Lind and Zetland (Child support)

Case •

[2023] AATA 3398

•

4 September 2023

Lind and Zetland (Child support) [2023] AATA 3398 (4 September 2023)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2022/SC024900

APPLICANT:  Ms Lind

OTHER PARTIES:  Child Support Registrar

Mr Zetland

TRIBUNAL:Senior Member S De Bono

DECISION DATE:  4 September 2023

DECISION:

The Tribunal sets aside the decision under review and, in substitution, decides that:

  • for the period 24 December 2021 to 30 June 2022 Mr Zetland’s income is set at $176,675 per annum;

  • for the period 1 July 2022 to 30 June 2023 Mr Zetland’s income is set at $164,682 per annum;

  • for the period 1 July 2023 to 30 June 2024 Mr Zetland’s income is set at $153,623 per annum;

  • for the period 1 November 2022 to 31 December 2024 Mr Zetland’s child support is increased by $3,720 per annum;

  • for the period 24 December 2021 to 30 June 2022 Ms Lind’s annual income is set at $135,294 per annum;

  • for the period 1 July 2022 to 30 June 2024 Ms Lind’s income is set at $142,600 per annum.

CATCHWORDS

CHILD SUPPORT – departure determination – high costs of child care – ground for departure established – 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 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. The issue to be considered in this application is whether there is a reason to change the administrative assessment of child support and, if so, whether it is just and equitable and otherwise proper to do so.

  2. Ms Lind and Mr Zetland are the parents of [Child 1]. [Child 1] is recorded as being in Ms Lind’s 100% care from the start of the registration of the child support assessment commencing on 24 December 2021. Child Support has collected child support from Mr Zetland, as the parent liable to pay child support from the commencement of the child support assessment.

  3. Prior to the departure application, the administrative assessment of child support was as follows:

    ·      For the period 24 December 2021 to 31 October 2022, Mr Zetland is assessed to pay an annual rate of child support of $18,006. This assessment is based on an adjusted taxable income (ATI) of $298,000 for Mr Zetland, and an ATI of $118,000 for Ms Lind.

    ·      For the period 1 November 2022 to 23 March 2023, Mr Zetland is assessed to pay an annual rate of child support of $15,651. This assessment is based on an ATI of $298,000 for Mr Zetland, and Ms Lind’s 2020/2021 ATI of $172,656.

  4. On 26 January 2022 Ms Lind applied for a change to the administrative assessment of child support (known as a change of assessment or departure determination) or the basis that, in the special circumstances of the case, the income, property and financial resources of Mr Zetland (Reason 8A) and the earning capacity of Mr Zetland (Reason 8B) has resulted in an unjust and inequitable level of financial support to be provided by Mr Zetland.

  5. On 26 April 2022 Mr Zetland cross applied on the basis of Reason 8A, that his income used in the administrative assessment of child support resulted in an unjust and inequitable level of financial support to be provided by him.

  6. On 14 June 2022 Child Support made the decision to depart from the administrative assessment in place and made the following departure determination on the basis of Reason 8A and changed the assessment as follows:

    ·      For the period 24 December 2021 to 31 October 2022, Ms Lind’s ATI is set at $118,000.

    ·      For the period 24 December 2021 to 31 October 2023, Mr Zetland’s ATI is set at $298,000.

  7. On 3 July 2022 Mr Zetland lodged an objection to this decision and on 6 October 2022 an objections officer allowed Mr Zetland’s objection and set aside the decision made on 14 June 2022 and made the following departure determination on the basis of Reason 8A and Reason 6, determining that in the special circumstances of the case, the costs of maintaining the child are significantly affected by the high costs of child care:

    ·      For the period 24 December 2021 to 31 August 2022, Mr Zetland’s ATI is set at $280,000;

    ·      For the period 1 September 2022 to 31 October 2023, Mr Zetland’s ATI is set at

    $137,500;

    ·      For the period 24 December 2021 to 31 August 2022, Ms Lind’s ATI is set at

    $118,000;

    ·      For the period 1 September 2022 to 31 October 2023, Ms Lind’s ATI is set at $88,000.

