Martelli and Haynes (Child support)

Martelli and Haynes (Child support) [2019] AATA 5115 (10 September 2019)

DIVISION:Social Services & Child Support Division
REVIEW NUMBER:  2019/PC016821
APPLICANT:  Ms Martelli
OTHER PARTIES:  Child Support Registrar
Mr Haynes

TRIBUNAL:Senior Member R Ellis
DECISION DATE: 10 September 2019
DECISION:

The Tribunal sets aside the decision under review and, in substitution, decides that no portion of the $374.11 paid by Mr Haynes on 5 February 2019 should be credited as a non-agency payment or a prescribed non-agency payment against his child support liability.

CATCHWORDS

CHILD SUPPORT – non-agency payment - whether utility payment should be credited – no mutual intention – condition for crediting as prescribed payment not satisfied – refusal to credit non-agency payment - 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

Ms Martelli and Mr Haynes are the parents of [Child 1] (born October 2011). There has been a child support assessment in place since 4 July 2018 with collection by the Department of Human Services, Child Support (the Child Support Agency) since 18 January 2019. Mr Haynes is the liable parent under the assessment.
From 4 July 2018 the child support assessment reflected that Ms Martelli provides 100 per cent care and Mr Haynes provides 0 per cent care of [Child 1].
On 7 February 2019 Mr Haynes advised the Child Support Agency of a payment of $374.11 made on 5 February 2019 for a water bill.
On 14 February 2019 the Child Support Agency made the decision to accept $374.11 as a non-agency payment made by Mr Haynes.
On 1 March 2019 Ms Martelli objected to this decision and on 29 May 2019 the Child Support Agency allowed the objection in part and made the decision to accept a non-agency payment of $184.08 made by Mr Haynes on 5 February 2019 as Ms Martelli’s share of the water bill (the objection decision).
On 26 June 2019 Ms Martelli applied to the Administrative Appeals Tribunal (the Tribunal) for a review of the objection decision.
The matter was considered on 10 September 2019. Ms Martelli and Mr Haynes gave evidence on affirmation by conference telephone. The Child Support Agency provided the Tribunal and the parties with a bundle of documents relevant to the review (108 pages).

ISSUES

The statutory provisions relevant to this review are contained in the Child Support (Registration and Collection) Act 1988 (the Act).
When a child support liability is registered under the Act for collection, the amount payable is a debt due to the Commonwealth and must be paid to the Child Support Agency not the payee. In some circumstances the Child Support Agency may credit payments made directly to a payee or to a third party against a child support liability that is registered for collection (sections 71, 71A or 71C of the Act). The Child Support Agency refers to the credits under sections 71 and 71A as ‘non-agency payments’. Credits under section 71C are known as ‘prescribed non-agency payments’ as this section applies to payments of the kind specified in section 19 of the Child Support (Registration and Collection) Regulations 2018 (the Regulations).
Section 71C of the Act provides a mechanism whereby payments made by a liable parent for items specified in section 19 of the Regulations may be taken into account in partial satisfaction of the liable parent’s child support liability. A number of specific criteria must be satisfied for this provision to apply. Even where all the criteria are met, there is still a discretion in section 71D of the Act to refuse to credit amounts that would otherwise be able to be credited against the liability.
The issue which arises in this case is whether or not the payment made by Mr Haynes can be credited against his child support liability.

