Lister and Lister (Child support)

Lister and Lister (Child support) [2018] AATA 3289 (31 July 2018)

DIVISION:Social Services & Child Support Division
REVIEW NUMBER:  2017/SC013027
APPLICANT:  Mr Lister
OTHER PARTIES:  Child Support Registrar
Miss Lister

TRIBUNAL:Member W Kennedy
DECISION DATE: 31 July 2018
DECISION:

The decision under review is affirmed.

CATCHWORDS

Child support - Departure determination - Income and financial resources of the liable parent - Business income - Ground for departure established - Adjusted taxable income of the liable parent varied - 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

This review concerns an application for a departure from the formula assessment of child support. Mr Lister and Miss Lister are the parents of one child, [Child 1], who was born in 2002. There has been a child support assessment in place for the children made by the Child Support Agency of the Department of Human Services (the Department) since 21 September 2009. From 3 March 2017 the assessment was based on Miss Lister having 72% care and Mr Lister having 28% care of [Child 1].
On 13 February 2017 Miss Lister applied to the Department for a departure from the formula assessment of child support based on Reason 5 (payments made by the liable parent) and Reason 8A (the income, property and financial resources of one or both of the parents). On 23 February 2017 Miss Lister withdrew her application in relation to Reason 5. Miss Lister asserted that the income used in the assessment for Mr Lister was not a true indication of his financial resources. She said that because he is self-employed the child support assessment should be based on the broad evidence of his income.
Prior to the original decision, for the period from 1 March 2017 to 15 May 2017, Mr Lister was assessed to pay an annual rate of child support of $4,432.00, based on his adjusted taxable income (ATI) of $49,106.00 and Miss Lister’s estimated income of $13,557.00. For the period from 16 May 2017 to 30 June 2017 Mr Lister was assessed to pay an annual rate of child support of $2,319.00, based on his estimated income of $37,021.00 and Miss Lister’s estimated income of $13,557.00.
On 28 June 2017 a delegate of the Child Support Registrar considered Miss Lister’s departure application and decided that Reason 8A had been established. The delegate decided to set Mr Lister’s ATI at $110,000.00 for the period from 13 February 2017 to 4 March 2020 or until there is a terminating event.
On 10 July 2017 Mr Lister lodged an objection to that decision. In his application he stated that no assessment should be made until after he had lodged his income tax return. On 21 August 2017 a Department objections officer decided to disallow the objection, finding that $110,000.00 per annum fairly represented the income and financial resources that Mr Lister receives through his business.
On 19 October 2017 Mr Lister lodged a request for an extension of time to lodge an application and also an application for a review of the decision of 21 August 2017 with the Administrative Appeals Tribunal (the Tribunal). On 5 December 2017 an extension of time was granted. The Tribunal had access to the statement and documents provided by the Department. Those documents are at folios 1 to 656 of the hearing papers and were provided to the parents in advance of the hearing.
Following a telephone directions hearing the Tribunal directed Mr Lister and Miss Lister to provide completed Statements of Financial Circumstances (SOFCs) and other documentation. The documents provided by Mr Lister are at folios A1 to A149 of the hearing papers. Miss Lister failed to respond to the directions.
The matter was initially heard on 15 May 2018, however, following Miss Lister’s claim that she had tried to respond to the Tribunal’s directions and that she remained able and willing to do so, the Tribunal adjourned the hearing to allow Miss Lister additional time to provide the documents. Despite the Tribunal’s repeated efforts no documents were received from Miss Lister. Although noting Miss Lister’s claim at the first hearing that she had attempted to respond to the Tribunal’s directions the Tribunal is satisfied that Miss Lister has failed in her duty to cooperate fully with the Tribunal.
The Tribunal reconvened and determined the matter on 31 July 2018. Mr Lister attended the hearing by telephone and gave his oral evidence under an affirmation. Miss Lister failed to make herself available for the hearing. The Child Support Registrar was not represented at the hearing.

