Jason and Beasant (Child support)

[2024] AATA 4117

Jason and Beasant (Child support) [2024] AATA 4117 (13 August 2024)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2024/BC027718

APPLICANT:  Mr  Jason

OTHER PARTIES:  Child Support Registrar

Ms  Beasant

TRIBUNAL:  Member P Jensen

DECISION DATE:  13 August 2024

DECISION:

The decision under review is affirmed.

CATCHWORDS 

CHILD SUPPORT – change of assessment – actual income and financial resources are fairly reflected for child support purposes – other potential ground for departure is not established – 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 theChild Support (Registration and Collection) Act 1988.

REASONS FOR DECISION

Introduction

1. Mr Jason and Ms Beasant are the parents of [Child 1] who was born in 2007 and [Child 2] who was born in 2009. A child support case was registered with Services Australia – Child Support (Child Support) in 2014. Since December 2021, each parent has been recorded as providing 50% care for the children. The Child Support (Assessment) Act 1989 (the Act) provides for an administrative assessment of child support payable. It uses a formula which contains variables such as the parents’ adjusted taxable incomes and their percentages of care for the children. From 1 September 2023 the administrative assessment was based on Mr Jason’s estimate of income of $138,890 per annum and Ms Beasant’s 2022–23 adjusted taxable income of $28,292. Mr Jason was assessed to pay $15,248 per annum in child support.

2. The Act also provides for a departure from the administrative assessment in certain circumstances. Mr Jason lodged a departure application on 30 October 2023. An original decision-maker refused the application. Mr Jason objected to that decision. An objections officer disallowed the objection. Mr Jason applied to the Tribunal for further review. I heard the matter on 13 August 2024. Mr Jason attended the hearing in person. Ms Beasant attended the hearing via MS Teams.

3. Paragraph 98C(1)(b) of the Act relevantly provides that a departure decision may be made in respect of a departure application if:

   (i)... one, or more than one, of the grounds for departure referred to in [subsection 117(2)] exists; and

   (ii)... it would be:

   (A)just and equitable as regards the child, the liable parent, and the carer entitled to child support; and

   (B)otherwise proper;

   to make a particular determination under this Part; …

A ground for departure

1. Subparagraphs 117(2)(c)(ia) and (ib) of the Act provide as a ground for departure:

   that, in the special circumstances of the case, application in relation to the child of the provisions of this Act relating to administrative assessment of child support would result in an unjust and inequitable determination of the level of financial support to be provided by the liable parent for the child:

   …

   (ia)because of the income, property and financial resources of either parent; or

   (ib)because of the earning capacity of either parent; …

2. The Tribunal can only find that a parent’s earning capacity is greater than their actual income if the requirements of subsection 117(7B) of the Act are satisfied. That subsection states:

   In having regard to the earning capacity of a parent of the child, the court may determine that the parent's earning capacity is greater than is reflected in his or her income for the purposes of this Act only if the court is satisfied that:

   (a)one or more of the following applies:

   (i)the parent does not work despite ample opportunity to do so;

   (ii)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;

   (iii)the parent has changed his or her occupation, industry or working pattern; 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:

   (i)the parent's caring responsibilities; or

   (ii)  the parent's state of health; 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.

3. Mr Jason’s central submission was that Ms Beasant works part-time but she could work full‑time and she should be assessed on her full-time earning capacity.

1. Ms Beasant’s historic adjusted taxable incomes are listed on page 146 of the hearing papers:

   2009$0

   2010$1

   2011$0

   2012$0

   2013$0

   2014 – 2017RNN

   2018$28,879

   2019$29,706

   2020$23,150

   2021$32,985

   2022$28,316

   2023$28,292

2. Mr Jason and Ms Beasant separated in 2014. Ms Beasant did not earn an income immediately prior to their separation. The hearing papers do not state what is meant by “RNN”, but it might be an abbreviation of “[tax] return not necessary”. Ms Beasant said that after separating from Mr Jason, she received income support payments. She said she was required to look for work and Centrelink helped her establish her own [business]. The evidence reproduced above suggests that she established that business during 2017–18. She said she remarried in August 2022. Her husband runs a [business]. She said her husband previously did his own bookkeeping but in April 2023 she started doing that work. She said her capacity to continue [working] during 2023–24 was affected by some health issues which culminated in recent surgery. She indicated that the surgery had been successful and she had made a good recovery.

3. Ms Beasant’s 2021–22 individual tax return lists earnings of $15,100, tax-deductible expenses of $0 and income support payments (presumably jobseeker payment) of $13,216. Her 2022–23 individual tax return lists earnings of $15,050, tax-deductible expenses of $0 and income support payments of $13,242. So far as is relevant for present purposes, income support payments are income-tested. Ms Beasant said she reports her earnings to Centrelink.

4. Mr Jason lodged his departure application on 30 October 2023. Child Support informed Ms Beasant of Mr Jason’s departure application on 30 November 2023. Child Support asked Ms Beasant to provide her bank account statements. She provided statements for the period from 1 September 2023 to 30 November 2023. The statements that appear in the hearing papers are heavily redacted. Ms Beasant said she provided Child Support with unredacted statements and Child Support then told her to redact everything that did not relate to her  [business], and she did so. Having heard from Ms Beasant, I accept her evidence on that issue. Child Support’s own redaction of relevant evidence is an ongoing problem. I accept that Child Support effectively told Ms Beasant to redact relevant evidence, including evidence of her earnings via her bookkeeping work.