  8. On 25 October 2022 Ms Lind sought further review with the Social Services Child Support Division of the Tribunal (the Tribunal). Directions were issued to both parties on 26 April 2023. On 27 July 2023 a telephone hearing was held in which Ms Lind and Mr Zetland gave evidence under affirmation.

  9. The Tribunal deferred its decision and issued further directions to Mr Zetland on 27 July 2023. On 4 September 2023 the Tribunal reconvened to make its decision. The Tribunal considered the documents and information provided to both parties prior to the hearing, and after the hearing, as well as the oral evidence of Ms Lind and Mr Zetland. Relevant aspects of the material and evidence will be referred to in the Tribunal’s Reasons for Decision.[1]

CONSIDERATION

[1] Administrative Appeals Tribunal Act 1975, subsection 37(1) and section 38AA Statement and Documents provided by Child Support numbered 1–336; Ms Lind’s documents numbered A1–A66 and Mr Zetland’s documents numbered B1–B63.

  1. The rate of child support payable by a liable parent is usually based on an administrative assessment under Part 5 of the Child Support (Assessment) Act 1989 (the Assessment Act). The liable parent or a carer may apply for a determination departing from the administrative assessment under Part 6A of the Assessment Act.

  2. Section 98C of the Assessment Act establishes a three-step process to be satisfied: that there is a ground for departure; that it is just and equitable to depart; and that it is otherwise proper to make a departure determination. Once satisfied, the Tribunal may make one of the determinations prescribed in section 98S of the Assessment Act.

Reason 6 – the high costs of child care for Ms Lind

  1. The grounds for departure from an administrative assessment of child support are those set out in subsection 117(2) of the Assessment Act. Subparagraph 117(2)(b)(ib) of the Assessment Act – commonly referred to as “Reason 6”– states as follows: “(b) that, in the special circumstances of the case, the costs of maintaining the child are significantly affected … (ib) because of the high child care costs in relation to the child.

  2. The term “special circumstances” is not defined in the Assessment Act. In Gyselman and Gyselman [1991] FamCA 93, the Full Family Court indicated that for there to be special circumstances, the facts of the case must establish something which is special or out of the ordinary.

  3. Subsection 117(3A) provides for the purposes of subparagraph 117(2)(b)(ib), child care costs for a parent can only be high if during a child support period, they total more than 5% of the amount worked out by:

    (a)  dividing the parent's adjusted taxable income for the period by 365; and

    (b)  multiplying the quotient by the number of days in the period.

  4. The Tribunal is satisfied that at the time of both parents’ applications for a departure determination [Child 1] was under 12 years old and both parents were working full time. Mr Zetland submitted that there were long periods in which [Child 1] did not attend child care. The tribunal notes that for the period 25 May 2022 to 23 June 2022 and 27 June 2022 to 30 October 2022 [Child 1] did not attend child care.[2] Ms Lind incurred a child support liability for the period 25 May 2022 to 20 June 2022 when [Child 1] was absent from child care.[3] There were five weeks during the period 2 January 2023 to 26 March 2023 when there were no records of care for [Child 1] before the Tribunal and no record that Ms Lind incurred out-of-pocket costs for child care because [Child 1] was not attending child care for those periods (see Appendix 1).

    [2] See A19–A20 and A24–A25 of Ms Lind’s submissions.

    [3] Page 278 of the subsection 37(1) submissions.

  5. The Tribunal also notes that [Child 1] was attending child care (during the periods she was attending) three days a week from 9 January 2023 (see Appendix 1). Ms Lind said her parents had care of [Child 1] during the two days a week when she was not in child care and during the weeks [Child 1] did not attend child care. Ms Lind said she pays her parents for the days they look after [Child 1]. Ms Lind did not provide evidence that she paid her parents for looking after [Child 1] and on balance the Tribunal did not accept this submission.