CONSIDERATION
The legislative framework and issues for the Tribunal to determine

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 Act). This requires the application of a statutory formula which takes into account factors such as the number and ages of the children, the level of care provided and the income of each parent.
The liable parent or a carer may apply to the Child Support Registrar for a determination to depart from the child support administrative assessment under Part 6A of the Act. Section 98C of the Act provides that the Registrar may make a determination to depart from the formula assessment and establishes a three step process for considering applications to do so. The Registrar, and the Tribunal standing in place of the Registrar, must be satisfied:
·     that one, or more than one, of the grounds for departure referred to in subsection 117(2) of the Act exists; and
·     that it would be just and equitable as regards the child, the liable parent, and the carer entitled to child support; and
·     that it would be otherwise proper to make a particular determination.
The grounds for departure from the administrative assessment are set out in subsection 117(2) of the Act. Each of the grounds, which for administrative purposes are referred to as reasons, require that special circumstances be established. The term ‘special circumstances’ is not defined in the Act. In Gyselman v Gyselman [1991] FamCA 93 the Full Court of the 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.
If satisfied that a ground or grounds exist and that it would be just and equitable and otherwise proper to make a particular determination, the Tribunal must make one of the determinations prescribed in section 98S of the Act. These include varying the annual rate of child support payable or a parent’s ATI.

Issue one – Does a ground exist to depart from the administrative assessment?

