Jagger and Jagger (Child support)

[2019] AATA 94

Jagger and Jagger (Child support) [2019] AATA 94 (3 January 2019)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2018/BC014769

APPLICANT:  Mr Jagger

OTHER PARTIES:  Child Support Registrar

Mrs Jagger

TRIBUNAL:Member J Thomson

DECISION DATE:  3 January 2019

DECISION:

The Tribunal sets aside the decision under review and, in substitution, decides that Mr Jagger’s income estimate of $59,732 lodged on 20 April 2018 be accepted, and his amended income estimate of $73,497 lodged on 25 May 2018 be accepted.

CATCHWORDS

CHILD SUPPORT – particulars of the administrative assessment – estimate of income - whether the estimate should have been refused - estimate of income should be accepted - 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 Jagger and Mrs Jagger are the parents of [Child 1], (born 2011), [Child 2], (born 2015) and [Child 3], (born 2013). The care percentages currently being assessed by the Department of Human Services – Child Support (the Department) are 86% to Mrs Jagger and 14% to Mr Jagger.

2. Mr Jagger seeks review of an objection decision made by the Department on 3 July 2018. This decision allowed Mrs Jagger’s objection to a decision dated 26 April 2018 to accept Mr Jagger’s estimate of income for the 2017/18 financial year of $134,257.21 for the year-to-date, 1 July 2017 to 19 April 2018, and $11,782.78 (annualised to $59,732) for the remaining estimate period, 20 April 2018 to 30 June 2018.

3. In allowing Mrs Jagger’s objection, the objections officer made a decision to revoke Mr Jagger’s estimate of income of $59,732 for the period 20 April 2018 to 30 June 2018.

4. The Tribunal heard the matter on 15 November 2018. Mr Jagger attended the hearing via conference telephone and gave affirmed evidence. His authorised representative, [Representative A] also attended the hearing via conference telephone and made submissions on behalf of Mr Jagger. Mrs Jagger also attended the hearing and gave affirmed evidence.

5. The Tribunal had before it documents provided by the Department. These documents were admitted into evidence and marked Exhibit 1. Both parties had copies of these papers with them at the hearing.

6. At the conclusion of the hearing, the Tribunal directed Mr Jagger to provide further written submissions, including a chronology relating to his transfer from [Employer 1A] to [Employer 1B] and the corresponding dates upon which he notified the Department of changes in his income relative to those changes in his employment circumstances, copies of his [Employer 1B] and [Employer 1A] PAYG summaries for the 2017/18 financial year, his “as filed” income tax return for that financial year, and [an Employer 1B] letter particularising his terms of employment and salary arrangements for the period of his employment with [Employer 1B] from 12 December 2017 to the date of completion of his [training course].    

7. Mr Jagger has complied with the Tribunal’s directions, and the additional documents and submissions prepared by his representative, [Representative A], have been admitted into evidence and marked Exhibit A. Copies of these documents have been provided to Mrs Jagger for her consideration and comment. She has not responded.

ISSUES

1. The statutory provisions relevant to this review are contained in the Child Support (Assessment) Act 1989, (the Act). The Act provides for an administrative assessment for the child support payable by a responsible parent. It uses a formula which contains variables such as the parents’ adjusted taxable incomes and their percentages of care of the child or children. A parent can elect to provide an estimate of their adjusted taxable income and, if accepted, a provisional rate of child support payable is calculated on the basis of that estimated income, subject to reconciliation, once their actual adjusted taxable income becomes known.

2. A parent can provide an estimate of income for the whole year or part of a financial year. This case concerns an estimate of income for part of a financial year.

3. When providing an estimate of income, the parent must provide two amounts. The first is their year-to-date income from the start of the financial year until the day before the day of the estimate: paragraph 60(3)(b) of the Act. The second is their estimate of their income from the day of the estimate until the end of the financial year: paragraph 60(3)(a) of the Act.

4. Subsection 63AA(2)(a) of the Act provides that the Registrar may refuse to accept a parent’s income election to which subsection 60(3) applies if the Registrar is satisfied that the partial year income amount for the income election is less than the amount the Registrar considers is likely to be the parent’s actual adjusted taxable income for the remaining period in relation to the income election.

5. The issues which arise in this case are:

   ·      Mr Jagger’s estimate of income for the remaining estimate period 20 April 2018 to 30 June 2018.

CONSIDERATION

1. In reaching its decision, the Tribunal has considered the affirmed evidence given by Mr and Mrs Jagger at hearing, and the submissions made by Mr Jagger’s representative, [Representative A] at hearing, the Department’s documents contained in Exhibit 1, and the additional documents and submissions provided by Mr Jagger and his representative post hearing, contained in Exhibit A.

2. On 24 July 2017, Mr Jagger and Mrs Jagger separated. Mrs Jagger registered a child support case with the Department on 3 October 2017.

