Major and Child Support Registrar (Child support)

[2024] AATA 792

Major and Child Support Registrar (Child support) [2024] AATA 792 (21 February 2024)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2023/MC027242

APPLICANT:  Mr Major

OTHER PARTIES:  Child Support Registrar

TRIBUNAL:Senior Member R Ellis

DECISION DATE:  21 February 2024

DECISION:

The Tribunal sets aside the decision under review and, in substitution, decides that the extension application should be granted.

CATCHWORDS

CHILD SUPPORT – refusal to grant an extension of time to object - reasonable explanation for the delay in lodging the objection late – 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. Mr Major and [Ms A] are the parents of [Child 1] (born February 2007) and [Child 2] (born November 2011).  There has been a child support assessment in place since 22 January 2018.

2. On 18 September 2022 Services Australia – Child Support (Child Support) made the decision to apply a 2021–22 Australian Taxation Office (ATO)-assessed income for [Ms A] in the assessment from the start of a new child support period on 1 November 2022.  Letters were issued to the parents advising of the new child support rates and incomes to be used from 1 November 2022 to 31 January 2024 (the original decision).

3. On 1 January 2023 Child Support applied a 2021–22 provisional income for Mr Major of $120,372 in the assessment from 1 January 2023 in accordance with the letters issued on 18 September 2022.

4. On 20 August 2023 Mr Major objected to this decision and as his objection was not made within the prescribed period he applied for an extension of time on 11 December 2023.

5. On 14 December 2023 Child Support refused the request for an extension of time and on 20 December 2023 Mr Major sought a review of the refusal decision by the Administrative Appeals Tribunal (the Tribunal).

6. The Tribunal conducted a hearing into the application on 16 February 2024.  Mr Major gave evidence on affirmation by Microsoft Teams audio.  At the commencement of the hearing the Tribunal agreed to allow [Ms B] to give evidence as a witness for Mr Major.  [Ms B] gave evidence on affirmation by Microsoft Teams audio.

7. The Child Support Agency provided the Tribunal and Mr Major with papers relevant to the matter (185 pages).

ISSUES

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

2. The issue which arises in this case is whether or not to grant Mr Major’s request for an extension of time to lodge an objection to the original decision.

CONSIDERATION

1. Part VII of the Act is about the procedures related to objections made for certain decisions. Section 81 is about time limits on lodging objections and provides that a person has 28 days in which to lodge an objection after a notice of the decision is served on them. Section 82 provides for a person to apply for an extension of time to lodge an objection after the 28-day period has elapsed. Section 83 requires Child Support to either grant or refuse an extension of time application and serve notice in writing of the decision.

2. In the event Child Support refuses the extension of time application, the person applying may apply to the Tribunal for a review (item 1 of the table in subsection 89(1) of the Act).

3. The Tribunal finds, based on the evidence provided, that Mr Major was advised about the outcome of the original decision by electronic means in a letter from Child Support dated 18 September 2022.  Given Mr Major lodged his objection more than 28 days after he was served with notice the Tribunal is satisfied an extension of time is necessary.

4. The Tribunal is required to consider whether or not it is reasonable or proper for an extension of time to be granted to Mr Major to lodge his objection to the decision made on 18 September 2022. From other decisions, which provide guidance to the Tribunal on this matter, it is clear that generally the statutory time limit of 28 days is to be enforced unless there are acceptable reasons for departing from this prescribed timeframe.

5. A review of relevant court decisions establishes that when considering matters relating to an extension of time, the Tribunal should take into account and balance a range of factors. These factors are a guide and are not exhaustive, but generally include:

   ·     the reasons for the delay and whether the applicant rested on their rights;

   ·     the merits of the substantive application;

   ·     any prejudice to the other party including any difficulties they will experience in providing evidence as a result of the delay;

   ·     any prejudice to the general public; and

   ·     fairness in granting an extension of time.

Reasons for the delay

1. The Tribunal finds that Mr Major’s application for an extension of time on 11 December 2023 in relation to the decision of 18 September 2022, of which he was notified by electronic means, is approximately 421 days out of time.

2. In seeking an extension of time Mr Major told the Tribunal that initially he had not seen the letter from Child Support dated 18 September 2022 advising him a provisional income of $120,372 was to be applied to the assessment.  Mr Major explained he had previously always received his correspondence from Child Support by post and for some reason this had changed to electronic delivery. Mr Major said he had never asked Child Support to change the method of delivering his correspondence at any time.

3. The Tribunal notes in evidence that during a conversation with Child Support on 12 August 2022 in relation to an income estimate the officer has recorded that Mr Major is using his online account but “prefers receiving assessment letters via post, as is currently occurring”.

4. Mr Major said although the evidence from Child Support showed the letter dated 18 September 2022 as “online read” he did not become aware of the letter until a conversation with a child support officer on 24 July 2023.  Mr Major explained that he had called Child Support to advise he had started working again after being unemployed for around six months.  Mr Major said he was shocked to learn he had a child support debt.  Mr Major said it was only following this conversation that he looked at his online correspondence.

5. The Tribunal notes in evidence that during a conversation with Child Support on 24 July 2023 Mr Major was informed he had a child support debt because his assessment had reverted to a deemed income of $120,372 from 1 January 2023.  The child support officer notes Mr Major “became upset and could not understand why he was being assessed at the high rate”.

6. Mr Major told the Tribunal that following this conversation he gathered his evidence and submitted his objection.  Mr Major pointed out it was several months after objecting that Child Support then informed him he needed to apply for an extension of time.

