Laster and Wrobleski (Child support)

Laster and Wrobleski (Child support) [2021] AATA 5203 (14 December 2021)

DIVISION:Social Services & Child Support Division
REVIEW NUMBER:  2021/BC022335
APPLICANT:  Mr Laster
OTHER PARTIES:  Child Support Registrar
Mrs Wrobleski

TRIBUNAL:Senior Member R Ellis
DECISION DATE: 14 December 2021
DECISION:

The Tribunal sets aside the decision under review and, in substitution, decides that the payment of $250 made by Mr Laster on 6 May 2021 for orthodontics for [Child 2] and the payment of $250 made by Mr Laster on 3 June 2021 for orthodontics for [Child 2] should both be applied as prescribed non-agency payments under section 71C of the Child Support (Registration and Collection) Act 1988.

CATCHWORDS

CHILD SUPPORT – prescribed non-agency payment – whether payment for orthodontic treatment should be credited – condition for crediting as prescribed payment satisfied under s71C – 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

Mr Laster and Mrs Wrobleski are the parents of [Child 1] (born May 2004) and [Child 2] (born April 2006). There has been a child support assessment in place since 19 April 2012 with collection by the Child Support Agency from the same date. Mr Laster is the parent liable to pay child support under the assessment.
From 20 September 2018 the child support assessment reflected that [Child 1] was in the 100 per cent care of Mrs Wrobleski and from 1 May 2021 the child support assessment reflected that [Child 2] was in the 100 per cent care of Mrs Wrobleski.
On 11 June 2021 Mr Laster applied to the Child Support Agency for credit of one payment of $250 made on 6 May 2021 and a second payment of $250 made on 3 June 2021 for orthodontic treatment for [Child 2] as non-agency payments.
On 21 June 2021 the Child Support Agency made the decision to accept the two payments totalling $500 as prescribed non-agency payments.
On 6 July 2021 Mrs Wrobleski objected to this decision and on 11 September 2021 the Child Support Agency allowed the objection and made the decision to refuse to credit the two payments totalling $500 as prescribed non-agency payments (the objection decision).
On 17 September 2021 Mr Laster applied to the Administrative Appeals Tribunal (the Tribunal) for a review of the objection decision.
The Tribunal conducted a hearing into the application on 2 December 2021. Mr Laster and Mrs Wrobleski gave evidence on affirmation by conference telephone. The Child Support Agency provided the Tribunal and the parties with papers relevant to the review (226 pages).
On 6 December 2021 Mrs Wrobleski advised the Tribunal she had been in contact with the Child Support Agency following the hearing and was informed there was new evidence available that was relevant to the non-agency payments under consideration. The Tribunal sought further information from the Child Support Agency under subsection 37(2) of the Administrative Appeals Tribunal Act 1975 and this was received on 13 December 2021 (C1–C7). The Tribunal determined this additional evidence was not relevant to its decision.

ISSUES

The statutory provisions relevant to this review are contained in the Child Support (Registration and Collection) Act 1988 (the Act).
When a child support liability is registered under the Act for collection, the amount payable is a debt due to the Commonwealth and must be paid to the Child Support Agency not the payee.
In some circumstances the Child Support Agency may credit payments made directly to a payee or to a third party against a child support liability that is registered for collection (sections 71, 71A or 71C of the Act). The Child Support Agency refers to the credits under sections 71 and 71A as “non-agency payments”. Credits under section 71C are known as “prescribed non-agency payments” as this section applies to payments of the kind specified in section 19 of the Child Support (Registration and Collection) Regulations 2018 (the Regulations).
Section 71C of the Act provides a mechanism whereby payments made by a liable parent to the payee or to another person for items specified in the Regulations may be taken into account in partial satisfaction of the liable parent’s child support liability. A number of specific criteria must be satisfied for this provision to apply. Even where all the criteria are met, there is still a discretion in section 71D of the Act to refuse to credit amounts that would otherwise be able to be credited against the liability.
The issue which arises in this case is whether or not either of the two payments made by Mr Laster can be accepted as non-agency payments and credited against his child support liability.

