Lunt and Laro (Child support)

Lunt and Laro (Child support) [2018] AATA 4985 (6 December 2018)

DIVISION:Social Services & Child Support Division
REVIEW NUMBER:  2018/BC015108
APPLICANT:  Ms Lunt
OTHER PARTIES:  Child Support Registrar
Mr Laro

TRIBUNAL:Senior Member R Ellis
DECISION DATE: 06 December 2018
DECISION:

The Tribunal sets aside the decision under review and, in substitution, decides that the fixed annual rate of child support should not apply to Ms Lunt’s child support assessment from 11 December 2017 in the relevant child support period.

CATCHWORDS

CHILD SUPPORT – particulars of the administrative assessment – whether fixed annual rate should apply - the income is below the threshold amount - it is unjust and inequitable to apply the fixed annual rate - 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 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 is about an application by Ms Lunt for the fixed annual rate of child support to not apply to the child support assessment.
Ms Lunt and Mr Laro are the parents of [Child 1] (born December 2003) and [Child 2] (born March 2007) and Ms Lunt is the liable parent under the assessment.
From 11 December 2017 Ms Lunt was assessed to pay the fixed annual rate of child support of $2,780.
On 11 May 2018 Ms Lunt made an application to the Department of Human Services, Child Support (the Child Support Agency) for the fixed annual rate to no longer apply to the assessment for the period from 11 December 2017 to 31 August 2018.
On 8 June 2018 the Child Support Agency accepted this application and made the decision that the fixed annual rate would no longer apply to the assessment (the original decision).
On 7 July 2018 Mr Laro objected to this decision and on 4 September 2018 the Child Support Agency allowed the objection (the objection decision).
The effect of this decision was that Ms Lunt was assessed to pay the fixed annual rate of $2,780 from 11 December 2017 to 31 August 2018 creating arrears of $1,693.29.
On 26 September 2018 Ms Lunt applied to the Administrative Appeals Tribunal (the Tribunal) for a review of the objection decision.
The Tribunal conducted a hearing into the application on 6 December 2018. Ms Lunt- and Mr Laro gave evidence on affirmation by conference telephone. The Child Support Agency provided the Tribunal and the parties with papers relevant to the matter (238 pages).

ISSUES

The statutory provisions relevant to this review are contained in the Child Support (Assessment) Act 1989 (the Act).
The issue which arises in this case is whether or not the fixed annual rate of child support should not apply in respect of Ms Lunt’s child support liability.

