Marson and Jonas (Child support)

[2021] AATA 2723

Marson and Jonas (Child support) [2021] AATA 2723 (28 May 2021)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2020/AC020329

APPLICANT:  Mr Marson

OTHER PARTIES:  Child Support Registrar

Mrs Jonas

TRIBUNAL:Member P Noonan

DECISION DATE:  28 May 2021

DECISION:

The Tribunal sets aside the decision under review and, in substitution, decides that Mr Marson’s adjusted taxable income is varied to $59,347.79 per annum from 14 January 2020 to 30 June 2020 and to $46,691.00 from 1 July 2020 to 30 June 2021.

CATCHWORDS

CHILD SUPPORT – departure determination – income, property and financial resources of the liable parent – a ground for departure established – decision to depart - 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 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

BACKGROUND

1. Mr Marson and Mrs Jonas are the parents of two children who are currently relevant to the child support assessment.

2. The Child Support (Assessment) Act 1989 (“the Act”) provides for an administrative assessment of the child support payable. It uses a formula, which contains variables such as the parents’ adjusted taxable incomes and their percentages of care of the children. The Act also provides for a departure from the administrative assessment in certain circumstances.

3. A child support case was first registered with Services Australia (‘the Department’) on 12 January 2012 and child support was registered for collection by the Department from the same date. The Department maintains a case completion date for this matter of 23 May 2025.

4. On 13 March 2020 Mr Marson applied for a departure from the assessment of child support payable at that time. Care of the children was registered as being 100% to Mrs Jonas. At the time of Mr Marson’s departure application the applicable assessment of child support payable was that Mr Marson was assessed to pay an annual rate of child support of $966.00. This assessment was based on an estimated 2019–20 adjusted taxable income of $28,678.00 for Mr Marson, and a provisional 2018–19 adjusted taxable income of $16,925.00 for Mrs Jonas.

5. On 17 July 2020, a Department officer acting as a delegate of the Child Support Registrar, found that a ground for departure was established and decided to depart from the assessment such that for the period 14 January 2020 to 13 January 2021, the adjusted taxable income of Mr Marson is set at $59,488.00.

6. Mr Marson objected to this decision and on 18 August 2020 a Department objections officer disallowed his objection.

7. On 26 November 2020 Mr Marson applied to the Administrative Appeals Tribunal (the Tribunal) for an independent review.

8. A hearing for the matter was held on 28 May 2021. Both Mr Marson and Mrs Jonas attended the hearing by conference telephone and gave evidence on affirmation. Mr Marson is represented in this matter by [Mr A] of [Organisation 1].

9. Pursuant to paragraph 98C(1)(b) of the Act, a decision to depart from the administrative assessment may be made if the following requirements are met:

   (i)that one, or more than one, of the grounds for departure referred to in [subsection 117(2)] exists; and

   (ii)that it would be:

   (A)  just and equitable as regards the child, the liable parent, and the carer entitled to child support; and

   (B)  otherwise proper; …

CONSIDERATION

A ground for departure – the income, access to financial resources and earning capacity of either parent

Mr Marson

1. Subparagraphs 117(2)(c)(ia) and (ib) of the Act, commonly referred to as Reason 8, provide as grounds for departure:

   (c) that, in the special circumstances of the case, application in relation to the child of the provisions of this Act relating to administrative assessment of child support would result in an unjust and inequitable determination of the level of financial support to be provided by the liable parent for the child:

   ...

   (ia) because of the income, property and financial resources of either parent …

   (ib) because of the earning capacity of either parent.

2. The term “special circumstances” is not defined in the Act. In Gyselman and Gyselman (1992) FLC 92–279, the Full Family Court indicated that for special circumstances to exist, the facts of the case must establish something which is special or out of the ordinary.

3. The Tribunal will first consider Mr Marson’s earning capacity as this was the basis upon which his child support payable was set in the decision under review.

