Lister and Child Support Registrar (Child support)

[2023] AATA 832

Lister and Child Support Registrar (Child support) [2023] AATA 832 (23 February 2023)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2022/SC024962

APPLICANT:  Mr Lister

OTHER PARTY:  Child Support Registrar

DATE DECISION MADE:                23 February 2023

DECISION:

The decision under review is affirmed.

CATCHWORDS

CHILD SUPPORT – refusal to grant an extension of time to object - no satisfactory explanation for the delay - little merit - weighing all factors the extension of time was correctly refused - decision under review affirmed

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

1. This matter concerns a decision of the Child Support Agency (CSA) to refuse Mr Lister’s application for an extension of time to lodge an objection to a decision of 9 September 2021.

2. Mr Lister is the parent liable to pay child support to Ms [A].  Mr Lister lodged a change of assessment application on 20 June 2021 based on Reason 8, which concerned [Ms A]’ income and/or financial resources, and Reason 5.  Reason 5 was later altered to Reason 2, as the relevant issue was Mr Lister’s expenditure on their child [Child 1]’s learning and health needs.

3. On 9 September 2021 the CSA made a departure determination (often called a change of assessment decision) under Part 6A of the Child Support (Assessment) Act 1989 (the Act).  For the period 1 September 2020 to 30 June 2021, the CSA set [Ms A]’ adjusted taxable income at $43,868. 

4. The CSA informed Mr Lister of the decision by notice dated 11 September 2021.  Mr Lister acknowledges he received the notice, although, due to a change of address, did not receive a copy until some time in October 2021.

5. Under section 80 of the Child Support (Registration and Collection) Act 1988 (the R&C Act) a person may lodge a written objection to a determination under Part 6A. Under section 81 of the R&C Act the person must lodge the objection within 28 days of being served notice of the decision. A person may, however, apply under section 82 for an extension of time within which to lodge an objection.

6. Mr Lister lodged an objection on 8 September 2022 together with an extension of time application.  As noted, the CSA has refused the application. 

7. Mr Lister applied to the Tribunal for a review of the refusal decision and the matter was heard in Brisbane by telephone on 23 February 2023.  Mr Lister was accompanied by Ms [B], who was earlier granted an application to be present as a support person.  Ms [B] was directed not to disclose in any form any information about [Ms A] that she might learn from the hearing.

8. The ‘Section 37(1) Statement and Documents’ provided by the CSA, comprising folios 1 to 296, is admitted into evidence as Exhibit 1. 

CONSIDERATION

1. As indicated, the CSA informed Mr Lister of its change of assessment decision by notice dated 9 September 2021.  Assuming this was received some time in October 2021, Mr Lister’s objection is therefore around 8 months out of time.

10.  The starting position is the prima facie rule that proceedings commenced outside a statutory period will not be entertained (Lucic v Nolan (1982) 45 ALR 411 at 416). However, the primary concern “…is to do that which will enable justice to be done between the parties” (see Martinsen v Secretary, Department of Family& Community Services [2004] FCA 297 per Spender J). Spender J quoted McHugh J in Gallo v Dawson (1990) 64 ALJR 459 as follows:

In order to determine whether the rules [imposing time limits] will work an injustice, it is necessary to have regard to the history of the proceedings, the conduct of the parties, the nature of the litigation, and the consequences for the parties of the grant or refusal of the application for extension of time ...

When the application is for an extension of time …it is always necessary to consider the prospects of the applicant succeeding in the appeal …

11.  The CSA’s covering letter to its change of assessment decision informed Mr Lister in bold that he had 28 days from receiving the letter in which to lodge an objection.  Mr Lister’s reasons for not objecting within this time relate to complexities surrounding the decision itself and his belief in his subsequent dealings with CSA staff that his concerns could be dealt with other than by lodging an objection.  As such, it will be expedient to deal initially with the merits of Mr Lister’s case.

Merits of Mr Lister’s case

12.  Section 98C empowers the CSA to make a departure determination if satisfied that:

(1)one or more grounds for departure referred to in subsection 117(2) exist;

(2)it would be just and equitable as regards the child, the liable parent and the carer entitled to child support; and

(3)it would be otherwise proper.

13.   As far as is relevant, paragraph 117(2)(c) provides for a ground of departure (Reason 8) where:

Grounds for departure order

(2)  For the purposes of subparagraph (1)(b)(i), the grounds for departure are as follows:

(a) …

(c) 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;...

14.  As noted, Mr Lister lodged his change of assessment application in June 2021.  Mr Lister sought a change of assessment on the footing that [Ms A]’ income as assessed by the ATO did not reflect her earning capacity, and also in relation to his expenses for [Child 1].

15.  As part of the preliminaries [Ms A] supplied a copy of her final pay advice for 2020/21 indicating a total wage for the income year of $25,685.  [Ms A] also provided a Centrelink notice stating her jobseeker payment was cancelled with effect from 17 April 2021.  This alerted the CSA to the fact [Ms A] was paid jobseeker payment in 2020/21 totalling $17,934 and also that this was not declared to the ATO. 