CONSIDERATION

For low income parents not on income support, a fixed annual rate of child support is payable (section 65A of the Act).
A parent who has been assessed at the fixed annual rate under section 65A may make an application to the Child Support Agency for it not to apply (section 65B). The parent making the application must provide evidence to demonstrate that his or her current income is less than the parenting payment (single) maximum basic amount and that it would be unjust and inequitable to expect him or her to pay the amount assessed under section 65A.
If the Child Support Agency has determined under section 65B of the Act that section 65A does not apply, and is later satisfied that the parent does not meet the relevant conditions, the fixed annual rate of child support may be reinstated (section 66B).
At the time relevant to this review, the fixed annual rate was $1,390 per child. The Tribunal finds that the Child Support Agency made a determination under section 65A which required Ms Lunt to pay the fixed annual rate in respect of [Child 1] and [Child 2].
Ms Lunt told the Tribunal she disagreed with the decision made by the Child Support Agency on 4 September 2018. Ms Lunt said the minimum annual rate should apply to her assessment because she was a stay-at-home mother and did not work.
The Tribunal finds that Ms Lunt made an application under section 65B on 11 May 2018.
Ms Lunt said she was [an occupation] but no longer worked. She said her only income was from family tax benefit payments received for her other two [children]. She said her 2017-18 taxable income was approximately $14.
Ms Lunt said the Child Support Agency had incorrectly calculated her income based on fortnightly transfers from her husband for groceries, additional transfers for specific bills like utilities, contributions from family members for gifts and Medicare refunds. Ms Lunt said she believed these funds should not have been included as it was not income available to her.
Ms Lunt explained that each fortnight her husband would transfer $260 from their joint account to her key card account for family grocery expenses. Ms Lunt said her husband supported her financially and she did not contribute any income to this joint account and yet the Child Support Agency had included this grocery money as her income. She said the other miscellaneous deposits into her account which were included as income by the Child Support Agency were family contributions to various gifts including flights to attend a family event and children’s birthday presents. There was also a one-off gift of $2,000 from her husband’s parents to assist with the purchase of a new fridge and mobile phone. She said this should not have been included as annual income.
The Tribunal notes in evidence from the Child Support Agency, copies of [bank] statements in the name of Ms Lunt for the period [March] 2018 to [June] 2018. The opening balance [in] March 2018 is $722.04 while the closing balance [in] June 2018 is $359.82. The statements show the following:
·     Two separate family allowance payments received fortnightly which total $292.30 per fortnight;
·     Regular fortnightly deposits of $260.00 with the description ‘Joint account from [Mr B]’;
·     A deposit of $2,000 received on 23 April 2018 with the description ‘Deposit [Mr B] phone fridge’;
·     A deposit of $689.53 received on 10 May 2018 transferred from a bank’s esaver account with the description ‘rates/agl’;
·     A deposit of $500.00 received on 10 May 2018 with the description ‘[Mr B] plane flights’;
·     A deposit of $323.41 received on 21 May 2018 transferred from a [bank] esaver account with the description ‘water rates’; and
·     Other deposits totalling $147.70 including a Medicare refund of $71.70.
The Tribunal also notes the Child Support Agency conducted a search of Ms Lunt’s taxation records which did not demonstrate any other sources of income. Centrelink records also verify that Ms Lunt only receives family tax benefit.
The Tribunal asked Mr Laro if he had any comments in relation to this matter. Mr Laro pointed out the transfers for water rates and electricity were from a [bank] esaver account which suggested Ms Lunt may have another bank account. Ms Lunt explained the esaver account was a secondary account off her main bank account which simply allowed for ease of budgeting. The Tribunal was satisfied with this explanation.
The parenting payment (single) maximum basic amount at the time relevant to this review was $19,201 per annum. In considering an application under 65B for the fixed annual rate not to be used, the definition of income in subsection 66A(4) of the Act must be considered in order to determine if the parent's current income is no more than this amount. In subsection 66A(4), ‘income’ is not restricted to taxable income. It is defined as:
· any money earned, derived or received by the parent for his or her own use or benefit; or
· a periodical payment by way of a gift or allowance.
The Tribunal is satisfied that Ms Lunt has provided evidence to support that her current income, generally accepted as income for the 12 months from the date of application to not have the annual rate apply, is less than this threshold amount of $19,201 per annum.
In determining whether or not it would be unjust and inequitable for Ms Lunt to pay the fixed annual rate, the Tribunal considered the Child Support Guide at section 2.5.3:
The fixed annual rate is a set rate of child support payable per child. It is payable by low income parents who did not receive an income support payment in the last relevant year of income (section 65A). It is intended to address the situation where parents minimise their taxable income in a way that does not fairly represent their true income, or real capacity to pay child support, and thereby reduces or avoids the contribution they should make towards meeting the costs of their children.
If parents are genuinely on a low income they would usually access social security, or other income support payments. Some parents may genuinely be on a low income and either choose not to access income support payments, or are not eligible to receive such payments. These parents are not regarded as minimising their income to reduce or avoid their contribution towards the payment of child support.
For these parents, it would be unfair to impose this fixed annual rate. Therefore, they may apply for the fixed annual rate not to be used.
The Tribunal accepts that Ms Lunt is not employed. Ms Lunt is a stay-at-home mother raising two children and supporting another two children from her first marriage. The Tribunal notes Ms Lunt and her husband could not afford a new fridge and were helped out by her husband’s parents. Ms Lunt told the Tribunal her family was surviving on one wage and living hand to mouth with very little money left over. The Tribunal is therefore satisfied that it would be unjust and inequitable for Ms Lunt to pay the fixed annual rate of child support.
The Tribunal finds that Ms Lunt’s application for the fixed annual rate of child support to not apply should be accepted.
In determining the date on which section 65A ceases to apply to Ms Lunt, subsection 65B(5) of the Act determines that the day may be any day from the first day of the child support period on which the fixed annual rate became payable by the parent.
The fixed annual rate became payable by Ms Lunt on 11 December 2017. The Tribunal therefore finds that the fixed annual rate in this case should cease to apply from 11 December 2017.

DECISION

[2018] AATA 4985

6 December 2018

Key Legal Topics

Areas of Law

Family Law

Administrative Law

Legal Concepts

Jurisdiction

Statutory Construction

Remedies

Judicial Review