4. A parent’s earning capacity can only be taken into account in limited circumstances, as set out in subsection 117(7B) of the Act which requires the Tribunal to consider three criteria in determining that the parent’s earning capacity is greater than is reflected in their income used in the administrative assessment:

   ·Whether the parent is:

   o   not working despite ample opportunity to do so (subparagraph 117(7B)(a)(i)); and/or

   o   has reduced their weekly hours of work to below full-time work (subparagraph 117(7B)(a)(ii)); and/or

   o   has changed their occupation, industry or working pattern (subparagraph 117(7B)(a)(iii)); and

   ·If the parent’s decision about their work arrangements is not justified by either their caring responsibilities (subparagraph 117(7B)(b)(i)) or their state of health (subparagraph 117(7B)(b)(ii)); and

   ·If 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 stop working, reduce their hours of work or change their occupation, industry or working pattern to affect the administrative assessment of child support (paragraph 117(7B)(c)).

5. All three of the above criteria must be met before a departure determination can be made to take into account whether the parties have a greater earning capacity. If the above criteria are satisfied, then the Tribunal may determine the actual earning capacity of the parent.

6. The Tribunal noted that Mr Marson is recorded as having resigned voluntarily from his permanent employment at [Company 1] on 1 October 2019. Mr Marson confirmed this to be the case. Mr Marson’s submission, in conjunction with his representative, is that he resigned from [Company 1] as he found the terms of employment too stressful and sought to resume work in his former line of work in [Occupation 1]. Mr Marson stated that stress issues related to being required to work overtime but not receive overtime pay, difficulties in accessing holidays and inadequate training. He soon found employment through [a labour hire firm] at [Company 2]. He submitted that his wages should not have fallen but due to the COVID-19 pandemic trains coming from interstate were cancelled and this caused available work to drop.

7. The Tribunal noted that Mr Marson had submitted a certificate from his doctor, dated 27 April 2020, which states he had to leave his employment at [Company 1] due to stress. Mr Marson contended that he had also been seeing his doctor in respect to stress prior to resigning his employment at [Company 1].

8. The Tribunal put to Mr Marson that his former representative, who is his current partner, had been recorded by the Department as stating she had advised Mr Marson to resign his employment at [Company 1] in order to reduce his child support liability. Mr Marson contended that he knew nothing of that conversation. He contended it was probably said out of pure spite. He and his partner keep their finances separate.

9. Mrs Jonas contended that stress in employment is normal and this should not be accepted as a reason for resigning and consequently reducing Mr Marson’s ability to financially support the children. In respect to Mr Marson’s former representative’s statement she contended that Mr Marson had allowed her to act on his behalf and accordingly this statement should be taken into consideration with respect to his intent behind resigning from [Company 1].   

10. Mrs Jonas also contended that [Occupation 1] is an essential industry and [specified good] was still crossing the border.

11. The Tribunal notes that Mr Marson provided a record of his net income including the period prior and after his resignation from [Company 1]. This shows that in fact on average in the period after resignation Mr Marson’s net income increased on a weekly basis. It did however fall on average, for a period, after Christmas 2019.

12. Having considered the evidence in its entirety the Tribunal considers that Mr Marson has successfully demonstrated that a major purpose of his decision to change his occupation and work pattern was not to affect child support payable. This is primarily because his income did not substantially decrease immediately after this change. The Tribunal accepts that his pay may well have been subsequently adversely affected by the advent of COVID-19 and notes that he has subsequently spent some time on income support payments. The Tribunal also accepts, and places some weight on the medical certificate, that he was suffering stress at [Company 1] which contributed to his resignation decision. The Tribunal also notes that Mr Marson’s pay records indicate that in late 2020 he obtained further employment which appears to be paying more than he previously earned at [Company 1] which also indicates that his primary intention in resigning was not to affect child support payable. 

13. With respect to the criteria set out at subsection 117(7B) the Tribunal is not satisfied that paragraph 117(7B)(c) is met. Accordingly, subparagraph 117(2)(c)(ib) is not met.

14. The Tribunal must now consider whether subparagraph 117(2)(c)(ia) is met, that is, in the special circumstances of the case, application in relation to the children of the provisions of this Act relating to the administrative assessment of child support would result in an unjust and inequitable determination of the level of financial support to be provided by the liable parent for the case because of the income, property and financial resources of either parent.

