in relation to the child (paragraph 117(7B)(c)). 

1. Mr Ignacio commenced full-time employment as [an occupation] with [Business 1] in July 2019; his annual salary was $102,795. On 17 September 2019, Mr Ignacio voluntarily resigned from [Business 1] with effect from 20 September 2019. Thus, the first criterion is met because Mr Ignacio voluntarily ceased his employment. He subsequently worked for [Business 1] as a contractor

2. Mr Ignacio was not clear about why he left his employment with [Business 1], in part because he confused his reasons for leaving work as an employee with his reasons for ceasing to be a contractor for [Business 1]. Mr Ignacio spoke of finding his [specific] role difficult because the company did not treat contractors well yet he went on to be a contractor. He also spoke of problems around [Business 1] not paying contractors for their work or for their superannuation and of his concerns about having to pay the costs of his company, [Business 3], while he was earning a salary.

3. The tribunal put it to Mr Ignacio that he did not leave his employment because of his caring responsibilities or his state of health. He said that [Business 1] did not like him sometimes leaving early to pick up the children. The tribunal was not persuaded that this was a significant factor in why he left his employment and so found the second criterion met.

4. Mr Ignacio is recorded as telling the objections officer on 13 November 2019 that he left [Business 1] because “he could not afford to keep working as the more money he makes the more we [Child Support] tell him he has to pay to the other parent”. Mr Ignacio felt that his position on paying child support has been misrepresented during the change of assessment process: It is not that he does not want to pay, it is that he cannot afford to pay. The tribunal understood Mr Ignacio’s argument and Mr Ignacio’s capacity to pay child support and any associated hardship is specifically considered below.

5. When Mr Ignacio chose to leave [Business 1] his income fell but there was no change to his child support liability because there was a change of assessment decision in place. This prompted Mr Ignacio to lodge a change of assessment application on 25 September 2019 on the basis of his reduced income and company expenses. In this context, one not unreasonable interpretation of Mr Ignacio’s decision to resign from [Business 1] and then work as a contractor for [Business 1] is that this would allow him to reduce his assessable income through [Business 3] related deductions and so reduce his child support liability. The tribunal concluded that a major purpose, if not the major purpose, for Mr Ignacio resigning from [Business 1] was to reduce his assessed child support liability. Thus criterion 3 was met.

6. All three criteria being met, the tribunal concluded that Mr Ignacio does have an earning capacity greater than the income used in the assessment, with the amount of that capacity being in the region of $102,795.

Ms Henriquez’s income, property and financial resources and earning capacity

1. Ms Henriquez was working as a full-time [occupation 1], earning an annual salary of $58,094, when she made her change of assessment application in January 2019. That salary later increased to around $64,000. In February 2020, Ms Henriquez began a new job as a full-time [occupation 1] for a different employer, earning an annual salary of $80,000. Her employment and earnings have not been affected by the COVID-19 situation as she has been able to work from home.

2. The tribunal was satisfied that Ms Henriquez was fully exercising her earning capacity as she has been working full-time at all relevant times.

3. There was nothing in Ms Henriquez’s SoFC or other available evidence, including bank statements, to indicate that she has access to any other income, property or financial resources not being considered in the assessment. She lives in rental accommodation, has less than $1,000 in savings and her only asset of significance is a car. Her liabilities consist of an $18,000 car loan, a credit card debt of about $11,000 and a debt to the Australian Taxation Office of around $5,500.

4. On the evidence before it, the tribunal was satisfied that Ms Henriquez’s financial situation was properly taken into account by the usual workings of the assessment process.

Commitments necessary for self-support or the support of anyone else the parent has a duty to maintain

1. Mr Ignacio and Ms Henriquez have no duty to maintain anyone other than the children. Neither proffered any argument in relation to personal health-related costs or any other unusual expenses.

