Keeme and Abrahall (Child support)

[2022] AATA 4102

Keeme and Abrahall (Child support) [2022] AATA 4102 (26 August 2022)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2022/BC023893

APPLICANT:  Mr  Keeme

OTHER PARTIES:  Child Support Registrar

Ms  Abrahall

TRIBUNAL:  Member P Jensen

DECISION DATE:  26 August 2022

DECISION:

The decision under review is set aside and, in substitution, Mr Keeme’s adjusted taxable income is varied to $83,395 per annum and Ms Abrahall’s adjusted taxable income is varied to $50,107 per annum from 23 July 2021 to 31 July 2022.

CATCHWORDS

CHILD SUPPORT – departure determination – income, property and financial resources of both parents – a ground for departure established – decision to depart - 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 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

Introduction

1. Mr Keeme and Ms Abrahall are the parents of [Child 1] who was born in 2009 and [Child 2] who was born in 2011. A child support case was registered in 2013 with the Child Support Agency (“the CSA”). 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 2 March 2021 the administrative assessment was based on Mr Keeme’s 2019-20 adjusted taxable income of $71,566, Ms Abrahall’s 2019-20 adjusted taxable income of $23,829 and each parent’s 50% care for both children. Mr Keeme was required to pay $5,482 per annum in child support.

2. The Act also provides for a departure from the administrative assessment in certain circumstances. On 6 December 2021, Mr Keeme lodged a departure application. An original decision-maker granted the application and made a departure decision. Mr Keeme objected to that decision. An objections officer allowed the objection and substituted a new decision which varied Ms Abrahall’s adjusted taxable income to $54,000 per annum from 1 November 2021 to 31 October 2022. Mr Keeme applied to the Tribunal for further review. I heard the matter on 23 August 2022. Mr Keeme and Ms Abrahall gave sworn evidence via MS Teams.

3. On 26 August 2022, Mr Keeme emailed further information to the Tribunal Registry. He effectively applied for leave to provide further information. He said he had forgotten to provide the information during the hearing. He did not provide any primary documentation in support of the information in the email; the email was an unsubstantiated statement. If the information were accepted into evidence, it would be necessary to forward the information to Ms Abrahall and then reconvene for a second day of hearing to provide her with an appropriate opportunity to the respond to the additional information. Mr Keeme’s application for review was lodged on 16 May 2022. He had ample opportunity to prepare for the hearing and ensure that he raised all the matters that he considered to be relevant. Section 30 of the Child Support Review Directions provides general guidance in respect of documents that are received after a hearing, although each case must be assessed on its particular merits. The Child Support Review Directions state that documents received after the hearing “will not usually be taken into account and we will return them to you.” That is the appropriate course to take in respect of Mr Keeme’s late email.

4. 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. Subparagraph 117(2)(c)(ia) of the Act, commonly referred to as Reason 8, provides 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; …

2. Ms Abrahall’s 2019-20 adjusted taxable income was $23,829. It appears that she has not lodged a tax return for 2020-21 and the CSA has used a “derived” 2020-21 adjusted taxable income of $26,623. Her 2021-22 adjusted taxable income was $50,107.

3. Prior to the hearing I directed Ms Abrahall to provide her employment payment summaries for 2021-22, her most recent payslip and a completed Statement of Financial Circumstances. She did not comply with any of those directions. She did not provide a satisfactory explanation for her non-compliance. However, she did provide a copy of her 2021-22 tax return which shows that she was employed by [Company 1] where she earned $13,545 and [Company 2] where she earned $20,960. She also received taxable government payments of $19,530. She also provided a letter from Centrelink dated 15 August 2022 which shows that she receives parenting payment at the single rate as well as family tax benefit. She is recorded as providing 50% care for [Child 1] and [Child 2] and 100% care for twins who were born in 2020.

