Keir and Keir (Child support)

[2019] AATA 2541

Keir and Keir (Child support) [2019] AATA 2541 (22 May 2019)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2018/BC014446

APPLICANT:  Mr Keir

OTHER PARTIES:  Child Support Registrar

Mrs Keir

TRIBUNAL:Member J Thomson

DECISION DATE:  22 May 2019

DECISION:

The Tribunal sets aside the decision under review and, in substitution, decides that Mr Keir’s annual rate of child support is varied to $6,000 for the period 1 April 2018 to 31 March 2020.

CATCHWORDS

CHILD SUPPORT – departure determination – income, property and financial resources of the liable parent - 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 removed 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 and Mrs Keir are the parents of [Child 1], born 2012, and [Child 2], born 2014 (the children). Mr Keir is the parent liable to pay child support to Mrs Keir for the children.

2. Mr Keir seeks review of an objection decision made by the Department of Human Services – Child Support (the Department) on 20 June 2018. This decision disallowed Mr Keir’s objection to a Department decision dated 23 May 2018 setting Mr Keir’s adjusted taxable income at $70,000 per annum for the period 1 April 2018 to 31 March 2020. The objection decision affirmed the Department’s decision of 23 May 2018.

3. The Tribunal heard the matter on 22 May 2019. Mr Keir and Mrs Keir attended the hearing via conference telephone and gave affirmed evidence. The Tribunal had before it documents provided by the Department, pages 1 to 202, and a statement of financial circumstances provided by Mrs Keir dated 16 July 2018. These documents were admitted into evidence and marked Exhibit 1.

ISSUES

1. The issue which arises in this case is Mr Keir’s income, property and financial resources available for child support purposes.

CONSIDERATION

1. In reaching its decision, the Tribunal has considered the affirmed evidence of both parents given at the hearing and the documents before the Tribunal referred to in paragraph 3 above.

The legislative framework

1. The rate of child support payable by a liable parent is usually based on an administrative assessment under Part 5 of the Child Support (Assessment) Act 1989 (the Act). A formula is used. It takes into account variables including each parent’s adjusted taxable income for the last relevant year of income, the number of children and the level of care provided by each parent.

2. Part 6A of the Act allows for a departure from an administrative assessment (a process commonly known as a “change of assessment”). Under subsection 98C(1), the Registrar may make such a departure determination if three matters are established:

   ·      one, or more than one, of the grounds for departure referred to in subsection 98C(2) exists [subparagraph 98C(1)(b)(i)];

   ·      a departure is just and equitable as regards the children and each parent [sub-subparagraph 98C(1)(b)(ii)(A)]; and

   ·      it is otherwise proper to make a departure decision [sub-subparagraph 98C(1)(b)(ii)(B)].

3. Subsection 98C(2) provides that the grounds for departure are the same as the grounds set out in subsection 117(2) of the Act.

4. If satisfied that a ground or grounds exist and that it would be just and equitable and otherwise proper to make a particular determination, the Registrar may make one of the determinations prescribed in section 98S of the Act. It permits a range of determinations, including varying the rate of child support payable, the adjusted taxable income or the cost percentage for a child.

Grounds for departure

1. Subparagraph 117(2)(c)(ia) – commonly referred to as Reason 8 – provides as a ground for departure:

   (c) 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…

2. The words “in the special circumstances of the case” are not defined in the legislation. Whilst it is not possible to define with precision the meaning of that term, 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 legislation in subsection 117(2) must be guided by the qualification that the Tribunal will not interfere with the administrative formula result in the ordinary run of cases. In Gyselman and Gyselman (1992) FLC 92-279, it was held that “special circumstances” were “facts peculiar to the particular case which set it apart from other cases”. The Tribunal will consider whether the application of the administrative assessment would result in an unjust and inequitable determination of child support payable, having regard to the evidence relevant to the parents’ financial position.

3. Mrs Keir applied to the Department for a change of assessment on 2 March 2018. At the time of her application, Mr Keir was assessed to pay child support at the annual rate of $2,246 for the period 1 November 2017 to 31 January 2019 based on his 2016/17 adjusted taxable income of $36,458 and Mrs Keir’s 2016/17 adjusted taxable income of $19,571.

4. After considering the financial evidence contained in the documents provided to the Tribunal by the Department and Mrs Keir in Exhibit 1, and Mr Keir’s evidence at hearing, the Tribunal is satisfied that his actual income is approximately $57,000 to $60,000.

5. As that amount is not reflected in the administrative assessment referred to previously, the Tribunal finds that the assessment is unjust and inequitable, making the case special and establishing a ground for departure from the administrative assessment currently in place.

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. At the hearing, both parents agreed that the rate of child support payable by Mr Keir should be varied to an amount equating to an annual rate of child support of $6,000 ($500 per month).

3. No evidence was offered at hearing to suggest that the children have special needs, either with respect to medical or educational issues.

4. The Tribunal is satisfied that varying Mr Keir’s annual rate of child support to $6,000 ($500 per month) is a just and equitable outcome. Using an income of about $57,000 in the child support formula would provide a rate of child support of $6,000 per annum. I am satisfied that is a fair reflection of Mr Keir’s financial circumstances.

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 the entitlements to income-tested pensions, allowances and benefits. Parents rather than the community have the primary duty to maintain a child. Varying the income of Mr Keir on which child support is calculated from that used in the administrative assessment, based on his income and financial resources which are not reflected in the administrative assessment will result in an appropriate apportionment of financial responsibility between the parents and the community. Such a result would be otherwise proper.

2. The Tribunal is satisfied that varying Mr Keir’s annual rate of child support to $6,000 achieves an otherwise proper result.

DECISION

The Tribunal sets aside the decision under review and, in substitution, decides that Mr Keir’s annual rate of child support is varied to $6,000 for the period 1 April 2018 to 31 March 2020.