  6. Ms Lind’s evidence in relation to [Child 1’s] attendance at child care was reduced during winter when [Child 1] was unwell and she was working from home during some of this period, this meant she could care for [Child 1] at home. Ms Lind also submitted that she reduced [Child 1’s] attendance at child care to three days a week because she was constantly getting sick. Ms Lind confirmed that from 9 January 2023 [Child 1] has been attending child care three days a week.

  7. In relation to the income for both parents the Tribunal noted the following income in the assessment periods:

Period

Ms Lind

Days in the period

Income in the period for Ms Lind

24 December 2021 to 31 October 2022

$118,000

311

$100,542

1 November 2022 to 23 March 2023

$172,656

446

$210,971

  1. Evidence before the Tribunal shows for the period 16 May 2022 to 31 October 2022 Ms Lind paid $2,532.07 in gap fees for child care. There was no evidence before the Tribunal about the gap fees for child care Ms Lind paid for the period prior to 16 May 2022. The Tribunal had no evidence before it which showed whether [Child 1] attended child care from the start of the child support assessment on 21 December 2021 to 15 May 2022 and whether Ms Lind was liable for gap fees during this period. Based on the evidence before it, the Tribunal has worked out that the period 16 May 2022 to 31 October 2022 is a period of 168 days. Ms Lind’s income is $54,312.38 for the period.[4] In working out the percentage of her income for the 168 days in the period, Ms Lind paid 4.66% of her income in child care fees.

    [4] This is worked out by dividing $118,000 by 365 = $323 a day multiplied by 168 days in the period: $54,312.32.

  2. For the period from 1 November 2022 to 23 March 2023 evidence before the Tribunal shows Ms Lind paid $4,037.23 in gap child care fees for a period of 142 days. Ms Lind’s income for the same period was $67,170.27.[5] In working out the percentage of her income for the 142 day period, Ms Lind paid 6% of her income for that period in child care fees.

    [5] This is worked out by dividing $172,656 by 365 = $473.03 a day multiplied by 142 days in the period: $67,170.27.

  3. The Tribunal is satisfied that for the period 1 November 2022 to 23 March 2023 Ms Lind paid child care fees which were greater than 5% of her adjusted taxable income for the period.

  4. Consequently, the Tribunal is satisfied that in the special circumstances of the case the costs of caring for [Child 1] are significantly affected because of the high costs of child care incurred by Ms Lind. Accordingly, the Tribunal is satisfied that a ground for departure from the administrative assessment of child support is established in relation to subparagraph 117(2)(b)(ib) of the Assessment Act.

Would departure from the administrative assessment be just and equitable?

  1. Having found that special circumstances exist such that the administrative assessment resulted in an unjust and inequitable result, so a ground for departure is established in relation to subparagraph 117(2)(b)(ib) (Reason 6) of the Assessment Act, the next step for the Tribunal is to consider whether it is just and equitable to depart from the administrative assessment.

  2. In deciding whether it is just and equitable, the Tribunal had regard to the matters set out in subsection 117(4) of the Assessment Act. Section 3 of the Assessment Act makes it clear that the parents of a child have the primary duty to maintain the child over all commitments of the parents other than commitments necessary for self-support or the support of another person to which they have a duty.

The needs of the children

  1. In determining the proper needs of a child, it is necessary to have regard to the manner in which the child is being, and in which the parents expected the child to be, cared for, educated or trained, and any special needs of the child (subsection 117(6) of the Assessment Act). The Tribunal has considered the evidence of the parties relating to the needs of the children.

  2. In regard to whether [Child 1] has any special needs, both parents confirmed [Child 1] does not have any special needs. Nor does [Child 1] have any financial resources, income or property of her own.