The Tribunal’s first task is to determine whether a ground for departure from the administrative assessment can be established. In her application to the Department Miss Lister said that she wished for a departure from the administrative assessment on the ground that the assessment does not correctly reflect one or both parent’s income, property and/or financial resources. This ground for departure, which is known as reason 8A for administrative purposes, is set out at subparagraph 117(2)(c)(ia) of the Act:
(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; or
…
Miss Lister has said that in particular she believes that because of his business arrangements Mr Lister’s taxable income was not an accurate reflection of the financial resources available to him.
The parents agree that Mr Lister is [an occupation] and that he operates a business registered as [a company] and trading as [a business]. The Australian Securities and Investments Commission advises that Mr Lister and his partner each own one of the two ordinary shares on issue. At the hearing Mr Lister said that he works as an employee and that his partner is also employed by the business.
At the commencement of the hearing Mr Lister said that he objected to the Department’s decision to include his partner’s income in the assessment. He said that she genuinely works in the business and he described her duties. The Tribunal has before it a statutory declaration from Mr Lister’s partner (folio A62) as well as a statutory declaration from a third party who claims to be a customer of long standing. The Tribunal found Mr Lister’s oral evidence convincing. As that evidence is supported by documentary evidence and is not contradicted the Tribunal accepts that Mr Lister’s partner is a genuine employee of the business and that the income paid to her by the business should not be taken into account in the assessment.
The Tribunal closely examined Mr Lister’s financial circumstances. Mr Lister has provided in evidence an SOFC as well as various business and personal account statements and income tax returns.
In his SOFC (folios A26 to A34) Mr Lister states that his only income is $1,000.00 per week, which is paid to him by the business. Taking into account income tax and child support Mr Lister identifies $1,180.00 in weekly expenditure. Despite claiming no expenditure on automobiles (which he states are met by the business), insurance, holidays and other items and claiming to spend only $5.00 each on repairs, clothing and shoes, entertainment and chemist Mr Lister’s expenditure is still $180.00 per week greater than his claimed income. At the hearing Mr Lister said that his partner meets the other expenses. However his partner’s salary is only $41,600.00 per annum. Even taking into account the family tax benefit received by Mr Lister’s partner the Tribunal finds that when the expenses attributed to his partner (for example half of the mortgage and half of the school fees) the household income is still insufficient to meet the weekly shortfall.
Mr Lister has provided a statutory declaration from his mother-in-law in which she states that she has provided a loan of $20,000.00 (folio A70). In his SOFC Mr Lister states that he has outstanding a personal loan from the Commonwealth Bank and a “credit line (furniture)” (folio A31). There is no provision in his statement of expenses for repayments of the loan from his mother-in-law or the two loans included in his SOFC. The Tribunal concludes that the income declared by Mr Lister is significantly less than that required to meet his demonstrated expenses.
It is well established that the taxable income of a person who is self-employed may not be an accurate reflection of their financial resources. For instance, in Carey v Carey (1994) FLC 92-489 the Family Court observed:
The legislation however realises that, whilst the simplest method of calculating child support is to use existing taxation records, the use of taxable income as the sole basis for child support could lead to some inequities and injustices. For a start, the financial position of many members of the community is not accurately reflected in their taxable income; either they manage to evade or avoid their taxation liabilities or they can so structure their affairs so that they are capital rich and income poor.
This and other cases establish that a ground for departure from the administrative assessment may be established because self-employed persons are able to derive additional personal benefits through their business structures, and also have greater control over the structure of their finances than does a salaried employee.
The Tribunal examined the documentation provided by Mr Lister in relation to the business. In accordance with the directions of the Tribunal Mr Lister has provided financial statements for the business for the 2016/17 financial year. Unfortunately these statements include only an income and expenditure statement rather than a detailed profit and loss. The statement is aggregated at a high level, showing for instance “employee benefit expenses” of $181,887.94 and “other expenses” of $162,860.08. The financial statements are thus of little value to the Tribunal in determining the benefits delivered to Mr Lister by the business in 2016/17.
However the Tribunal notes that the aggregated figures correspond reasonably well with the 2015/16 financial year. Gross income has grown by 12.6% and claimed expenses have grown by 17.5%. In the absence of detailed accounts for a later year the Tribunal has decided that it would be most appropriate to examine the accounts for 2015/16. This approach is favourable to Mr Lister because the component of most interest to the Tribunal is the claimed expenses, which are less in 2015/16 than in the following year.
The Tribunal examined the detailed profit and loss statement for 2015/16 (folios 302 to 303) in order to determine whether Mr Lister obtains from the business benefits that are not available to ordinary wage earners. The following items are of most interest in this regard:
·Depreciation  $9,464.00
·Motor vehicle expenses              $29,132.18
·Telephone expenses                  $13,851.44
·Rates and taxes  $12,313.66
Depreciation is an allowance rather than an expenditure item. The financial statements show that it is only motor vehicles that are being depreciated (folio 304). The Tribunal considers that this is a resource available to Mr Lister. At the hearing Mr Lister acknowledged that all of his personal motor vehicle expenses are met by the business. In this regard the Tribunal notes that the detailed profit and loss does not identify motor vehicle lease payments for 2015/16 however there were motor vehicle lease payments of $20,641.91 the previous year and the business’ bank account shows lease payments in 2016/17 at a rate that equals $19,588.68 per annum. The Tribunal is loath to mix one year with another and so, for the purpose of this analysis, it will ignore vehicle lease payments. At the hearing Mr Lister also acknowledged that the business meets all of his personal telephone expenses.
After careful consideration the Tribunal decided to add to (or deduct from) Mr Lister’s salary a component of the following items as disclosed in the 2015/16 financial statements:
·     Half of the taxable loss of the business of $18,060 (folio 271) on the basis that half of the business belongs to Mr Lister and he must absorb that part of the loss,
·     All of the depreciation of $9,464.00 on the basis that this is a resource available to Mr Lister,
·     One half of the motor vehicle expenses of $29,132.18 on the basis that Mr Lister meets none of his personal motor vehicle expenses from his personal resources,
·     One half of the telephone expenses of $13,851.44 on the basis that Mr Lister meets none of his personal telephone expenses from his personal resources.
In 2015/16 Mr Lister was paid $51,000.00 (folio 243). The Tribunal adds the depreciation and half of the motor vehicle and telephone expenses and subtracts half of the loss. This produces a net figure of $21,925.81. Grossing up this amount for income tax at Mr Lister’s marginal rate (and including the Medicare levy) produces a figure of some $33,470.00. When added to Mr Lister’s wage it produces a result of $84,470.00. Although the Tribunal has arrived at this result using the figures in the 2015/16 profit and loss it believes that there is a strong possibility that Mr Lister derives a greater benefit than is disclosed in the financial statements. This is both because of the lack of lease payments disclosed in the 2015/16 accounts and also because many of the items are described in a way that is inconclusive as to their content. These include cleaning and rubbish removal, computing, donations, office supplies, materials and supplies, repairs and maintenance, staff amenities, rates and taxes and store supplies. In order to better clarify these items the Tribunal decided to examine actual expenditure by the business and by Mr Lister.
The Tribunal has before it statements for the following accounts:
·     Commonwealth Bank account …6151 for the period from 1 July 2017 to 30 September 2017 (folios A136 to A144),
·     Commonwealth Bank account …6739 for the period from 1 Jul 2016 to 19 April 2017 (folios 167 to 231) and for the period from 1 July 2017 to 30 September 2017 (folios A76 to A101),
·     Commonwealth Bank credit card …9978 for the period from 21 June 2016 to 21 March 2017 (131-148) and for the period from 14 July 2017 to 22 September 2017 (folio A149),
·     National Australia Bank credit card …4899 for the period from 1 July 2017 to 30 September 2017 (folios A145 to A148)
The Tribunal focussed on the period from 1 July 2017 to 30 September 2017, that being the more recent period and also the one for which Mr Lister was directed to provide statements for all bank and credit card accounts which he is authorised to use.
Commonwealth Bank account …6151 is the joint personal account of Mr Lister and his partner. It receives transfers from the business account and also receives family tax benefit payments. During the period under review the account also received four transfers with a total value of $1,800.00 from Commonwealth Bank account …4447. At the hearing Mr Lister said that this is his partner’s personal account. The account also received two transfers with a total value of $19,000.00 from Commonwealth Bank account …7401. At the hearing Mr Lister said that this also is a personal account of his partner. The joint personal account pays Mr Lister’s mortgage, insurance and child support and meets some household expenses. During the three month period covered by the statements general household expenditure from this account totalled some $3,600.00. The account also provided repayments for a personal loan up to 21 July 2017. From 28 July 2017 repayments of this loan were made from the business account (see below).
Commonwealth Bank account …6739 is the business account. During the period covered by the statements the account received some $198,000.00 and paid out some $214,000.00. The Tribunal is unable to identify the sources of most of the deposits or the destination of most of the withdrawals, however those that are identified appear to be mostly business related. Of those that can be positively identified a total of $12,216.00 was paid into Mr Lister’s account …6151. A total of $3,196.65 was paid to[an organisation]. At the hearing Mr Lister acknowledged that this represented his children’s school fees. Mr Lister’s personal loan repayments, totalling $3,642.50, were also made from this account. A total of $4,960.00 (eight payments) was transferred to Commonwealth Bank account …6674. At the hearing Mr Lister said that this is the personal credit card of his partner. A total of $4,000.00 (four payments) was transferred to Commonwealth Bank account …7401, the account that Mr Lister had previously identified as a personal account of his partner.
In considering possible personal expenditure the Tribunal notes that Mr Lister has acknowledged that the business meets all of his motor vehicle and telephone expenses, and presumably those of his partner, although the Tribunal notes that in 2016/17 his partner also received $10,400.00 in “car allowance” (folio A48). The business bank account statements disclose BMW finance lease payments of $4,897.17 over the three month period. They also disclose expenditure of $1,501.50 at restaurants and other expenditure that appears to not be business related (at IGA, Kmart, Big W and so on) totalling $7,643.48. At the hearing Mr Lister said that the business provides amenities for staff, including lunch and that this would explain that expenditure. Even if the Tribunal accepts this explanation it assesses half of the expenditure as being a benefit to Mr Lister and his household on the basis that they form half of the staff of the business. The Tribunal notes that the expenditure on household type supplies through the business account is more than double the amount of similar purchases paid for through Mr Lister’s personal bank account. The business bank account also made six payments totalling $1,200.00 to credit card …9978. The only purchases disclosed by the credit card account statement (folio A149) appear to be household related.