CONSIDERATION

Ms Martelli told the Tribunal that after separation she and [Child 1] lived at the family home in [Town 1] until 20 December 2018. She said under a private agreement reached between the parents, Mr Haynes was to pay the mortgage costs and all utility costs while they were living at the home. Ms Martelli said this was to be in lieu of child support.
Ms Martelli said prior to vacating the family home she contacted the various utility companies, including the [Company 1], to advise of her moving date and arrange final readings. Ms Martelli explained that when Mr Haynes refused to pay the bills as per their private agreement she then applied for agency collection of child support and arrears.
Ms Martelli said she did not dispute that Mr Haynes had eventually paid the water bill but said the payment should not be accepted as a non-agency payment as it was part of the private agreement between the parents. Ms Martelli said under this agreement she should not pay any of the water bill for the period she and [Child 1] were living in the family home.
The Tribunal notes in evidence from the Child Support Agency a copy of the agreement between Ms Martelli and Mr Haynes. The agreement states that while Ms Martelli and [Child 1] reside at the [Town 1] residence, Ms Martelli cannot claim child support and Mr Haynes will pay all costs associated with the mortgage and the utilities at the residence. The agreement, dated 18 July 2018, is signed by both parents.
Mr Haynes told the Tribunal that when Ms Martelli applied for agency collection and child support arrears he had provided the Child Support Agency with documents showing payments he made towards the mortgage and utility costs. He said this included the water bill he paid on 5 February 2019 which the Child Support Agency had then credited as a non-agency payment.
Mr Haynes confirmed that Ms Martelli had vacated the [Town 1] home by 20 December 2018 and said all the payments he made on the mortgage and utilities up to and including this date were intended to be in lieu of child support under their private agreement.
Mr Haynes acknowledged that he had refused to pay certain bills but this was based on legal advice. He said Ms Martelli had broken an agreement to contact [Company 2] and arrange for his previous telephone number to be assigned to him. He had then refused to pay the bills on the advice of his solicitor.
The Tribunal notes in evidence from the Child Support Agency a copy of a water bill from the [Company 1] issued on 22 January 2019 for the amount of $374.11. The bill, which is in the name of Mr Haynes, is for the [Town 1] property. It covers the 63 days from [November] 2018 to [January] 2019 (the meter reading was taken [in] January 2019).
Section 71A of the Act provides for payments made by the payer of an enforceable maintenance liability to a third party to be credited against the amount payable under the child support liability. The amount paid by the payer to the third party must partially or completely satisfy a debt owed by the payee, the payer or both the payer and the payee (paragraph 71A(1)(a)). It must be the intention of both parties that the payments, or part of the payments, be credited against the payer’s enforceable child support liability in relation to the child support enforcement period (paragraph 71A(1)(c)).
It is not in contention and the Tribunal finds that Mr Haynes made a payment of $374.11 on 5 February 2019 for a water bill for the property in which Ms Martelli and [Child 1] were living. Collection of child support commenced from 18 January 2019 and the Tribunal is satisfied that at the time payment of the water bill was made on 5 February 2019 there was an enforceable maintenance liability in place. Payment of the water bill also satisfied a debt owed by Mr Haynes, Ms Martelli or both to the water provider. Paragraph 71A(1)(a) is, therefore, met.
For payment of the water bill to meet the requirements under paragraph 71A(1)(c) it must also have been the intention of both parents that the amount paid, or part of the amount paid, was to be paid “in complete or partial satisfaction of an amount payable” under the “enforceable maintenance liability in relation to the child support enforcement period”. In other words, both Ms Martelli and Mr Haynes must have intended for the $374.11, or part of the $374.11, to be credited against Mr Haynes’s enforceable maintenance liability.
The private agreement between Ms Martelli and Mr Haynes demonstrates there was an intention on the part of both parents that payments made by Mr Haynes for utility costs, such as the water bill, were to be made in lieu of child support. The water bill covered the period from 19 November 2018 to 20 January 2019. As the child support enforcement period did not commence until 18 January 2019 (when the Child Support Agency started collecting child support) this intention existed primarily during a non-enforcement period. The Tribunal is of the view the payment made by Mr Haynes does not meet the requirements of paragraph 71A(1)(c) up until 18 January 2019.
It could be argued, however, that as the child support enforcement period commenced on 18 January 2019, the payment made by Mr Haynes meets the requirements of paragraph 71A(1)(c) from that point onward. To do so, both parents must have intended for the payment, or part of the payment, to be credited against Mr Haynes’s child support liability. Ms Martelli has made it clear that when she applied for agency collection on 18 January 2019 she did so because, in her view, the private agreement had ended. So while there was a child support enforcement period in place from 18 January 2019, Ms Martelli no longer intended that payments made by Mr Haynes for costs such as the water bill were to be in lieu of child support. The Tribunal is also of the view the payment made by Mr Haynes does not meet the requirements of paragraph 71A(1)(c) after 18 January 2018.
The Tribunal finds, for the reasons above, that no portion of the payment of $374.11 made by Mr Haynes can be considered as a non-agency payment under section 71A of the Act.
Where such payments cannot be credited under section 71A, they may be credited under section 71C even if there is no mutual intention between the parents. Section 71C provides, subject to section 71D, for an amount to be credited against a payer’s child support liability regardless of the intention of the parents at the time the payment was made provided that it does not exceed 30 per cent of the amount payable and the balance of child support is paid as it becomes due and payable. Section 71C also requires that at the time payment was made, or at the time the payment is to be credited, the payer must not have at least regular care (14 per cent) of any of the children to whom the assessment applies.
The payment to be credited must also be a payment of the kind specified in section 19 of the Regulations. This section states that for the purposes of paragraph 71C(1)(b) of the Act, specified payments are payments of the following kinds in relation to an enforceable maintenance liability:
(a) child care costs for the child who is the subject of the enforceable maintenance liability;
(b) fees charged by a school or preschool for that child;
(c) amounts payable for uniforms and books required by a school or preschool for that child;
(d) fees for essential medical and dental services for that child;
(e) the payee’s share of amounts payable for rent or a security bond for the payee’s home;
(f) the payee’s share of amounts payable for utilities, rates or body corporate charges for the payee’s home;
(g) the payee’s share of repayments on a loan that financed the payee’s home;
(h) costs to the payee of obtaining and running a motor vehicle, including repairs and standing costs.
The Tribunal is satisfied that at the time the payment of $374.11 was made, Mr Haynes did not have at least regular care of [Child 1].
The water bill covered the period from 19 November 2018 to 20 January 2019. As Ms Martelli vacated the family home on 20 December 2018 and the child support enforcement period did not commence until 18 January 2019 it is unlikely she had a share of amounts payable for water in the short period between 18 January 2019 and 20 January 2019. The payment made by Mr Haynes is, therefore, not a prescribed non-agency payment of the kind specified in section 19 of the Regulations.
The Tribunal finds that no portion of the payment of $374.11 made by Mr Haynes can be considered as a prescribed non-agency payment under section 71C of the Act.

DECISION

[2019] AATA 5115

10 September 2019

Key Legal Topics

Areas of Law

Family Law

Administrative Law

Legal Concepts

Statutory Construction

Jurisdiction

Remedies

Judicial Review