Khoo and Beazley (Child support) - [2020] AATA 5845

Khoo and Beazley (Child support) [2020] AATA 5845 (5 November 2020)

DIVISION:Social Services & Child Support Division
REVIEW NUMBER:  2020/SC019164
APPLICANT:  Mr Khoo
OTHER PARTIES:  Child Support Registrar
Ms Beazley

TRIBUNAL:Member T Bubutievski
DECISION DATE: 5 November 2020
DECISION:

The decision under review is varied such that Ms Beazley’s adjusted taxable income is set at $65,000 from 1 January 2020 to 31 December 2021.

All other aspects of the decision under review remain unchanged.

CATCHWORDS

CHILD SUPPORT – departure determination – costs of education – manner expected by both parents – cost of maintaining the children are significantly affected – financial resources of both parents – decision under review varied

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

Mr Khoo and Ms Beazley are the parents of [Child 1], who was born in 2006, and [Child 2], who was born in 2009. There has been a child support assessment in place for the children made by Services Australia (Child Support) (the former Department of Human Services) (the Department) since 18 November 2016. This is an application seeking a change to that assessment.
A previous decision of this Tribunal (differently constituted) made on 19 April 2018 set Mr Khoo’s adjusted child support income at $150,000 for the period 6 April 2017 to 31 December 2019. It also increased the annual rate of child support payable by Mr Khoo due to the cost of private school fees for both the children.
On 27 August 2019 Mr Khoo made an application to Child Support for a change to the child support assessment on the basis of Reason 3 (private school fees); and Reasons 8A and 8B (his and Ms Beazley’s income and financial resources). In response, Ms Beazley cross applied for Reason 2 (special needs) and Reason 3 (private school fees).
On 19 February 2020 a departmental delegate decided to depart from the administrative assessment due to private school fees and Mr Khoo’s income not being correctly reflected in the child support assessment. The decision made covers several years and is as follows:

For the period 1 January 2020 to 31 December 2021 Mr Khoo’s adjusted taxable income (ATI) amount be set at $80,000; and
For the periods 1 January 2020 to 28 February 2020 and from 1 April 2020 to 31 December 2020 the annual rate of child support increase by $4,791 being Mr Khoo’s contribution to the children’s additional education expenses; and
For the period 1 March 2020 to 31 March 2020 the annual rate of child support increase by a further $18,363 ($4,791 + $13,572) being Mr Khoo’s contribution to the out of pocket expenses related to [Child 1]’s operation plus Mr Khoo’s contribution to the children’s additional education expenses; and
For the period 1 January 2021 to 31 December 2021 the annual rate of child support increase by $4,935 being Mr Khoo’s contribution to the children’s additional education expenses.

Mr Khoo objected to this decision, and on 13 May 2020 a departmental objections officer partly allowed the objection. As a consequence of the objection decision, the original decision was varied as follows:

For the period from 1 January 2020 to 31 December 2023, Mr Khoo’s ATI is set at $75,000.
From 1 July 2021 and from each 1 July thereafter, for the duration of my decision, Mr Khoo’s ATI will increase by the Child Support Inflation Factor.
For the period 1 January 2020 to 31 December 2020, the annual rate increases by $5,536. ($4350 + $1186). This takes into account Mr Khoo’s equal contribution to the children’s school fees and [Child 1]’s special needs costs.
For the period 1 January 2021 to 31 December 2021, the annual rate increases by $4,567.
For the period 1 January 2022 to 31 December 2022, the annual rate increases by $5,051.
For the period 1 January 2023 to 31 December 2023, the annual rate increases by $5,304.

On 1 June 2020 Mr Khoo made an application for review by the Social Services and Child Support Division of this Tribunal. The Tribunal held a telephone directions hearing on 25 August 2020 and issued Directions, with which Mr Khoo largely complied and Ms Beazley partially complied subsequent to the hearing.
The matter was heard by the Tribunal on 30 September 2020. Mr Khoo and Ms Beazley both attended the hearing by telephone and gave sworn evidence. The Child Support Registrar did not seek leave to appear. Both parties and the Tribunal had access to documents numbered 1 to 496 from Child Support, and after all submissions, documents A1 to A76 from Mr Khoo and B1 to B31 from Ms Beazley. At the time of the hearing the Tribunal had not received all the documents from Ms Beazley. At hearing she claimed to have sent all the documents required. The Tribunal decided to accept submissions from Ms Beazley after the hearing, which were exchanged with Mr Khoo for his comments prior to the Tribunal reconvening in the absence of the parties to make a decision in the matter on 5 November 2020.