3. On 5 December 2017, Mrs Jagger opted to have Mr Jagger’s child support collected by the Department.

4. Mr Jagger’s evidence and [Representative A’s] submissions at hearing and post hearing were to the following effect.

5. Mr Jagger is an [occupation 1], currently employed with [Employer 1B] as a fully qualified [specific position] (see at a salary rate of $88.91 per hour [Employer 1B] letter 25 May 2018 – Exhibit A11).

6. Prior to 12 December 2017, Mr Jagger was employed as [an occupation 1] with [Employer 1A],  but had transferred to [Employer 1B’s’s related] service, [using new equipment], for which he was required to undertake special [training].

7. On 12 December 2017, he commenced employment with [Employer 1B] in the position of [specific position], and from that date until 17 April 2018, he was remunerated on a training wage of $1,636.25 gross per fortnight. Since completion of his training on 17 April 2018, he has been paid as a fully qualified [specific position] at the rate of $88.91 per hour (see [Employer 1B] letter 25 May 2018 at Exhibit A 11).

8. On 3 January 2018, after Mr Jagger became aware that Mrs Jagger had opted to have Mr Jagger’s child support collected by the Department, he contacted the Department to discuss arrangements for collection of his child support payments.

9. During the course of his discussions with the Department, he informed the Department officer of his changed employment circumstances, as a consequence of his transferring from [Employer 1A] to [Employer 1B], effective from 12 December 2017, and that from 12 December 2017, his income would be significantly reduced while he was being trained to [use the new equipment].

10. Mr Jagger said he informed the Department that he was not able to advise the precise amount of his training salary or the duration of the training course because at that point in time, [Employer 1B] had not provided him with details of his training salary, and the duration of his training course was dependent upon a number of factors, including the availability of [required] facilities and training [professionals].

11. He also informed the Department of difficulties he anticipated encountering as regards the provision of his year-to-date income from his employment with [Employer 1A] up until 11 January 2018, because his [Employer 1A] payslips were issued electronically, and only retrievable by accessing the [Employer 1A] pay records portal, to which he no longer had access as a result of his having transferred to [Employer 1B].

12. He gave evidence that it was [the employer’s] corporate group policy to restrict access to salary records within the group because of the differentials in pay scales across the [employer’s] group of companies. He said he was advised by the pay staff at [Employer 1A] that he would not be able to obtain details of his [Employer 1A] income from 1 July 2017 to 11 December 2017 until his [Employer 1A] PAYG income summary issued at the end of the 2017/18 financial year.

13. Mr Jagger said he informed the Department that his income tax return for the 2016/17 financial year reflected declared income of $182,948, but he expected that his income for the 2017/18 financial year would be significantly less.

14. The Department’s file records provided to the Tribunal as part of Exhibit 1 do not clearly reflect the sequence of events following Mr Jagger’s initial discussions with the Department on 3 January 2018. Suffice it to say it appears he contacted the Department on 4 January 2018 and again on 10 January 2018 to provide details of his income from 10 January 2018.

15. At page 20 of the Department’s documents, Exhibit 1 is a copy of an email from Mr Jagger in which, amongst other things, he advises the Department that he had been in contact with the Department on 4 January 2018 and 10 January 2018 concerning his income details and, on 10 January 2018 had called to provide year-to-date figures and details of his fortnightly income from that date.

16. In that email, Mr Jagger confirmed that his income to 4 January 2018 was $143,544, and that he anticipated that his fortnightly income from that date onward was likely to be $2,132.11 gross per fortnight. He provided a copy of his [Employer 1B] payslip for the period 8 January 2018 to 21 January 2018 reflecting his total gross fortnightly income at $2,132.11 (see page 21 of Exhibit 1)

17. The Department’s objections officer’s decision of 3 April 2018 at pages 25 and 26 of Exhibit 1 records the Department’s decision accepting Mr Jagger’s 3 January 2018 estimate of income, based on his anticipated fortnightly income of $1,600, annualised to $41,714 for the period 3 January 2018 to 30 June 2018.

18. Mrs Jagger objected to the Department’s decision on 3 January 2018, resulting in the objections officer’s decision of 3 April 2018, allowing her objection and revoking Mr Jagger estimate of income lodged on 3 January 2018.

19. The objections officer’s decision appears to be based on the conflicting information provided by Mr Jagger in the telephone conversations he had with the Department over the period 3 January 2018 to 10 January 2018, when he provided an estimate of $1,600 as his fortnightly income on 3 January 2018, and later, provided the objections officer with a payslip reflecting a fortnightly gross salary of $2,132.11, and a taxable fortnightly income, after deductions, of $1,908. As this was more than the $1600 per fortnight estimate he had initially provided, the objections officer revoked his earlier assessment. Mr Jagger did not seek review of this decision.