Mr Zetland’s income, property and financial resources

  1. Evidence before the Tribunal shows Mr Zetland was employed by [Employer 1] Systems Australia Pty Ltd ([Employer 1]) from 24 May 2021 to 3 August 2022.[6] He was also employed concurrently by [Employer 2] and then ASG Group Australia now known as [Employer 3] Australia. During the period from 24 May 2021 to 3 August 2022 Mr Zetland was employed on a full-time basis by two employers. He said he increased his working hours to be eligible for a home loan on the former family home before he and Ms Lind separated. He said he was unable to continue in both roles because of the demands of [Employer 1] following employers requesting employees return to the office post-COVID-19 and he found he was unable to continue to juggle both jobs. Mr Zetland said this was the reason he ceased work for [Employer 1]. Mr Zetland ceased work with [Employer 2] before he commenced work with [Employer 3] Australia.

    [6] Page 259 of the subsection 37(1) submissions.

  2. Ms Lind submitted that as Mr Zetland was employed in two full-time jobs when they separated the administrative assessment of child support should continue to be calculated on Mr Zetland’s adjusted taxable income for both jobs. Ms Lind submitted that Mr Zetland ceased full-time employment with [Employer 1] to affect the administrative assessment of child support.

  3. A parent’s earning capacity can only be taken into account in limited circumstances, as set out in subsection 117(7B) of the Assessment Act. This subsection requires the Tribunal to consider three criteria in determining whether the parent’s earning capacity is greater than is reflected in his or her income used in the administrative assessment:

    ·Whether the parent:

    o   is not working despite ample opportunity to do so (subparagraph 117(7B)(a)(i)); and/or

    o   has reduced their weekly hours of work to below full-time work (subparagraph 117(7B)(a)(ii)); and/or

    o   has changed their occupation, industry or working pattern (subparagraph 117(7B)(a)(iii)); and

    ·If the parent’s decision about their work arrangements is not justified by either their caring responsibilities (subparagraph 117(7B)(b)(i)) or their state of health (subparagraph 117(7B)(b)(ii)); and

    ·If the parent has not demonstrated that it was not a major purpose of their decision not to work despite ample opportunity to do so or to stop working, reduce their hours of work or change their occupation, industry or working pattern to affect the administrative assessment of child support (paragraph 117(7B)(c)).

  4. All of the criteria must be met in order for the Tribunal to be satisfied that in the special circumstances of the case, an application in relation to the child of the provisions of the Assessment Act relating to the 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.

  5. Mr Zetland has reduced his employment from two full-time jobs to one full-time job, in accordance with subsection 117(7B) of the Assessment Act the Tribunal is not satisfied that he has reduced his working hours which give effect to the any of the requirements for subsection 117(7B) to apply.

  6. Mr Zetland provided his tax return for the financial year ending 30 June 2021, but he did not provide his tax return for the financial year ending 30 June 2022 as directed by the Tribunal. Mr Zetland’s 2020/2021 tax return shows income from [Employer 1] of $14,897, income from [Employer 2], Mr Zetland’s former employer of $101,250 with a termination payment of $2,076 and a lump sum payment of $9,904. Mr Zetland’s taxable income for the financial year ending 30 June 2021 was $128,217.[7]

    [7] B59–B60 of Mr Zetland’s submissions.

  7. Mr Zetland’s 2020/2021 tax return shows gross rent of $61,978 with interest deductions of $41,860, capital works deductions of $17,809 and other rental deductions of $30,649 with a net rental loss of $28,940.[8] The Tribunal was unclear of the nature of these expenses and determines that both the capital expenses and other rental deductions are to be added back into Mr Zetland’s income. The Tribunal has determined Mr Zetland’s adjusted taxable income for the 2020/2021 financial year is $176,675.[9]

    [8] B61 of Mr Zetland’s submissions.

    [9] The Tribunal will not vary the assessment in place for the period commencing on 24 December 2021 because this will contribute to the child care costs for that period for [Child 1].

  8. For the 2021/2022 financial year Mr Zetland was employed by [Employer 1] for the period 1 July 2022 to 3 August 2022, his base rate salary is $140,000 annually. For the period 1 July 2022 to 3 August 2022 when Mr Zetland ceased employment with [Employer 1], his gross income for the period of 63 days would have been $24,164.[10] Mr Zetland commenced work with [Employer 3] Australia in July 2021, Mr Zetland’s gross annual salary for that financial year is $139,000.[11] Based on the evidence before the Tribunal Mr Zetland’s gross salary from employment for the 2021/2021 financial year is likely to be $163,164.[12] This amount does not include any rental income.