CONSIDERATION

Mr Laster told the Tribunal the two payments under consideration were for orthodontic treatment for [Child 2]. Mr Laster said he believed the legislation had been applied correctly initially as the payments met all the requirements for prescribed non-agency payments under the Act. He said the payments were refused on objection, however, the Child Support Agency subsequently recognised an error had been made as the legislation had not been followed. He said his only recourse was to apply for a review by the Tribunal.
Mr Laster said he had provided a letter from the orthodontist confirming the treatment for [Child 2] was essential. Mr Laster said he had also supplied the Child Support Agency with invoices to show the payments of $250 each had been made.
The Tribunal notes in evidence from the Child Support Agency a letter from [a named orthodontic practice] dated 10 March 2021 stating that [Child 2] has crowded teeth which are “prominent on the upper” and that treatment is “essential in supporting his wellbeing”. The letter also states that treatment began with full fixed appliances mid-December with an expected duration of 18-24 months. The Tribunal further notes invoices from [the orthodontic practice] addressed to Mr Laster for a payment of $250 made on 6 May 2021 and a payment of $250 made on 3 June 2021 for orthodontic treatment for [Child 2]. There was an outstanding balance of $3,500 as at 3 June 2021.
Mr Laster told the Tribunal the total cost of treatment was approximately $4,000 and he was making payments of $250 each month under a payment plan. He said he no longer had private health cover with extras and so the payments he was making each month were his out-of-pocket costs. He added the orthodontics were not covered under Medicare.
Mr Laster said there was no arrangement between the parents that the payments he was making for orthodontics would be in lieu of child support.
Mrs Wrobleski told the Tribunal the orthodontics had been arranged by Mr Laster and she was unaware [Child 2] was having the treatment as Mr Laster had not informed her. Mrs Wrobleski pointed out this was despite court orders stating that Mr Laster must notify her in writing of any decisions he proposed to make in relation to the children.
Mrs Wrobleski said Mr Laster signed the contract with [the orthodontic practice] and it was her understanding that treatment commenced in December 2020 but Mr Laster did not contact her to discuss the matter nor obtain her input as required under the court orders.
Mrs Wrobleski said in 2018, when discussing orthodontics for [Child 1], Mr Laster had said he would be prepared to split the costs for any orthodontics for [Child 2]. Mrs Wrobleski said at the same time Mr Laster had told her the orthodontics for [Child 2] would be covered under his private health insurance. Mrs Wrobleski added that she was unaware of the full cost of the treatment for [Child 2] and Mr Laster had not asked her for a financial contribution. Mrs Wrobleski said if Mr Laster had approached her about the cost she would have assisted and made a claim on her own private health insurance.
Mr Laster reiterated that his private health insurance did not cover the cost of orthodontics for [Child 2]. Mr Laster said that in 2018 he had considered meeting the full cost of orthodontics for [Child 2] himself but could no longer afford to do so.
Mrs Wrobleski told the Tribunal she did not dispute that Mr Laster had made the payments of $250 each to [the orthodontic practice] but she had never agreed that the cost of orthodontics for [Child 2] should be considered in lieu of child support. Mrs Wrobleski maintained that Mr Laster should have split the cost of orthodontics and allowed her to claim her share on her own private health cover.
It is not in contention and the parents agree that Mr Laster made a payment of $250 on 6 May 2021 and a payment of $250 on 3 June 2021 towards orthodontics for [Child 2].
Section 71A of the Act provides for payments made by the payer of an enforceable maintenance liability to a third party to be credited against the amount payable under the child support liability. The amount paid by the payer to the third party must partially or completely satisfy a debt owed by the payee, the payer or both the payer and the payee (paragraph 71A(1)(a)). It must be the intention of both parties that the amount paid, or part of the amount paid, be credited against the payer’s enforceable child support liability in relation to the child support enforcement period (paragraph 71A(1)(c)).
The Tribunal is satisfied the two payments made by Mr Laster for orthodontics were not intended by both parents to be in lieu of child support. The Tribunal finds the payments made by Mr Laster cannot, therefore, be considered as non-agency payments under section 71A of the Act.
Where such a payment cannot be credited under section 71A of the Act, it may be credited under section 71C even if there is no mutual intention between the parents. Section 71C was introduced to give payers more choice regarding the form in which child support is paid. It provides, subject to section 71D, for an amount to be credited against a payer’s child support liability regardless of the intention of the parents at the time the payment was made. Under subsection 71C(1) of the Act the Child Support Agency must credit an amount when all the conditions set out in paragraphs 71C(1)(a) to 71C(1)(d) are met.
