Llagas and Llagas (Child support)

[2024] AATA 2894

Llagas and Llagas (Child support) [2024] AATA 2894 (12 July 2024)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2024/BC027435

APPLICANT:  Mr  Llagas

OTHER PARTIES:  Child Support Registrar

Ms Llagas

TRIBUNAL:  Member P Jensen

DECISION DATE:  12 July 2024

DECISION:

The decision under review is set aside and, in substitution, Ms Llagas’s departure application which was lodged on 10 September 2023 is refused.

CATCHWORDS

CHILD SUPPORT – departure determination – ground for departure – special circumstances – costs of special needs – cost of maintaining the child – occupational therapy recommended only – 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

Introduction

1. Mr Llagas and Ms Llagas are the parents of [Child 1] who was born in October 2020. A child support case was registered with Services Australia – Child Support (Child Support) in April 2022. The Child Support (Assessment) Act 1989 (the Act) provides for an administrative assessment of child support payable. It uses a formula which contains variables such as the parents’ adjusted taxable incomes and their percentages of care for the child. From 19 August 2023 the administrative assessment was based on Mr Llagas’s 2021–22 adjusted taxable income of $142,388, Ms Llagas’s 2021–22 adjusted taxable income of $65,670, and Mr Llagas’s 14% care and Ms Llagas’s 86% care for [Child 1]. Mr Llagas was assessed to pay $10,764 per annum in child support.

2. The Act also provides for a departure from the administrative assessment in certain circumstances. Ms Llagas lodged a departure application on 10 September 2023. An original decision-maker granted the application and increased Mr Llagas’s rate of child support payable by $735 per annum from 1 October 2023 to 30 September 2024. The decision effectively required Mr Llagas to pay a half of Ms Llagas’s out-of-pocket costs in respect of [Child 1’s] occupational therapy during July to September 2023.

3. Mr Llagas objected to that decision. An objections officer allowed the objection, set aside the original decision and, in substitution, increased Mr Llagas’s rate of child support payable by $1,247 per annum from 10 September 2023 to 9 September 2024. The decision effectively required Mr Llagas to pay three quarters of those out-of-pocket costs.

4. Mr Llagas applied to the Tribunal for further review. I conducted a directions hearing on 31 May 2024 and a substantive hearing on 12 July 2024. Mr Llagas attended the hearing in person. Ms Llagas attended the hearing via MS Teams.

5. Paragraph 98C(1)(b) of the Act relevantly provides that a departure decision may be made in respect of a departure application if:

   (i)... one, or more than one, of the grounds for departure referred to in [subsection 117(2)] exists; and

   (ii)... it would be:

   (A)just and equitable as regards the child, the liable parent, and the carer entitled to child support; and

   (B)otherwise proper;

   to make a particular determination under this Part; …

A ground for departure

1. Subparagraph 117(2)(b)(ia) of the Act, commonly referred to as Reason 2, provides as a ground for departure:

   that, in the special circumstances of the case, the costs of maintaining the child are significantly affected:

   …   

   (ia)because of special needs of the child …

2. During July to September 2023, [Child 1] attended seven sessions with occupational therapists. To satisfy subparagraph 117(2)(b)(ia) of the Act, it must be established that [Child 1] had a special need. There will be occasions when a child might benefit from a therapy but they do not have a special need that necessitates that therapy (either specifically, or as one of a range of possible treatments).

3. On 11 April 2023, [Paediatrician A], provided a letter which included the following (reproduced verbatim):

   [Child 1] is almost 3 years old now and has the background of egg and dairy intolerance. He is otherwise clinically and developmentally meeting all of his age milestones. As you are aware, both parents are separated for almost 2 years and are in the process of navigating shared care arrangement. [Ms Llagas] has noted more challenging behaviour over the past couple of months and is concerned with this changes. I have mentioned to parents that some of the difficult behaviours seen are typical of children in this age group, even in children who does [sic] not have recent family changes. To help both household, I have suggested occupational therapist/behavioural therapist and/or psychological help. [Child 1] is currently not attending daycare and I have mentioned that attending daycare can be beneficial at this stage to see his behaviour in different settings. I would be happy to see the family again towards the end of the year, both parents together.

4. [Paediatrician A] did not diagnose [Child 1] as suffering from any medical condition (apart from the egg and diary intolerance). She “suggested” occupational therapy and/or other treatments “[t]o help both household[s]”, but she did not indicate that [Child 1] needed any of those treatments.