    [10] This was worked out by dividing Mr Zetland’s gross annual salary from [Employer 1] of $140,000 by 365 to determine the daily rate: $383.56 x 63 = $24,164.28.

    [11] B46 of Mr Zetland’s submissions.

    [12] This figure was calculated by adding the following amounts: Mr Zetland’s [Employer 3] annual salary of $139,000 plus his salary from [Employer 1] of $24,164 = $163,164.

  9. For the financial year ending 30 June 2023, Mr Zetland’s year-to-date gross annual income from 17 May 2023 is $132,289.12, Mr Zetland occasionally earns overtime and call out loadings which may affect his base salary.[13] The Tribunal has calculated that Mr Zetland’s gross annual income from employment for the 2022/2023 financial year will be approximately $142,644 with overtime and call outs.[14] This amount does not include rental income. The rental schedules where requested from both Mr Zetland and Ms Lind, but these were not provided to the Tribunal.

    [13] B46 of Mr Zetland’s submissions.

    [14] This figure is worked out by annualising Mr Zetland’s income for the period to 15 May 2023 of $132,289 (for 320 days in the year) divided by 365 days to work out the daily rate, which is $362.45 x the number of days remaining in the financial year (25 days) = $10,355.08 plus Mr Zetland’s year to date income = $142,644.

  10. On 26 August 2022 Mr Zetland resigned as director and secretary of [Business 1] (the company) which is the corporate trustee of [Family Trust 1] (the Trust). Mr Zetland said the asset of the Trust is a retail premise ([address]) with an asset value of $592,456 for the 2020/2021 financial year and $612,469 for the 2021/2022 financial year. The Trust has liabilities of $592,258 for the 2020/2021 financial year and $606,918 for the 2021/2022 financial year.[15] The property was first rented on1 April 2017.[16]

    [15] B19 of Mr Zetland’s submissions.

    [16] B22 and B34 of Mr Zetland’s submissions.

  1. For the financial year ending on 30 June 2021 there was gross rent of $59,724 and net rent of $7,804.[17] For the financial year ending 30 June 2022 the gross rent was $63,790 with net rent of $21,958.[18] As Mr Zetland was the sole director and secretary of the company up until 26 August 2022 and profits of the Trust have to be disbursed, in the absence of further information the Tribunal is satisfied that the amounts of $7,804 and $21,958 are a financial resource available to Mr Zetland for the relevant financial years to be added to his income for those years.

    [17] Pages B40–B41 of Mr Zetland’s submissions.

    [18] B55 of Mr Zetland’s submissions.

  2. Mr Zetland indicated on his Statement of Financial Circumstances (SOFC) that the total of his average income is $3,123 or $162,396 annually.[19] He indicates this is a salary of $2,673 a week ($138,996 annually) and rent of $450 weekly ($23,400 annually).

    [19] B2 of Mr Zetland’s submissions.

  3. Mr Zetland indicates property which includes his own home which he owns himself with a value of $670,00, a rental property valued at $500,000 which he owns and another property with a value of $1,059,000 which Mr Zetland owns a 50% share with Ms Lind (this property has now been sold and will be part of the financial settlement between Ms Lind and Mr Zetland which is yet to be finalised). Mr Zetland currently has an offset account with $50,000 in available funds.[20] He indicates liabilities of $1,912.80.[21] Mr Zetland indicates expenditure of $2,269 weekly or $117,988 annually.

    [20] B5 and B6 of Mr Zetland’s submissions.

    [21] B7–B8 of Mr Zetland’s submissions.

