Maidment and Maidment (Child support)

[2024] ARTA 427

Maidment and Maidment (Child support) [2024] ARTA 427 (29 October 2024)

Applicant/s:  Mr Maidment

Respondent:  Child Support Registrar    

Other Parties:       Ms Maidment

Tribunal Number:   2024/MC028117 

Tribunal:  Senior Member J Longo

Place:Melbourne

Date:29 October 2024

Decision:

The Tribunal affirms the decision under review.

CATCHWORDS

CHILD SUPPORT – particulars of the administrative assessment – estimate of income – reverting to the administrative assessment – provisional adjusted taxable income – exceptional circumstances preventing updated income information – 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 pursuant to subsection 16(2AB) of the Child Support (Registration and Collection) Act 1988.

Statement of Reasons

BACKGROUND

1.Mr Maidment and Ms Maidment are the parents of [Child 1] and [Child 2]. A child support case has been registered with Services Australia – Child Support (Child Support) since 22 January 2018. Mr Maidment is assessed as the payer of child support.

2.Prior to 31 October 2022, Mr Maidment was assessed on his income from the 2020–21 financial year. Mr Maidment’s income was $116,980 and Ms Maidment’s income was $44,007. On 7 February 2022 Mr Maidment made an election to lodge an estimate of income of $0 from 7 February 2022 to 30 June 2023 to replace his income as used at the time.

3.On 16 July 2022, a departure determination decision was made which varied Mr Maidment’s adjusted taxable income to $48,000 until 31 December 2022. Child Support, on the cessation of the departure determination, reverted the administrative assessment to a provisional income of $120,372 from 1 January 2023 in the absence of Mr Maidment’s 2021–22 taxable income being lodged with the Australian Taxation Office (ATO).

4.On 26 July 2023, Child Support received Mr Maidment’s 2022–23 taxable income of $220 from the ATO and made a new administrative assessment from 1 September 2023. Mr Maidment’s income was applied from 1 September 2023 until 30 November 2024. In the absence of Ms Maidment’s ATO taxable income, Child Support applied a provisional income of $52,268 for Ms Maidment.

5.On 20 August 2023, Mr Maidment objected to the use of the provisional income of $120,372 applying from 1 January 2023. As the objection was lodged out of time Mr Maidment also made an application for the time to be extended. On 14 December 2023, Child Support refused the application to extend time. Mr Maidment sought review of this refusal to extend the time to object with the Administrative Appeals Tribunal (the AAT). On 21 February 2024 the AAT granted the application to extend time and the matter was remitted to Child Support. On 6 June 2024 Child Support disallowed Mr Maidment’s objection.

6.On 24 June 2024, Mr Maidment lodged an application for review with the AAT. From 14 October 2024, the AAT became the Administrative Review Tribunal (the Tribunal). Under the transitional provisions in the Administrative Review Tribunal (Consequential and Transitional Provisions No. 1) Act 2024 (the Transitional Act), applications for review to the AAT that were not finalised before 14 October 2024 are taken to be an application for review to the Tribunal. This also applies to decisions not finalised before 14 October 2024 being taken to be decisions of the Tribunal. The Transitional Act gives the Tribunal the authority to continue and finalise any aspect of the review not already completed by the AAT. This decision and statement of reasons is made by the Tribunal.

CONSIDERATION

7.The statutory provisions relevant to this review are contained in the Child Support (Assessment) Act 1989 (the Act), the Child Support (Assessment) Regulations 2018 (the Regulations) and the Child Support (Registration and Collection) Act 1988.

8.Administrative assessments under Part 5 of the Act are based on formulas which contain variables such as the parents’ adjusted taxable incomes and their percentages of care for the child. The formula also incorporates a concept known as the last relevant year of income under section 5 of the Act.

9.It is not in dispute that at the time of Mr Maidment’s estimate of income on 7 February 2022, he was assessed on income from the 2020–21 financial year. Mr Maidment’s income was $116,980 for the 2020–21 financial year. On 7 February 2022, Mr Maidment lodged an estimate of $0 for the period 7 February 2022 until 30 June 2023. However, this estimate did not apply from 16 July 2022 as a departure determination was made which varied Mr Maidment’s adjusted taxable income to $48,000 from 16 July 2022 until 31 December 2022.

10.If the ATO had assessed Mr Maidment’s 2021–22 taxable income, Child Support would have used that adjusted taxable income in the administrative assessment from 1 January 2023, when the departure determination had ended, in accordance with section 56 of the Act. However, Mr Maidment had not lodged his 2021–22 tax return and so the ATO had not assessed his taxable income. Child Support therefore used a provisional adjusted taxable income for Mr Maidment. Child Support made a provisional income determination of $120,372 for 2021–22 and therefore applied this provisional income from 1 January 2023.

11.In summary, Mr Maidment’s rate of child support payable was governed by the Part 5 administrative assessment from 7 February 2022 until 15 July 2022, and then by the Part 6A departure decision from 16 July 2022 to 31 December 2022, and then a further Part 5 administrative assessments from 1 January 2023 until 1 September 2023.

