Marchbank and Legum (Child support)

[2022] AATA 1553

Marchbank and Legum (Child support) [2022] AATA 1553 (23 February 2022)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2021/MC022929

APPLICANT:  Mr Marchbank

OTHER PARTIES:  Child Support Registrar

Ms Legum

TRIBUNAL:Member K Dordevic

DECISION DATE:  23 February 2022

1. The decision of the Tribunal and the reasons for the decision were delivered orally on 23 February 2022.

2. The following paragraphs are the reasons for the Tribunal’s decision.

CATCHWORDS

CHILD SUPPORT – particulars of the administrative assessment – whether the adjusted taxable incomes for past periods for the liable parent should be applied – decision under review set aside and the matters sent back for reconsideration with directions

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

1. Mr Marchbank and Ms Legum are the parents of one child (born 2010). There was a child support assessment in place made by the Department of Human Services – Child Support from 17 July 2010.

2. Mr Marchbank’s 2018 adjusted taxable income was required to calculate the assessment from 1 March to 31 December 2019. As Child Support did not have his Australian Taxation Office (ATO) assessed income for the 2018 financial year, the Registrar determined that his adjusted taxable income for the last relevant year of incomes was two-thirds of the annualised Male Total Average Weekly Earnings (Australia) – (MTAWE) figure. 

3. Mr Marchbank lodged his 2013 to 2020 income tax returns in January and February 2021. On 8 February 2021 the Australian Taxation Office (ATO) issued a Notice of Assessment for the 2018 financial year indicating that Mr Marchbank’s taxable income was $8,136. His 2013 to 2016 tax refunds were intercepted by Child Support soon after he lodged his returns.

4. On 17 March 2021 Mr Marchbank lodged an application for his 2018 and 2019 adjusted taxable incomes to be applied to the administrative assessment from 1 March 2019. On 22 March 2021 his application in respect of the 2019 year was accepted. On 30 March 2021 his application in respect of the 2018 financial year was refused.

5. On 8 October 2021 Mr Marchbank lodged a written objection to that decision. An extension of time in which to lodge his application was lodged on 15 October 2021. His objection was disallowed on 1 December 2021.

6. On 14 December 2021 Mr Marchbank made an application to this Tribunal for a review of the decision. The application was heard on 23 February 2022. The parties attended by MS Teams video. In addition to oral evidence, the Tribunal had regard to documents provided by Child Support (folios 1 to 198). On 10 January 2022 the Child Support Registrar applied for a direction prohibiting or restricting the disclosure of certain information. Pursuant to section 35 of the Administrative Appeals Tribunal Act 1975, the Tribunal directed that of the 19 pages of additional documents provided by the applicant, only pages 1 and 4 are to be disclosed to the second party. At hearing the father provided verbal permission to release in full the medical reports, which will be forwarded to the mother post hearing. It is also noted that the Tribunal, with the permission of the father provided prior to the mother joining the hearing, read the relevant sections of the reports to the mother during the hearing.

7. The legislation relevant to this application is contained in the Child Support (Assessment) Act 1989 (the Act).

10.  Section 58 of the Act provides that if Child Support cannot ascertain a person’s taxable income, it can determine an income to be used in the administrative assessment. If no information is available as to the person’s recent income, the amount determined must be at least two-thirds of the annualised MTAWE figure.

11. Section 58A of the Act provides that, if Child Support subsequently ascertains the person’s income and the amount ascertained is less than the default income used, a retrospective determination can only take place if certain criteria are met. Relevant to this application paragraph 58A(2)(c) of the Act refers to circumstances prescribed by the regulations:

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).

12.  The Tribunal makes the following findings. From 1 March 2019 Mr Marchbank’s 2018 adjusted taxable income was required to calculate his child support liability. As he did not provide Child Support with his adjusted taxable income for the 2018 financial year, a provisional income of $50,076 (being two-thirds of the annualised MTAWE) was applied to the assessment, in accord with section 58 of the Act. However it is not in dispute that Mr Marchbank lodged his tax return for the 2018 financial year late and that his adjusted taxable income of $8,136 was lower than the provisional income amount determined under section 58 of the Act. T

13.  Regulation 11 of the Child Support (Assessment) Regulations 2018 (the Regulations) sets out the prescribed circumstances for the purposes of section 58A of the Act. In short, if any of the prescribed circumstances apply to Mr Marchbank, the effective date of the amendment of the assessment would be the commencement of the appropriate child support period.

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.

