Krout and Tipton (Child support)

Krout and Tipton (Child support) [2021] AATA 4499 (21 September 2021)

DIVISION:Social Services & Child Support Division
REVIEW NUMBERS: 2021/PC021222 & 2021/PC021288
APPLICANTS: Ms Krout / Mr Tipton

OTHER PARTIES: Child Support Registrar

Mr Tipton / Ms Krout

TRIBUNAL: Member P Jensen

DECISION DATE: 21 September 2021

DECISION:

The decision under review is set aside and, in substitution, Ms Krout’s adjusted taxable income is varied to $75,000 per annum and Mr Tipton’s adjusted taxable income is varied to $75,000 per annum from 1 July 2020 to 30 June 2022.

CATCHWORDS

CHILD SUPPORT – departure determination – income, property and financial resources of both parents – business income – failure to comply with directions – costs of education – decision to depart based on financial resources – 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

Introduction

Ms Krout and Mr Tipton are the parents of [Child 1] who was born in 2012 and [Child 2] who was born in 2013. A child support case was registered in 2015 with what is commonly called the Child Support Agency or CSA. Ms Krout was recorded as providing 60% care and Mr Tipton was recorded as providing 40% care for both children from July 2018. Each parent was recorded as providing 50% care for both children from July 2020. There might have recently been another change in the parents’ pattern of care of the children. Ms Krout said Mr Tipton was withholding care. I did not allow Mr Tipton to respond to Ms Krout’s statement because the issue was not relevant to the decision under review. If a change in care has been reported to the CSA, the CSA will make a care decision in due course.
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 of the children. From 1 July 2020 the administrative assessment was based on Ms Krout’s provisional 2018-19 adjusted taxable income of $19,754 and Mr Tipton’s estimate of income of $75,191, and Mr Tipton was required to pay $7,668 per annum in child support. From 30 July 2020, Mr Tipton’s rate of child support payable reduced to $5,898 per annum as a result of a change in care.
The Act also provides for a departure from the administrative assessment in certain circumstances. In March 2019, Mr Tipton applied for a departure from the administrative assessment on the basis of the children’s private school fees. His application was refused. Neither parent objected to that decision.
On 26 August 2020, Mr Tipton lodged another departure application. In October 2020, Ms Krout lodged a departure application. In November 2020 an original decision-maker refused the applications. Ms Krout objected to that decision. An objections officer disallowed her objection. Both parents applied to the Tribunal for further review. I conducted a directions hearing on 22 July 2021 and a full hearing on 21 September 2021. Ms Krout and Mr Tipton gave sworn evidence by conference phone.
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

Subparagraph 117(2)(b)(ii) of the Act, commonly referred to as Reason 3, provides as a ground for departure:
that, in the special circumstances of the case, the costs of maintaining the child are significantly affected:
…
(ii)because the child is being cared for, educated or trained in the manner that was expected by his or her parents …
The children attend [a named] Primary School. There is no dispute that they are being educated in the manner that was expected by the parents. Prior to 2020 the parents were jointly liable for the school fees. Since 2020, each parent has been separately liable for 50% of the school fees pursuant to an agreement that they reached with the school. At the full hearing both parents effectively acknowledged that the circumstances surrounding the payment of the school fees from 2020 onwards do not constitute special circumstances for the purposes of Reason 3. In my opinion those acknowledgements were properly made.
The parents had agreed to each pay half of the school fees for 2018 and 2019. Mr Tipton had paid his half but Ms Krout did not pay her half, and at the end of 2019 her shortfall in respect of those two years was $6,150.46.[1] On 30 June 2020 the parents reached an agreement which, very broadly speaking, provided that if Mr Tipton paid more than half the school fees, then his additional payments would be credited against his child support liability. The parents applied to have a court make orders in those terms, and the court made those orders. Mr Tipton paid the outstanding debt of $6,150.46 and applied to have the payment credited against his child support liability. The CSA decided to grant his application. Ms Krout applied for review of that decision and the matter made its way to the Tribunal. I heard the matter on 21 September 2021. I affirmed the decision to credit the payment of $6,150.46 against Mr Tipton’s child support liability. In light of that decision, which effectively resulted in each parent paying half the children’s school fees for 2018 and 2019 as per their agreement, the circumstances surrounding the payment of school fees from 26 February 2019[2] to 31 December 2019 do not constitute special circumstances for the purposes of Reason 3.
[1]At times, Ms Krout disputed those facts, but she ultimately acknowledged those facts. Her evidence is discussed in more detail below.
[2]In the absence of a relevant court order — and no such order has been made — any departure decision could only have effect, at the earliest, from 18 months prior to when Mr Tipton lodged his departure application, i.e. from 18 months prior to 26 August 2020: section 98S of the Act.
Reason 3 is not established.