ISSUES

The rate of child support payable by the liable parent is usually based on an administrative assessment under Part 5 of the Child Support (Assessment) Act 1989 (the Assessment Act). This requires the application of a statutory formula which takes into account factors such as the number of children, the level of care provided, the income of each parent and the costs of the children.
The liable parent or a carer may apply to the Child Support Registrar for a determination to depart from the administrative assessment under Part 6A of the Assessment Act. The application for departure is authorised by section 98B of the Assessment Act. Section 98C of the Assessment Act provides that the Registrar may make a determination to depart from the formula assessment and establishes a three step process. In order to depart from the administrative assessment the Registrar, and the Tribunal standing in place of the Registrar, must be satisfied:
(i) that one, or more than one, of the grounds for departure referred to in subsection 117 (2) exists; and
(ii)that 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;
The grounds for departure from an administrative assessment of child support are set out in subsection 117(2) of the Assessment Act.
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 Tribunal may make one of the determinations prescribed in section 98S of the Assessment Act. Section 98S permits a range of determinations, including varying the annual rate of child support payable or the ATI of the parties.

Issue 1 – Does a ground exist to depart from the administrative assessment?
Does a ground exist to depart from the administrative assessment under Reason 3?

Mr Khoo sought a departure from the administrative assessment on the ground that the costs of maintaining the children is significantly affected by the cost of educating them in the manner that was expected by Mr Khoo and Ms Beazley. This is the ground reflected in subparagraph 117(2)(b)(ii) of the Assessment Act.
In the first instance, Child Support found that this reason was not established in Mr Khoo’s application but was established in Ms Beazley’s cross-application. The objection decision also found this reason established.
The children attend a private school, [School 1]. At the last hearing of the Tribunal in this matter, Ms Beazley and Mr Khoo agreed that it was the parents’ intention that the children be privately educated. In the current matter Mr Khoo agreed that the children had been privately educated prior to the separation. He said that he had previously paid the whole of the school fees, but that he had not paid any of the fees in 2020. Mr Khoo said that he pays for tutoring in two subjects for the children and also pays for the cost of their religious education. Mr Khoo provided receipts for tutoring for $1,050 and also receipts for payments to [a] College of around $670 per term. Ms Beazley said that this is additional religious education, and she did not agree to the children attending it, but that if Mr Khoo wanted to pay for it that was his affair. She said that they are meant to each pay half of the cost of the tutoring but Mr Khoo had not paid all of his half in 2020.
After the hearing, Ms Beazley provided receipts for payments she made to [School 1] in 2020, being $4,175.02 on 17 June 2020 and $6,395.20 on 5 August 2020. She had previously provided the receipts for the payments she made in 2019 to Child Support, noting that [Child 1] received a scholarship in 2019. [Child 1] does not have a scholarship in 2020.
The objections officer found that the tuition fees for [School 1] for 2020 for one pupil in Junior High and one in Primary is $9,582. There is a sibling discount of $882 which gives total tuition fees of $8,700 ($9,582 - $882). This does not include any expenses for uniforms, camps, digital education fees, schoolbooks and resources. These expenses are common to both public and private education. The administrative assessment of child support factors in those expenses which are required to educate a child, regardless of whether or not they are in the public or private school system. It does not, however, factor in private school tuition fees. These are often significant, and the case law has established that it is only this portion of private schooling expenses which can be considered under Reason 3.
The Tribunal finds that the children are being privately educated in accordance with the joint expectation of both their parents. This education occurs at [School 1]. Mr Khoo may pay other expenses associated with the children’s education, but the Tribunal cannot find that these expenses are of a type which can be considered under Reason 3.
In order to establish Reason 3, there are two threshold requirements that need to be satisfied:

It must be established that [Child 1] and [Child 2] are being cared for, educated or trained in a way that both parents intended; and
That the costs incurred to care for, educate or train [Child 1] and [Child 2] significantly affect the costs of maintaining [Child 1] and [Child 2] overall.

There does not appear to be any disagreement between the parents as to their intention to educate the children privately. The tuition cost of $8,700 is more than half of the amount of child support payable by Mr Khoo if no adjustment is made in respect of it. This cost significantly increases the cost of maintaining [Child 1] and [Child 2].