The Tribunal would not normally consider the income of a parent’s current partner, however because Mr Lister’s partner is employed by the business and because their finances are inextricably intertwined there is no alternative. The Tribunal has determined that the most reliable analysis will be produced by assessing payments made for the benefit of the household and then removing the amount attributed to Mr Lister’s partner as wages. The Tribunal concludes that during the three month period under close examination Mr Lister’s household received from the business, either by way of direct payment or by the business meeting their personal expenses the following benefits:
·Direct transfer of funds to …6151          $12,216.00
·Direct transfer of funds to …7401          $4,000.00
·Credit card repayments …6674             $4,960.00
·Credit card repayments …9978             $1,200.00
·Payment of school fees  $3,196.55
·Loan repayments  $3,642.50
·Restaurant meals  $750.75
·Personal or household expenses           $3,821.74
These payments total some $33,787.54 which equals some $135,150.00 when annualised. So as to focus on Mr Lister alone the Tribunal removes Mr Lister’s partner’s salary of $41,600.00 from this, resulting in a figure of $93,550.00. To this must be added the benefits obtained by Mr Lister as a result of the business paying all of his motor vehicle and telephone expenses. As indicated above Mr Lister has not provided a detailed profit and loss for the business for 2016/17 and so the Tribunal relies on the profit and loss statement for 2015/16 previously obtained by the Department. That document shows motor vehicle expenses of $29,132.18 and telephone expenses of $13,851.44. If the Tribunal were to count half of these expenses as delivering a personal benefit to Mr Lister it would suggest that he obtains income and resources from the business of some $115,041.00. However in providing the income and resources to Mr Lister the business has lost money and as a half owner of the business half of that loss represents a reduction in resources available to Mr Lister. The Tribunal accordingly deducts $9,030.00, producing a figure of $106,011.00. Mr Lister pays income tax only on the wages declared by him of $52,000.00 in 2016/17 and $51,000.00 in 2015/16. Grossing up the difference for income tax means that the actual resources available to Mr Lister would be the same as a person with a taxable income in excess of $110,000.00.
The assessment in place at the time that Miss Lister applied for the change of assessment was based on an ATI of $49,106.00. This was reduced to $37,021.00 following the provision of an estimate by Mr Lister. The Tribunal has found that Mr Lister has financial resources of at least $110,000.00 per annum. It finds that the circumstances under which Mr Lister’s financial resources are not taken fully into account are special. It also finds that the lower assessment is a result that is unjust and inequitable in the circumstances. This establishes a ground to depart from the formula assessment of child support under subparagraph 117(2)(c)(ia) of the Act in relation to Mr Lister’s financial resources.