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; …
I conducted a directions hearing on 22 July 2021. Each parent claimed that the other parent’s income and financial resources were not fairly reflected for child support purposes in their adjusted taxable incomes as assessed by the Australian Taxation Office (“the ATO”) from time to time. Each parent submitted that the other parent should be directed to provide bank account statements from 2015 to date, and each parent stated that they were agreeable to providing their own bank account statements from 2015 to date. I explained why I would not be issuing directions in those terms. I suggested that each parent be directed to provide bank account statements for a three-month sample period. Both parents continued to request directions that required both parents to provide bank account statements for a longer period. In light of those submissions, I stated that I would direct them to provide bank account statements for the period from 1 July 2019 to 30 June 2021. Ms Krout then complained that complying with such a direction would be onerous.
I issued written directions on 22 July 2021. Ms Krout was directed to provide the following by 20 August 2021:
-her 2018-19 and 2019-20 individual tax returns and Notices of Assessment; and
-account statements of all financial accounts (including savings accounts, cheque accounts, business accounts, credit card accounts and loan accounts) to which she was a signatory from 1 July 2019 to 30 June 2021.
Note: the account statements must include running balances.
Ms Krout did not provide any of the documentation that she had been directed to provide by the due date. At my request a letter was sent to her which noted her non‑compliance and invited her to provide written submissions as to why her application for review should not be dismissed on that basis. Ms Krout contacted the Registry on 26 August 2021 and, according to a file note, she eventually became angry and abusive and the call was terminated. In a letter dated 27 August 2021, Ms Krout stated that she “had made a genuine error as I believed submission date was Friday, 27 August”. She enclosed eight pages of documentary evidence which concerned Mr Tipton. She did not provide any of the documentation that she had been directed to provide. On 30 August 2021 the Registry sent an email to Ms Krout asking her when she would provide the documentation that she had been directed to provide. On 1 September 2021 she provided certain documentation and she sent an email in which she stated, amongst other things: “I have now provided all requested documentation to the best of my ability”. On the same day the Registry sent an email in reply which stated that it had received the following documentation from her:
Statements
[Bank 1] Account ending [deleted]
·01/07/2019 - 08/11/2019
·08/05/2020 - 10/08/2020
·10/11/2020 - 10/02/2021
·10/02/2021 - 10/05/2021
·10/05/2021 - 03/06/2021
[Bank 2] Credit Card [[ending]]
·19/06/2019 - 20/06/2021
[Bank 1] Credit Card [[ending]]
·19/08/2020 - 19/05/2021
Income tax return
·2018-19 only
Written submissions and supporting evidence
On 24 September 2020, [Bank 1] provided the CSA with a summary of the [Bank 1] bank accounts to which Ms Krout was a signatory,[3] and it provided a sample of bank account statements for each account. She was a signatory to the savings account with an account number [ending], the credit card account ending [and] a [account] ending. [The] bank account statements of the account ending [showed] that it was an active account.[4]
[3]Page 175 of the hearing papers.
[4]Page 177 of the hearing papers.
It is immediately apparent from the Registry’s email dated 1 September 2021 that it had not received all the required bank account statements for the three listed accounts. It must have also been immediately apparent to Ms Krout that the Registry had not received any bank account statements for the business account [ending].
On 2 September 2021 the Registry wrote to Ms Krout and informed her that it had received additional documentation which it had marked A1 to A250 (which was the documentation that it had received from Ms Krout) and B1 to B304 (which was the documentation that it had received from Mr Tipton). It enclosed copies of that documentation. Those documents plus the documents provided by the CSA (which both parents confirmed they had received prior to the directions hearing) constituted the hearing papers in this matter.