4. According to the objections officer, various information which the CSA obtained from the Australian Taxation Office and Centrelink (and which the CSA omitted to provide to the Tribunal and the parents) establishes that Ms Abrahall worked for [Company 1]  from 23 July 2021 to 10 November 2021 and she worked for [Company 2] from 9 November 2021: page 16 of the hearing papers. At the hearing, I noted that Ms Abrahall earned the $20,960 from [Company 2] during approximately eight months which equates to approximately $655 per week. She said her earnings from [Company 2] fluctuate according to the number of shifts she is given per week, but she is likely to continue to earn, on average, about $655 per week. That evidence suggests that her 2022‑23 adjusted taxable income is likely to be similar to her 2021-22 adjusted taxable income.

5. When Mr Keeme lodged his departure application on 6 December 2021 the administrative assessment was based on Ms Abrahall’s derived 2020-21 adjusted taxable income of $26,623, whereas her actual income at the time was significantly higher. The difference between those incomes and the consequential rates of child support payable constitutes special circumstances such that the application of the administrative assessment resulted in an unjust and inequitable determination of child support payable. Reason 8 is established.

Just and equitable

1. The requirement to consider whether a departure would be just and equitable directs attention to what is fair to the parents and their children. Regard must be had to a variety of factors such as the needs of the children, the parents’ commitments and any hardship that would be caused by departing or not departing from the formula.

2. Mr Keeme sought a departure decision with effect from the date on which Ms Abrahall commenced employment. Towards the end of the hearing he said that by August 2021 he had obtained “concrete evidence” that Ms Abrahall had returned to paid employment. I noted that he phoned the CSA on 30 August 2021 about his rate of child support payable, which he considered unfair, and the CSA informed him that he could lodge a departure application (which is commonly referred to as a Change of Assessment). He phoned it again on 17 September 2021 and it reminded him that he could lodge a departure application. It also referred him to relevant information in the Child Support Guide and it explained the departure process. During the hearing I asked him why he had not lodged his departure application sooner. He referred to difficulties in downloading, printing and scanning the departure application form. I am not persuaded that those difficulties fully explain his delay.

3. On 4 August 2022, Mr Keeme stated: “my primary point is the extraordinary gap in the cost of meeting the children’s housing needs as compared to the other parent who has the luxury of having to meet the children’s needs at approximately half as cost as what it costs me [sic].” In an undated Statement of Financial Circumstances, he stated that his rent was $345 per week. He also provided a lease which shows that his rent will increase to $400 per week from 10 September 2022. Mr Keeme’s household consists of himself, [Child 1] and [Child 2]. Ms Abrahall said she lives in public housing and her rent is $250 per week. She stated, and Mr Keeme disputed, that her rent would increase later in 2022. Her household consists of herself, [Child 1], [Child 2] and the twins. Mr Keeme submitted that I should direct Ms Abrahall to provide documentary evidence in support of her statement that her rent is $250 per week, and I considered doing so, but having heard from Ms Abrahall and having questioned her in respect of the oral and documentary evidence that she provided, I decided it was not necessary to issue that direction. I accept her evidence concerning her current rent.

4. Mr Keeme said he had been unable to locate a legislative provision that prevented a decision-maker from varying the rate of child support payable on the basis of the difference in the parents’ rents. There is no such provision, but it does not automatically follow that the rate of child support payable must be varied on that basis. Each case must be considered on its particular facts.