The term “special circumstances” is not defined in the Assessment Act. In Gyselman and Gyselman [1991] FamCA 93 the Full Family Court indicated that for there to be special circumstances, the facts of the case must establish something which is special or out of the ordinary. The Tribunal is satisfied that the private school fees incurred with the consent of both parents amount to a special circumstance. The Tribunal finds this ground established. As a ground is established, the Tribunal must also consider whether it is just and equitable, and otherwise proper, to change the assessment. This involves a consideration of all the circumstances of the parents, including a fairly detailed assessment of both parents’ income, financial resources and financial obligations.

Issue 2 – Would departure from the administrative assessment be just and equitable?

As the Tribunal is satisfied that a ground has been established to depart from the administrative assessment of child support, the next step is to consider whether it is just and equitable to depart from the assessment. In deciding whether it is just and equitable, the Tribunal must have regard to the following matters set out in subsection 117(4) of the Assessment Act:
(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.
Section 3 of the Assessment Act states that it is the duty of both parents to financially support their children. All children should receive a proper amount of financial support from their parents in accordance with their capacity to contribute. The Tribunal only has to consider the factors set out in subsection 117(4) of the Assessment Act to the extent they are relevant in any particular case (see Gyselman).
Firstly, Mr Khoo requests the Tribunal to amend the child support assessment as far back as 2018. The Tribunal has already made a decision about the child support assessment up until 31 December 2019. The Tribunal does not have jurisdiction to review its own decisions. If Mr Khoo wishes to change the child support assessment prior to 1 January 2020 he will need to go to a court with a family law jurisdiction. As far as this review is concerned, the Tribunal can only consider the child support assessment from 1 January 2020 onwards.

Mr Khoo’s financial situation

Mr Khoo says that he is employed full time, and his payslips show a weekly income of $759.96 including allowances of $150. His hourly rate is $15.8148. The Tribunal noted that this is well below both the minimum wage and the income he could expect under the [Industry 1] Award 2020. Mr Khoo said that he also sometimes receives commissions. Subsequent to the hearing he provided payslips showing a commission of $1,368.40 for the week ending 30 September 2020 and $826 for the week ending 7 October 2020. His year to date total income was $19,229.10 as at 7 October 2020 – an annual rate of income of $71,422. Mr Khoo’s PAYG Summary for 2019/20 shows $27,819 in income and $4,852 in allowances. His bank statements show income of $500 for “referrals” on occasion. Mr Khoo said that [he is doing specified work] and it may take up to a year to be paid any commission for [this type of work]. The Tribunal does have some doubt as to the veracity of the evidence about Mr Khoo’s income. It is acknowledged that he is employed by a friend, and the income shown on his payslips varied dramatically once the Tribunal pointed out that his rate of pay was below that required by law and Mr Khoo submitted further information.
Mr Khoo sold his home and moved into the property which was formerly a rental property. He no longer has rental income. The settlement statement for the sale in November 2019 showed that he was paid $90,385.35 after his liabilities were met. He has declared that he still has $47,000 in the bank.
The objections officer found that Mr Khoo’s declared expenses in his application for a change to the child support assessment amounted to $45,360 excluding the loan repayments for the property he has since sold. The objections officer said that if he was paying the declared school fees of $11,876 as claimed in his COA application, this brings the outgoings to $57,236. The Tribunal has found that Mr Khoo is not paying school fees for the children, but he does appear to be paying the cost of their religious education and up to half of their tutoring, totalling just under $7,000. Mr Khoo did not complete the Statement of Financial Circumstances provided to him by the Tribunal in full, and did not give details of his expenses, perhaps to prevent the Tribunal coming to the same sort of conclusion as the objections officer.
Mr Khoo’s bank statements for the period 14 March 2020 to 14 May 2020 show total debits of $17,059.59. This is equivalent to expenditure of $8,529.79 per month – over $100,000 per annum. This includes his mortgage repayment, utilities and repayments on his credit cards. His mortgage repayments of $3,456 per month amount to more than his alleged income. Between 14 September 2019 and 13 March 2020 Mr Khoo was able to repay $38,610 off his mortgage – much more than he allegedly earned in the same period. His credit card statement shows that he uses his credit card to pay most of his costs of daily living. There were several deposits to Mr Khoo’s bank account marked as loans. Mr Khoo said that these were loans from family to help him manage.
Even accepting that Mr Khoo is receiving some loaned funds and may have used the funds from the property sale to help him make ends meet after November 2019, the Tribunal sees no reason to disturb the decision that Mr Khoo’s adjusted child support income amount should be set at $75,000 per annum, adjusted for inflation.
Mr Khoo provided evidence that he is still engaged in legal action in relation to the sale of his previous [business]. He is employed by a friend and said that he intended to invest any money he received from legal proceedings into the business in which he is employed. He said that he hoped to receive at least $150,000.

