Maat and Maas (Child support)

[2020] AATA 4923

Maat and Maas (Child support) [2020] AATA 4923 (15 October 2020)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2020/SC019010

APPLICANT:  Dr Maat

OTHER PARTIES:  Child Support Registrar

Ms Maas

TRIBUNAL:Member C Breheny

DECISION DATE:  15 October 2020

DECISION:

The decision under review is set aside and a decision substituted that:

• From 16 April 2019 until a terminating event ends the assessment, the rate of child support payable by Dr Maat is set at $40,000 per annum, and

• The annual rate is increased by the weighted average Consumer Price Index for the preceding September quarter on 1 January each year, commencing on 1 January 2020.

CATCHWORDS

CHILD SUPPORT – departure determination – costs of education - manner expected by both parents - cost of maintaining the children are significantly affected – financial resources of both parents - 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

BACKGROUND

1. Ms Maas and Dr Maat are the separated parents of [the child], born June 2005. A child support case was initially registered with the (then) Department of Human Services (now Services Australia) – Child Support (Child Support) from 12 February 2015 and registered for collection since that date. That registration ended on 11 February 2017, but the case was restarted from 16 April 2019 and since then child support is payable on the basis that Ms Maas has 100% care of [the child]. Dr Maat was at all relevant times liable to pay child support to Ms Maas.

2. For the period 16 April 2019 to 15 July 2020 Dr Maat’s child support liability had been administratively assessed as being $11,744 per annum based on his 2017/18 adjusted taxable income of $99,695 and Ms Maas’s 2017/18 adjusted taxable income of $123,404, resulting in a child support liability of $17,654 per annum.

3. On 24 June 2019, Ms Maas applied to Child Support for a change of assessment on the basis that Dr Maat’s income, property, financial resources and earning capacity were not accurately reflected in the assessment and that Dr Maat ought to be contributing to [the child]’s private school fees.

4. On 4 October 2019, decision maker (DM) Timms decided to change the administrative assessment on the basis of Dr Maat’s and Ms Maas’s income and financial resources and determined that for the period 24 June 2019 to 23 June 2021 Dr Maat’s adjusted taxable income was set at $292,513 and Ms Maas’s adjusted taxable income was set at $190,000.

5. On 21 October 2019, Ms Maas objected to the decision and on 21 January 2020, a Child Support objections officer decided to partly allow the objection. The objections officer determined that for the period 16 April 2019 to 15 April 2021 Dr Maat’s adjusted taxable income was set at $295,453, Ms Maas’s adjusted taxable income was set at $190,000. The objections officer also decided that for the period 1 May 2019 to 31 December 2019 child support liability was increased by $34,317 per annum and from 1 January 2020 to 31 December 2021 child support liability was increased by $23,250 per annum.

6. On 8 May 2020, Dr Maat applied to the Social Services and Child Support Division of the Administrative Appeals Tribunal (the Tribunal) for an independent review of Child Support’s decision. A hearing into Dr Maat’s application for review was held on 6 October 2020. Both Ms Maas and Dr Maat attended the hearing by conference telephone and gave evidence on affirmation. 

7. I had before me the statement and documents provided by Child Support pursuant to subsection 37(1) and section 38AA of the Administrative Appeals Tribunal Act 1975, received on 1 June 2020 and 21 September 2020 respectively numbered 1–336. I also considered additional documents provided by Dr Maat (marked A1–A32) and Ms Maas (marked B1–B46) as a result of written directions issued on 10 August 2020.

8. Dr Maat provided additional written evidence immediately prior and after the hearing (marked A33–A103 and A104–A143). On 6 October 2020 I deferred making a decision to allow for additional comments from either party on the new material. As no comments were received within the allocated timeframe, I made my decision on the evidence before me.

LEGISLATIVE FRAMEWORK AND ISSUES

1. The legislation relevant to this review is contained in the child support law, in particular the Child Support (Assessment) Act 1989 (the Act) and the Child Support (Registration and Collection) Act 1988.

