Lefroy and Lefroy (SSAT Appeal)
[2009] FMCAfam 1043
•17 November 2009
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| LEFROY & LEFROY (SSAT APPEAL) | [2009] FMCAfam 1043 |
| CHILD SUPPORT – Appeal from decision of SSAT – election in relation to income for Child Support year – decision of Child Support registrar to discharge the election. |
| Child Support (Assessment) Act 1989 Child Support (Registration and Collection) Act 1988 |
| LDME & JMA (SSAT Appeal) [2007] FMCAfam712 Tasman & Tisdall [2008] FMCAfam 126 |
| Applicant: | MR LEFROY |
| Respondent: | MS LEFROY |
| File Number: | BRC 4479 of 2007 |
| Judgment of: | Slack FM |
| Hearing date: | 25 September 2009 |
| Date of Last Submission: | 25 September 2009 |
| Delivered at: | Brisbane |
| Delivered on: | 17 November 2009 |
REPRESENTATION
The Applicant appeared on his own behalf.
There was no appearance by or for the Respondent.
ORDERS
That the Appeal from the decision of the Social Security Appeals Tribunal dated 31 March 2009 be dismissed.
IT IS NOTED IN CONNECTION WITH THESE ORDERS that the judgment of Federal Magistrate Slack delivered this day will for all publication and reporting purposes be referred to as Lefroy & Lefroy.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT BRISBANE |
BRC 4479 of 2007
| MR LEFROY |
Applicant
And
| MS LEFROY |
Respondent
REASONS FOR JUDGMENT
This is an appeal from the decision of the Social Security Appeals Tribunal (hereafter “the SSAT”) dated 31 March 2009 to affirm the decision under review, thereby dismissing the applicant’s appeal against a decision by the Child Support Registrar to refuse to change the particulars of an administrative assessment by accepting an estimate of income from Mr Lefroy for $27,003.00 on 26 September 2008.
Background
The following background history given in the reasons of the SSAT does not appear to be in dispute.
At all material times Mr Lefroy was the parent liable to pay child support for [X], born [in] 1998. Ms Lefroy has primary care of [X] for child support purposes. Mr Lefroy is recorded as being a payer of child support at all material times.
On 26 September 2008, Mr Lefroy provided the Child Support Agency with an estimated annualised income of $27,003.00 for the period 26 September 2008 to 25 September 2009. The CSA accepted the estimate and applied it with effect from 26 September 2008.
On 7 October 2008, Ms Lefroy objected to the CSA acceptance of the estimate.
On 6 December 2008, an objections officer allowed the objection and ….changed the particulars of the administrative assessment by refusing to accept an estimate of income from Mr Lefroy of $27,003.00 on
26 September 2008.The consequence of the decision was that the applicant was assessed for child support for the period between 26 September 2008 to
26 September 2009with a child support income amount of $69,273.
The Applicant appealed to the SSAT on 6 January 2009.
The appeal was dismissed.
Elections
The Child Support (Assessment) Act 1989 (hereafter “the Assessment Act”) provides a mechanism for a parent to elect their adjusted taxable income for assessing their child support for a particular child support period (see s.60 of the Assessment Act). A person may elect the child support income (for assessing the annual rate of child support payable) to be the amount worked out using a method prescribed in s.60(5) of the Assessment Act. This would appear to be the only opportunity to effect a change in the child support assessment based purely on a change in the level of income. The election however, if made, must be before or during the child support period (see s.61 of the Assessment Act).
If an election is not made within the time limits prescribed then the only other option is to seek a departure from administrative assessment. For a departure application to succeed, an applicant must satisfy the requirements of s.117 of the Assessment Act.
There is provision in the Assessment Act for the Child Support Registrar to refuse to accept an election and to amend an assessment and that discretion can be exercised if the Registrar is satisfied that the amount the parent estimated…is likely to be less than the actual amount that would be the parent’s adjustable taxable income for the remaining period if that period were a year of income (s.60A(1) of the Assessment Act). The Assessment Act provides mechanisms for review of elections. The Child Support Registrar can refuse to accept an election and can review an election, particularly if the Child Support Registrar receives information that contradicts the election.
The election provisions in the Assessment Act must be read in conjunction with the objects and scheme of the Assessment Act.
The principle object is … to ensure that children receive a proper level of financial support from their parents.
The Act intends that persons …should be able to have the level of child support to be provided for the children readily determined without the need to resort to Court proceedings.
The formulas for the assessment of a parent’s child support are based upon a parent’s taxable income. The election provides a parent with an ability to administratively adjust their taxable income for the purpose of assessing their child support obligation if there are likely to be changes from the previous year’s taxable income that allow for an election to be accepted by the Child Support Registrar.
Whilst there are penalty provisions for under-estimating income in an election and a capacity to adjust the level of child support based upon a correct child support income amount when taxation returns are lodged, those adjustments occur after the relevant child support period. I consider that it is the clear intention of the Assessment Act that parents should meet their ongoing child support obligations for the prospective needs of their children.