[Child 1]’s special needs

The child support assessment has been further amended for a short period to reflect [Child 1]’s special needs. [Child 1] had [some] issues which required surgery. Mr Khoo said that he did not dispute the need for [Child 1] to have his [surgery] and that he was prepared to pay half of the expense. He said that it was his understanding that the child support assessment would be changed to take that into account.
There is no dispute between the parents as to [Child 1]’s need for some surgery in early 2020. Ms Beazley provided receipts showing that she paid the specialist $420; and that then there was a gap of $1,504.15 for the surgery and $448 for the anaesthetist − a total of $2,372.15. The Tribunal finds that this is a special need which significantly adds to the cost of maintaining [Child 1]. The objections officer rounded this down, and then apportioned it equally between the parents. This means that each parent is responsible for paying $1,186. The annual rate of child support payable by Mr Khoo was increased by $1,186 for the period 1 January 2020 to 31 December 2020 to reflect this. The Tribunal finds no error in these calculations and sees no reason to disturb this part of the decision either.

Ms Beazley’s financial situation

This brings the Tribunal to an examination of Ms Beazley’s financial circumstances. Ms Beazley is the owner of a [business] (“the business”). Ms Beazley declares income of $614.21 per week from the business. She is also the director of a family trust, [Business 1], which owns her family home. She said that this was an asset protection strategy. Ms Beazley values this home at $650,000 and notes that [Business 1] has a $500,000 mortgage on the property. In addition, Ms Beazley is the owner of two investment properties − one in [Location 1], [Suburb 1]; and one in [Location 2], [Suburb 1]. Ms Beazley valued the properties at $1.6 million, and indicated that although her current partner is not an owner of the property, he is one of the mortgagors. She said that the joint mortgage is $1,440,000. She said that she also owes $300,000 to her parents. She has declared rental income of $600 per week from [Location 1] and $650 per week from [Location 2]. Her bank statements show rental payments from two real estate agents which are consistent with these amounts. She declares household expenses of $3,000 per week, with no breakdown of this figure provided.

