Maag and Maag (Child support)

[2020] AATA 4779

Maag and Maag (Child support) [2020] AATA 4779 (7 October 2020)

DIVISION:Social Services & Child Support Division

REVIEW NUMBERS:  2020/AC019647 & 2020/AC019648

APPLICANT:  Mr Maag

OTHER PARTIES:  Ms Maag

Child Support Registrar

TRIBUNAL:  Member S Cullimore

DECISION DATE:  7 October 2020

DECISION:

The Tribunal affirms the decisions under review.

This means that the amounts of $1,250.00, $1,000.00 and $941.89 paid by Mr Maag to the relevant school on 2 March 2020, 31 March 2020 and 4 May 2020, respectively, are not to be credited to Mr Maag as non-agency payments, and the applications for review are not successful.

CATCHWORDS

CHILD SUPPORT – non-agency payment – whether school fees should be credited as prescribed payments – all conditions to credit are satisfied – whether there are special circumstances to refuse – special circumstances exist – prescribed payments refused – decision under review affirmed

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 following information is taken from the records of Services Australia – Child Support (“the CSA”) and is not in dispute, and the Tribunal finds each matter as fact.

2. Mr Maag and Ms Maag are the parents of three children, one of whom is still subject to the child support case (he is now 15 years old).

3. The child support case originally started on 22 January 2007 and has been Registrar Collect since 17 February 2020.

4. Care is recorded as sole care to Ms Maag since 26 January 2020 (it was previously shared care since 2011).[1]

   [1] C123

5. The current assessment, from 1 October 2020, is that Mr Maag pay Ms Maag $26,672 pa (ie. based on her having sole care).[2]

   [2] A130

6. In two separate claims, Mr Maag claimed credits for various “non-agency payments” (“NAPs”). These were for school fees for the relevant child, and were amounts paid by him to the school concerned on 2 March 2020 ($1,250.00), 31 March 2020 ($1,000.00) and 4 May 2020 ($941.89).

7. On 15 April 2020 a delegate decided to refuse to credit the amounts of $1,250.00 and $1,000.00, relying upon the discretion contained in section 71D of the Child Support (Registration and Collection) Act1988 (“the Act”).[3]

   [3] Set out below.

8. On 15 May 2020 a different delegate accepted a claim by Mr Maag for the crediting of the amount of $941.89.

9. Each parent objected to the decision adverse to them.

10.On 14 July 2020 and 15 July 2020 objections officers decided (in short) to refuse to credit all three payments to Mr Maag, relying upon section 71D of the Act.[4]

[4] Thus “allowing” Ms Maag’s objection to one decision and “disallowing” Mr Maag’s objection to the other decision.

11.On 11 August 2020 Mr Maag sought further review by this Tribunal of the objection decisions.

DOCUMENTARY EVIDENCE AND HEARING

12.The Tribunal had before it the original bundles of documents provided by the CSA (2 files).

13.Further documents were requested from the CSA by the Tribunal. These are marked C130 onwards.

1. Both parties attended the hearing via teleconference and gave evidence and made verbal submissions.

ISSUES

15.The principal issue to be decided by the Tribunal is:

·Should the section 71D discretion be exercised to refuse to credit to Mr Maag any or all of these NAPs?

CONSIDERATION

The relevant child support law

1. The relevant law is contained in section 71 onwards of the Act.

2. These provisions state that a person can be given a “NAP credit” in various circumstances.

3. So - called “prescribed NAPs” are provided for by section 71C of the Act.

4. Credit is given if the payer pays a third party an amount, and (i) the child support case is “an enforceable maintenance liability” (ie Registrar Collect); (ii) the payment “is of a kind specified in the regulations”; (iii) the payer “does not have at least regular care” (14% of care) of any child of the assessment, both when the payment is made and when the Registrar applies the credit; (iv) the payment is on top of any previous NAP credits given to the payer; and (v) the payer is (or later becomes) up-to-date with their child support payments for the “period” for which that payer has been assessed to pay child support (which here is a calendar month).

5. Payments “of a kind specified in the regulations” include private school fees.

6. The consent or agreement of the other party is not needed for the crediting of these prescribed NAPs.

7. The credit is in the form of a “bank” of NAP credits. The amount of cash child support for any particular period cannot be reduced by more than 30% to reflect the amount of credits in the payer’s “bank”.

8. There is an overriding discretion to refuse to credit a non-agency payment, of any type, even though it meets all of the relevant requirements.

9. This is set out in section 71D of the Act, as follows:

   71DRegistrar may refuse to credit amounts in special circumstances

   The Registrar may refuse to credit an amount under section 71 ..[or] .. 71C if satisfied that, in the circumstances of the particular case, the amount ought not to be credited.

10. The provision is very broad. No factors are identified which might persuade the Tribunal to refuse or not to refuse a NAP credit.

11. The CSA Guide is a policy manual to guide decision makers and it relevantly states as follows (emphasis added):

Discretion to refuse to credit an amount

The Registrar can refuse to credit a non-agency payment claimed under CSRC Act sections 71, 71A or 71C if the Registrar is satisfied that, in the circumstances of the particular case, the amount ought not to be credited (CSRC Act section 71D).

