Jent and Child Support Registrar (Child support)

[2023] AATA 3308

Jent and Child Support Registrar (Child support) [2023] AATA 3308 (28 August 2023)

DIVISION:Social Services & Child Support Division

REVIEW NUMBERS:  2023/SC025821, 2023/SC025835, 2023/SC025836, 2023/SC025837 and 2023/SC025838

APPLICANT:  Mr Jent

OTHER PARTY:  Child Support Registrar

TRIBUNAL:Member P Jensen

DATE OF DECISIONS:                   28 August 2023

DECISIONS:

The decisions under review are affirmed.

CATCHWORDS

CHILD SUPPORT – refusal to grant an extension of time to object – decision as to particulars of assessment – replacement of derived incomes with actual taxable incomes – no prospect of success – 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 Jent applied for extensions of time in which to object to five Services Australia – Child Support (Child Support) decisions. Child Support decided to refuse the extension of time applications. Mr Jent promptly applied to the Tribunal for review of the refusal decisions. I heard the matters on 28 August 2023. Mr Jent gave sworn evidence via MS Teams. He was represented by his wife, [Mrs A].

2. The Child Support (Assessment) Act 1989 (the Assessment 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 time to time, Mr Jent was assessed to pay child support to [Ms B] in respect of their two children.

3. The Assessment Act provides for child support periods: section 7A of the Assessment Act. A new child support period started on 1 September 2019. If the Australian Taxation Office (ATO) had assessed Mr Jent’s adjusted taxable income for “the last relevant year of income”, i.e. 2018–19, Child Support would have used that adjusted taxable income in the administrative assessment from 1 September 2019: section 56 of the Assessment Act. However, [Ms B] had not lodged her 2018–19 tax return so Child Support decided to use a provisional 2018–19 adjusted taxable income of $73,680 which was calculated pursuant to section 58 of the Assessment Act.

4. Section 58A of the Act commences as follows:

   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)[…]; or

(c)[…];

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).

1. On 19 May 2020, Child Support ascertained that [Ms B’s] 2018–19 adjusted taxable income, as assessed by the ATO, was $39,048. Child Support was therefore required to amend the administrative assessment: subsection 58A(1) of the Assessment Act. An individual has the option of lodging their tax return via a tax professional, in which case they are usually required to lodge their tax return by 15 May of the following year: see, generally However, that due date was extended in respect of 2018–19 to 5 June 2020: see [Ms B] lodged her 2018–19 tax return prior to 5 June 2020. Paragraph 58A(2)(a) of the Assessment Act was satisfied and Child Support was required to amend the administrative assessment in respect of the child support period that started on 1 September 2019 on the basis that [Ms B’s] 2018–19 adjusted taxable income was $39,048. Child Support did not have a discretion to make a different decision. Mr Jent belatedly objected to that decision. His objection has no merit.

2. For similar reasons, Child Support made the following decisions; it did not have a discretion to make different decisions:

   ·    On 22 December 2020, Child Support decided to replace [Ms B’s] provisional 2019–20 adjusted taxable income of $40,024 with her actual 2019–20 adjusted taxable income of $79,964 for the child support period from 1 September 2020 to 30 November 2021.

   ·    On 15 March 2022, Child Support decided to replace [Ms B’s] provisional 2020–21 adjusted taxable income of $82,203 with her actual 2020–21 adjusted taxable income of $99,205 for the child support period from 1 September 2021 to 30 November 2022.

3. Mr Jent belatedly objected to those decisions. His objections have no merit.

4. A new child support period was due to commence on 1 December 2022. On 22 October 2022, [Ms B’s] 2021–22 adjusted taxable income had not been assessed by the ATO. Subsection 58(2) of the Assessment Act provided that if the ATO or Child Support had information which allowed Child Support to calculate an amount that was a reasonable approximation of [Ms B’s] 2021–22 adjusted taxable income, Child Support could use that amount as [Ms B’s] provisional 2021–22 adjusted taxable income. Subsection 58(3) of the Assessment Act provided that because [Ms B’s] 2020–21 adjusted taxable income had been assessed, Child Support could calculate her provisional 2021–22 adjusted taxable income by multiplying her 2020–21 adjusted taxable income “by the ATI indexation factor.” On 22 October 2022, Child Support calculated [Ms B’s] provisional 2021–22 adjusted taxable income to be $102,082 pursuant to subsection 58(3) and it applied that provisional adjusted taxable income to the child support period from 1 December 2022 to 29 February 2024. Mr Jent belatedly objected to that decision. It is arguable that Child Support should have calculated [Ms B’s] provisional 2021–22 adjusted taxable income pursuant to subsection 58(2) of the Assessment Act. However, the point is now moot because regardless of the provisional adjusted taxable income that was used or should have been used, Child Support decided on 23 March 2022 to replace it with [Ms B’s] actual 2021–22 adjusted taxable income of $92,577. For all practical purposes, Mr Jent’s objection has no merit.

5. Finally, Child Support decided on 6 July 2020 to accept Mr Jent’s estimate of income which consisted of his statement that his adjusted taxable income from 1 to 5 July 2020 was $600 and his estimate that his adjusted taxable income from 6 July 2020 to 30 June 2021 would be $51,428 (which equated to $52,142 per annum). Child Support had a discretion to refuse Mr Jent’s estimate of income if his adjusted taxable income from 1 to 5 July 2020 was more than $600 or his estimate of his adjusted taxable income for the remainder of 2020–21 was an under‑estimate: section 63AA of the Act. At the Tribunal hearing, Mr Jent confirmed that his statement concerning his adjusted taxable income from 1 to 5 July 2020 was accurate and his estimate of his adjusted taxable income for the remainder of 2020–21 was a fair estimate. It transpired that his 2020–21 adjusted taxable income was $46,606. His estimate was not an under-estimate. Child Support therefore had no discretion to refuse his estimate of income. Mr Jent belatedly objected to the decision to accept his estimate of income. His objection has no merit.

6. There is no dispute that Mr Jent lodged his five objections on 16 January 2023. There is no dispute that his objections were lodged more than 28 days after he was notified of the five original decisions in question. His objections were therefore lodged out of time: section 81 of the Child Support (Registration and Collection) Act 1988 (the Registration Act). His applications for extensions of time in which to object were lodged pursuant to section 82 of the Registration Act. Normally, when considering whether to grant an extension of time application, it is necessary to weigh up various factors including the delay, the reasons for the delay, the merit of the objection and the potential prejudice to the other parent if the extension of time application were granted. That is not necessary in this case because once the applicable law is properly understood, it is clear that Mr Jent’s objections have no merit. He provided detailed submissions as to why, in his opinion, the decisions produced an unfair result. I do not doubt the sincerity of those submissions, but they do not change the legal analysis set out above. Child Support’s decisions to refuse his extension of applications were the preferable decisions.

DECISION

The decisions under review are affirmed.