Kitching and Kitching (Child support)

[2021] AATA 994

Kitching and Kitching (Child support) [2021] AATA 994 (18 February 2021)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2020/MC020308

APPLICANT:  Mr Kitching

OTHER PARTIES:  Child Support Registrar

Ms Kitching

TRIBUNAL:Member A Byers

DECISION DATE:  18 February 2021

DECISION:

The Tribunal sets aside the decision under review and, in substitution, decides that there was no child support owing for the arrears period from 25 February to 24 May 2020.

CATCHWORDS

CHILD SUPPORT - opt-in arrears - whether there were unpaid amounts – whether application for collection of unpaid amounts should be accepted – decision to accept application but no arrears owing - 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

BACKGROUND

1. Mr Kitching is the parent liable to pay child support to Ms Kitching for their child [Child 1].  This follows a decision of the Child Support Agency (the CSA) to accept Ms Kitching’s application for an administrative assessment of child support from 21 April 2019. 

2. Mr and Ms Kitching separated in January 2018.  However, they were separated under the one roof from June 2019 to July 2020.

3. Ms Kitching elected not to have Mr Kitching’s child support liability registered for collection by the CSA and instead had a private collection arrangement with Mr Kitching.  Mr Kitching’s child support liability was calculated on the basis that he had 0% and Ms Kitching 100% of [Child 1’s] care.  This changed when the CSA decided on 25 May 2020 that the parties each had 50% of [Child 1’s] care from 18 May 2020.  The decision-maker indicated the change recognised the parties were living under the one roof.

4. On 25 May 2020 Ms Kitching applied to have the CSA collect child support from Mr Kitching.  Ms Kitching indicated she was not seeking arrears of child support but subsequently changed her mind and asked the CSA to collect three months arrears said to remain unpaid.

5. On 14 August 2020 the CSA decided to collect child support for Ms Kitching.  The child support liability was registered and became enforceable on 25 May 2020.  On 28 August 2020 the CSA decided to collect child support arrears from Mr Kitching for the period 25 February to 24 May 2020.  The arrears were calculated to total $670.66.

6. Mr Kitching objected to the decision of 28 August 2020 and on 21 November 2020 an objections officer disallowed the objection.

7. Mr Kitching sought review of the objections officer’s decision and the Tribunal heard the matter by conference telephone on 18 February 2021.  Mr and Ms Kitching gave sworn evidence and the following material was before the Tribunal prior to hearing:

   -     the subsection 37(1) papers provided by the CSA, comprising folios 1 to 258 (marked Exhibit 1);  

   -     documents provided by Mr Kitching, comprising folios 1 to 14 (marked Exhibit A); and

   -     documents provided by Ms Kitching, comprising folios 1 to 12 (marked Exhibit B).      

CONSIDERATION

1. In general terms Division 2 of Part III of the Child Support (Registration and Collection) Act 1988[1] sets out a regime whereby a person may apply to the CSA in a prescribed manner to have a maintenance liability registered.  The effect of registration is that the CSA will enforce collection of a payer’s child support liability and in limited circumstances collect child support arrears. 

   [1] All further references are to this Act unless otherwise stated.

2. As noted, when Ms Kitching applied for an administrative assessment of child support on 21 April 2019, she elected (in accordance with subsection 24A(2)) to collect Mr Kitching’s child support liability under a private arrangement.  On 25 May 2020 Ms Kitching contacted the CSA and requested that it collect Mr Kitching’s child support on her behalf.

10. The CSA accepted Ms Kitching’s request as a formal application under section 25 for registration of Mr Kitching’s child support liability.  In accordance with subsection 28A(3), Ms Kitching subsequently elected to have any unpaid child support collected for a period of three months before registration, that is, from 25 February to 24 May 2020 (the arrears period).  As noted, the arrears figure was calculated to be $670.66.

11. As there was not an enforceable child support liability in place prior to 25 May 2020, a mutual intention that a payment be child support is not required.  Thus, depending on the circumstances, a payment having the character of one made for the benefit of a child could suffice. 