15. In Mr Marson’s case it is clear that he is not self-employed. He is an ordinary wage earner. Mr Marson has not lodged his 2019/20 taxation return. However, his representative supplied income statements from the Australian Taxation Office. This statement records that in 2019/20 Mr Marson earned gross $50,301.79 in 2019/20 and in 2020/21 year to date, as at 4 February 2021, he had earned gross $28,350.76. In addition it is accepted that Mr Marson accessed $10,000.00 in superannuation lump sums in both 2019/20 and 2020/21. He also received $2,046.00 in jobseeker payments between 23 March 2002 and 30 June 2020. While the Department noted that these superannuation payments were non-taxable payments, and did not account for them when considering Mr Marson’s overall access to financial resources, the Tribunal does not agree with this treatment. As noted at hearing these payments are clearly financial resources available for the support of the children and accordingly it is proper that they be taken into account, subject to relevant just and equitable considerations to be considered later in these Reasons. The Tribunal will also allow an amount of $3,000.00 for reasonable deductions.

16. Therefore the Tribunal is satisfied that in 2019/20 Mr Marson earned or had access to financial resources equivalent to a gross income of $59,347.79.

    Mrs Jonas’s income and access to financial resources

17. The evidence before the Tribunal indicates that Mrs Jonas is entirely reliant upon Commonwealth income support payments and this was also the case at the time of Mr Marson’s departure application. Mrs Jonas rents privately and has no assets of any note to her name, other than a joint share in her former residence with Mr Marson, which Mr Marson lives in and which has not been subject to a property settlement. The Tribunal notes that Mr Marson maintains the mortgage with respect to that property. The Tribunal is satisfied that the income maintained in the administrative assessment of $16,925.00 with respect to Mrs Jonas is a reasonable reflection of her overall income and access to financial resources.

    Departure ground conclusion

18. Under the applicable assessment, the rate of child support payable by Mr Marson is $966.00 per annum. The Tribunal has determined that his income and overall access to financial resources is reflective of an income of $59,347.79 per annum at the time of the departure application. The annual amount of child support payable by Mr Marson using this figure and Mrs Jonas’s income of $16,925.00 is approximately $9,794.00 per annum. Such an amount is materially different and establishes special circumstances in this matter. Accordingly, a ground for departure under subparagraph 117(2)(c)(ia) of the Act does not exist.

    Would departure from the administrative assessment be just and equitable?

    Mr Marson

19. In his Statement of Financial Circumstances Mr Marson disclosed the former matrimonial home, minimal funds in the bank, a car worth $5,000.00, superannuation of $230,000.00, a mortgage of $200,000.00, a small amount of credit card debt and weekly household expenses of $550.00 or $28,600.00 per annum. He confirmed that he continues to work in the same employment. Overall the Tribunal concludes that Mr Marson has sufficient income to meet his necessary expenses for self-support and that his financial disclosures are reasonable.

Mrs Jonas

1. Mrs Jonas did not disclose any assets or liabilities of note. She listed weekly household expenses of $840.00 or $43,680.00 per annum. On the evidence before it, the Tribunal accepts Mrs Jonas’s financial disclosures to be reasonable. Clearly any child support payable to her will be of assistance to her in maintaining the children.

The children

1. In determining the proper needs of the child, it is necessary to have regard to the manner in which the children are being, and in which the parents expected the children to be, cared for, educated or trained, and any special needs of the children (subsection 117(6) of the Act). In Eades & Cadell (SSAT Appeal) [2009] FMCAfam 275 at paragraph 22, Slack FM stated as follows:

   In considering the proper needs of the child [s 117(4)(b)], the SSAT:

   a.would ordinarily consider the evidence of the parties about the needs of the children to assess the reasonableness and quantum of those needs;

   b.may have regard to publish guidelines as to the needs of the children (see Hallinan & Witynski at 94.323).

   c.may also have regard to the costs of children used in the assessment of child support under the existing formula arrangements (although it is not sufficient or appropriate to rely upon the formula to perform that task, Lindenmayer J in Dwyer & McGuire (1993) FLC92-420 (and see also Gyselman (supra) at 79.078).