Issue two – Would departure from the administrative assessment be just and equitable?

Relevant law and evidence

As the Tribunal is satisfied that there is a ground to depart from the administrative assessment of child support, the next step is to consider whether it is just and equitable to depart from the assessment. In deciding whether it is just and equitable the Tribunal had regard to the following matters set out in subsection 117(4) of the Act:
(4) In determining whether it would be just and equitable as regards the child, the carer entitled to child support and the liable parent to make a particular order under this Division, the court must have regard to:
(a) the nature of the duty of a parent to maintain a child (as stated in section 3); and
(b) the proper needs of the child; and
(c) the income, earning capacity, property and financial resources of the child; and
(d) the income, property and financial resources of each parent who is a party to the proceeding; and
(da) the earning capacity of each parent who is a party to the proceeding; and
(e) the commitments of each parent who is a party to the proceeding that are necessary to enable the parent to support:
(i)      himself or herself; or
(ii) any other child or another person that the person has a duty to maintain; and
(f) the direct and indirect costs incurred by the carer entitled to child support in providing care for the child; and
(g) any hardship that would be caused:
(i)      to:
(A)     the child; or
(B)     the carer entitled to child support;
by the making of, or the refusal to make, the order; and
(ii)      to:
(A)     the liable parent; or
(B) any other child or another person that the liable parent has a duty to support;
by the making of, or the refusal to make, the order; and
(iii) to any resident child of the parent (see subsection 10) by the making of, or the refusal to make, the order.
The Tribunal considered the evidence provided by the parties, including the documents provided to the Tribunal as well as the documents provided by the Department.

