Latymer and Barnatt (Child support)

[2022] AATA 947

Latymer and Barnatt (Child support) [2022] AATA 947 (17 March 2022)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2021/MC022634

APPLICANT:  Mr Latymer

OTHER PARTIES:  Child Support Registrar

Ms Barnatt

TRIBUNAL:Member H Moreland

DECISION DATE:  17 March 2022

DECISION:

The decision under review is affirmed.

CATCHWORDS

CHILD SUPPORT – particulars of the administrative assessment – estimate reconciliation – whether estimate reconciliation was correct – decision under review affirmed

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 Latymer and Ms Barnatt are the parents of [Child 1].

2. On 29 January 2021, Mr Latymer lodged an income estimate of $0 to be used in his child support assessment from 29 January 2021.[1] At that time, Mr Latymer’s year-to-date income was $68,504.[2] On 1 April 2021, Mr Latymer amended his estimate to reflect an annualised income of $9,145 for the period from 30 January 2021 to 30 June 2021.[3]

   [1] Child Support papers, p 8.

   [2] Child Support papers, p 15.

   [3] Child Support papers, p 31.

3. On 16 August 2021, Child Support carried out a reconciliation based on the Australian Taxation Office’s assessed income for Mr Latymer of $137,205. As a result of this reconciliation, Child Support determined that Mr Latymer had an amount of child support payable ($9,654.36).[4]

   [4] Child Support papers, p 78.

4. On 21 September 2021, Mr Latymer objected to this decision. On 7 October 2021, an extension of time for the objection was granted and on 14 October 2021, Child Support wrote to Mr Latymer and Ms Barnatt to inform them that they had decided to disallow Mr Latymer’s objection.

1. On 1 November 2021, Mr Latymer lodged an application with the Administrative Appeals Tribunal (the tribunal) for a review of the decision.

2. The tribunal heard the matter on 17 February 2022, and Mr Latymer and Ms Barnatt both participated in the hearing by teleconference. The tribunal took into consideration documents provided by Child Support.

CONSIDERATION  

1. The statutory provisions relevant to this review are in the Child Support (Assessment) Act 1989 (the Assessment Act). The rate of child support payable by a liable parent is usually based on an administrative assessment, the provisions for which are set out in Part 5 of the Assessment Act. The administrative assessment is based on a statutory formula which takes into account factors such as the number of children, the level of care provided and the child support income amount of each parent.

2. According to section 43 of the Assessment Act, the adjusted taxable income for each of the parents is the taxable income from the last tax year that ended before the start of the child support period (plus supplementary amounts, if relevant).

3. Section 60 of the Assessment Act provides that a person can elect that an estimate of their adjusted taxable income be used for the purpose of assessing the child support payable. This ensures that a person’s changed circumstances can be taken into account. Section 60 also sets out the period affected by an estimate. It states that the period starts on the day the person made an estimate or the start of the tax year, whichever is the later, and ends at the end of the tax year.

10.Mr Latymer contacted Child Support on 29 January 2021, to inform them that his job was being made redundant.[5] According to Child Support’s records, Mr Latymer then contacted them on 1 April 2021 to inform them that he would be receiving $620 per fortnight in jobkeeper payments which was annualised to $9,145.[6]

[5] Child Support papers, pp 10 and 78.

[6] Child Support papers, p 31.

11.Based on this information, Child Support calculated that Mr Latymer’s income would be $72,312.57 ($68,504 for the period from 1 July 2020 to 29 January 2021 and $3,808.57 for the period from 30 January 2021 to 30 June 2021).[7]

[7] Child Support papers, p 39.

12.According to section 61 of the Assessment Act, at the end of each relevant financial year, Child Support must reconcile estimates of income it has been provided with, with advice it receives from the Australian Taxation Office of each relevant person’s actual taxable income for the relevant year to remedy where inaccurate estimates have been made.

13.Section 64A of the Assessment Act sets out the circumstances when the Registrar must amend an administrative assessment of child support in relation to a child support period where the administrative assessment was made on the basis of more than one income election. Relevantly, in this case, the administrative assessment must be amended immediately if the amount of the parent’s adjusted taxable income for the last relevant year is subsequently ascertained and it is different from the amount of adjusted taxable income made in the parent’s income elections. A common situation where a parent’s adjusted taxable income for the last relevant year of income will be ascertained is where the parent lodges their tax return for that year of income and a tax assessment has been issued. The method for undertaking this reconciliation process is set out at subsection 64A(4). Subsection 64A(2) states that if the actual adjusted taxable income is more than the parent’s estimated adjusted taxable income for the year of income, then the parent’s adjusted taxable income for a day that occurs in the application period of each income election made by the parent is taken to be, and to have always been, the amount worked out for that income election using the method in subsection (4).

14.If the parent’s adjusted taxable income, subsequently ascertained, is higher than the amount that was determined by the Registrar, under section 64AA the administrative assessment is required to be amended for the child support period on the basis of the reconciliation process set out under section 64A.

1. As noted above, according to the information provided to Child Support, Mr Latymer’s income for the 2020/21 financial year would be $72,312.57. Mr Latymer’s actual taxable income, however, according to the Australian Taxation Office, was $137,205.[8]

2. Mr Latymer told the tribunal that he had advised Child Support of a redundancy payment of $40,000 he had received. According to Child Support however, upon review of the recording of the relevant conversation, no mention was made by Mr Latymer of any redundancy payment.[9] The tribunal notes that even if Mr Latymer had informed Child Support of the $40,000, that does not explain a discrepancy of more than $60,000 between the reported estimated income of $72,312.57 and Mr Latymer’s actual income of $137,205.

   [8] Child Support papers, pp 78 and 80.

   [9] Child Support papers, p 102.

17.The tribunal notes that ultimately, at the conclusion of the hearing, Mr Latymer said that he could not argue about how much income he received in the 2020/21 financial year.

1. The tribunal concludes that the reconciliation of Mr Latymer’s income is correct.

DECISION

The decision under review is affirmed.