2. The rate of child support payable by a liable parent is usually based on an administrative assessment under Part 5 of the Act. This requires the application of a statutory formula, which takes into account factors such as the number of children, the level of care provided and the income of each parent. Either the liable parent or the carer entitled to child support may apply to the Registrar for a determination to depart from the child support administrative assessment under Part 6A of the Act (section 98B). Section 98C provides that the Registrar may make a determination to depart from the formula assessment and establishes a three-step process. The Registrar, and the Tribunal standing in place of the Registrar, must be satisfied that a ground for departure exists and that it is just and equitable and otherwise proper to make a departure determination.

3. The grounds for departure from an administrative assessment of child support are those set out in subsection 117(2) of the Act. 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 may make one of the determinations prescribed in section 98S of the Act.

4. In the legislation, each ground for departure is prefaced by the words, “in the special circumstances of the case”. Therefore, when considering whether one (or more) grounds exists, the Tribunal must be satisfied that there are “special circumstances” in the case. The phrase “special circumstances of the case” is not defined in the Act. The Full Family Court, in the case of Gyselman and Gyselman (1992) FLC 92–279 stated that:

   It is intended to emphasise that the facts of the case must establish something which is special or out of the ordinary. That is, the intention of the Legislature is that the court will not interfere with the administrative formula result in the ordinary run of cases.

5. Subsection 98C(3) of the Act provides that subsections 117(4) to (9) of the Act apply and the Tribunal must consider these when deciding whether it would be just and equitable or otherwise proper to make the departure decision.

CONSIDERATION

A ground for departure

1. Ms Maas asked for a departure from the administrative assessment on the basis that the assessment does not correctly reflect the parties’ respective income, property, financial resources and earning capacity (also known as “Reason 8A and Reason 8B”) and that Dr Maat had capacity to contribute to private school fees (also known as “Reason 3”).

Income, property, financial resources and earning capacity of both parties

1. Subparagraph 117(2)(c)(ia) of the Act provides that, in the special circumstances of the case, a ground for departure may be established if application of the legislative provisions relating to an administrative assessment results in an “unjust and inequitable determination of the level of financial support to be provided by the liable parent” due to the income, property and financial resources of either parent.

Dr Maat – income, property and financial resources

1. At the time Ms Maas lodged her application on 24 June 2019 child support liability was based on Dr Maat’s 2017/18 adjusted taxable income of $99,695. Ms Maas submitted that Dr Maat’s income was far greater than indicated in his annual personal tax returns. He is the sole director of a company, [Company name] Pty Ltd, which has an annual turnover of about $400,000. He has capacity to pay child support and contribute to [the child]’s private school fees (folio 66).

2. Dr Maat stated that he is a [Medical specialist] and conducts his business via his company. As an overseas[1] trained doctor living in Australia, there were significant limitations on his ability to work in his field. Ms Maas therefore overstated his capacity to earn (folio A36).

   [1] Trained in [Country]

3. Dr Maat provided both personal income tax returns and company tax returns for the 2018/19 (folios A115 and A125) and 2019/20 (folios A16 and A26) financial years. Child Support documents contain the tax returns for the 207/18 financial years (folio 150 and 141). The evidence indicates that Dr Maat’s combined financial resources were greater in 2018/19 than in 2017/18 and 2019/20:

Personal income	2017/18 financial year	2018/19 financial year	2019/20 financial year
Salary	$120,000	$120,000 + $32,000 director’s fee +$2,739 other employer	$120,000
Interest	$432	40	$17
deductions	$20,737	$20,737	Nil
Personal taxable income	$99,695	$134,052	$120,017
[Company name] Pty Ltd	2017/18 financial year	2018/19 financial year	2019/20 financial year
Income	$388,159	$403,533	$276,477
Interest	$6,418	$13,142	$16,378
Total Income	$394,568	$416,675	$292,855
Expenses: super	Nil	$14,440	$11,400
Expenses: interest	$438	$5,114	$623
Expenses: motor vehicle	$7,246	$1,833	$3,546
Other expenses[2]	$214,285	$238,641	$183,249
Add-back non-deductable expenses	+$2,940	+$11,287	+$11,400
[Company] taxable income (profit)	$175,453	$167,934	$105,437
Total (personal taxable income plus [Company]Tessarella taxable income)	$275,148	$301,976	$225,454

[2] These include the salary/director’s fee Dr Maat pays himself, as well as insurances, travelling and accountancy fees (e.g. folio A128)

1. I will accept that the expenses claimed by Dr Maat are necessary for his work. His main expenses appear to relate to insurances and travel/conferences, which seem reasonable for a medical specialist. On the basis of this evidence I therefore find that Dr Maat’s income and financial resources amounted to $275,148 in 2017/18, $301,976 in 2018/19 and $225,454 in 2019/20.