In anticipation that one or both parents might state at the full hearing that they had not received all of the hearing papers, I arranged for the Registry to contact both parents and confirm that they had received the hearing papers, and, according to a Registry file note, that occurred in respect of Ms Krout on the day before the full hearing.
At the full hearing I sought to confirm that both parents had the hearing papers with them. I had difficulty understanding Ms Krout’s answers. At different times she appeared to indicate that she had certain parts of the hearing papers and she was missing certain parts of the hearing papers. It was apparent, and Ms Krout acknowledged, that she had not prepared for the full hearing. She said she had been too busy attending to other matters including other legal proceedings involving Mr Tipton.
I noted that, according to the Registry’s records, she had provided some documentation in response to my directions but she had not fully comply with the directions. Ms Krout was initially insistent that she had fully complied with the directions. She raised the possibility that the documents had gone astray or had not been properly processed. She also raised the possibility that she had inadvertently omitted to fully comply with the directions, but if that is what actually happened, she had honestly believed that she had fully complied. There was no suggestion by Ms Krout that she had been unable to fully comply despite “the best of my ability”.
The preceding chronology strongly suggests that Ms Krout had not fully complied with the directions, and she was aware of her omission (because she was effectively informed of that fact via an email), and she did not take any steps to rectify her omission. It also strongly suggests that she had received the hearing papers prior to the hearing. It is worth mentioning a couple of other matters that cast doubt on the reliability of Ms Krout’s evidence more generally.
At the directions hearing on 22 July 2021, I questioned the parents about the payments they had made in respect of the children’s school fees for 2018 and 2019. Ms Krout said that prior to 2020, she paid all the school fees. She later said that she was pretty sure she paid all the school fees for 2019, and she could provide proof of the payments. I referred her to a document in the bundle of documents provided by the CSA (which at that stage constituted the hearing papers) which suggested that Mr Tipton had made a payment of $3,253.48 to the school on 20 May 2019. Ms Krout confirmed that she had received that bundle of documents but she stated that she did not have them with her for the directions hearing and so she could not comment further on the issue.
The hearing papers included some documentation which supported Mr Tipton’s account of events. I explained that I would not direct Ms Krout to provide any evidence on the issue, but if she disputed Mr Tipton’s account of events she could provide evidence in support of her account of events. It transpired that she did not provide any such evidence. At the full hearing on 21 September 2021, I asked Ms Krout whether she agreed with Mr Tipton’s evidence that he had paid his half of the 2018 and 2019 school fees plus $6,150.46 of her half. She said she did not agree with his account of events. She said she had kept making payments to the school until she could not afford to make any more payments. She was unable to give any indication of when she stopped making such payments. She stated that she had suggested at the directions hearing that I obtain the relevant evidence from the school, and she had proceeded on the basis that I would obtain that evidence. I stated that the matter had not been left on that basis. She disagreed. She applied for an adjournment so that she could obtain the relevant evidence from the school. I refused her application and gave ex tempore reasons for my decision (and Ms Krout repeatedly interrupted me despite being directed to desist). Later during the hearing, Ms Krout said she had told Mr Tipton not to pay “my portion” of the debt but he did it anyway, i.e. he paid the debt of $6,150.46. I noted Ms Krout’s reference to “my portion”. Ms Krout replied that it had never been in dispute that the debt of $6,150.46 had been her debt.[5]