Mr Khoo also alleged that Ms Beazley continues to be involved in a business called [Business 2]. Ms Beazley said that she operated the business for less than a year with another person who [has the professional qualification]. That person left and the business could not operate without a licensee. Ms Beazley said that she was able to sell the business as a going concern in early 2019 and that she got enough money to pay the debts of the business but made a loss on the sale. She said that it was sold for about $10,000 and the ongoing business expenses were higher than the income. The Tribunal sought documents from Ms Beazley to verify this, but they were not forthcoming.
Ms Beazley said that she and Mr Khoo had originally owned three properties and in the property settlement she got two properties and he got one. The property at [Location 2] belonged to her new partner. It was transferred to her on 13 March 2019. Ms Beazley said that it was transferred for no consideration and her partner paid the stamp duty. Ms Beazley said that her partner is currently paying the mortgage on the family home although they are meant to contribute to it equally. Ms Beazley said that she is presently on jobkeeper payment. The business has two other staff. Mr Khoo alleged that Ms Beazley had two offices. Ms Beazley said that she has one office and she hires another premises as needed. She said that she has not worked full time.
The most recently provided financial information for the business was for 2017. It had total income of $91,400 and made a loss of $9,506. Child Support obtained Business Activity Statements for the business for the 2018 financial year, which show total turnover of $169,719 − clearly a significant increase. Ms Beazley’s 2018 income tax return shows a salary of $36,500 and allowances of $18,940. She also had a small net rental property loss of $3,110.
Ms Beazley confirmed that she has a car which is owned by the business and she has the benefit of the motor vehicle running costs and her mobile phone being paid by the business.
An examination of the relatively limited financial information Ms Beazley subsequently provided shows that in addition to her wages, she received $10,000 in superannuation in April 2020 and a further $10,000 in July 2020. There was a payment of $10,518.40 from [a company] on 24 June 2020 which has not been explained. Her credit card statements show a mix of business and personal expenses including the rental on the second office. For example, of the total purchases of $6,449.05 made between 4 June 2020 and 5 July 2020, at least $2,667.68 of these relate to business expenses. This pattern continues up until the last available information on 3 September 2020.
Between 14 April and 10 August 2020 there were total deposits to Ms Beazley’s personal account of $88,988.62. An amount of $99,353.10 was withdrawn. Even allowing for the $20,000 in superannuation and the payment from the car yard to be one-offs, this amounts to over $150,000 per annum. A difficulty arises because much of that income is derived from rent, with the rental properties being subject to high amounts of debt. It would be unfair to Ms Beazley to consider the income but not the liabilities attached to earning that income.
The business account shows a total of $25,981 paid from the Australian Taxation Office between July and September 2020. These appear to be a combination of jobkeeper payments and the COVID-19 cash boost. Ms Beazley’s personal account shows wages of $2,662 per month.
There are many large payments to [Bank 1] both from Ms Beazley’s personal account and the business account. Between 24 July 2020 and 4 August 2020 Ms Beazley paid [Bank 1] $15,000 from her personal account and $9,000 from the business account. No [Bank 1] credit card was declared to the Tribunal. Ms Beazley provided the Tribunal with none of the financial statements or Business Activity Statements for [her business] for 2019/20 although they had specifically been requested as part of the Tribunal’s directions. Nor did she provide settlement documents for the sale of [Business 2], which was also specifically requested in the directions. Although this information should be available to Ms Beazley and she assured the Tribunal that it would be provided, it was not provided at any stage.
In Humphries & Berry (2008) FMCAfam 409 (SSAT Appeal (Humphries & Berry), Slack FM dealt with the issue of the disclosure of financial information in matters before the Tribunal. His Honour stated that the principle of full and frank disclosure applicable to proceedings in the Family Court was also applicable to proceedings before the SSAT (and in this case, the AAT). His Honour stated as follows at paragraph 26, 27, 30 and 31 below:
Although the SSAT has the power to obtain information (s.103K) and the power to require the Child Support Registrar to exercise powers under the Assessment Act and the Child Support Registration and Collection Act for the purposes of gaining information relevant to a review (s.103L), there nevertheless remains a primary duty and obligation on the parties to the review to make a full and complete disclosure of their financial affairs relevant to the matter before the hearing and a duty to assist the Tribunal to come to its determination in the application.” (paras 26 and 27)
…………In financial proceedings under the Family Law Act, the authorities make it clear that a Court should not be unduly cautious about making findings in favour of the other party if it is not satisfied that proper disclosure has been made (see Chang & Su (2002) FLC93-117)”. Such principles, in my consideration, have similar application to these matters before the SSAT…”(paras 30 and 31)
Ms Beazley has not made full and frank disclosure to the Tribunal. She did not make full and frank disclosure to Child Support. There is a wide discretion in these matters and the Court has been very clear about how to proceed when this occurs. The objections officer accepted that Ms Beazley’s ATI was correctly reflected in the assessment. Given the additional benefits Ms Beazley receives from her business over and above her income, such as motor vehicle and telephone expenses, and the large increase in turnover of the business between 2017 and 2018, the Tribunal considers this to be unlikely. Ms Beazley did not provide any of the financial information which would allow a clearer picture of this to appear. Her last lodged income tax return was for the 2018 financial year. The tax return for the business for 2018 was not provided to the Tribunal or Child Support so it is not clear if the business made a profit in that year. Any profit can be considered to be Ms Beazley’s income regardless of whether or not it is distributed to her. It can, and should, be added to her taxable income for child support purposes. Given the increase in turnover, it appears probable that the business now operates at a profit.