2. The information contained in earlier tax returns shows that in 2015/16 Dr Maat’s personal taxable income was $241,389 (folio 85) and company taxable income was $73,419 (folio 79) and in 2016/17 Dr Maat’s personal taxable income was $91,987 (folio 144) and company taxable income was $125,184 (folio 138). This results in total financial resources of $314,808 in 2015/16 and $217,171 in 2016/17.

3. Dr Maat stated that his income was significantly higher in 2018/19 because he worked very long hours (about 36 hours per week) and took on extra work to try and earn as much as possible to cover his legal expenses (folio A36). He said that he could not sustain this level of activity, given the type of medical work he is involved in. He reduced his working hours to about 18 hours per week in 2019/20 and his income reduced accordingly.

4. Dr Maat noted that he will probably increase his working hours again in the near future, but he is looking to find employment in other fields. He has returned to [Country] and is looking to find employment with [Medical organisation], helping with Veterans’ Affairs or obtaining a teaching position at one of the universities (folio A36). Thus, whilst he may work longer hours, his salary may not be as high. Dr Maat estimated that his financial resources will probably be around $200,000 per year in the future.

Dr Maat – earning capacity

1. Ms Maas submitted that Dr Maat had greater earning capacity, particularly since he reduced his working hours in the past financial year. She noted in her change of assessment application that the rate for a [Medical specialist] doing locum work is about $3,000-$4,000 per day (folio 74).

2. The relevant legislative provisions for consideration of a parent’s earning capacity are provided for in subparagraph 117(2)(c)(ib) and also in subsection 117(7B) of the Act. Essentially the provision restricts the circumstances in which a person’s earning capacity can be used as a basis to depart from a formula assessment.

3. There are three essential matters to be considered in determining whether the administrative assessment should be departed from on the grounds of earning capacity. In simple terms they can be explained as follows:

   ·did the parent not work despite ample opportunity to do so, reduce their hours of work or change their occupation, industry or working pattern; and

   ·was the parent’s decision not to work despite ample opportunity to do so or to reduce their hours of work or change their occupation, industry or working pattern not justified because of caring responsibilities or their state of health; and

   ·the parent has not demonstrated that it was not a major purpose of their decision not to work despite ample opportunity to do so or to reduce their hours of work or change their occupation, industry or working pattern to affect the administrative assessment of child support.

   All three of the above criteria must be met before a change of assessment can be made to take into account whether the parent has a greater earning capacity.

4. In this case there appears to be no dispute that Dr Maat reduced his working hours in the 2019/20 financial year and he also agreed that he was looking at utilising his medical skills in a different, less stressful capacity. Based on this evidence, I therefore find that paragraph 117(7B)(a) of the Act is satisfied.

5. Dr Maat stated that working as a [Medical specialist] is extremely stressful, as he spends hours in front of the computer interpreting medical tests, such as CT scans or MRIs relating to a person’s serious health issues. It is imperative that his interpretations are correct, as they affect a person’s life. Dr Maat also said that since returning to [Country], he has to obtain recertification for each [Jurisdiction] in [Country] that he wishes to practice in, which makes finding full-time employment difficult.

6. The legislation requires that a person’s decision to reduce their working hours is justified by their state of health or caring responsibilities. On the basis of the evidence provided by Dr Maat, I am not persuaded that his decision to reduce his working hours was justified by the state of his health or caring responsibilities and this means paragraph 117(7B)(b) of the Act is also satisfied in this case.

7. As noted, the third criterion in relation to a person’s earning capacity represents a rebuttable presumption. The onus of proving a major purpose for the decision about their work is on the person who made the choice and “If the Tribunal is not satisfied one way or the other, the person with the onus fails.”[3]

   [3] Carlson & Acuff & Anor (SSAT Appeal) [2010] FMCAfam 677, at [68]

8. Dr Maat did not provide any other evidence to support his decision, but noted that he did “not think about child support”, when he decided to reduce his working hours. I therefore find that he did not demonstrate to my satisfaction that it was not a major purpose of his decision to reduce his working hours to avoid his responsibility to pay child support and therefore subsection 117(7B) of the Act applies in respect of Dr Maat’s circumstances.