[5]Mr Tipton provided a copy of the judgment [deleted]: pages B12 to B68 of the hearing papers. His Honour stated at paragraph 42: “The wife was not an impressive witness. I have no doubt that she exaggerated her evidence, was prepared to mislead the Court and at times simply fabricated evidence as she went along.” When I read that passage I was reminded of Ms Krout’s initial statement at the directions hearing that she had paid all the school fees prior to 2020, and her subsequent statement that she was pretty sure that she had paid all the school fees in 2019.
Ms Krout completed a Statement of Financial Circumstances on 19 April 2021. She stated that her average parenting payment was $217 per week. According to her bank account statements, [she] received a net parenting payment of $989.83 on 8 April 2021. Parenting payment is paid fortnightly. To the extent that bank account statements were provided for the account ending [for] 2020-21,[6] her net parenting payments varied from $868.40 per fortnight to $1,387.89 per fortnight. There was no evidential basis for Ms Krout’s statement that her average parenting payment was $217 per week. She significantly understated that aspect of her income.
[6]Statements were not provided for the period from 25 September 2020 to 9 November 2020.
As at April 2021, Ms Krout’s most recently lodged tax return was for 2017-18.[7] At the directions hearing in July 2020 she said she had lodged her 2018-19 tax return “last week” and she would lodge her 2019-20 tax return “next week”. I directed her to provide tax returns and Notices of Assessment for 2018-19 and 2019-20. She only provided her 2018‑19 tax return.
[7]Page 434 of the hearing papers.
Ms Krout stated that she operates, or operated, a business as [an occupation]. Her claim that she is no longer operating that business could have been investigated further if she had fully complied with the directions.
On 2 September 2020, Mr Tipton contacted the CSA and it noted:[8]
Mr Tipton wanted to know what can be done about [Ms Krout’s] income as he has information that she is earning approximately 60k from [her business]. Current income used in the assessment is approx. 16K.
Mr Tipton advised this information came to light when both parties attended court and he has evidence to confirm this.
Discussed COA, Mr Tipton will follow up with solicitor to make sure there are no legal implications to him by using this information.
[8]Page 147 of the hearing papers.
At the full hearing, Mr Tipton said that he had copies of Ms Krout’s bank account statements which indicated her business revenue. I asked him why he had not provided a copy of that documentation to the Tribunal. He said he had expected Ms Krout to provide it pursuant to the directions. It is unfortunate that he did not provide a copy of that documentation, but it is understandable that he had concerns about providing documentation in the current proceedings which had been obtained in other legal proceedings; there is a general prohibition on doing so. However, the documentation in question could have been provided to the Tribunal in the current proceedings: [deleted]. I considered adjourning the proceedings to allow Mr Tipton further time to provide that documentation but decided not to take that course.
It was noted in Humphries & Berry [2008] FMCAfam 409:
30.In circumstances where a party … places before the SSAT inconsistent, confusing and incomplete financial information, the fact that the SSAT can and may exercise its powers to obtain further information that might clarify the financial circumstances of a party does not relieve a party of their primary obligation to disclose their financial affairs in a manner that can be understood. The extent to which the SSAT should exercise its powers of information gathering and testing of evidence in each case will depend on the circumstances of the matter but the exercise of such power does not in any way derogate from the immutable obligation and duty to both parties throughout the proceedings before the SSAT to make full, frank and cogent disclosure of all relevant information pertaining to their financial affairs in order that the Tribunal can make a proper assessment of their respective capacities to provide for the needs of their children.
31.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.

