Kabat and Naff (Child support)

[2020] AATA 5836

Kabat and Naff (Child support) [2020] AATA 5836 (18 November 2020)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2020/PC019390

APPLICANT:  Ms Kabat

OTHER PARTIES:  Child Support Registrar

Mr Naff

TRIBUNAL:Member S Brakespeare

DECISION DATE:  18 November 2020

DECISION:

The decision under review is affirmed.

CATCHWORDS

CHILD SUPPORT – departure determination – whether there was a ground for departure – costs of special needs significantly affect the cost of maintaining the child – ground for departure established – not just and equitable to make a change – 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

BACKGROUND

1. Mr Naff is the parent liable to pay child support to Ms Kabat in respect of their child [Child 1], who is nine years of age. The Child Support Agency records reflect that Ms Kabat has sole care of the child.

2. On 27 October 2019 Ms Kabat lodged a change of assessment application based on multiple grounds; including the special needs of the child.

3. On 31 January 2020 an officer of the Child Support Agency made a departure determination in the following terms (the original decision):

   ·For the period 1 October 2019 to 31 January 2021 Mr Naff’s adjusted taxable income is varied to $223,184;

   ·For the period 1 January 2020 to 31 December 2020 Mr Naff’s annual  rate of child support is increased by $16,540.

4. Both parties lodged an objection to the original decision. An objections officer allowed the objection on 16 June 2020 and made a decision to refuse to make a departure from the administrative assessment of child support (the objection decision).

5. Ms Kabat lodged an application for review of the objection decision with the tribunal. A telephone directions hearing was convened on 7 October 2020. Both parties participated. A hearing was held on 18 November 2020. Ms Kabat and Mr Naff gave evidence on affirmation to the tribunal via conference telephone. The Child Support Agency provided the tribunal and the parties with a bundle of papers relevant to the review (689 pages). The tribunal also received further documents from the parties which were exchanged prior to hearing. Ms Kabat’s documents were folioed A1 to A10 and Mr Naff’s documents were folioed B1 to B76.

6. Relevant aspects of the evidence and material before the tribunal will be referred to in the tribunal’s consideration of the issues which it has to decide.

ISSUES

1. The statutory provisions relevant to these reviews are contained in the Child Support (Assessment) Act 1989 (the Act).

2. The rate of child support payable by the liable parent is usually based on an administrative assessment under Part 5 of the Act.

3. Under Part 6A of the Act the liable parent or the carer of the child or children may apply to the Child Support Registrar for a determination to depart from the administrative assessment (section 98B).

4. Section 98C provides that the Registrar may make a determination to depart from the administrative assessment and it establishes a three-step process such that the issues for determination by this tribunal are:

   ·whether a ground is established to depart from the administrative assessment of child support; and

   ·if so, whether it is just and equitable to make a particular departure determination; and

   ·if so, whether it is otherwise proper to make a particular departure determination.

5. The grounds for departure from an administrative assessment of child support are set out in subsection 117(2) of the Act.

6. Each ground is prefaced by the words “in the special circumstances of the case”. The meaning of this expression is not defined in the Act, but the Family Court in Gyselman and Gyselman (1992) FLC 92-279 has held:

   as a generality it is intended to emphasise that the facts of the case must establish something which is special or out of the ordinary. That is, the intention of the Legislature is that the court will not interfere with the formula in the ordinary run of cases.

7. Likewise, in Phillippe and Phillippe (1978) FLC 90-433 the Court held that “special circumstances” are “facts peculiar to the particular case which set it apart from other cases”.

8. If the tribunal is satisfied that a ground exists and that it would be just and equitable and otherwise proper to make a particular determination, the tribunal may make one of the determinations prescribed in section 98S of the Act.

9. The range of determinations which can be made includes variations to: the annual rate of child support payable; or to the adjusted taxable incomes of the parents and/or carer; or to other components of the statutory formula used to calculate child support.

CONSIDERATION

Issue 1 – Is there a ground for departure?