2. No special needs were raised. Overall the Tribunal considered this an appropriate case to largely distribute the costs of raising the children using the relevant child support formula, which is based on social science research giving the average costs of children in various family income brackets.

Conclusion

1. It is open to the Tribunal to vary the rate of child support payable or vary some of the variables that are used in the administrative assessment formula. The principal object of the Act is to ensure that children receive a proper level of financial support from their parents. Further, the Tribunal notes the statements contained in sections 3 and 4 of the Act to the following effect:

   ·         Parents of a child have a primary duty to maintain the child;

   ·         The duty has a priority over all other commitments of the parent other than commitments necessary for self-support;

   ·         The level of financial support to be provided by parents to their children should be determined in accordance with the legislatively fixed standards; and

   ·         The level of financial support is to be determined according to the capacity to provide financial support and noting that parents with a like capacity to provide financial support should provide like amounts.

2. The Tribunal has had due regard to the submissions made by both parents in respect to hardship considerations and departure dates.

3. Mr Marson submitted that it is not easy for him. He is casually employed and he has to keep working to get paid. Mrs Jonas submitted that she is struggling to financially support the children and she has not been receiving any child support at all lately. [Mr A] submitted that a just and equitable outcome would be to accept the taxable income of Mr Marson.

4. The income used in the administrative assessment is $18,089.00 from 14 January 2021 which is based on an estimate of income lodged by Mr Marson. As noted above as at 4 February 2021, he had earned gross $28,350.76 and continues to work. Annualised this figure is $39,691.00. Clearly Mr Marson is earning more than his estimates of income. In addition he has accessed a further $10,000.00 lump sum payment from his superannuation in 2020/21. The Tribunal allows for $3,000.00 in reasonable deductions in each financial year as a just and equitable deduction. The Tribunal is satisfied his income and overall access to financial resources in 2020/21 is equivalent to $46,691.00. Accordingly, the Tribunal will vary Mr Marson’s adjusted taxable income to $59,347.79 per annum from 14 January 2020 to 30 June 2020 and to $46,691.00 from 1 July 2020. Overall, the Tribunal considers it is just and equitable to depart from the administrative assessment of child support payable having had due regard to the respective financial situations of each parent.

5. With respect to an appropriate date range for this departure determination the Tribunal is satisfied that the date adopted by the objections officer for departure is appropriate, being 14 January 2020. The Tribunal will extend the departure determination to 30 June 2021. A departure beyond that date is not appropriate given Mr Marson’s uncertain employment situation as a casual employee and with limited relative income, who is reliant upon his physical health, and as such the assessment of child support payable by him should be assessed on an ongoing basis subject to the normal application of the administrative assessment which allows for income estimates and income reconciliations.

6. This departure determination results in child support payable of approximately $9,794.00 per annum or $188.00 per week from 14 January 2020 to 30 June 2020 and $6,202.00 or $119.00 per week from 1 July 2020 to 30 June 2021.

7. The Tribunal notes that some arrears will be likely created to Mr Marson by this decision. However, the Tribunal is satisfied that he has had access to financial resources equivalent to the calculations made by the Tribunal with respect to his adjusted taxable income and it is appropriate that he make a commensurate contribution to the maintenance of the children. He is afforded the opportunity of a reversion to the administrative assessment from 1 July 2021 and his child support payable will no longer be affected by the lump sum superannuation payments he accessed in the two previous financial years. The Tribunal also does not consider Mrs Jonas will be placed in undue financial hardship by this decision. She will be paid child support in accordance with the Tribunal assessment of the parent’s overall respective financial capacities to support the child.

8. Overall, the Tribunal considers this departure determination is a just and equitable outcome, with regard to the respective situations of each parent.

Otherwise proper

1. An increase in child support payable may reduce the cost to the community. There is also nothing improper in adjustments to the amount of child support payable to reflect the parents’ actual capacity to provide support to the children.

DECISION

The Tribunal sets aside the decision under review and, in substitution, decides that Mr Marson’s adjusted taxable income is varied to $59,347.79 per annum from 14 January 2020 to 30 June 2020 and to $46,691.00 from 1 July 2020 to 30 June 2021.