The reference to “SSAT” was a reference to the Social Security Appeals Tribunal, which was the tribunal that reviewed objections officer’s departure decisions. The Administrative Appeals Tribunal now conducts those reviews.
Similar observations were made in Agripa & Horton [2010] FMCAfam 1144 at paragraphs 24 and 25:
24. … In financial proceedings under the Family Law Act 1975 a party has a duty of full and frank disclosure of all of his or her financial circumstances (Black & Kellner, (1992) 15 Fam LR 343, (1992) FLC 92-287, Weir & Weir, (1992) 16 Fam LR 154, (1993) FLC 92-338). If it is established to the Court’s satisfaction that there has been deliberate non-disclosure, “then the court should not be unduly cautious about making findings in favour of the innocent party. To do otherwise might be thought to provide a charter for fraud” (Weir, above, FamLR at 158, FLC at 79,593).
25. In my view the same principle must apply in the assessment of child support for the same reason. If the SSAT is satisfied that a parent has made a deliberate non-disclosure of his or her financial circumstances, it should be reasonably robust in assessing the non-disclosing parent’s financial circumstances adversely to that parent and in favour of the other parent. That is not to say that it may arrive at an entirely arbitrary result, but rather that it may draw generous inferences adverse to the non-disclosing party about that party’s financial circumstances.
As matters currently stand: Mr Tipton claimed that Ms Krout earned a significant income via her business; Ms Krout was aware of Mr Tipton’s claim; Ms Krout was directed to provide bank account statements for all accounts to which she was a signatory during 2019-20 and 2020-21; she failed to provide any of the documentation that she had been directed to provide; she was informed that her application for review might be dismissed if she did not comply with the directions; she provided some documentation but failed to fully comply with the directions; she was informed of her partial compliance (and, by inference, her partial non-compliance); and she continued to fail to fully comply with the directions. I find that she intentionally did not provide all of her bank account statements, and it is appropriate to make robust findings in that context. I also find that she was provided with a full copy of the hearing papers prior to the full hearing.
At the very end of the hearing, Ms Krout applied for an adjournment so that she could provide the documents that she had been directed to provide but which the Registry had not received. I refused her application and I gave ex tempore reasons for my decision (and she once again repeatedly interrupted me despite being directed to desist).
According to the bank account statements of the account ending [that] Ms Krout did provide for 2020-21, which did not include statements for the 46 days from 25 September 2020 to 9 November 2020, she received net payments of parenting payment of $24,844 and she received approximately $8,000 gross via her business. The income she received via the account ending [remains] unknown.
I questioned Ms Krout about a deposit of $998.50 on 3 December 2020.[9] She said it might have been for a charitable donation. She said she does a lot of charity work. I asked her to give an indication of the quantum of the donations that she receives. She said she was unable to do so. In response to further questions, Ms Krout explained that she collects money for charitable causes and she provides people with her bank account details so that they can deposit their donations into her account. She said that she then transfers the money to [Financial Institute 1] to be transferred to the ultimate recipient, such as “[name]”, or she withdraws cash and takes it to [Financial Institute 1] for that purpose. I asked her to locate a transfer to [Financial Institute 1] in her bank account statements. She was unable to do so. I had an electronic set of hearing papers. A search for “[keyword]” did not produce any relevant matches. A search for “[another keyword]” did not produce any matches.
[9]Page A56 of the hearing papers.
On 17 December 2020, Ms Krout received a “Deposit Trading [Account]” of $250.00.[10] She said she had received a donation in respect of multiple sclerosis. I was unable to find a matching debit to any charitable organisation.
[10]Page A56 of the hearing papers.
Mr Tipton noted a number of deposits by the ATO. Ms Krout indicated that they were in respect of COVID-19. She confirmed that they constituted taxable income. The deposits into account [totalled] $21,900 during the period of 2020-21 for which she provided bank account statements. She might have received additional payments during that financial year.