20. Following completion of his [specified] training course on 17 April 2018, Mr Jagger again contacted the Department on 20 April 2018 to provide a fresh income estimate.

21. The Department’s file notes at pages 32 to 37 of Exhibit 1 record Mr Jagger advising the Department that his latest payslip reflected an increase in his income since completing his training course, and, by reference to colleagues in similar [Employer 1B] employment circumstances, he deduced his gross fortnightly income from 17 April 2018 was likely to be $3,000.

22. At page 36 of Exhibit 1 the Department’s file note records Mr Jagger advising the Department on multiple occasions that his fortnightly income varied depending on his [work] hours, and for that reason, it was difficult for him to provide accurate income estimates.

23. On 26 April 2018, the Department sent Mr Jagger a letter accepting the fresh income estimate he provided on 20 April 2018. The income estimates summary at page 40 of Exhibit 1 records Mr Jagger’s year-to-date income estimate for the period 1 July 2017 to 19 April 2018 at $134,257.21, and his income estimate for the remaining period 20 April 2018 to 30 June 2018 at $11,782.78, based on a fortnightly [Employer 1B] gross income estimate of $3,250. Extrapolated, over the 72 day period from 20 April 2018 to 30 June 2018, to $16,714.28, less allowable deductions of $4,931.50, a net estimated taxable income of $11,782.78, annualised to $59,732.14 results.

24. On 8 May 2018, Mrs Jagger objected to the Department’s decision of 26 April 2018 to accept Mr Jagger’s income estimate for the period 20 April 2018 to 30 June 2018 detailed above, contending that his previous year’s income tax return reflected an income of $183,000, and, although Mr Jagger had advised her that his income while he was training for his appointment as an [occupation 1 employing the new equipment] would be reduced, she said he advised her that his income would be approximately $120,000 per annum (see page 67 of Exhibit 1).

25. A Department officer contacted Mr Jagger on 21 May 2018 to discuss Mrs Jagger’s objection to the Department’s decision to accept his 20 April 2018 to 30 June 2018 income estimate referred to above. Mr Jagger agreed to provide further information upon his return from his rostered [shift], and on 25 May 2018, he provided a fresh income estimate, based on updated income information he had received from his employer, [Employer 1B] following his return from [that shift].

26. The Department’s file notes at pages 73 and 74 of Exhibit 1 record Mr Jagger providing a fresh estimate of $19,433 as his income for the period 17 April 2018 to 30 June 2018, which the Department averaged over a period of approximately 72 days as being equivalent to a fortnightly income of $3,778, annualised to $73,497, and an anticipated adjusted taxable income for the 2017/18 financial year of $148,717. The file note at page 74 records the Department accepting this estimate.

27. Accordingly, the Department issued letters to Mr and Mrs Jagger on 25 May 2018, confirming its acceptance of Mr Jagger’s amended estimate.

28. The summary details attached to that letter recorded his income estimate for the 2017/18 financial year at $148,717.70, his year-to-date estimate, 1 July 2017 to 19 April 2018 at $134,257.21, and his estimate for the period 20 April 2018 to 20 April 2018 at a daily rate of $163.64, annualised to $59,732. The summary also recorded his estimate for the remaining period 21 April 2018 to 30 June 2018, based on his revised fortnightly pay estimate of $3,778, extrapolated to $19,159.85 over that 71 day period, reduced to $14,296.85, net of allowable deductions, resulting in an annualised figure of $73,497 (see pages 76 and 78 of Exhibit 1).

29. Mr Jagger and [Employer 1B] submitted further documents to the Department relating to Mr Jagger’s income in the course of the objections process between 25 May 2018 and 30 May 2018, in particular, documents at pages 113 and 118 of Exhibit 1 reflecting Mr Jagger’s income and allowances for the period 1 April 2018 to 27 May 2018.

30. On 3 July 2018, the Department’s objections officer made a decision to allow Mrs Jagger’s objection, and revoked Mr Jagger income estimate of $59,732 for the period 20 April 2018 to 30 June 2018.

31. In reaching that decision, the objections officer analysed Mr Jagger’s fortnightly income over the three fortnightly pay periods reflected in the income information for the period 29 April 2018 to 27 May 2018 contained in Exhibit 1 at page 113; $3,555.57 for the fortnight ended 29 April 2018; $4,309.80 for the fortnight ended 13 May 2018; and $3,907.46 for the fortnight ended 27 May 2018), resulting in a total income for that period of $11,772.83.

32. The objections officer then calculated Mr Jagger’s allowable deductions for the period 29 April 2018 to 27 May 2018 (using the figure applied in Mr Jagger earlier estimate for the period 20 April 2018 to 30 June 2018 of $4,931.50), resulting in a figure of $2,847.86, and arrived at a net taxable income of $8,924.97 for the 29 April 2018 to 27 May 2018 period, annualised to $79,453.99. As this figure exceeded Mr Jagger’s 20 April 2018 income estimate of $73,497 on 21 May 2018, and his earlier estimate of $59,732.14 provided on 20 April 2018, the objections officer concluded that Mr Jagger had underestimated his income, and revoked both those earlier estimates.