Direct and indirect costs of providing care for the child incurred by the parent entitled to child support

1. Neither Mr Ignacio nor Ms Henriquez identified any unusually high direct or indirect costs involved in providing care for the children, other than Mr Ignacio’s identification of the [children’s activities] related costs discussed above.

What determination should be made taking into account the above factors?

1. The tribunal proposes to make the following determination:

   ·     For the period 7 July 2019 to 31 October 2022, Mr Ignacio’s adjusted taxable income is varied to $102,795.

2. The amount of $102,795 is Mr Ignacio’s income from [service] work had he continued to work for [Business 1] rather than choosing to resign from that employment. The tribunal has found above that circumstances around Mr Ignacio’s resignation are such that his earning capacity can be taken into account in the change of assessment process. The tribunal was unpersuaded by Mr Ignacio’s argument, as put forward in his 25 September 2019 change of assessment application, that his adjusted taxable income should be reduced because of his resignation.

3. The start date of 7 July 2019 is the start date used by both previous decision makers in this matter and relates to the beginning of Mr Ignacio’s employment with [Business 1]. The use of this date allows continuity with previous decisions in this matter.

4. In the period between Ms Henriquez’s change of assessment application and 7 July 2019, the adjusted taxable income used for Mr Ignacio in the assessment is his 2017/18 adjusted taxable income of $43,491. There is an argument for considering the accuracy of the adjusted taxable income figure used for Mr Ignacio in this period, however, the tribunal was satisfied that any discrepancy would be balanced out going forward.

5. The end date of 31 October 2022 will allow both parties time to lodge their 2021/22 income tax returns and Mr Ignacio to put in place systems for managing and recording the financial transactions of [Business 2] and [Business 3] in a more professional manner, particularly addressing the confusion of his personal and business expenses and, for [Business 2], those of [Ms A]. It will also provide Ms Henriquez with some certainty going forward and so allow her to organise her financial affairs.

Any hardship resulting from the departure determination

1. The proposed departure determination increases the amount of child support payable by Mr Ignacio for the period from 7 July 2019 to 31 October 2022. While the amount of the increase is less than that under previous decisions in this matter, the tribunal was satisfied that it better reflected Mr Ignacio’s financial situation. In forming that view, the tribunal has considered Mr Ignacio’s liabilities which he listed on his undated SoFC as $14,000 owing on credit cards; a mortgage of $175,000; $8,000 owing on an old work [vehicle]; and $35,000 due to [a named finance company].

2. Mr Ignacio may view this decision as causing him hardship as he believes that he does not have and will not have the financial capacity to pay the child support liability associated with this decision. His concerns about his likely future income led him to make his 31 March 2020 change of assessment application. However, the tribunal has carefully considered his financial circumstances and finds the decision to be fair. As previously noted, proper attention to the management of his finances would greatly assist Mr Ignacio.

3. Ms Henriquez told the tribunal that she experienced financial hardship following the original change of assessment decision in this case. Her social security payments decreased but she did not receive any increase in child support because Mr Ignacio did not pay his assessed child support liability. The tribunal was satisfied that Ms Henriquez would not be put in a position of overpayment by this decision as Mr Ignacio owed $7,033.37 in child support arrears as at 7 May 2020.

Issue 3: Is it otherwise proper to depart from the administrative assessment?

1. The tribunal considered the impact of its decision on the balance of support provided by the parents on one hand and the taxpayer on the other. It is necessary to decide whether this is a proper outcome given that parents have the primary responsibility to support their children.

2. Here Ms Henriquez receives family tax benefit for the children. The proposed change to Mr Ignacio’s adjusted taxable income may reduce the amount Ms Henriquez is paid as she will receive more in child support. This would mean a decrease in the amount of taxpayer support for the children. The tribunal was therefore satisfied that this decision is otherwise proper in the circumstances of the case.

DECISION

The tribunal sets aside the decision under review and, in substitution, decides that:

• For the period 7 July 2019 to 31 October 2022, Mr Ignacio’s adjusted taxable income is varied to $102,795.

This means that the application for review was partly successful.