12. According to the objections officer, the arrears figure is calculated as follows:

No. of days in the arrears period (86.37) x daily rate ($7.76454) = $670.66 (rounded)

13. Apart from the minor point that this exercise results in a rounded figure of $670.66, there are two immediate problems with the calculation.  Firstly, the number of days used is an obvious fiction.  There are 90 days in the arrears period and, try as I might, I have been unable to determine how the CSA arrived at its decimalised figure.

14. Secondly, having regard to the CSA’s daily rate calculations, the daily rate of $7.76454 assumes Ms Kitching had 100% care of [Child 1] throughout the arrears period in circumstances where the CSA decided Mr Kitching had 50% care from 18 May 2020.  The CSA calculated Mr Kitching’s liability from 18 May 2020 at $3.8827 per day.

15. Using the correct figures, the liability figure would be $671.64 (rounded); i.e., ($7.76454/day x 83 days) + ($3.8827/day x 7 days).

16. For completeness, the decision-maker who changed the pattern of care to equal shared care from 18 May 2020 correctly recognised that (unless there are unusual circumstances to the contrary) persons living separated under one roof have the same number of nights care of their children.  However, it appears the decision-maker has wrongly determined that the date of effect for the change of care for both Mr and Ms Kitching is the date of Ms Kitching’s notification (18 May 2020).  As I understand paragraph 54F(3)(b) of the Child Support (Assessment) Act 1989, the date of effect for Ms Kitching (as the person with reduced care) is June 2019, and for Mr Kitching (as the person with increased care) is 18 May 2020.

17. This means that, during the portion of the arrears period prior to 18 May 2020, Mr Kitching’s child support liability should have been assessed on the footing that he had 0% and Ms Kitching 50% of [Child 1’s] care.  It follows that the figure arrived at in paragraph 15 materially overstates Mr Kitching’s liability during the arrears period based on the statutory care percentages.[2]  For reasons that will become apparent it is unnecessary to consider this aspect further.

[2] Had the CSA been informed of the living arrangements prior to the arrears period, using the CSA’s daily rate calculation Mr Kitching’s child support liability during this period would have been only $349.44.

18. A further matter is the CSA’s approach regarding the evidence needed to make its decision.  The approach is captured in an officer’s file note of 28 August 2020:

Opt In Arrears accepted as child support are unable to consider funds taken from a joint bank account as child support (unless both parents agree) as this is a joint bank account and both parents have equal rights and access to the funds making it impossible to determine that funds were from one parent or the other.

Therefore we cannot consider the funds that [Mr Kitching] has claimed that [Ms Kitching]

took from the joint bank account as child support payments during the Opt In Arrears.   As such I have accepted the Opt In Arrears as claimed by [Ms Kitching].

19. What I understand from this is that, having found Mr Kitching’s documentary evidence and explanation of the documentation wanting, the CSA ruled in Ms Kitching’s favour without requiring any evidence from her (other than her assertions in her statutory declaration).  Arguably, this approach runs counter to the position outlined by the Full Bench of the Federal Court in McDonald v Director-General Social Security [1984] FCA 57.

20. The Court indicated that (in the absence of statutory provisions to the contrary) there is no onus of proof in administrative law.  However, a party asserting a claim needs (in the course of addressing the requirements of a statutory provision) to ensure sufficient probative evidence is tabled to support the claim.  Where the evidence tabled is insufficient for a decision-maker to establish on balance if the claim is made out, the decision-maker is to reject the claim. 

21. Ms Kitching’s claim in the present matter is that there was unpaid child support during the arrears period equivalent to the total assessed liability for Mr Kitching.  This claim plainly must be established on balance in accordance with the requirement in subsection 28A(3) before a decision-maker can decide if arrears are unpaid and if so the quantum.  Thus, in my view Ms Kitching needed to ensure probative evidence was tabled to support her claim.  It was not a formal requirement, as the CSA appears to have supposed, that Mr Kitching provide probative evidence to rebut Ms Kitching’s claim.  It is of course consistent with this that Mr Kitching was at liberty to seek to do so.