  4. Mr Zetland said he has not made any additional contributions to his superannuation.

  5. Mr Zetland does not have anyone else he has a legal duty to support.

Ms Lind’s income, property and financial resources

  1. Ms Lind is employed on a full-time basis. Ms Lind said she has worked for [Employer 4] in [a specified role] for the past 4 years and she has always worked full time, she is an associate project manager. She had six months’ maternity leave in 2021, [Child 1] was born [in] November 2020. Ms Lind’s maternity leave would have been around that period, she is likely to have returned to work before 1 July 2021. This means Ms Lind would have been in full-time work for all of the 2021/2022 financial year. Ms Lind is paid monthly and her annual salary for the 2022/2023 financial year will be $142,600. Ms Lind said she may get an annual bonus in addition to her base salary which if paid, is paid in either April or May.

  2. Ms Lind’s tax return for the financial year ending 30 June 2022 shows gross income from [Employer 4] as $135,294.[22] With a 50% share in the rental property at [Address 1] which has since been sold. Ms Lind owns two other investment properties in her own right.[23] Both were rented and both were negatively geared.[24] It is unclear what Ms Lind’s adjusted taxable income was for the 2021/2022 financial year because $131,464 has been recorded as the net rental loss.[25] Ms Lind’s expenses are greater than her annual gross income and the Tribunal is unclear how Ms Lind is meeting her expenses.

    [22] A11 of Ms Lind’s submissions.

    [23] A12 of Ms Lind’s submissions.

    [24] A12–A14 of Ms Lind’s submissions.

    [25] A14 of Ms Lind’s submissions.

  3. Ms Lind is currently renting. Ms Lind values her two residential investment properties at $570,000 and $750,000, the total value of the properties owned by Ms Lind is estimated to be $2,380,000 (this includes the value of [Address 1]) and includes the value of her car.[26] Ms Lind indicates total liabilities of $1,956,000.[27] Ms Lind indicates $5,386 in weekly expenses or $280,027.[28] The Tribunal did not accept that Ms Lind’s SOFC was an accurate reflection of her expenses.

    [26] A5 of Ms Lind’s submissions.

    [27] A6 of Ms Lind’s submissions.

    [28] A9 of Ms Lind’s submissions.

  4. Ms Lind has not made additional contributions to her superannuation.

  5. Ms Lind does not have anyone else she has a legal duty to support.

Conclusion

  1. From the commencement of the child support assessment on 24 December 2021 the Tribunal has determined that Mr Zetland’s income for the 2020/2021 financial year was $176,675.[29] For the 2021/2022 financial year the Tribunal has determined Mr Zetland’s income will be approximately $163,164.[30] For the 2022/2023 financial year the Tribunal has determined that Mr Zetland’s income will be approximately $142,724.

    [29] See paragraph 33 of these Reasons.

    [30] See paragraph 35 of these Reasons.

  2. The Tribunal is satisfied Mr Zetland was paid income from the Family Trust of $7,804 in the 2020/2021 financial year and $21,958 in the 2021/2022 financial year which is a financial resource available to Mr Zetland. The Tribunal will add these amounts to Mr Zetland’s adjusted taxable income for those years.[31]

    [31] As the Trust deed was not before the Tribunal, the Tribunal determined Mr Zetland received the total of the disbursements from the Trust.

  3. The Trust tax return has not been finalised for the 2022/2023 financial year, it is unclear if any disbursements will be made from the Trust. Mr Zetland was also directed to provide the Trust deed which he did not comply with. The Tribunal expects the net rental profit for the Trust will be less than in the 2021/2022 financial year, given interest rates have increased.  It is likely Mr Zetland remains a beneficiary of the Trust and the Tribunal determines that the Trust distribution will be less than the 2021/2022 financial year. The Tribunal has estimated that the Trust distribution will be 50% down on the previous financial year and determines $10,979 was paid to Mr Zetland.[32]

    [32] This is half of the net rental of the 2021/2022 financial year.

  4. The Tribunal also notes that Ms Lind indicates greater expenses than her income as a PAYG employee allows. The Tribunal also notes significant rental losses for the 2021/2022 financial year.[33]

    [33] See paragraph 43 of these Reasons.