12.A new child support period commenced on 1 September 2023 until 30 November 2024, after Mr Maidment’s 2022–23 taxable income of $220 was provided to Child Support on 26 July 2023 by the ATO. On 23 August 2023 Mr Maidment objected to the use of a provisional income of $120,372 from 1 January 2023. As the objection was not lodged within the 28-day time frame, an extension of time was considered and initially refused by Child Support. On 21 February 2024, the AAT granted the extension of time and the objection was considered by Child Support. Mr Maidment lodged his 2021–22 income tax return on or about June 2024 and his income for 2021–22 was assessed by the ATO as $54,419.

13.Section 58A of the Act provides for an income amount which has been determined in this manner to be replaced with an actual adjusted taxable income amount when the actual amount becomes available. Section 58A says that the Registrar must immediately amend an administrative assessment of child support if the income used for a parent in the assessment was an amount determined under section 58 of the Act and a person’s actual adjusted taxable income is different from the amount determined under section 58.

14.Subsection 58A(2) of the Act explains when an adjusted taxable income amount can be amended from a date prior to when the adjusted taxable income amount actually became available to Child Support:

Retrospective determinations

(2)  If:

(a)  at the time the Registrar is to amend the administrative assessment under this section, the parent could lodge his or her tax return by the date required under Part IV of the Income Tax Assessment Act 1936 (taking into account any deferral under section 388-55 in Schedule 1 to the Taxation Administration Act 1953 ); or

(b)  paragraph (a) of this subsection does not apply and:

(i)the amount subsequently ascertained, as mentioned in subparagraph (1)(b)(i), is higher than the amount that was determined under section 58; or

(ii)the later amount that the Registrar determines, as mentioned in subparagraph (1)(b)(ii), is higher than the earlier amount determined under section 58; or

(c)  neither paragraph (a) nor (b) applies, but circumstances prescribed by the regulations for the purposes of this section apply in relation to the parent;

then the Registrar must immediately amend the administrative assessment for the child support period on the basis that the parent's adjusted taxable income for that year of income is, and has always been, the amount that was subsequently ascertained or later determined (as the case requires).

15.The relevant criterion in Mr Maidment’s case is that in paragraph 58A(2)(c) – whether or not the circumstances prescribed by the Regulations apply in his case. If they do, his adjusted taxable income for 2021–22 of $54,419 can be applied to the assessment from 1 January 2023, rather than the provisional income amount of $120,372.

16.Section 11 of the Regulations sets out the type of circumstances which could apply:

Adjusted taxable income--prescribed circumstances

(1)  For the purposes of section 58A of the Act, the following circumstances are prescribed in relation to a parent who was unable to provide information about the parent's adjusted taxable income to the Registrar at the time the relevant administrative assessment was made:

(a)  one or more of the following applied in relation to the parent at that time:

(i)  the parent did not know that an application for the assessment had been made and accepted;

(ii)  the parent had a serious illness or injury;

(iii)  the parent was under detention or imprisonment;

(iv)  the parent resided in a remote location which made it difficult to contact the Registrar;

(v)  a natural disaster prevented the parent from being able to contact the Registrar;

(vi)  there was some other exceptional circumstance that prevented the parent from providing the information;

(b)  the Registrar confirms that the parent was unable to provide the information at that time because of a circumstance mentioned in paragraph (a);

(c)  the parent later provides the information to the Registrar as soon as is practicable in the circumstances.

17.Mr Maidment confirmed in his evidence at hearing that he knew that an application for the assessment had been made (subparagraph 11(1(a)(i) as an application had been registered since 2018), he did not have a serious illness or injury (subparagraph 11(1(a)(ii)), he was not in detention or imprisoned (subparagraph 11(1(a)(iii)), he was not in a remote location which made it difficult for him to contact Child Support (subparagraph 11(1(a)(iv)) and he was not prevented from providing the information due to a natural disaster (subparagraph 11(1(a)(v)). Mr Maidment stated that he thought there were exceptional circumstances that prevented the parent from providing the information under subparagraph 11(1(a)(ii) of the Regulations.

18.Mr Maidment stated that he told Child Support that he was unemployed and that he did so on 27 February 2022 and that they should have been aware that his income was not the same as previously determined in the provisional income. I referred Mr Maidment to the letter on 10 August 2022 which stated that his provisional income would apply from 1 January 2023 and the conversation with Child Support on 12 August 2022, where he was verbally advised about the departure determination and its effect on his estimated income.

19.I am satisfied that on 12 August 2022, Mr Maidment was made aware that his estimate could not apply due to the departure determination. I also note that Mr Maidment was sent correspondence on 19 September 2022 that showed that from 1 January 2023 his income would revert to the provisional income of $120,372. Mr Maidment stated that he did not receive this letter, but I am satisfied that the letter was received by Mr Maidment though his myGov online account as based on the documentary evidence provided in the Child Support documents. On the question as to why Mr Maidment did not lodge his income tax return for 2020–21 earlier, Mr Maidment stated that there was no reason for the delay.   

20.Section 11 of the Regulations says that the prescribed circumstances must have applied “at the time the relevant administrative assessment was made”. In this case, that was 19 September 2022. I find that none of the circumstances prescribed under the Regulations indicate that Mr Maidment was unable to provide information about his adjusted taxable income to the Registrar on 1 January 2023, or other exceptional circumstances that prevented him from providing the information. Accordingly, I affirm the decision under review.

DECISION

The Tribunal affirms the decision under review.

Date(s) of hearing:	Wednesday, 9 October 2024
Representative for the Applicant:	Self-represented
Representative for the Other party:	Self-represented