5. Ms Beasant’s bank account statements cover a period that pre-dates Mr Jason’s departure application. The bank account statements show deposits for “[deleted] and the like. Ms Beasant received revenue of $90 on 2 September 2023, $100 on 15 September 2023, $100 on 28 September 2023, $90 on 2 October 2023, $50 on 7 October 2023, $90 on 11 October 2023, $100 on 12 October 2023, $90 on 14 October 2023, and so on. The bank statements show deposits totalling $1,660 over three months, which equates to $6,640 per annum.

6. At the hearing, Ms Beasant said she also receives $90 per fortnight in cash from one of her clients. She said she declares that income to Centrelink and the ATO. She said she commenced bookkeeping in April 2023 and she has been paid for that work too. Mr Jason noted that Ms Beasant’s bank account statements do not show any deposits for the bookkeeping work, which led to the discussion about Child Support asking her to redact evidence. I asked Ms Beasant to open her online bank account and identify the first deposit for bookkeeping work since 1 September 2023. She said she received $3,000 on 13 November 2023. She explained that her husband is paid in lump sums and she is consequently paid in lump sums. Importantly, the transaction occurred before Ms Beasant was informed that Mr Jason had lodged a departure application. If I had considered it necessary, I would have directed Ms Beasant to provide unredacted copies of her bank account statements. However, having heard from Ms Beasant and having had the opportunity to question her, I did not consider that necessary. I accept her evidence concerning the deposit of $3,000.

7. As I observed during the hearing, a suggestion that a parent receives undeclared income is easily made. If the suggestion is true, it is difficult to prove, but if it is not true, it is difficult to disprove. Mr Jason indicated that he had reservations about whether Ms Beasant declared all her income but he acknowledged that there was no clear evidence that she received undeclared income. He also suggested that if she did receive undeclared income, the amount involved would probably not make a significant difference for child support purposes. Ms Beasant maintained that she declares all her income, including her cash income. In the absence of any clear evidence to the contrary, I accept her evidence on that issue. I find that Ms Beasant’s actual income and financial resources are fairly reflected for child support purposes in her adjusted taxable incomes as assessed by the ATO from time to time.

8. Returning to Mr Jason’s central submission, which was that Ms Beasant should be assessed on her earning capacity, the starting point is subparagraph 117(7B)(a)(i) of the Act. Mr Jason submitted that Ms Beasant “does not work”. In response to further questions, he confirmed that he was interpreting the phrase “does not work” to mean “does not work full-time”. However, the subparagraph does not include those additional words. Paragraph 117(7B)(a) is only satisfied if the person does not work, i.e. they are unemployed, despite there being ample opportunity for them to work. Mr Jason submitted that Ms Beasant does minimal work. Ms Beasant said her  [rate] is $30 per hour. I noted that she declared revenue of approximately $15,000 per annum for 2021–22 and 2022–23, which equates to approximately $15,000 / 52 weeks / $30 per hour = 9.6 hours of work per week, and that average would be higher if one assumed that she took some leave during the year. Mr Jason did not dispute that calculation. I find that Ms Beasant works approximately 10 hours per week. The key finding is that she works. Subparagraph 117(7B)(a)(i) is not satisfied.

9. There is no dispute that Ms Beasant was not undertaking a full-time workload when the child support case was registered and she has not subsequently undertaken a full-time workload. She has not reduced her workload from full-time to part-time. Subparagraph 117(7B)(a)(ii) is not satisfied.

10. I noted that on Ms Beasant’s account of events, she has been in part-time self-employment for many years and there has not been a change to her occupation, industry or working pattern. Mr Jason did not take issue with that observation. I consider that to be a fair reflection of Ms Beasant’s circumstances. However, for completeness, I note that one could argue that Ms Beasant changed her occupation by extending her business to include bookkeeping. If one took that view, it would be necessary to consider whether the decision to extend the business was made for a major purpose of affecting the rate of child support payable: paragraph 117(7B)(c). There was no suggestion that by extending her business, she reduced her overall income. She made some statements which suggested that, now that she has recovered from her recent surgery, her overall income might increase. If it were necessary to decide whether Ms Beasant extended her business for a major purpose of affecting the rate of child support payable, I would conclude that she did not. Paragraph 117(7B)(c) would not be satisfied.

11. The requirements of subsection 117(7B) are not satisfied in respect of Ms Beasant and I cannot have regard to her earning capacity. Mr Jason submitted that such a conclusion would be unfair. He submitted that Ms Beasant could work full-time and her election to work part-time unfairly increases his rate of child support payable. He effectively submitted that if there was a general discretion to have regard to Ms Beasant’s earning, that discretion should be exercised in this case. There is no such general discretion.

12. In summary, I cannot have regard to Ms Beasant’s earning capacity because the requirements of subsection 117(7B) are not satisfied and her actual income and financial resources are fairly reflected for child support purposes in her adjusted taxable incomes as assessed by the ATO from time to time. Reason 8 is not established in respect of Ms Beasant. There is no suggestion that any of the other potential ground for departure is established in this case. The original decision to refuse Mr Jason’s departure decision was the correct decision according to law: subparagraph 98C(1)(b)(i) of the Act

DECISION

The decision under review is affirmed.