1. Subparagraph 117(2)(b)(ia) of the Act provides a ground for departure exists where, in the special circumstances of the case, the costs of maintaining the child are significantly affected because of special needs of the child. 

2. It is not in contention, and the tribunal finds, that the child has been diagnosed with autism.

3. Initially Ms Kabat made her change of assessment application in respect of the past and future costs of the child’s special needs. However, she advised the objections officer that NDIS funding in respect of the child had been significantly increased and therefore she would no longer have any out-of-pocket costs for the child’s special needs going forward. She claimed, however, that she had incurred out-of-pocket costs  in relation to the child’s therapy at the [Clinic 1] in the amount of $21,202 for the period 1 January 2018 to 31 October 2019 and she wanted Mr Naff to contribute to those costs in an amount calculated taking into account his percentage of the child support income. The tribunal notes that Mr Naff’s  percentage of the child support income was 62.48% from 21 November 2018, being the start date of the case.

4. The tribunal finds that in the 12-month period following the commencement of the child support assessment Ms Kabat’s out-of-pocket cost for the therapy at the [Clinic 1] was approximately $10,800.  The administrative assessment that was in place at that time assessed the cost of the child to be $21,099 per annum and that Mr Naff was liable to pay $13,177 per annum. The tribunal  finds that the cost of the child’s special needs increases the overall costs by 50%.  Ms Kabat was responsible for all of the increased costs as well as $7,914 of the child’s normal costs assessed under the administrative assessment.

5. The tribunal  finds that there are special circumstances in this case and the costs of maintaining the child are significantly affected because because of special needs of the child.

6. This means there is a ground for departure.

Issue 2 – is it just and equitable to make a particular determination?

1. As the tribunal is satisfied that there is a ground to depart from the administrative assessment of child support, the next step is to consider whether it is just and equitable as regards the children, the liable parent, and the carer entitled to child support to make a particular determination in accordance with sub-subparagraph 98C(1)(b)(ii)(A) of the Act. This in turn requires the tribunal to consider the matters discussed below[1], which are as set out in subsection 117(4) of the Act:

   [1] The tribunal is required to give “overt consideration” to relevant factors listed in subsection 117(4) of the Act re Tyagi & Meares [2008] FMCAfam 886.

(4)  In determining whether it would be just and equitable as regards the child, the carer entitled to child support and the liable parent to make a particular order under this Division, the court must have regard to:

(a)  the nature of the duty of a parent to maintain a child (as stated in section 3); and

(b)  the proper needs of the child; and

(c)  the income, earning capacity, property and financial resources of the child; and

(d)  the income, property and financial resources of each parent who is a party to the proceeding; and

(da)  the earning capacity of each parent who is a party to the proceeding; and

(e)  the commitments of each parent who is a party to the proceeding that are necessary to enable the parent to support:

(i)  himself or herself; or

(ii)  any other child or another person that the person has a duty to maintain; and

(f)  the direct and indirect costs incurred by the carer entitled to child support in providing care for the child; and

(g)  any hardship that would be caused:

(i)  to:

(A)  the child; or

(B)  the carer entitled to child support;

by the making of, or the refusal to make, the order; and

(ii)  to:

(A)  the liable parent; or

(B)  any other child or another person that the liable parent has a duty to support;

by the making of, or the refusal to make, the order; and

(iii)  to any resident child of the parent (see subsection (10)) by the making of, or the refusal to make, the order.

1. In having regard to the proper needs of the child, regard must be had to the manner in which the child is being, and in which the parents expected the child to be, cared for, educated or trained, and any special needs of the child (subsection 117(6) of the Act). The tribunal finds that there were extra costs for the child’s special needs in the amount of $10,800 for the period 21 November 2018 to 31 October 2019.

2. The tribunal is satisfied that the child does not have any income, earning capacity, property or financial resources  that should be taken into account for the purpose of  the child support assessment.