On 22 June 2020, Ms Krout completed a Statement of Financial Circumstances. She stated that her liabilities totalled $103,000 which included a debt to “Lawyers / friends” of $50,000.[11] The document also states: “Last edited 12/10/20”.[12] I asked Ms Krout what she meant by that notation. She said she did not have that portion of the hearing papers with her and so she could not comment. I noted that it could mean that she completed the document on 22 June 2020 and she adopted its contents again on 12 October 2020. She did not take issue with that interpretation and, on balance, I consider that to be the meaning that it conveys. She completed another Statement of Financial Circumstances six months later, on 19 April 2021. She stated that her liabilities totalled $740,500 which included a home loan of $426,500 and a debt of approximately $300,000 which she described as “total personal loans - inc legal family court in which I am respondent”.[13] It appeared that Ms Krout was indicating that she had incurred an additional $250,000 in legal fees over the intervening six-month period, which Mr Tipton queried. The documentation provided to the Tribunal did not allow the matter to be investigated further.
[11]Page 217 of the hearing papers.
[12]Page 221 of the hearing papers.
[13]Page A1 of the hearing papers.
Ms Krout said she had recently purchased a townhouse for $605,000 and the associated home loan was approximately $400,000. On her account of events, which I do not accept, she earns almost no income and is reliant on income support payments and the like. She currently receives parenting payment. That might change if there has been a change in her provision of care. According to her most recent Statement of Financial Circumstances she has no savings and she has significant debts.
Mr Tipton is employed by [Company 1] which is controlled by his father, Mr Tipton (“Mr Tipton Snr”). The company runs a [business]. Mr Tipton has variously described himself as [an occupation] and a [business] manager.[14] Ms Krout provided a screenshot of the [business]’s website which states that Mr Tipton Snr is the owner, Mr Tipton is the manager and Mr Tipton’s sister, Ms Tipton, is the event coordinator. The original decision-maker summarised Ms Krout’s concerns as follows:[15]
[Ms Krout] states Mr Tipton works within his family business, is not just as [occupation] as he declares in his application, his family is very wealthy and this provides him with a much higher income and financial resources that what he declares for child support purposes.
[14]Pages 107 and B124 of the hearing papers.
[15]Page 36 of the hearing papers.
Mr Tipton provided a copy of his 2019-20 tax return. He received wages of $59,797, allowances et cetera of $3,010 and government payments of $1,540. He expected his taxable income to be $60,278.
Mr Tipton’s 2018-19 adjusted taxable income was $91,246. It included a distribution of $23,657 from the Tipton Family Trust. Mr Tipton Snr received a distribution of $78,857. Ms Tipton received a distribution of $28,915.[16] Mr Tipton said he has no control over the trust and, as far as he could recall, 2018-19 was the only financial year in which he received a distribution. Ms Krout said he received distributions prior to their separation. They separated in 2014.[17] Mr Tipton maintained that, as far as he could recall, he had not received any other distributions from the trust.
[16]Page 355 of the hearing papers.
[17]Page B14 of the hearing papers.
Mr Tipton provided his bank account statements for 2019-20 and 2020-21. Ms Krout did not refer to that documentation during the course of the full hearing. More generally, she did not refer me to any documentary evidence that indicated that Mr Tipton’s income and financial resources would not be fairly reflected for child support purposes in his adjusted taxable incomes as assessed by the ATO from time to time. I independently assessed the documentary evidence and was unable to locate any such evidence.
According to the documentation provided by the CSA, the administrative assessment from 1 July 2020 was based on Mr Tipton’s estimate of income of $75,191 per annum.[18] The CSA had a discretion to not accept Mr Tipton’s estimate if it appeared to be an underestimate. It decided to accept the estimate. Ms Krout had a right to object to that decision. It appears that she did not do so, but if she did, her objection was disallowed: the CSA’s decision to accept the estimate remained in force. The evidence suggests that Mr Tipton’s estimate was a fair estimate and I will proceed on that basis.
[18]Pages 420 and 452 of the hearing papers. A different income may have been used from 1 July 2021: page 446 of the hearing papers.
Mr Tipton said he lives in an apartment that is owned by his partner. He said she owned the apartment before they first met. He completed a Statement of Financial Circumstances on 28 April 2021. He stated that he has no savings and debts of approximately $115,000.
During 2020-21, Ms Krout received at least $24,844 in parenting payment and she received at least $21,900 in taxable income from the ATO. During 2020-21 the administrative assessment was based on incomes for Ms Krout of $19,754 per annum and $22,122 per annum.[19] The difference between her actual income and the incomes used in the administrative assessment constitutes special circumstances such that the application of the administrative assessment results in an unjust and inequitable determination of child support payable. Reason 8 is established.
[19]Pages 448 to 452 of the hearing papers.