As a consequence I consider that there is a clear obligation on those making elections to do so in good faith with due and proper regard for their obligation to meet their child support commitments. In my consideration there is an onus upon the person making the election not only to make an accurate assessment (admittedly as best can be done in the circumstances) but also be prepared to support their estimate based on a proper disclosure of all relevant facts and relevant documents.
The Act also provides a mechanism for the departure from a child support assessment to meet the individual circumstances of the needs of children where special circumstances exist. The scheme of the Assessment Act does not seem to intend that there be endless disputes about elections of income but rather that disputes about an assessment of child support be dealt with pursuant to the departure provisions of the Assessment Act. Indeed in this matter it would appear that whatever the outcome both parties have the option of proceeding with a change of assessment application.
In this matter it would appear that the Registrar accepted the election (page 113 of s.110K documents).
The payee then lodged a letter objecting to the CSA decision to accept the estimate of income.
There is no provision in sub-division C that allows a payee parent to object to a decision to accept an election. That would seem to accord to the intentions of the Assessment Act to make the departure provisions as being the primary mechanism for changing assessments in the individual circumstances of a matter and to avoid endless disputes about elections. The payee would of course have the capacity to apply for a change in assessment. The Registrar has, though, the power to amend an assessment of child support payable to a parent for some days in a child support period if “the Registrar has given the parent notice under s.160 or ss.162A(2) requiring or requesting the parent to notify the Registrar of the occurrence of an event that may effect the accuracy of an estimate on which the election is based.” (s.63A(1) of the Assessment Act).
In this matter a notice was given to the applicant on 26 September 2008 (see para 112 of s.110K documents).
Notwithstanding that it is the Child Support Registrar who has sought to review an election, there remains a continuing onus upon the person making the election to provide the basis for the election and full and complete disclosure of all relevant facts and documents concerning their income and likely earning capacity.
Grounds of appeal
The applicant was not legally represented in the appeal. The Grounds of Appeal do not plead any identifiable error of law.
During the course of oral argument and having regard to the affidavit material filed by him, as best I can determine, his appeal is based on the grounds that the SSAT erred as a matter of law by failing to take into account all of the relevant evidence in the matter or alternatively, have erred in law in the manner in which they took into account his evidence in the proceedings.
In the proceedings before the SSAT, the applicant submitted a handwritten document (Exhibit 3) setting out his income for the period between 7 August 2008 and 7 January 2009. He also provided some bank statements and documents to the SSAT (referred to by the Tribunal in para14 of the reasons).
The relevant conclusions reached by the SSAT are contained in para 16 of the reasons:
The only objective evidence before the Tribunal (and the CSA in the first instance) was the financial material provided by
Mr Lefroy. Mr Lefroy has made submissions which at best can be described as speculation and which the Tribunal did not find persuasive. The Tribunal did not have regard to Mr Lefroy’s speculation to further expenses. On the basis of his own evidence, his earnings are likely to be materially higher than the estimate provided. The Tribunal finds therefore that based on the information provided by Mr Lefroy, the estimated annualised income provided by Mr Lefroy of $27,003.00 should not be accepted.
The election made by the applicant seems to have been on the basis that his average gross earnings would be $2,238 per month and his taxable income for the period was to be $27,203.
The complaint made by the applicant seems to be that the SSAT selectively considered his figures and made wrong assumptions about his work related expenses.
It does not appear to be in dispute that the only supporting documents produced by the applicant verifying his income were for the period from 26 September 2008 to 31 October 2008.
Otherwise the only information provided was the handwritten document which is Exhibit 3 in the proceedings. I can accept that the very nature of making an election will necessarily mean that supporting documentation may not be available and reliance will need to be had upon the estimates of the Applicant. However there would need to be established with proof, if called upon, the basis or reasoning upon which a projected decline in income will occur for the relevant child support period.
In this case the documents supplied by the applicant did not support his contention about his likely projected income.
Ultimately I am not satisfied that this Appeal can succeed for the following reasons:
a)Whilst I can accept that elections by their nature are speculative there is nevertheless an onus upon the elector to support the basis of the election with supporting evidence if called upon to do so a mere statement of likely income from the elector may not be sufficient;
b)I am satisfied that the primary mechanism for review of Child Support obligations under the Assessment Act in the departure provisions and the Act did not intend that there be endless disputes about elections.
c)In this matter both parties have the ability to seek a departure from the assessed child support for the relevant Child support period and appropriate relief is available to both parties if they are aggrieved by the decision about the election.
d)I am satisfied that the SSAT was entitled to refuse to accept that the likely income as elected by the Applicant was not as stated by him. Whilst the taxable income may well have been less than that assessed the appropriate remedy for the Applicant was a departure application.
I am not satisfied that there was an error of law on the part of the SSAT and the appeal must be dismissed.
I certify that the preceding thirty-five (35) paragraphs are a true copy of the reasons for judgment of Slack FM
Deputy Associate: Richard Smith
Date: 17 November 2009
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