Knowlton and Scofield (Child support)

This matter concerned an application by Ms Scofield for a departure from a child support administrative assessment made by Child Support. Ms Scofield sought the departure on several grounds, including the special needs of the children, high childcare costs, and that the assessment did not accurately reflect the income, property, and financial resources, or earning capacity of the parents. Child Support initially found that some grounds were established and adjusted the assessment, but Ms Scofield objected to this decision. An objections officer then part-allowed the objection, setting aside the original decision and substituting a new one. Mr Knowlton subsequently applied to the Administrative Appeals Tribunal (the Tribunal) for a review of the objections officer’s decision.

The Tribunal was required to determine whether the grounds for departure from the administrative assessment were established, and if so, whether it would be just and equitable and otherwise proper to make a departure determination. Specifically, the Tribunal considered whether the costs of maintaining the children were significantly affected by their special needs (Reason 2), high childcare costs (Reason 6), and whether the assessment failed to correctly reflect the parents' income, property, and financial resources (Reason 8A) or earning capacity (Reason 8B). The Tribunal also had to consider the proper needs of the children and the financial circumstances of both parents in determining if a departure was just and equitable.

The Tribunal found that a ground for departure was established under Reason 8A, concluding that Mr Knowlton was receiving a financial benefit from a loan agreement with his parents that should be considered a financial resource. This benefit was calculated as the difference between the interest defined in the loan agreement and the amount Mr Knowlton was actually paying. The Tribunal also considered the high costs of childcare, finding that Ms Scofield's net child care expenses were significant and that Mr Knowlton should contribute 50% of these expenses. While the Tribunal acknowledged evidence suggesting special needs for the children, it was not persuaded that the net costs after rebates significantly affected the overall costs of maintaining them. The Tribunal determined that it was just and equitable to depart from the administrative assessment.

The Tribunal set aside the objections officer's decision and substituted its own. For the period from 4 December 2022 to 27 August 2023, Mr Knowlton's income was to be increased by $23,940 per annum. For the period from 28 August 2023 to 27 October 2023, his income was to be increased by $98,340 per annum. For the period from 28 October 2023 to 31 December 2024, Mr Knowlton's annual child support rate was to be increased by $74,400. Additionally, for the period from 4 December 2022 to 3 December 2023, $5,903 was to be added to the annual rate of child support payable by Mr Knowlton. The Tribunal concluded that neither party would experience hardship as a consequence of this departure determination and that it was otherwise proper to make the determination.