5. On 19 July 2023 the Federal Circuit and Family Court made consent orders which included the following:

   14.That the parties will attend upon and present the child as recommended by the child’s paediatrician, [Paediatrician A], and further, the parties will follow the reasonable recommendations, treatments and referrals of [Paediatrician A], including to other specialists/allied health professional.

6. [Paediatrician A] was not a party to the court proceedings. The fact that orders were made, with the parents’ consent, which elevated [Paediatrician A’s] recommendations to legal requirements does not change [Paediatrician A’s] medical assessment of [Child 1]. Again, there is nothing in [Paediatrician A’s] letter dated 11 April 2023 to suggest that [Child 1] needed occupational therapy and/or other treatments. I accept that such therapy or other treatments may have been beneficial.

7. On 7 September 2023, [Paediatrician A] provided a detailed letter which included the following:

   Thank you for your ongoing review of [Child 1] who I first saw in person in May 2023. [Child 1] is an almost 3 years old boy who was referred initially for review of his behaviour and development on the background of an acrimonious parental separation. [Child 1’s] parents, [Ms Llagas] and [Mr Llagas], were in the middle of finalising legal parental shared care arrangement when they saw me in May. [Ms Llagas] was concerned with [Child 1’s] difficult behaviour (biting and temper tantrums). This behaviours were more apparent when [Child 1] was under [Ms Llagas’s] care. I mentioned that these behaviours described then were still within the normal limit of developmental stage of 2.5 years old child who have not yet learned to regulate, manage and process their feelings, especially when limit or boundaries were being enforced. [Child 1] was not enrolled in daycare then and I mentioned that attending daycare could be beneficial to see if he exhibited challenging behaviour in different settings and under different care givers. To help prepare [Child 1] transitioning between the two households and to further help parents manage [Child 1’s] behaviour, I have also suggested occupational therapist/behavioural therapist and/or psychological help.

8. Both letters, written five months apart, are in similar terms. They indicate that [Child 1] might benefit from occupational therapy (or similar help). They do not indicate that [Child 1] needed occupational therapy (or similar help). [Child 1] did not have a special need. Reason 2 is not established.

9. Subparagraphs 117(2)(c)(ia) and (ib) of the Act, commonly referred to as Reason 8, provide as a ground for departure:

   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

   (ib)because of the earning capacity of either parent; …

10. The Tribunal can only find that a parent’s earning capacity is greater than their actual income if the requirements of subsection 117(7B) are satisfied. That subsection states:

    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.

11. In October 2023, Mr Llagas submitted that Ms Llagas should be assessed on her earning capacity. In November 2023 the original decision-maker concluded that Ms Llagas could not be assessed on her earning capacity. The original decision-maker provided reasons for that conclusion: pages 347 and 348 of the hearing papers. In particular, the original decision-maker noted that Ms Llagas’s income had reduced but she had not applied to be assessed on an estimate of her reduced income, which would have increased Mr Llagas’s rate of child support payable. Instead, Ms Llagas had continued to be assessed on an historical income which was more than she was actually receiving. In January 2024 the objections officer reached the same conclusion: pages 82 and 83 of the hearing papers.

12. In February 2024, Mr Llagas withdrew his submission that Ms Llagas should be assessed on her earning capacity: page A26 of the hearing papers. During the directions hearing he once again submitted that she should be assessed on her earning capacity. During the substantive hearing he effectively acknowledged that Ms Llagas could not be assessed on her earning capacity. In my opinion, that acknowledgement was properly made. If Ms Llagas had reduced her income for a major purpose of affecting the rate of child support payable, it is likely that she would have promptly provided Child Support with an estimate of her reduced income. Paragraph 117(7B)(c) of the Act is not satisfied.

13. Neither parent submitted that Reason 8 was established in respect of either parent’s income and financial resources, but, for completeness, each parent was required to complete a Statement of Financial Circumstances and provide other evidence of their more recent income, and they did so. They were questioned in respect of that evidence during the hearing. Both parents acknowledged that each parent’s income and financial resources were fairly reflected for child support purposes in their adjusted taxable income as assessed by the Australian Taxation Office from time to time. In my opinion, those acknowledgements were properly made. Reason 8 is not established.

14. There are no other potential grounds for departures. I am therefore required to refuse Ms Llagas’s departure application which was lodged on 10 September 2023: subparagraph 98C(1)(b)(i) of the Act.

DECISION

The decision under review is set aside and, in substitution, Ms Llagas’s departure application which was lodged on 10 September 2023 is refused.