The Tribunal is not satisfied that Ms Beazley’s income and financial resources are correctly reflected in the child support assessment. At the present time the assessment proceeds on the basis of a provisional income amount for her for the 2019 taxable year of $52,765. It is unlikely that this is correct. In the last provided income tax return for the business, being 2017, motor vehicle expenses were $4,776 and depreciation expenses were $7,633. All other expenses amounted to over $68,000. Since then it appears that the turnover of the business has increased although it has now been somewhat affected by the COVID-19 pandemic and the associated delays in court processes.
The Family Court has established the principle that in the case of self-employed parents, their taxable income may not be an accurate reflection of their earning capacity and financial resources. Several cases in particular have examined this issue closely, including Scott v Scott (1994) FLC 92-457, and Carey v Carey (1994) FLC 92-489. The Courts consider that self-employed people are able to derive additional benefits from their business in addition to wages. They also have greater control over the structure of their finances than an employee receiving salary or wages, and so may be able to use the income of the business in ways other than paying wages. Expenses and deductions which may be legitimate for tax purposes may not be considered to take precedence over child support obligations. Under child support law, other than the basic expenses necessary for self-support, there are very few expenses which take precedence over the support of children. There is considerable divergence between the taxation system, which is intended to provide general support for many, and the child support system, which is intended to provide specific support for the children of relationships.
Depreciation is a business expense which is frequently added back to a business owner’s income for child support purposes, as it is understood that this amount is usually an accounting entry rather than a true representation of funds expended in the replacement of assets. In many cases, it actually represents an extra income to the person, but it must be considered carefully in each individual case rather than routinely added back.
In his response to the information Ms Beazley provided following the hearing, Mr Khoo reiterated his previous points and said that he considered Ms Beazley’s business vehicle to be valued at $150,000 not $70,000. He was of the opinion that her lifestyle and levels of debt were not consistent with her declared income. The Tribunal can see that Ms Beazley’s partner subsidises her expenses to some degree but does agree with this proposition. As noted above, a lot of the income Ms Beazley generates is from rent which is then used to service the debts on the properties. The information available to the Tribunal is that Ms Beazley does not make a profit from her rental activities. This means that the rental income is effectively excluded from the assessment, which no doubt appears unfair to Mr Khoo as in his opinion Ms Beazley is asset rich. Nonetheless, that is the correct approach in law. Absent a positive income from Ms Beazley’s investment properties it is only her income from self-employment which appears in the child support assessment.
In cases such as these, it is not the Tribunal’s role to conduct a forensic accountancy exercise. The Tribunal only needs to be broadly satisfied that the person has income and financial resources at a particular level. On the basis of the information before it the Tribunal could not find that Ms Beazley’s financial resources and personal benefits from the business are less than $65,000 per annum, COVID-19 notwithstanding. This allows for her income, her motor vehicle, telephone expenses, depreciation and a small amount of profit. Amending Ms Beazley’s income in the child support assessment would reduce the amount of child support payable by Mr Khoo. The Tribunal accepts that Mr Khoo was seeking for Ms Beazley’s ATI to be set at a much higher level, but it could not justify such a change on the evidence before it.
The Tribunal has decided that all the other aspects of the objection decision are correct. It proposes to make no further change. The only matter which the Tribunal considers was incorrectly determined by the objections officer is Ms Beazley’s ATI for child support purposes.
The Tribunal finds that setting Ms Beazley’s ATI at $65,000 from 1 January 2020 is correct. It considered the time period for which this change should run and decided that by the end of 2021 the impact of the pandemic will be clearer and Ms Beazley should be able to provide all the relevant financial documents for herself, her rental properties and her business for the 2021 financial year so that the matter can be considered anew. The Tribunal decided that backdating the decision is appropriate as it will reduce the arrears Mr Khoo has outstanding.
The Tribunal is satisfied that it would be appropriate to make this change as long as it is otherwise proper to do so.

Issue 3 – Is it otherwise proper to depart from the administrative assessment?

The final step for the Tribunal is to determine whether it is “otherwise proper” to depart from the administrative assessment. Subsection 117(5) of the Assessment Act requires the Tribunal to take into consideration the nature of the duty of a parent to maintain a child, and the effect that any change to the assessment would have on the rate of any Centrelink benefits being received by the parties or the children.
The child support law recognises that each parent has a primary duty to maintain their children. In the case that they cannot, the government may assist in the form of family assistance payments. The Tribunal accepts that this decision may slightly increase the amount of family assistance Ms Beazley receives. The Tribunal is satisfied that a departure from the assessment will better reflect the financial resources that have been available to both parents and ensure that the level of financial support provided by the parties for children is determined according to their capacity to provide that support. It is therefore otherwise proper to depart from the administrative assessment in this matter.

DECISION

The decision under review is varied such that Ms Beazley’s adjusted taxable income is set at $65,000 from 1 January 2020 to 31 December 2021.

All other aspects of the decision under review remain unchanged.