Assessment of evidence, findings of fact and application of the law

Section 3 of the Assessment Act states and the Tribunal accepts that it is the duty of both parents to financially support their children and that [Child 1] should receive a proper amount of financial support from her parents in accordance with their capacity to contribute.

The children’s needs

At the hearing Mr Lister said that there were no needs that were unusual or out of the ordinary that need to be taken into account in the assessment.

The children’s incomes and earning capacities

[Child 1] is 16 years old and attending school. She has no income or earning capacity that needs to be taken into account in the assessment.

The income, property and financial resources and earning capacity of Mr Lister and his necessary commitments

Mr Lister’s financial circumstances have been discussed above.
At the hearing Mr Lister said that he has had some financial struggles. At the hearing Mr Lister acknowledged that he leases for his own use a vehicle that retails new for some $120,000.00. He said that he bought the vehicle used for a bargain $55,000.00. He said that he needed a vehicle like this to transport his children. His children attend private schools and he is currently some thousands of dollars in credit on his mortgage offset account. The Tribunal finds that Mr Lister’s claim that he is struggling financially is not supported by the documentary evidence.
At the hearing Mr Lister did not identify any circumstances that are special or out of the ordinary about his necessary commitments.

The income, property and financial resources and earning capacity of Miss Lister and her necessary commitments

Miss Lister did not attend the hearing. Miss Lister also failed to respond to the Tribunal’s directions and as a result the evidence concerning Miss Lister’s circumstances is limited.
Although Mr Lister did not cross-apply under reason 8B (the earning capacity of one or both parents) he has previously stated that he believes that Miss Lister should be working full time and that is it unfair that she chooses to work less. At the hearing he said that in early 2018 Miss Lister had said that she was earning $65,000.00 to $70,000.00. He said that he believed that she had been working at two jobs but that she was now receiving workers’ compensation. He said that he had no documentary evidence to support these suggestions.
Miss Lister has previously advised the Department that she stopped work in December 2016 in order to further pursue her education. In July 2017 she resumed work three days a week. The Department has obtained information from Miss Lister’s 2017 and 2018 income tax return. These show taxable incomes of $28,621.00 in 2017 and $41,693.00 in 2018. Compared with her 2016 taxable income of $40,844.00 these latter returns support her evidence as to changes to her employment status. The Tribunal also observes that at the time of the original application the assessment had been based on Miss Lister’s estimated income of $13,557.00 but that her income has since been reconciled by the Department with the result that the assessment has been recalculated using her actual income of $33,337.00.
Mr Lister has said that he believes that there is no reason for Miss Lister to not work and that the Tribunal should set her income according to her earning capacity. Subsection 117(7B) of the Act provides the circumstances under which the Tribunal may make a finding as to earning capacity:
(7B)In having regard to the earning capacity of a parent of the child, the court may determine that the parent's earning capacity is greater than is reflected in his or her income for the purposes of this Act only if the court is satisfied that:
(a) one or more of the following applies:
(i)the parent does not work despite ample opportunity to do so;
(ii)the parent has reduced the number of hours per week of his or her employment or other work below the normal number of hours per week that constitutes full-time work for the occupation or industry in which the parent is employed or otherwise engaged;
(iii)the parent has changed his or her occupation, industry or working pattern; and
(b) the parent's decision not to work, to reduce the number of hours, or to change his or her occupation, industry or working pattern, is not justified on the basis of:
(i)the parent's caring responsibilities; or
(ii)the parent's state of health; and
(c)the parent has not demonstrated that it was not a major purpose of that decision to affect the administrative assessment of child support in relation to the child.
The Tribunal finds that Miss Lister left her employment in December 2016 and as a result paragraph 117(7B)(a) of the Act is satisfied. [Child 1] is 16 years old and it is not apparent that she has any needs that would prevent Miss Lister from working. The Tribunal finds that Miss Lister’s caring responsibilities do not prevent her from working. There is no evidence before the Tribunal that would suggest that Miss Lister’s health circumstances would prevent her from working. The Tribunal finds that paragraph 117(7B)(b) of the Act is satisfied. Miss Lister has previously said that she left employment in order to pursue her education, specifically to complete a [course]. Miss Lister resumed work in the [sector] after studying for some seven months. The comparison between her 2016 taxable income and her 2018 taxable income suggests that she is now working as much as she had prior to her decision to further her education. The legislation is not intended to allow the Department to make career decision for parents, but rather to ensure that parents do not make decisions with the intention of affecting their child support assessment. The decision of Miss Lister to pursue further education and then to move to employment that apparently makes use of her education strongly suggests that her decisions were oriented towards furthering her career rather than towards affecting the assessment. The Tribunal finds that paragraph 117(7B)(c) of the Act is not satisfied and it is therefore not open to the Tribunal to make a finding as to Miss Lister’s earning capacity.
The evidence before the Tribunal does not disclose any other matters as to Miss Lister’s necessary commitments that require consideration by the Tribunal.