  5. Child Support determined Ms Lind’s income for the 2021/2022 financial year, which in the normal course would be based on Ms Lind’s income for the previous financial year. Child Support noted Ms Lind’s income for the 2020/2021 financial year was $172,656 which included $92,892 salary, $11,030 in allowances and supplement income of $39,734.[34]

    [34] Page 19 of the subsection 37(1) submissions.

  6. The objections officer determined that Ms Lind’s income based on a payslip with year to date information (which was not before the Tribunal) for the 2021/2022 financial year would be approximately $118,000.[35]

    [35] Pages18–19 of subsection 37(1) submissions.

  7. In relation to the child care costs for [Child 1] incurred by Ms Lind, the Tribunal notes that [Child 1] is nearly three years old. The child care statements before the Tribunal show [Child 1] has been attending child care three days a week every second week. The Tribunal has determined that [Child 1] will attend child care for 26 weeks out of 52 weeks, given the child care attendance shown for the period 9 January 2023 to 26 March 2023.[36] If [Child 1] attends child care for 26 weeks a year at an average out-of-pocket cost to Ms Lind, based on current child care gap fees will be $7,439.90 annually.[37]

    [36] See Appendix 1.

    [37] This is worked out by multiplying the gap fee of $286.15 for three days of child care over 26 weeks annually.

  8. Accordingly, the Tribunal concludes that it would be just and equitable to make a departure determination from the administrative assessment of child support.

  9. Based on the evidence before it and the fact that Mr Zetland’s tax return for the 2021/2022 financial year was not available the Tribunal varies the objections officer’s decision in relation to Mr Zetland’s income:

    ·for the period 24 December 2021 to 30 June 2022 Mr Zetland’s income is set at $176,675 per annum;

    ·for the period 1 July 2022 to 30 June 2023 Mr Zetland’s income is set at $164,682 per annum;

    ·for the period 1 July 2023 to 30 June 2024 Mr Zetland’s income is set at $153,623 per annum.

    ·for the period 1 November 2022 to 31 December 2024 Mr Zetland’s child support is increased by $3,720 per annum.

    The Tribunal also determines the following income for Ms Lind:

    ·for the period 24 December 2021 to 30 June 2022 Ms Lind’s annual income is set at $135,294 per annum;

    ·for the period 1 July 2022 to 30 June 2024 Ms Lind’s income is set at $142,600 per annum.

  10. The Tribunal has carefully considered the written and oral evidence and costs regarding the child’s proper needs provided in this matter. The income, resources, benefits and assets together with the commitments and liabilities of both parties were also scrutinised to determine the above departure determination. The Tribunal has varied the departure period to a later date, because the administrative assessment for the period 24 December 2021 to 30 June 2022 determines a higher rate of child support payable by Mr Zetland but also includes the additional cost of child care for that period, when compared with the income set by the Tribunal and the resulting administrative assessment.

Would there be resulting hardship from a departure from the administrative assessment?

  1. Subsection 117(4) of the Assessment Act requires the Tribunal to take into account whether any departure determination or failure to make a departure will cause any hardship to the child, the carer, the liable parent or any other person the liable parent has a duty to support.

  2. The decision of the Tribunal is a more accurate reflection of the income, property and financial resources available to each parent.

  3. When comparing the decision of the Tribunal with the administrative assessment in place at the time of Ms Lind’s and Mr Zetland’s departure applications the Tribunal decision sets the parent’s income at an amount that more accurately reflects their income for the periods when compared with the amounts determined by the formula administrative assessment. Additionally, the decision of the Tribunal means that Mr Zetland contributes half of the cost of gap fees Ms Lind is incurring in child care fees for [Child 1] for the periods she is likely to attend child care, this based on her past attendance.

  4. The Tribunal has set the departure period for Mr Zetland’s increased child support until 31 December 2024, this period gives Ms Lind some certainty and support in paying the out-of-pocket costs for child care for [Child 1]. The Tribunal is satisfied that the decision will not cause hardship for Ms Lind.

