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

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

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Ignacio and Henriquez (Child support)

Details

AGLC: Ignacio and Henriquez (Child support) [2020] AATA 3687
Case: [2020] AATA 3687
Decision Date: 17 July 2020

CaseChat Overview and Summary

This matter concerned an appeal to the tribunal by Ms Henriquez regarding a child support departure determination. The dispute centred on the assessment of Mr Ignacio's income and financial resources, and the impact of this assessment on the child support payable. Ms Henriquez contended that she experienced financial hardship due to a previous decision, as her social security payments decreased while Mr Ignacio failed to pay his assessed child support liability, resulting in significant arrears.

The tribunal was required to determine whether a departure from the standard assessment was justified, considering the financial circumstances of both parents and the broader implications for taxpayer support. Specifically, the tribunal had to assess if the proposed adjustment to Mr Ignacio's income was appropriate, given the existing child support debt and the potential impact on Ms Henriquez's entitlement to family tax benefit. The central legal issue was whether the proposed change to Mr Ignacio's adjusted taxable income would lead to a proper outcome, balancing parental responsibility with the provision of taxpayer support.

The tribunal reasoned that Ms Henriquez would not be placed in a position of overpayment, noting that Mr Ignacio owed substantial arrears. It considered the principle that parents have the primary responsibility for child support and weighed the balance of support provided by the parents against that provided by the taxpayer. The tribunal concluded that a proposed change to Mr Ignacio's adjusted taxable income, which might reduce Ms Henriquez's family tax benefit due to an increase in child support received, represented an appropriate outcome in the circumstances. This was because it would shift more of the financial burden of supporting the children from the taxpayer to the parents.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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. 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. 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.

Ratio Decidendi

Legal Principle Established

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