9. As all three criteria provided for in subsection 117(7B) of the Act are met, I will consider Dr Maat’s earning capacity further in relation to this review.

Ms Maas – income, property and financial resources

1. Ms Maas is working as [an Occupation] for [Employer] and she has done so for nearly three years (folio B2). Recent payslips (for July/August 2020) indicate that her base salary is currently $195,700 (folio B14/B15). Her payslip for the end of June 2020 states that her gross salary for 2019/20 was $221,494 (folio B16).

2. Ms Maas provided her 2018/19 income tax return which shows a taxable income of $178,370 (folio B25). She noted that she did receive additional “performance bonuses” in 2019/20 and suggested that an annual income of $220,000 was a fair reflection of her financial resources.

3. Dr Maat suggested that Ms Maas also owns an investment property together with her husband and she would therefore have additional rental income. He submitted title searches from NSW Land Registry (folios A142 and A143), which indicate that Ms Maas is the owner of one property and joint owner (together with her partner) of a second property. Ms Maas stated in the hearing that she owns one property and that her partner has an investment property. She noted that the investment property was solely in her partner’s name and that he received rental income from that property.

4. The evidence provided by Dr Maat does not appear to support Ms Maas’s contentions, but rather appears to indicate that Ms Maas is joint owner of the rental property. Ms Maas was given the opportunity to comment on this information, but she did not do so.

5. I have thus concluded that whilst Ms Maas’s annual income tax returns adequately represent her employment income; it is entirely possible that she also has access to additional rental income from the jointly owned investment property.

Ms Maas – earning capacity

1. Ms Maas has been working full time for a number of years and she was working full time when she lodged her change of assessment application. As such I do not consider that Ms Maas has greater earning capacity than she exercises for the purposes of this review.

School fees

1. Subparagraph 117(2)(b)(ii)) of the Act provides that a ground for departure exists, where in the special circumstances of the case, the costs of maintaining the child are significantly affected because the child is being cared for, educated or trained in the manner that was expected by his or her parents.

2. [The child] attends an elite private school in Sydney. She is currently in Year 9 and has been in the private school system since preschool. Dr Maat did not dispute that they both signed the initial enrolment form, but suggested that he and Ms Maas agreed at the time to share private school fees equally (folio A37). He paid for the first years of [the child]’s schooling to enable Ms Maas to save some money and purchase a home, but when he asked her to start contributing to the fees she refused. Dr Maat noted that as Ms Maas “reneged on their initial agreement” he stopped paying for school fees in 2018 (folio A 37).

3. Dr Maat stated that he “un-enrolled” [the child] from the private school, when it appeared that [the child] would be joining him in [Country], but Ms Maas did not agree to this arrangement. She subsequently re-enrolled [the child] in the private school and gave an undertaking that she would pay for all school fees. He agreed that [the child] could return to private schooling, if Ms Maas would be solely responsible for the fees (folio A38).

4. Dr Maat said that Ms Maas was adamant that [the child] should receive a private school education and he did not disagree with that. His employment situation has since changed however and he can no longer afford to pay the high fees. Dr Maat argued that he has “paid enough” for [the child]’s schooling in the past and Ms Maas could now afford to pay for the remainder of [the child]’s school years.

5. Ms Maas submitted that she and Dr Maat enrolled [the child] at a private school when [the child] was very young and she has been in the private school system since then. She submitted a letter from the Deputy Head of [the child]’s school indicating that the original enrolment form was signed by both parties in November 2005 (folio 110). Ms Maas contended that their initial agreement was that Dr Maat would pay the private school fees and not pay additional child support.

6. Dr Maat submitted an email from [Ms A] dated 3 March 2018, to support his evidence that he “un-enrolled” [the child] from the private school. The email states “ this is to confirm your formal withdrawal has been received…We are sorry to see [the child] leaving [the school]” (folio A141). He also submitted further emails indicating that [the child] would return to the private school from 6 August 2018 (folio A139) and that Ms Maas was the sole signatory on [the child]’s enrolment form dated 27 July 2018 (folio A137).