Just and equitable

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.
Mr Tipton lodged his departure application on 26 August 2020. Ms Krout sought a departure decision with effect from 18 August 2015,[20] which was when the child support case was registered. Mr Tipton did not express a view on the matter. I do not consider it appropriate in this case to make a departure decision that commences well before the date on which Mr Tipton lodged his departure application. However, a change in care occurred on 1 July 2020, at which point each parent started providing 50% care to both children, and Mr Tipton lodged his departure application the following month. I consider it appropriate to make a departure decision with effect from 1 July 2020.
[20]Page 215 of the hearing papers.
In addition to Ms Krout’s income of at least $24,844 plus $21,900, she also earned an undisclosed sum via her business. Mr Tipton submitted that it was a significant sum. Ms Krout was directed to provide her bank account statements, and if she had fully complied with that direction, it might have been possible to quantify her business income. She intentionally did not fully comply with the direction. Doing the best I can in the circumstances, it appears that, very broadly speaking, the parents had similar incomes. Unfortunately the evidence does not allow me to make a more precise finding on that issue.
Ms Krout claimed that the business had more recently been generating less revenue, or no revenue. However, in light of her failure to fully comply with the directions, I am not persuaded that that is the case.
Ms Krout has been recorded as providing 50% care for the children since 1 July 2020. Mr Tipton has been recorded as providing 50% care for the children since 30 July 2020, and prior to that he was recorded as providing 40% care. There are different dates of effect because the change in care was not reported promptly. If it appeared likely that the parents would continue to each provide 50% care for both children, it would be appropriate to vary the rate of child support payable so that neither parent was required to pay child support to the other parent. However, the possibility that Ms Krout might be recorded as providing less care raises a further difficulty.
Varying both parents’ incomes to $75,000 per annum will result in neither parent being required to pay child support while they are each recorded as providing 50% care, and it will result in Ms Krout being required to pay child support to Mr Tipton if he is recorded as providing the majority or all of the care. I considered varying both parents’ adjusted taxable incomes to $75,191 per annum, but that would suggest a degree of precision in respect of Ms Krout’s income that the evidence does not allow. Ultimately the issue is the rate of child support payable between the parents, and not the parents’ incomes, and varying both parents’ adjusted taxable incomes to $75,000 per annum will result in a fair rate of child support payable.
Ms Krout’s conduct to date suggests that she will continue to fail to comply with her obligation to fully and frankly disclose her financial circumstances. It is appropriate to make a departure decision with effect until 30 June 2022.
The documentation provided by the CSA in May 2021 indicated that Mr Tipton was up to date with his child support payments. He was required to pay approximately $7,200 in child support from 1 July 2020 to date, depending on what rate was payable from 1 July 2021 to date. The proposed decision will reduce the rate payable from 30 July 2020 to nil, subject to any care decision in respect of any recent change in care. Mr Tipton may be required to pay a low rate of child support from 1 July 2020 to 29 July 2020. If Mr Tipton starts providing the majority of the care, or all of the care, it is appropriate that Ms Krout makes a contribution to the additional costs that he will be incurring directly. The proposed decision will be just and equitable.

Otherwise proper

The requirement to consider whether a departure to the administrative assessment 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. Parents rather than the community have the primary duty to maintain a child.
Both parents receive family tax benefit in respect of their care of the children. Varying the rate of child support payable between the parents will affect their respective rates of family tax benefit. Such a result will be otherwise proper.

DECISION

[2021] AATA 4499

21 September 2021

Key Legal Topics

Areas of Law

Family Law

Administrative Law

Legal Concepts

Judicial Review

Jurisdiction

Costs

Procedural Fairness