16.  Accordingly, the ATO’s assessment of [Ms A] adjusted taxable income for 2020/21 ($25,934) required an amendment to reflect [Ms A]’ actual income ($43,868).

17.  A change of assessment under Reason 8 can be made essentially where the difference between a parent’s adjusted taxable income under a normal Part 5 assessment under the Act and their actual or available income differs materially to the extent that special circumstances exist.

18.  Under the Part 5 assessment, prior to the child support period starting on 1 September 2020 [Ms A]’ adjusted taxable income was assessed to be $38,979 based on 2018/19 as the relevant income year.  From 1 September 2020 the relevant income year was 2019/20.  [Ms A]’ adjusted taxable income for this income year was $30,778 as assessed by the ATO.

19.  The decision-maker found there was a ground for departure under Reason 8 from 1 September 2020 because there was a material difference between the Part 5 assessment ($30,778) and what could be considered her available income at the time ($43,868).  As noted, the decision-maker set [Ms A]’ adjusted taxable income at $43,868 from 1 September 2020 to 30 June 2021.

20.  It will be noted that, as a result, Mr Lister’s child support liability was never assessed on [Ms A]’ much lower Part 5 assessed adjusted taxable income of $30,778.  This reduced Mr Lister’s child support liability to an extent that the decision-maker concluded the reduction addressed the Reason 2 issue regarding his expenditure on [Child 1]’s learning and health issues.  In my view, it is this aspect that supports what would otherwise be an overly generous backdate of the departure determination in Mr Lister’s favour. 

21.  The decision-maker carefully considered the position as at 30 June 2021.  The decision-maker found from [Ms A]’ last 5 (weekly) pay advices that, in the absence of any indications to the contrary, she might expect an annualised income of $26,845 going forward.  The decision-maker could have adopted this figure for a further period.  However, given the uncertainty, the decision-maker considered the better approach was to assign an end date to the change of assessment of 30 June 2021, which activated the Part 5 assessment for [Ms A] from 1 July 2021 (of $30,778).

22.  I think this is a carefully plotted decision which addressed everything the decision-maker needed to consider.  In my view on objection there would be little chance this decision would be changed in Mr Lister’s favour.  In this regard, some decision-makers might consider the backdated decision overly generous. 

23.  Mr Lister’s concern is that [Ms A] has not (as she apparently undertook to do) lodged an application with the ATO for an amended 2020/21 assessment.[1]  The result has been that, when the next child support period commenced on 1 August 2021, the CSA has used [Ms A]’ ATO assessed 2020/21 adjusted taxable income of $25,934 (and not $43,868).

[1] Although [Ms A] may be afraid of the taxation consequences, from a child support perspective, had she done so she could have immediately lodged an estimate if her 2021/22 adjusted taxable income was likely to be 85% or less than $43,868.

24. Although I appreciate Mr Lister’s concern, the idea that this can be rectified by changing the end date of the change of assessment decision involves a misconception of the role of Part 6A assessments generally. A departure under Reason 8 is made, or can be continued, if, at a point in time, a parent’s income materially differs from their available financial resources to an extent that would give rise to special circumstances. As at 1 July 2021, [Ms A] was not earning income at the annual rate of $43,868 and, as noted, based on her 5 final pay advices for 2020/21 it was reasonable to conclude that she was earning at the rate of about $26,800 per annum.

25.  Further, even if the decision-maker assumed [Ms A] was about to lodge an application for an amended ATO assessment, the difference between $25,934 and the rate of earnings as at 1 July 2021 would not be sufficient in my view to give rise to special circumstances.

26.  As far as I can determine, the only recourse is if [Ms A] lodges, or is obliged by the ATO to lodge, an application for an amended assessment, or the ATO undertakes its own reassessment.  A plain reading of subsection 58(1) of the Act is that the CSA cannot make an assessment of a person’s taxable income for an income year where the ATO has already done so. 

27.  However, under section 56 of the Act, where the ATO amends an assessment and the amended figure is an increase over the original assessment, the amendment would ordinarily take effect from the start of the relevant child support period.  I say “ordinarily” because subsection 56(2) appears to afford the CSA a discretion as to whether to “amend the administrative assessment to take account of the amendment to the tax assessment”. 

Conclusion

28.  Mr Lister’s specific concerns cannot be accommodated by an adjustment to the change of assessment decision.  Further, as this decision was carefully made, addressed what needed to be considered, and included a backdated start date favouring Mr Lister, I consider the chances of a successful objection are remote. 

29.  Accordingly, irrespective of other considerations such as Mr Lister’s reasons for the delay, I consider the justice of the case will not be served in the circumstances by granting him an extension of time to lodge an objection.    

DECISION

The decision under review is affirmed.