The Registrar may refuse to credit an amount in certain circumstances, including, but not limited to, the following:

·The payee's agreement to credit an amount paid to a third party or payment made as a transfer of property was obtained through coercion or harassment. …

·The payer is claiming a credit under CSRC Act section 71C for an expense they regularly meet that was taken into account in a change of assessment decision. …

·The payer is claiming credit under CSRC Act section 71C for an expense which they have undertaken to pay in addition to their liability as specified in an agreement between the parents (this does not have to be a child support agreement).

·The payer is claiming credit under CSRC Act section 71C for an expense that they are responsible to pay under the terms of a court order.

·The payer is claiming credit under CSRC Act section 71C for expenses for the child for which they are separately responsible…

·…

1. It is also not clear if the words “an amount” and “the amount” in section 71D mean all of a particular payment or could include part of a particular payment. The Tribunal prefers the former interpretation.

DISCUSSION OF EVIDENCE, CONCLUSIONS AND REASONING

1. It was not disputed and the Tribunal finds that each of the three payments paid by Mr Maag to the school concerned met all of the requirements set out in section 71C of the Act (see above). They were therefore prima facie “prescribed NAPs”.

2. The issue in dispute whether the Tribunal (standing in the shoes of the objections officers) should exercise the section 71D discretion to refuse to credit some or all of these amounts, ie is the Tribunal “…satisfied that, in the circumstances of the particular case, the amount ought not to be credited”?

3. The history of the matter is that after separation the parents set up a trust fund of about $50,000 to cover school fees for their three children. This was in about 2007.

4. The fund was in the name of and controlled by Mr Maag.

5. Once that fund was exhausted, in about 2013 or 2014, Mr Maag paid all of the school fees for all three children, out of his own pocket, plus child support, at the rate as assessed by the CSA.

6. The parents also for some five years had a legally binding child support agreement to that effect.

7. Then, in early 2020 this agreement or arrangement came to an end. This was sparked by the relevant child expressing a wish to live with his mother, and so Ms Maag took on the sole care of him. The CSA recorded the new care levels as being effective from 26 January 2020.

8. At around that time, or shortly afterwards, Mr Maag contacted the school and Ms Maag and advised them that, because of the reduction in his level of care, he would not meet the school fees for the 2020 school year.

9. Ms Maag then paid all of those fees (some $16,000) in full, presumably from her savings.

10. Mr Maag continues to pay Ms Maag child support based upon a normal administrative assessment.

11. In March and May 2020 he paid the remaining amounts which he owed to the school for the 2019 school year, being of course the amounts for which he claimed NAP credits.

12. Ms Maag submitted that in the circumstances no credit should be given to Mr Maag for any of the payments made by him to the school in 2020 because they were owed for and related to the 2019 school year, and legally (because only his name was on the documentation with the school) and under their previous arrangement he was 100% liable for those fees.

13. She further submitted that she would suffer some financial hardship if Mr Maag was given any credit against ongoing child support in 2020 for his “late” payment of those fees, because she was currently not working, owing to mental health issues, and her only sources of income were child support and FTB. This situation she said could continue until early next year.

14. Mr Maag submitted that he had over the years, since about 2007, paid very substantial amounts of child support and school fees for the three children (which the Tribunal accepts is the case), and that the relevant law focussed on the fact of payment, and does not specify for what period the school fees were payable.

15. The Tribunal accepts that there is merit in both of those arguments.

16. The Tribunal finds that the function, or at least a major function, of section 71D of the Act is to prevent an injustice or unfairness to a payee (and/or the child/ren of the assessment) if a NAP is credited, where some special or unusual circumstances exist.

17. It is quite possible to imagine various scenarios where this would be the case, and some of these scenarios (including the third dot point in the Guide, above, a scenario analogous to this matter) are set out in the CSA Guide.

18. The Tribunal finds that there would be some injustice or unfairness to the payee and the child in this matter if these NAPs were to be credited.

19. The plain fact of the matter is that the amounts do relate to a period, the 2019 school year, for which Mr Maag had taken on the legal responsibility of paying all of the school fees. The fact that he paid some of those fees in 2020 does not detract from the fact that they relate to 2019.

20. Further, if these NAPs were credited, Ms Maag’s ongoing child support would drop from about $2,100pcm to about $1,500pcm for about 5 months. In her circumstances, that would be a considerable reduction in her ongoing income, including what she needs to meet the costs of care of the child. Some financial hardship to Ms Maag would result.

21. These two factors – combined – persuade the Tribunal to affirm the decisions to refuse to credit these NAPs.

DECISION

The Tribunal affirms the decisions under review.

This means that the amounts of $1,250.00, $1,000.00 and $941.89 paid by Mr Maag to the relevant school on 2 March 2020, 31 March 2020 and 4 May 2020, respectively, are not to be credited to Mr Maag as non-agency payments, and the applications for review are not successful.