1. Ms Maas wrote on 14 October 2019 that [the child] only missed eight school days in July 2018, because Dr Maat had taken her to Queensland. [The child] did not attend any school at that time (folio 178), but she had not missed any other school days.

2. I have considered the evidence before me and I am of the view that both parties intended for [the child] to be educated in the private school system. Whilst Dr Maat may have “un-enrolled” [the child] from the private school, it appears that he continued to pay the school fees throughout 2018 (folio 111).

3. Dr Maat now states that he does not wish for [the child] to attend private school, it appears that this “change of mind” is motivated by the notion that Ms Maas ought to pay the private school fees and that he is no longer responsible for this additional cost. I accept Dr Maat’s contention that he could not afford the high fees, but I am not persuaded that he has changed his expectation for [the child] to be educated privately.

4. On the basis of the evidence before me I therefore find that both Dr Maat and Ms Maas expected [the child] to be educated in the private school system.

5. Ms Maas noted that [the child] attends an elite private school and she provided evidence that [the child]’s school fees amounted to $36,900 in 2019 (folio 112). Ms Maas noted that she would spend an additional $5,000 on other school related costs, bringing the total cost to $41,900. School fees for 2020 are $35,500 (folio B42). Ms Maas stated that she spends nearly $10,000 per term now on [the child]’s schooling (folio B39) and it appears that the school generally increases the fees by about 2.5% each year (folio B41).

6. Ms Maas said that [the child] currently attends Year 9 and she would like to complete International Baccalaureate studies in Year 11 and 12. These studies attract additional fees of about $4,000 per year. Thus costs associated with [the child]’s private schooling could amount to $45,000 (or more) when she attends Year 11 and 12.

Conclusion – grounds for departure

1. When Ms Maas lodged her departure application on 24 June 2019 (the 2018/19 financial year), the rate of child support was based on Dr Maat’s 2017/18 taxable income of $99,695 and Ms Maas’s 2017/18 taxable income of $123,404 resulting in a child support liability of $11,744 per annum payable by Dr Maat to Ms Maas.

2. I have found that Dr Maat’s actual income and financial resources in 2018/19 amounted to $301,976 and Ms Maas’s income was $178,370. I have estimated that Dr Maat’s child support liability for [the child], if calculated on the basis of these incomes, would be $18,371 per year at the time Ms Maas lodged her application. I note that Dr Maat submitted that his income had reduced in 2019/20, but I have found that he does have additional earning capacity.

3. I find that the difference between the administratively assessed rate of child support and the rate of child support based on actual financial resources of both parents, is so great that it gives rise to special circumstances in this particular case.

4. Based on the evidence before me I am satisfied that the ground for departure set out in subparagraph 117(2)(c)(ia) of the Act has been made out in respect of both Dr Maat’s and Ms Maas’s income, property and financial resources.

5. As stated earlier, I have also found that the parents intended for [the child] to be educated in the private school system and I accept that fees of this magnitude are costs which parents would not have to expend in the education of a child in the public system.

6. I am satisfied that the costs of educating [the child] for the 2019 academic year are so great as to significantly affect the costs of maintaining her, and that special circumstances exist as those fees are not taken into account in the administrative assessment. I therefore also find that the cost of [the child]’s education at an elite private school provides a ground to depart from the administrative assessment.

7. I am cognisant of Dr Maat’s concern that he cannot afford to pay the private school fees and in this regard I note the case of Wright[4] in which Riethmuller FM (as he was then) considered how this Tribunal ought to deal with the payment of private school fees where the children were enrolled in private schools but the father subsequently suggested he could no longer meet those fees. It relevantly states [at para 5]:

   Secondly, with respect to school fees, the Tribunal accepted that the children had been enrolled in private schools for many years. There was no issue between the parties as to their expectation that the children would have a private school education. The real issue in the case was whether or not given the current financial circumstances of the Father, he could continue to meet those school fees.

   [4] Wright and Wright (SSAT Appeal) [2009] FMCAfam 979

8. And further [at para 9]:

   At present the school fees are clearly an expense of the Wife as the Husband has advised the school he will no longer accept liability.  Therefore the fees should be taken up as an expense of caring for the children, in determining the costs of maintaining the children. Once it has determined the costs of the children the Tribunal should then turn to consider the capacity of the Appellant to contribute to those costs along with the capacity of the Respondent to contribute to those costs.

