Jordan and Mitchell (Child support)
[2024] ARTA 206
•29 October 2024
Jordan and Mitchell (Child support) [2024] ARTA 206 (29 October 2024)
Applicant: Mrs Jordan
Respondent: Child Support Registrar
Other Parties: Mr Mitchell
Tribunal Number: 2024/AC028245
Tribunal: Member J Bakas
Place:Adelaide
Date:29 October 2024
Decision:The Tribunal affirms the decision under review.
CATCHWORDS
CHILD SUPPORT – wife’s additional post-separation income excluded from assessment – date of separation – income estimate at time of application less than income at time of separation – 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 pursuant to subsection 16(2AB) of the Child Support (Registration and Collection) Act 1988.
Statement of Reasons
BACKGROUND
Mrs Jordan and Mr Mitchell are the parents of two children. There has been a child support assessment in place with Services Australia – Child Support (Child Support) since 4 April 2022.
On 4 December 2023, Mrs Jordan applied to Child Support for the exclusion from her child support income of additional income earned post-separation.
On 15 January 2024, Child Support accepted this application and, as a result, Mrs Jordan’s post‑separation income of $46,360 was excluded and her post‑separation income was set at $108,175. This was based on a 30% reduction of Mrs Jordan’s2022/23 taxable income of $154,535 pursuant to subsection 44(1) of the Child Support (Assessment) Act 1989.
Mr Mitchell objected to this decision, and on 4 July 2024, Child Support allowed the objection, refusing to exclude Mrs Jordan’s post-separation income finding that, at the time of Mrs Jordan’s application, her 2023/24 estimate of her income of $104,285 was being used in the assessment which was less than her income at the time of separation.
Mrs Jordan sought review of the objections officer’s decision with the Administrative Appeal Tribunal (AAT) on 12 July 2024.
From 14 October 2024, the AAT became the Administrative Review Tribunal (the Tribunal). Under the transitional provisions in the Administrative Review Tribunal (Consequential and Transitional Provisions No. 1) Act 2024 (the Transitional Act), applications for review to the AAT that were not finalised before 14 October 2024 are taken to be an application for review to the Tribunal. The Transitional Act gives the Tribunal the authority to continue and finalise any aspect of the review not already completed by the AAT. This decision and statement of reasons is made by the Tribunal.
The matter was heard on 29 October 2024 and both Mrs Jordan and Mr Mitchell appeared before the Tribunal via MS Teams audio.
Prior to the hearing, Child Support sent a bundle of its relevant documents to the Tribunal and to the parties (folios C1 to C432). In addition, the Tribunal took into account the documents provided by Mrs Jordan (folios A1–A103) and Mr Mitchell (folios B1–B28) which were copied to the parties.
ISSUES
The statutory provisions relevant to this review are contained in the Child Support (Assessment) Act 1989 (the Act).
The issues which arise in this case are:
10.1.Should part of Mrs Jordan’s post-separation income be excluded from her adjusted taxable income for all or part of the relevant child support period? And, if so,
10.2.How much is to be excluded and from what date?
CONSIDERATION
The circumstances in which additional income earned post-separation can be excluded for the purposes of child support calculations are limited. The circumstances are provided for in section 44 of the Act.
Section 44 provides for a number of threshold criteria, such as the parents having lived together on a genuine domestic basis for at least six months, and for any application to have been made within three years of separation.
The parties agree that they lived together on a genuine domestic basis for more than six months and remain separated. The date of separation was disputed at the hearing by the parties with Mrs Jordan saying their separation is recorded as 21 November 2021, the date she left the marital home, but they were living a separated under one roof from about April/May 2021. Mr Mitchell stated that the date of separation was 11 November 2021.
I note that on Mrs Jordan’s application form lodged on 4 December 2023, she recorded the date of separation as 20 November 2022 which appears to be an error and should refer to 2021. I also note that in the hearing papers at page 158, Mrs Jordan states that she left the house on 21 November 2021 and that the relationship ended in late July 2021, with her sleeping in the downstairs theatre room. In addition, Mrs Jordan advised Child Support that the relationship ended in July 2021 and they lived under the same roof until final separation in November 2021. She commenced working for salary wages in October 2021. Prior to this, the evidence of the parties at the hearing is that she would receive a taxable income via Mr Mitchell’s business but she did not actually undertake any work.
Child Support also refer to a letter from a solicitor confirming the date of separation as 21 November 2021. However I note that this letter is from Mr Mitchell’s solicitor and he does not disagree that the separation occurred around that time.
On balance I am satisfied that the date of separation is correctly recorded as 21 November 2021. Mrs Jordan’s application was made on 4 December 2023 which is within three years of the separation date.
It is not in dispute that all these threshold criteria (paragraphs 44(1)(a), (b) and (c)) are satisfied.
Paragraph 44(1)(d) contains two additional requirements that must be satisfied before the ‘post‑separation income’ can be excluded:
(d) in the last relevant year of income, or in the application period for an income election (if such an election has been made by the parent), the applicant earns, derives or receives income:
(i) in accordance with a pattern of earnings, derivation or receipt that is established after the applicant and the other parent first separate; and
(ii) that is of a kind that it is reasonable to expect would not have been earned, derived or received in the ordinary course of events.
The issue in this case is that Mrs Jordan made an income election on 4 December 2023 which was applied from 30 November 2023. This income election was for the amount of $104,285.
Her adjusted taxable income for the previous years (which she does not dispute) was as follows:
20.1. 2020/21 $111,739
20.2. 2021/22 $137,280
20.3. 2022/23 $154,535
As such, at the time of the application, on 4 December 2023, Mrs Jordan’s 2023/24 estimate of adjusted taxable income of $104,285 (annualised) was used in the assessment.
Mrs Jordan’s pre-separation income was higher than this amount (regardless of whether the date of separation was in the 2020/21 or the 2021/22 financial year).
As the income estimate used in the assessment at the time of her application to exclude post‑separation income was less than her income at the time of separation, she was not earning additional income at the time of application to exclude post-separation earnings.
As such, the I find that the objections officer’s decision is correct.
DECISION
The Tribunal affirms the decision under review.
| Date of hearing: | Tuesday 29 October 2024 |
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