The payment to be credited must be a payment of the kind specified in section 19 of the Regulations. This section states that for the purposes of paragraph 71C(1)(b) of the Act, specified payments are payments of the following kinds in relation to an enforceable maintenance liability:
(a) child care costs for the child who is the subject of the enforceable maintenance liability;
(b) fees charged by a school or preschool for that child;
(c) amounts payable for uniforms and books required by a school or preschool for that child;
(d) fees for essential medical and dental services for that child;
(e) the payee’s share of amounts payable for rent or a security bond for the payee’s home;
(f) the payee’s share of amounts payable for utilities, rates or body corporate charges for the payee’s home;
(g) the payee’s share of repayments on a loan that financed the payee’s home;
(h) costs to the payee of obtaining and running a motor vehicle, including repairs and standing costs.
The Tribunal finds the payments made on 6 May 2021 and 3 June 2021 for orthodontics were for essential dental services and are, therefore, payments of the kind specified in the Regulations.
The condition in paragraph 71C(1)(a) of the Act is that the payer of an enforceable maintenance liability in relation to a payment period or initial period has made one or more payments to the payee, or to another person. The Tribunal is satisfied this is the case.
The condition in paragraph 71C(1)(ba) is that at the time the payment is made, the payer does not have at least regular care of any of the children to whom the relevant administrative assessment relates. It is also a condition that the payer does not have at least regular care of any of the children at the time at which the Registrar applies section 71C (paragraph 71C(1)(d)). Mrs Wrobleski has argued the orthodontic treatment commenced in December 2020 when Mr Laster had 100 per cent care of [Child 2], however, the law clearly states the consideration in relation to care is that the payer does not have at least regular care at the time the payment is made. The Tribunal is satisfied Mr Laster had less than 14 per cent care, or regular care, of the children when the payments were made.
Where the conditions in subsection 71C(1) are met, the Registrar must credit any amount that has not already been credited against the amount payable under the payer’s liability for the period, up to a maximum of 30 per cent of the amount payable for that period.
In this case the Tribunal finds the payments made by Mr Laster of $250 on 6 May 2021 and of $250 on 3 June 2021 for orthodontic costs meet all the conditions set out under the Act and must, therefore, be credited under section 71C.
Even where all the criteria under section 71C are met, there is still a discretion in section 71D of the Act to refuse to credit amounts that would otherwise be able to be credited against the liability. Section 71D of the Act states that the Registrar “may refuse to credit an amount under sections 71, 71A or 71C if satisfied that, in the circumstances of the particular case, the amount ought not to be credited”. The title of section 71D is “Registrar may refuse to credit amounts in special circumstances”.
Chapter 5.3.1 of the Child Support Guide contains a non-exhaustive list of circumstances in which the discretion to refuse to credit an amount may be exercised. These include:
· the payee’s agreement to credit an amount paid to a third party or payment made as a transfer of property was obtained through coercion or harassment;
· the payer is claiming a credit under section 71C for an expense they regularly meet that was taken into account in a change of assessment decision;
· the payer is claiming credit under section 71C for an expense which they have undertaken to pay in addition to their liability as specified in an agreement between the parents (this does not have to be a child support agreement);
· the payer is claiming credit under section 71C for an expense that they are responsible to pay under the terms of a court order;
· the payer is claiming credit under section 71C for expenses for the child for which they are separately responsible. For example, the payer claims credit for child care costs for the days when the child resides with the payer; and
· the payer is claiming credit under section 71C for loan repayments and they have a history of regularly withdrawing funds from the loan account using its redraw facility.
The Tribunal does not consider the exercising of the discretion set out in section 71D of the Act is warranted in the circumstances of these particular payments.
The Tribunal is satisfied the application made by Mr Laster on 11 June 2021 for credit of a payment of $250 made on 6 May 2021 and for credit of a payment of $250 made on 3 June 2021 for orthodontic treatment for [Child 2] should be accepted as prescribed non-agency payments.

DECISION

[2021] AATA 5203

14 December 2021

Key Legal Topics

Areas of Law

Family Law

Administrative Law

Legal Concepts

Statutory Construction

Judicial Review

Remedies

Jurisdiction