22. Where separated parents are living under the one roof and both are providing financially for their child for whom they have equal shared care, caution is needed to ensure the liable parent is not already contributing sufficiently to meet their liability.  In the present case, the position is muddied further by the fact the parties had mingled finances.

23. During the arrears period the parties had a joint [Bank 1] account.  Ms Kitching originally contributed around $125,000 to the account from her previous marriage and Mr Kitching contributed about $50,000.  In December 2019 the parties sold their former jointly owned matrimonial home and net proceeds of $240,960 were placed in the account.  Mr Kitching’s wage as [an occupation 1] was directly credited to the account and Ms Kitching’s wage was separately credited to an account solely in her name.

24. Both parties operated credit cards and each used the joint account to meet credit card repayments, although Ms Kitching said she also made some repayments from her single account.  As I understand things, (as evidenced in a joint account statement provided) on 18 May 2020 Ms Kitching separately and unilaterally withdrew $169,600 and $10,000 from the joint account, leaving a balance of $62,030, which Mr Kitching then withdrew.  Ms Kitching said the sum included $160,000 which the parties agreed was fair given her larger initial contribution.  I understand Ms Kitching withdrew $10,000 separately to account for rent she considered owing.  Ms Kitching also included a sum of $5,000 in anticipation of a $10,000 reimbursement from [his employer] for costs associated with the sale of the former matrimonial home.

25. Mr Kitching then sent Ms Kitching an account for various bills and payments he covered on her behalf and she settled this account with payments to Mr Kitching totalling $6,000.  The payments were made in separate instalments on 5 and 8 June 2020.

26. Mr Kitching said that the joint account balance remained about the same during the arrears period.  This invites the inference that all his wage was being used (amongst other things) to support the family, which included Ms Kitching’s [number] children from her previous marriage.  Mr Kitching indicated it should be obvious from his credit card expenditure during the arrears period that he was not only supporting himself but (at least) [Child 1] as well.  Consistent with Mr Kitching’s point, a perusal of the joint account shows balances of $243,972 on 19 December 2019 and $241,680 on 14 May 2020.  Without going into detail, looking at Mr Kitching’s credit card expenditure it appears spending on groceries alone would materially exceed his personal requirements.

27. Ms Kitching supplied some brief extracts from her single account which support her claim that she was paying the rent during the arrears period.  Ms Kitching has not supplied any material relating to other expenditure.

28. As Ms Kitching did not apply for child support arrears in her application for collection (on 25 May 2020) and paid Mr Kitching $6,000 considered owing before her application for arrears (on 27 June 2020), I asked her whether she had in mind during the arrears period what child support was owed.  Ms Kitching said she did not ask the CSA to collect child support earlier because of fears (later realised) that “it would blow up in her face”.  I understand Ms Kitching considered at the time that Mr Kitching was not meeting any of his assessed child support commitment.  If this is the case it is not clear why Ms Kitching would not have taken an opportunity to make an adjustment in either the sums withdrawn on 18 May 2020 or the repayments made to Mr Kitching of $6,000.

29. Looking at the evidence that Ms Kitching has supplied, in the light of the parties’ intermingled finances as described I cannot with any confidence conclude that it shows on balance that Mr Kitching did not support [Child 1] to an extent that would meet his child support liability during the arrears period.  Although this is sufficient to decide the matter in Mr Kitching’s favour, I am also satisfied he has supplied evidence indicating he provided sufficient financial support for [Child 1] to meet his liability.

30. Although not entirely clear, as I understand subsections 28A(1) and (4), there is nevertheless an obligation to grant Ms Kitching’s application for unpaid arrears not exceeding three months, as the preconditions are met.  That is, Ms Kitching has made an application for collection under subsection 25(1) and the CSA was obliged under subsection 25(2) to register Mr Kitching’s child support liability.  This also appears to be the view briefly expressed in 5.1.4 of the Child Support Guide.  Adopting this approach, the formal effect of my decision is that the application is granted but the unpaid arrears figure is nil.       

DECISION

The Tribunal sets aside the decision under review and, in substitution, decides that there was no child support owing for the arrears period from 25 February to 24 May 2020.