7. Child Support confirmed with Mr Major on 12 August 2022 it was his preference to continue receiving his correspondence by post.  Mr Major has submitted he was not aware of the correspondence from Child Support dated 18 September 2022 as it had been sent to him by electronic means.  This is an entirely plausible explanation under the circumstances.

8. The Tribunal is satisfied Mr Major has provided reasonable justification for the lengthy delay in applying for a review of the original decision made by Child Support.

Merits of the objection

1. Mr Major told the Tribunal he was made redundant in early February 2022 and tried to submit an estimate of his income several months later because he was still not working.  Mr Major said this estimate was rejected by Child Support because his income had been set following a change of assessment decision.  Mr Major said in this decision Child Support had determined his income was $48,000 and although he was not working he continued to pay child support based on this income amount.

2. Mr Major explained that because he was not working and employer withholding had ended he had been paying child support directly to the agency.  Mr Major said he was paying what he thought was the correct amount given he was unaware the assessment was based on a provisional income of $120,372.

3. The Tribunal notes in evidence that Mr Major lodged an estimate of income of $0 on 7 February 2022 after being made redundant.  This estimate was accepted.  On 27 June 2022 Mr Major then submitted a further estimate of income of $0 to apply in the assessment from 1 July 2022 because he was still not working.  This estimate was refused.  In a letter from Child Support dated 10 August 2022 Mr Major was advised his estimate could not be accepted because Child Support was “satisfied that your actual income will be higher than your estimate”.  The Tribunal further notes that in a change of assessment decision made on 13 July 2022 Child Support varied the income of Mr Major to $48,000 for the period from 9 May 2022 to 31 December 2022.  In this decision the decision maker refers to the estimate of income lodged by Mr Major on 27 June 2022.

4. Mr Major told the Tribunal he could not understand why Child Support had used a provisional income of $120,372 in the assessment from 1 January 2023 when the agency was aware he was not working.  Mr Major acknowledged he had yet to file his individual tax return for 2021–22 but expected his adjusted taxable income would be lower than $120,372.

5. The rate of child support payable by the liable parent is usually based on an administrative assessment under Part 5 of the Assessment Act. The elements of the formula used include the adjusted taxable income of each parent and this is ordinarily equal to their taxable income for the last relevant year of income and supplementary amounts. The last relevant year of income is the last year of income that ended before the start of the child support period.

6. In circumstances where a tax assessment has not been undertaken by the Australian Taxation Office, Child Support may determine an appropriate amount to be the parent’s provisional adjusted taxable income for the last relevant year of income (section 58 of the Assessment Act).

7. Mr Major has explained that he has yet to submit his 2021–22 individual tax return.  It is for this reason that Child Support made the decision on 18 September 2022 to determine a deemed 2021–22 adjusted taxable income for Mr Major of $120,372.  This amount was applied to the assessment from 1 January 2023 which was the date immediately after the income of $48,000 as set under the change of assessment decision had expired.  Mr Major submits this is unfair because Child Support was aware he was not working.

8. Child Support may establish an amount to be a parent’s adjusted taxable income if information or a document is at hand that allows a parent’s adjusted taxable income for the last relevant year of income to be determined (subsection 58(2) of the Assessment Act). Child Support must be satisfied the amount determined is a reasonable approximation of the parent’s adjusted taxable income for that year.

9. Mr Major submitted an estimate of $0 on 7 February 2022 along with a year-to-date income of $74,630 and was still not working when he submitted his estimate of $0 on 27 June 2022.  Given there was information available to determine a reasonable approximation of his adjusted taxable income for that year Child Support could have taken this path rather than deeming an income of $120,372.  The Tribunal is satisfied there may be some merit to his objection.

Potential prejudice to [Ms A] and the wider public

1. The Tribunal must also consider the potential prejudice to [Ms A] and the wider public.  [Ms A] should ordinarily be able to rely on the child support assessment once the period for objection has passed.  Given the application made by Mr Major is more than a year out of time the Tribunal considers [Ms A] would be disadvantaged should an extension of time to lodge an objection be granted.

2. Time limits for the review of administrative decisions should be observed as strictly as possible in order to assist the proper administration of government agencies.  There is also a public expectation that there be a degree of certainty in relation to time limits but the law also allows for extensions of time.  In this case the Tribunal believes there would be prejudice to the general public if an extension of time to lodge an objection was granted.

Fairness in granting an extension of time as between Mr Major and other persons in similar positions

1. Child Support notifies parties that they can object to decisions and have 28 days within which to submit a request for such a review.  Most people comply within the 28‑day timeframe.  The Tribunal is satisfied with the explanation Mr Major has given for the delay in submitting his objection and has found there may be some merit to the objection.  It is reasonable to accept that any other person’s request for an extension of time in such circumstances would be granted.  The Tribunal finds that it would not be unfair to others to grant Mr Major an extension of time.

CONCLUSION

1. Mr Major has provided a satisfactory explanation for the delay in applying for review of the original decision.  The Tribunal found there could be some merit to his application which weighs in favour of the granting of an extension of time.  While there may be prejudice to [Ms A] and the general public should an extension of time be granted the Tribunal has also found it would not be unfair to others to do so.

2. Having carefully considered the various factors which must be taken into account, the Tribunal finds it would be appropriate in this case for the extension of time in which to lodge an objection to be granted.

DECISION

The Tribunal sets aside the decision under review and, in substitution, decides that the extension application should be granted.