9. In accordance with this approach, I will turn to the capacity of each parent to contribute to these costs later in these Reasons.

10. Subparagraph 98C(1)(b)(i) of the Act is satisfied if “one, or more than one” of the grounds for departure are established. Having found grounds for departure established, I will now consider whether it is just and equitable and otherwise proper to make a departure determination.

Just and equitable

1. The requirement to consider whether a departure would be just and equitable directs that my attention is turned to what is fair to the parents and their children. To do so I must have regard to a number of factors set out in subsection 117(4) of the Act, such as the needs of [the child], the parents’ commitments and any hardships that would be caused by departing, or not departing, from the statutory formula.

Dr Maat

1. Dr Maat’s income, property and financial resources have been discussed in some detail above. I have found that at the time Ms Maas lodged her application for a change of assessment (in the 2018/19 financial year) Dr Maat’s income, property and financial resources amounted to $301,976. His income reduced to $225,454 in 2019/20 and Dr Maat stated that his current financial resources may only amount to about $200,000 per annum.

2. Dr Maat provided a completed Statement of Financial Circumstances (folios A1–A9). He indicated employment income of $2,307 per week (about $120,000 per year), plus $1,298 per week business income (about $67,500). Thus his total income and financial resources would amount to $157,500 per year.

3. He indicated expenses (excluding child support), but including taxation, of $2,362 per week. These include $290 per week for entertainment, gifts, books, holidays and a house cleaner, which are considered non-essential expenses.[5]

   [5] The Family Court (in Mee and Ferguson (1986) FLC 91-716) has been prescriptive about the types of expenses that can be considered “necessary” expenses and that there are only a few expenses which can be considered to take priority over a parent’s primary duty to support their children. This includes expenses such as a reasonable amount for rent or mortgage payments, food, utilities, and some loans.

4. On this basis Dr Maat’s total income of $3,605 per week exceeds his expenses of $2,072 per week by about $1,533 per week. Based on the evidence before me, I therefore find that Dr Maat is comfortably able to meet all of his current expenses.

Ms Maas

1. Ms Maas’s 2018/19 taxable income was $178,370 and her 2019/20 taxable income was about $220,000. Ms Maas indicated on her Statement of Financial Circumstances (folio B9–B9) that her current weekly base salary is $3,800 ($197,600 per annum).

2. She agreed that her annual salary may be higher, if she receives additional performance bonuses. As noted above, it is also possible that she receives additional rental income.

3. Ms Maas indicated total expenses of about $4,690 per week. This includes $280 per week for herself for holidays, entertainment, gifts, books, gym and house cleaning. Ms Maas stated she currently pays for all of [the child]’s school fees, which amount to $730 per week ($37,960 per year).

4. Based on the above information I have estimated that Ms Maas’s weekly expenses are approximately $4,410 (excluding $280 per week for her discretionary expenses).

5. It therefore appears that Ms Maas has an income shortfall of about $610 per week, but some of this shortfall may be covered by Ms Maas’s additional income and financial resources. I am therefore persuaded that Ms Maas is generally able to meet all of her necessary financial commitments.

[The child]

1. Ms Maas indicated that general expenses for [the child] include $730 per week for private school fees. She spends an additional $660 per week on food, toiletries, clothing, as well as holidays and entertainment for [the child]. Thus, her total expenditure (including education fees) for [the child] is $1,390 per week or $72,280 per annum, more than half of these expenses are attributable to school fees.

2. [The child] is now 15 years old and attends school. She has no income, property or financial resources relevant to my determination.

Otherwise proper  

1. The requirement to consider whether it is “otherwise proper” to depart from the administrative assessment directs attention to what is fair to the community. It is necessary to consider the effect of any departure from the administrative assessment on entitlements to income-tested pensions, allowances or benefits (subsection 117(5) of the Act).

2. It is a prime objective of the child support legislation that parents should be obliged to support their own children to the extent of their real capacity, and that that obligation should not be unnecessarily abrogated to the public welfare system when the parents themselves have the capacity to maintain their children.

3. Ms Maas is not in receipt of Centrelink payments, which are affected by maintenance payments such as child support. I am nevertheless of the view that it is otherwise proper to depart from the administrative assessment.