3. In respect of the period 21 November 2018 to 31 October 2019 Mr Naff was assessed using his 2017/18 adjusted taxable income of $127,328 and Ms Kabat was assessed using her 2017/18 adjusted taxable income of $86,296. For the period 1 November 2019 to 30 June 2020 Mr Naff was assessed using his 2018/19 adjusted taxable income of $164,134 and Ms Kabat was assessed using her 2018/19 adjusted taxable income of $103,967.

4. Ms Kabat is of the view that Mr Naff delayed lodging his income tax return so that his 2018/19 income would not be applied to the assessment. She said that his income of $164,134 should be applied to the period 21 November 2018 to 31 October 2019. The tribunal finds that the relevant year of income for a child support period commencing on 21 November 2018 is the 2017/18 income year (section 43 of the Act). The tribunal is satisfied that Mr Naff has lodged his 2018/19 income tax return within the allowable time  and there is no reason to retrospectively amend the adjusted taxable income used for either party in the administrative assessment.

5. At hearing the parties confirmed that they are close to reaching property settlement which includes a cash pool in excess of $300,000.

6. Ms Kabat states that the earning capacity provisions should apply to Mr Naff. Since 1 July 2020 the administrative assessment has been based on an income estimate for Mr Naff of $35,975 per annum. Ms Kabat claims that Mr Naff ceased work voluntarily. Mr Naff states he was retrenched. The tribunal does not intend to deal with an event that occurred approximately eight months after the initial change of assessment application was made. If Ms Kabat wishes to pursue an earning capacity determination it is open to her to make a new change of assessment application.

7. Subsection 117(9) of the Act allows the tribunal to have regard to other matters. In this case the tribunal considered whether it is appropriate to make a departure determination given that Ms Kabat is requesting the tribunal to make a determination in respect of special needs costs that were incurred in the 12 months prior to the making of a change of assessment application.

8. Ms Kabat told the tribunal that she delayed making the application because Mr Naff had lied about his capacity to assist with the special needs. She said the he was being treated for [a medical condition] at the time and she accepted his assertion that he did not have capacity to contribute to the child’s therapy costs. She said that whilst she had obtained a change of assessment application form from the Child Support Agency at the time the child support case commenced she concluded, after studying the form, that any such application was unlikely to be successful. Ms Kabat said that in 2019 Mr Naff disclosed to the Family Court his taxable income and details of significant money transfers overseas. Ms Kabat said that this information made it evident that Mr Naff could have contributed to the child’s therapy. As a result of these disclosures Ms Kabat lodged the change of assessment application.

9. Mr Naff told the tribunal that the reason he chose not to contribute to the [Clinic 1] therapy  for the child was because he did not think that the program was the most efficient program.  (The tribunal notes the child has been enrolled at the [Clinic 1] since 2013.) He said his preference was for the [Program 1] in which the child is currently involved. Mr Naff conceded, however, that initially the [Program 1] was too expensive and for this reason the child was not enrolled until the NDIS funding was approved (in August 2019). Mr Naff also stated that Ms Kabat could have got funding from other sources to pay for the child’s therapy needs; an assertion that Ms Kabat denies and one which is not supported by any evidence. The tribunal finds that Mr Naff’s evidence as to why he chose not to contribute to the child’s  therapy costs to be less than satisfactory.

10. The tribunal takes the view, however, that it was open to Ms Kabat to lodge the change of assessment application at an earlier time. The Child Support Agency had informed her of the process and provided her with the necessary forms. She was aware at all relevant times   of the costs of the child’s therapy and that Mr Naff was not contributing to those costs. In deciding not to pursue the application at the time she has rested  on her rights.

11. Given Ms Kabat’s relatively high income and the imminent property settlement the tribunal is satisfied that a failure  to make a departure determination will not cause Ms Kabat hardship. The tribunal does not find it to be just and equitable to make a departure determination in respect of a period that had already passed when the change of assessment application was made.

12. The tribunal therefore refuses to make determination to depart from the administrative assessment of child support.

DECISION

The decision under review is affirmed.