33. In her submissions to the Tribunal at hearing, [Representative A] referred the Tribunal to Mr Jagger’s income tax return prepared by his tax agent’s on 20 July 2018 for the financial year 2017/18 and submitted to the Australian Taxation Office (ATO), together with his PAYG payment summaries provided by his employer’s, [Employer 1A] (for the period 1 July 2017 to 11 December 2017), and [Employer 1B] (for the period 1 July 2017 to 30 June 2018). These documents appear at pages A1 to A10 of Exhibit A.

34. [Representative A] submitted that, based on this information, which only became available after the objections officer published his decision of 3 July 2018, Mr Jagger’s actual gross income, including allowances, but net of deductions of $702, for the period 1 July 2017 to 11 December 2017, when he ceased working for [Employer 1A], and transferred to [Employer 1B], was $107,113, and for the period 12 December 2017 to 30 June 2018, during which he was employed by [Employer 1B], as confirmed by the letter provided by that company dated 25 May 2018 (see page A 11 of Exhibit A), his actual gross income  (including allowances and reportable fringe benefits, less allowable deductions of $181), was $36,522.

35. Based on his actual gross income of $36,522 for the period of his employment with [Employer 1B] from 12 December 2017 to 30 June 2018, [Representative A] submitted Mr Jagger’s gross income for the period 12 December 2017 to 19 April 2018 would have been $23,439.30 ($36,522 / 201 days = $181.70 per day x 129 days = $23,439.30), his gross income for the year-to-date, 1 July 2017 to 19 April 2018 would have been $130,552.30 ($107,113 plus $23,439.30 = $130,552.30), and his gross income for the remainder of the 2017/18 financial year – 20 April 2018 to 30 June 2018 would have been $13,082 ($181.70 per day x 72 days = $13,082).

36. The Tribunal therefore finds, based on the evidence provided by Mr Jagger and [Representative A’s], submissions as set out above, that Mr Jagger actual gross income for the period 1 July 2017 to 11 December 2017 was $107,113, as reflected in his PAYG payment summary at page A9 of Exhibit A, and his actual gross income for the period 12 December 2017 to 30 June 2018 was $36,522, as reflected in his PAYG payment summary at page A10 of Exhibit A.

37. The estimate recorded in the summary details attached to the Department’s letter of 26 April 2018 reflects a year-to-date, 1 July 2017 to 19 April 2018 income of $134,257.21. Mr Jagger’s actual gross income for that period, reflected in his income tax return and PAYG payment summaries referred to above was $130,552.30. Given the information available to Mr Jagger at that time, his estimate appears to have been accurate in the circumstances.

38. His estimate for the period 20 April 2018 to 30 June 2018 of $11,782.78, based on his fortnightly gross income estimate of between $3,000 and $3,250 ($16,714.28 less allowable deductions of $4,931.50 = $11,782.78), annualised to $59,732, compared with his actual gross income for that period of $13,082, given the information available to him at the time he provided that estimate, appears to have been accurate in the circumstances.

39. Following his return from [the specified shift], Mr Jagger lodged an amended income estimate on 25 May 2018, reflected in the Department’s letter accepting that amended estimate of 25 May 2018 for the period 21 April 2018 to 30 June 2018 at $14,296.85, based on his increased fortnightly gross income of $3,778, annualised to $73,497. However, his actual income for that period, based on his 2017/18 income tax return and his PAYG payment summary for the period 12 December 2017 to 30 June 2018 was only $13,082, annualised to $66,320.50.

1. The Tribunal therefore finds that Mr Jagger’s estimate of his income provided on 20 April 2018 for the period 20 April 2018 to 30 June 2018 of $11,782, annualised to $59,732, was likely to have been his income for that period, and his amended estimate of his income provided on 25 May 2018 for the period 21 April 2018 to 30 June 2018 of $14, 296.85, annualised to $73,497 was likely to have been his amended taxable income for that period.

2. The Tribunal therefore sets aside the objections officer’s decision under review, and decides that Mr Jagger’s income estimate on 20 April 2018 for the period 20 April 2018 to 30 June 2018 of $59,732 should be accepted, and his amended estimate on 25 May 2018 for the period 21 April 2018 to 30 June 2018 of $73,497 should be accepted.

DECISION

The Tribunal sets aside the decision under review and, in substitution, decides that Mr Jagger’s income estimate of $59,732 lodged on 20 April 2018 be accepted, and his amended income estimate of $73,497 lodged on 25 May 2018 be accepted.