Conclusion

1. Section 98S of the Act describes the determinations that the Registrar, and the Tribunal standing in the shoes of the Registrar, may make if it decides to depart from the administrative assessment. It is open to the Tribunal to set a rate of child support payable or set some of the variables used in the administrative assessment formula (for example, vary one or both parents’ adjusted taxable income).

2. When Ms Maas lodged her departure application on 24 June 2019 (the 2018/19 financial year), the rate of child support was based on Dr Maat’s 2017/18 taxable income of $99,695 and Ms Maas’s 2017/18 taxable income of $123,404 resulting in a child support liability of $11,744  per annum.

3. Dr Maat submitted that his income and financial resources (including profit from his business) are not as high as the income amount set by the objections officer ($295,453 per annum). He agreed that his 2018/19 financial resources were higher ($301,976), but that income was “artificially high” because he had to take on a lot of extra work to cover all of his expenses. His future income would be much lower. Dr Maat suggested that an annual income of about $200,000 would probably be more realistic and he could not afford to pay for school fees, as well as pay child support on such a reduced income.

4. Ms Maas contended that Dr Maat’s financial resources were probably even higher than anticipated by the objections officer. He is a specialist medical officer and has capacity to earn a substantial income. He also has the ability to deduct some of his expenses through his business, which she, as a “wage/salary earner”, could not do. Ms Maas noted that Dr Maat agreed that he had reduced his working hours and he probably did so to affect his child support liability. Ms Maas observed that Dr Maat currently owes substantial arrears.[6]

   [6] I note these amount to $48,033.85 as at 31 August 2020 and Dr Maat last made a payment on 11 February 2020 (folio 334).

5. I have found that Dr Maat’s 2018/19 income and financial resources amounted to $301,976 and that this amount had reduced to $225,454 in 2019/20. Dr Maat suggested that his current earnings might be even lower, but I have found that he has greater earning capacity, which ought to be considered.

6. Ms Maas’s 2018/19 taxable income was $178,370, but her 2019/20 taxable income is likely to be about $220,000. I also noted that Ms Maas may have some additional financial resources in form of rental income from a jointly owned investment property.

7. In addition, I was also persuaded that both parents intended for [the child] to be educated in the private school sector and she has attended an elite private school from an early age. School fees and additional costs were $41,900 in 2019 and $39,500 in 2020 and the costs are likely to increase each year.

8. Given the variability of my findings I have decided that it is more appropriate in this case to set an annual rate of child support, rather than income amounts for the parties. Ms Maas indicated that her total expenses for [the child] are about $1,390 per week or $72,280 per annum. I am of the view that both parents should contribute to these expenses and that it is reasonable for Dr Maat to contribute $40,000 per annum (approximately 55% of total expenses). Whilst both parties’ financial resources appeared to be similar in 2019/20 ($225,454 Dr Maat and $220,000 Ms Maas), I think it is fair for Dr Maat to contribute a greater amount, given his additional earning capacity.

9. Given that prices are likely to rise, it is also fair for the amount to be increased annually by the Consumer Price Index.

10. I will commence my determination from the date on which the new administrative assessment commenced (16 April 2019). Neither party disputed this start date. Both parties suggested however that any departure determination should be in force for as long as possible to avoid having to go through this lengthy process again. My decision will therefore be in force until a terminating event ends the child support case (which will be some time in 2023).

11. I have estimated that my decision will reduce Dr Maat’s arrears by about $5,000 and his ongoing payments would be about $770–$780 per week. As noted on his Statement of Financial Circumstances, Dr Maat’s stated current income exceeds his expenses by about $1,500 per week and he should therefore be able to manage these payments. The child support payments will assist Ms Maas to meet her expenses for [the child] and neither parent should experience financial hardship as a result of my decision.

12. I have reached a different conclusion from the objections officer and I therefore set aside their decision.

DECISION

The decision under review is set aside and a decision substituted that:

• From 16 April 2019 until a terminating event ends the assessment, the rate of child support payable by Dr Maat is set at $40,000 per annum, and

• The annual rate is increased by the weighted average Consumer Price Index for the preceding September quarter on 1 January each year, commencing on 1 January 2020.