14.  Mr Marchbank provided documentary evidence that from at least July 2017 he was suffering from psychotic episodes and had periods of crisis assessments by mental health teams as well as in-patient admissions following two suicide attempts. He was formally diagnosed with schizophrenia, with paranoid ideation in 2020, but the consultant psychiatrist, [Dr A], from [noted] that the onset of symptoms was some years before a formal diagnosis was made. Dr [A] went on to state that the condition has a:

Significant impact on function and medical comorbidities. Despite treatment Mr Marchbank experiences ongoing negative symptoms of schizophrenia which include cognitive impairment and neglect to personal care and health resulting in poor management of Type 2 Diabetes. Due to the severity of his symptoms (disorganization, persecutory delusions) he is unable to participate in the workforce and has been itinerant for several years

15.  The Tribunal also considered the other medical reports in evidence, verbally summarised at hearing for the benefit of Ms Legum:

·   An undated GP Mental Health Plan completed by Dr [B], general practitioner, stating that Mr Marchbank’s reasons for presenting were post-traumatic stress disorder with a query relating to personality disorder;

·   A GP Mental Health Plan completed by Dr [C], general practitioner, dated 29 August 2016. It is noted that the diagnosis is major depression with a query about paranoid ideation. It also noted a past history of suicide attempt in February 2014;

·   Client agreement with [Clinic 1] dated 29 August 2016;

·   A discharge summary from [Emergency] Department dated 22 July 2017 noting that Mr Marchbank was admitted following a suicide attempt;

·   A discharge summary from [a] Hospital dated 8 September 2017 noting that Mr Marchbank was admitted following an assault, resulting in loss of consciousness, scalp haematoma and lip laceration;

·   An email from Dr [D], psychologist, [Clinic 1] dated 17 November 2016 asking how Mr Marchbank was, noting that he had an emergency room admission a month ago and attempts to call him were unsuccessful as his telephone number was no longer connected;

·   An email from Dr [D], psychologist, [Clinic 1] dated 16 March 2017 asking if Mr Marchbank intended to continue with therapy;

·   A medical certificate dated 27 July 2017 completed by Dr [E], general practitioner, stating that Mr Marchbank was diagnosed with major depression and was unable to work from 22 July to 22 August 2017;

·   A medical certificate dated 18 November 2017 completed by Dr [C], general practitioner, stating that Mr Marchbank was diagnosed with major depression, with symptoms including depressed mood and poor concentration;

·   Emails from [Clinic 1] from July to December 2017 indicating that Mr Marchbank missed appointments asking that he contact to arrange payments;

·   A compensation claim, seeking a lump sum payment as well as assistance with counselling and loss of earnings, created on 5 December 2019 stating that Mr Marchbank experienced an act of violence on 9 August 2017, stating that the effects on him included psychological and physical trauma;

·   An undated Medical Evidence Report completed by [Dr A], consultant psychiatrist, [stating] that Mr Marchbank was diagnosed with schizophrenia, where the “onset of symptoms appears to have occurred several years ago, diagnosed in 2020”.

·   There is also a discharge summary report [dated] 23 August 2020 which states that Mr Marchbank had a psychiatric history dating back to 2017 with three brief Crisis Assessment Treatment Team interventions. It also notes that he was admitted to [a] Medical Centre from 17 June to 3 July 2019 after an suicide attempt. It also noted that past diagnoses included adjustment disorder, delusional disorder and borderline personality disorder. A discharge notification states that Mr Marchbank has a history of homelessness from 2018;

·   A discharge summary dated 22 June 2020 from [a] Hospital listing Mr Marchbank’s diagnosis as paranoid schizophrenia and that he was treatment as an in-patient from 10 June 2020;

·   Letter from [a named doctor] dated 25 August 2014 stating that he treated Mr Marchbank for depression and an eating disorder about 15 years ago. He reconnected with Mr Marchbank following concerns for his depression and eating disorder symptoms, as well as suicidal ideation.

16. On balance, the Tribunal finds that Mr Marchbank’s reasons for not providing information about his 2018 adjusted taxable income accord with the prescribed reasons detailed in regulation 11 (1)(a)(ii) and (vi) outlined above. The Tribunal is satisfied on the basis of the medical evidence before it that Mr Marchbank suffered from a significant illness, by way of his mental health disorder. Furthermore, the Tribunal is satisfied that his long-standing homelessness gave rise to an exceptional circumstance that adequately explains his inability to provide the information regarding his 2018 adjusted taxable income within a reasonable period. The Tribunal is satisfied that he then did provide that information to the Registrar as soon as practicable, namely when he was in supported temporary accommodation and he was receiving mental health support. Thus, pursuant to paragraph 58A(2)(c) of the Act, the Registrar must update the administrative assessment on the basis that Mr Marchbank’s 2018 adjusted taxable income is $8,136.

17.  This is a difficult situation. Ms Legum has had sole care of the child since birth and has significant expenses. She is currently receiving about $10 per week from the father to contribute to the child’s costs. This decision will place her in a situation of overpayment. The Tribunal notes that at hearing Mr Marchbank stated that thought he wanted his arrears cleared, but he did not want the mother to be in a situation of credit. Therefore he was willing to waive any overpayment that would arise as a consequence of this decision. The Tribunal cannot make such a determination. In order to waive the overpayment he must contact Child Support directly to organise this.

DECISION

The decision under review is set aside and the matter is sent back to the Child Support Registrar for reconsideration in accordance with the direction that the administrative assessment is to be amended, pursuant to paragraph 58A(2)(c) of the Child Support (Assessment) Act 1989, to reflect Mr Marchbank’s 2018 adjusted taxable income of $8,136.