5. To be granted public housing, one must satisfy certain criteria including a liquid asset test and an income test. The fact that Ms Abrahall resides in public housing is an indication of her relatively strained financial circumstances. Further, it is not unusual for a parent with a higher income to live in more expensive accommodation. Mr Keeme is a social worker and his 2021-22 adjusted taxable income was $83,395. Ms Abrahall is an aged care worker and income support payment recipient and her 2021-22 adjusted taxable income was $50,107. Further, accommodation costs are just one component of household expenses. Mr Keeme owns his car. He estimated that his motor vehicle expenses consist of petrol, ($50 per week), maintenance ($25 per week) and registration ($30 per week). Ms Abrahall said she bought a new car in March or April 2022 to safely transport her four children. The car cost $23,000 and her car loan repayments are $250 per week. She presumably also has petrol and registration expenses. Mr Keeme referred to his own debts. He said he has a credit card debt of approximately $1,950 as a result of buying a television and laptop computer in 2019. He also has three bank loans with balances of approximately $3,770, $3,610 and $2,900. He said one loan is in respect of his relocation in March 2019, one loan is in respect of car repairs in December 2019 and he could not recall why he obtained the third loan. His lingering debts need to be viewed in the context of his gifts to his parents of approximately $3,000 during 2021 and approximately $1,500 to date during 2022. He acknowledged that he does not have a duty to provide for his parents. It is commendable that he is generous to his parents, but the broader point is that both parents have made financial decisions which have led to their current financial circumstances. Viewing Mr Keeme’s and Ms Abrahall’s financial circumstances as a whole, their household expenses and loan repayments do not warrant a variation to the otherwise appropriate rate of child support payable.

6. Ms Abrahall returned to paid employment in July 2021. Mr Keeme said he was aware in August 2021 that she had returned to paid employment. As noted above, he contacted the CSA in August and September 2021 about his rate of child support payable and was advised of the option of lodging a departure application. He lodged an incomplete departure application on 1 December 2021 and a completed departure application on 6 December 2021. During the hearing, Mr Keeme noted that the objections officer had made a departure decision with effect from 1 November 2021 rather than the date on which Ms Abrahall returned to paid employment. He explained that Ms Abrahall had previously been the payer of child support when the parents had been providing a different pattern of care, she had paid her assessed rate of child support, the CSA had subsequently made a decision to retrospectively reduce her rate of child support payable and he had been required to repay the overpayment. He did not provide documentary evidence of the CSA’s actual decision but it appeared that he was referring to a decision that did not involve the exercise of a discretion. He may have been referring to a reassessment following Ms Abrahall’s timely lodgement of her 2018‑19 tax return: page 16 of the hearing papers. That reassessment is relevant to an overall consideration of the child support case, but it is important to keep in mind that the circumstances that led to that reassessment are different to the circumstances that led to Mr Keeme lodging a departure application in December 2021 in respect of a significant change in circumstances that occurred in July 2021 and that he was aware of by August 2021. On a consideration of those matters as a whole, I formed a preliminary view that it would be appropriate to make a departure decision with effect from 1 November 2021.

7. It is now known that Ms Abrahall’s 2021-22 adjusted taxable income was $50,107 and Mr Keeme’s 2021-22 adjusted taxable income was $83,395. Varying the parents’ adjusted taxable incomes to those incomes from 1 November 2021 would increase Mr Keeme’s child support liability by approximately $1,100. He is currently up-to-date with his child support payments. Ms Abrahall did not press for a decision that would create child support arrears for Mr Keeme. On a consideration of the matter as a whole, the preferable approach is to vary the parents’ incomes from when Ms Abrahall commenced paid employment, which was 23 July 2021. Such a decision will increase Mr Keeme’s child support liability by approximately $800.

8. As matters currently stand, in the absence of a departure decision, the administrative assessment will default to using the parents’ 2021-22 adjusted taxable incomes from 1 August 2022: page 349 of the hearing papers. It is appropriate to make a departure decision with effect until 31 July 2022. The proposed decision will be just and equitable.

Otherwise proper

1. The requirement to consider whether a departure would be otherwise proper directs attention to what is fair to the community. It is necessary to consider the effect of any departure from the administrative assessment on entitlements to income-tested pensions, allowances and benefits. Mr Keeme and Ms Abrahall rather than the community have the primary duty of maintaining the children. Both parents receive family tax benefit in respect of their care of the children. The proposed decision will result in an appropriate apportionment of financial responsibility between the parents and the community. The proposed decision will be otherwise proper.

DECISION

The decision under review is set aside and, in substitution, Mr Keeme’s adjusted taxable income is varied to $83,395 per annum and Ms Abrahall’s adjusted taxable income is varied to $50,107 per annum from 23 July 2021 to 31 July 2022.