The parents’ duty to support others

At the hearing Mr Lister said that he has a legal responsibility to provide for his two other children. The Tribunal notes that provision is made for relevant dependent children in the assessment. There is no evidence before the Tribunal that Miss Lister has a legal duty to support any person other than [Child 1].

Hardship

The departure from the formula assessment contemplated by the Tribunal will result in Mr Lister’s child support liability changing from the $2,319.00 per annum it was at the time of the original decision to some $14,987.00 per annum. Taking into account that Mr Lister’s primary obligation is to support his children, the Tribunal finds that the decision contemplated by it is appropriate and that it will not cause undue hardship to Mr Lister. The Tribunal also notes that since the original application there has been a change in care and also a reconciliation of Miss Lister’s estimated income. This means that the change in Mr Lister’s ATI will have a modest impact on the child support assessment.

Terms and period of departure

Miss Lister applied for the change of assessment on 13 February 2017. Both the original decision maker and the objections officer found that it would be fair to both parents to commence the change on the date of Miss Lister’s application. The Tribunal makes the same finding.
At the hearing Mr Lister said that he was tired of the process and wants to put the whole matter behind him. With the hope that it will not be necessary for the parties to go through the application process again the Tribunal believes that it is desirable for the assessment to be set for a reasonably lengthy period of time. This will also help ensure predictability for both parents. [Child 1] turns 18 in early 2020 and, unless extended, the child support assessment will end at that time. The Tribunal has decided that would be appropriate to extend the departure from the formula assessment until 4 March 2020 or until the occurrence of a terminating event, whichever occurs earlier.

Issue three – Is it otherwise proper to depart from the administrative assessment?

The final step for the Tribunal to undertake is to determine whether it is “otherwise proper” to depart from the administrative assessment. Subsection 117(5) of the Assessment Act requires the Tribunal to take into consideration the following matters:
(a)the nature of the duty of a parent to maintain a child (as stated in section 3) and, in particular, the fact that it is the parents of a child themselves who have the primary duty to maintain the child; and
(b) the effect that the making of the order would have on:
(i)any entitlement of the child, or the carer entitled to child support, to an income tested pension, allowance or benefit; or
(ii)the rate of any income tested pension, allowance or benefit payable to the child or the carer entitled to child support.
The child support law recognises that each parent has a primary duty to maintain their children. In this case Miss Lister receives a social security benefit and this may be slightly reduced, which would be appropriate in the circumstances. The Tribunal is satisfied that it is otherwise proper to depart from the administrative assessment in this matter.
The Tribunal concludes that it would be appropriate to set Mr Lister’s ATI at $110,000.00 per annum for the period from 13 February 2017 to 4 March 2020 or until there is a terminating event. As this is the same as the original decision and the decision of the objections officer the decision under review is affirmed.

DECISION

The decision under review is affirmed.

[2018] AATA 3289

31 July 2018

Key Legal Topics

Areas of Law

Family Law

Administrative Law

Legal Concepts

Jurisdiction

Statutory Construction

Remedies

Judicial Review