  5. As Ms Lind is paying more than 5% of her income in gap fees for child care it is appropriate that Mr Zetland contribute to these costs. The Tribunal is also satisfied that Mr Zetland has funds available following weekly expenses, as indicated by his SOFC and the decision of the Tribunal has determined this will not cause him hardship.

Is it otherwise proper to make a particular departure determination?

  1. The third step is to consider whether it would be otherwise proper to make a particular departure determination in accordance with sub-subparagraph 98C(1)(b)(ii)(B) of the Assessment Act. Subsection 117(5) of the Assessment Act sets out the matters that must be considered when deciding whether it would be “otherwise proper” to make a departure determination. Subsection 117(5) focuses on the balance of support carried between the parents on the one hand and the taxpayer on the other.

  2. As Ms Lind is not in receipt of family tax benefit there is no effect on the level of support that should be provided by each parent nor is there a burden on the public purse. The Tribunal has concluded that it is otherwise proper in the circumstances to depart from the administrative assessment.

  3. The Tribunal notes that it is open to either party to lodge further change of assessment applications should future circumstances of either party change significantly from the circumstances upon which this decision is based.

DECISION

The Tribunal sets aside the decision under review and, in substitution, decides that:

  • for the period 24 December 2021 to 30 June 2022 Mr Zetland’s income is set at $176,675 per annum;

  • for the period 1 July 2022 to 30 June 2023 Mr Zetland’s income is set at $164,682 per annum;

  • for the period 1 July 2023 to 30 June 2024 Mr Zetland’s income is set at $153,623 per annum;

  • for the period 1 November 2022 to 31 December 2024 Mr Zetland’s child support is increased by $3,720 per annum;

  • for the period 24 December 2021 to 30 June 2022 Ms Lind’s annual income is set at $135,294 per annum;

  • for the period 1 July 2022 to 30 June 2024 Ms Lind’s income is set at $142,600 per annum.

Appendix 1:

Child Care Week Out of pocket cost (gap fee) Days in care Page
2022
16/5/2022 - 22/5/2022 $313.92 4 days 281
23/5/2022 - 29/5/2022 $392.40 5 days 280
30/5/2022 – 5/6/2022 $392.40 5 days 280
6/6/2022 – 12/6/2022 $426.46 5 days 279 - 280
13/6/2022 – 19/6/2022 $392.40 5 days 279
20/6/2022 - 26/6/2022 $426.56 5 days 278 - 289
24/10/2022 – 30/10/2022 $154.77 3 days A25
31/10/2022 – 6/11/2022 $232.15 3 days A24
7/10/2022 – 13/11/2022 $232.15 3 days A23 – A24
14/11/2022 – 20/11/2022 $232.15 3 days A23
21/11/2022 – 27/11/2022 $232.15 3 days A23
28/11/2022 – 4/12/2022 $232.15 3 days A22
5/12/2022 – 11/12/2022 $232.15 3 days A22
12/12/2022 – 18/12/2022 $232.15 3 days A21 – A22
19/12/2022 – 25/12/2022 $232.15 3 days A21
26/12/2022 – 1/1/2022 $154.77 3 days A21
2023
2/1/2023 – 8/1/2023 $329.53 4 days A20 – A21
9/1/2023 – 15/1/2023 $286.15 3 days A50
16/1/2023 – 22/1/2023 *
23/1/2023 – 29/1/2023 $298.15 3 days A53
30/1/2023 – 5/2/2023
6/2/2023 – 12/2/2023 $286.15 3 days A56
13/2/2023 – 19/2/2023
20/3/2023 – 26/3/2023 $286.15 3 days A59
27/2/2023 – 5/3/2023
6/3/2023 – 12/3/2023 $286.15 3 days A62
13/3/2023 – 19/3/2023
20/3/2023 – 26/3/2023 $286.15 3 days A59
Total $6,337.16

[Child 1] did not attend child care from 25/5/2022 – 23/6/2022 inclusive (A19 – A20 of Ms Lind’s submissions).

No care recorded for the period 27 June 2022 to 30 October 2022 (A24 – A25 of Ms Lind’s submissions).

*No care records for these periods:


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