Masland and Dewing (Child support)

Masland and Dewing (Child support) [2021] AATA 3183 (30 July 2021)

DIVISION:Social Services & Child Support Division
REVIEW NUMBER:  2020/BC020185
APPLICANT:  Mr Masland
OTHER PARTIES:  Child Support Registrar
Ms Dewing

TRIBUNAL:Senior Member R Ellis
DECISION DATE: 30 July 2021
DECISION:

The Tribunal sets aside the decision under review and, in substitution, decides that for the period from 2 September 2020 to 31 March 2023 the adjusted taxable income of Mr Masland is varied to $210,628.

CATCHWORDS

CHILD SUPPORT – departure determination – income, property and financial resources of both parents - benefits derived from business - 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

This review is about whether or not there should be a departure from the administrative assessment of child support.
Mr Masland and Ms Dewing are the parents of [Child 1] (born July 2010) and [Child 2] (born May 2012). There has been a child support assessment in place since 11 July 2013 and Mr Masland is the liable parent.
The administrative assessments of child support under consideration are as follows:
·     for the period from 1 January 2020 to 30 June 2020 Mr Masland was assessed to pay an annual rate of $27,328 based on an adjusted taxable income amount of $264,506 for Mr Masland as set by the Tribunal[1] in a decision dated 29 August 2019 and a 2017–18 adjusted taxable income of $15,092 for Ms Dewing (the annual rate payable includes an amount of $1,996 for school tuition costs for the children);
·     for the period from 1 July 2020 to 1 September 2020 Mr Masland was assessed to pay an annual rate of $27,872 based on an adjusted taxable income amount of $264,506 for Mr Masland as set by the Tribunal[2] in a decision dated 29 August 2019 and a 2019–20 derived income of $20,711 for Ms Dewing (the annual rate payable includes an amount of $1,996 for school tuition costs for the children);
·     for the period from 2 September 2020 to 31 December 2020 Mr Masland was assessed to pay an annual rate of $18,178 based on a 2019–20 declared income of $154,264 for Mr Masland and a 2019–20 derived income of $20,711 for Ms Dewing (the annual rate payable includes an amount of $1,996 for school tuition costs for the children); and
·     for the period from 1 January 2021 to 30 September 2021 Mr Masland is assessed to pay an annual rate of $18,277 based on a 2019–20 declared income of $154,264 for Mr Masland and a 2019–20 derived income of $20,711 for Ms Dewing (the annual rate payable includes an amount of $2,095 for school tuition costs for the children).
[1] Separately constituted
[2] ibid.
On 24 February 2020 Mr Masland applied to the Child Support Agency for a change to the assessment on the basis of a parent’s income, property and financial resources (the ground commonly referred to as Reason 8A) and the high costs incurred to spend time with, or communicate with, the children (Reason 1).
On 16 June 2020 the Child Support Agency made the decision to refuse the application under section 98F of the Child Support (Assessment) Act 1989 (the Act) as a ground was not established (the original decision).
On 16 July 2020 Mr Masland objected to this decision and on 23 October 2020 the Child Support Agency allowed the objection and made the decision to change the assessment so that for the period from 2 September 2020 to 31 December 2021 the adjusted taxable income of Mr Masland is set at $318,234 (the objection decision).
On 5 November 2020 Mr Masland applied for a review of the objection decision by the Administrative Appeals Tribunal (the Tribunal).
A directions hearing was held on 16 February 2021. Both Mr Masland and Ms Dewing attended by conference telephone. Mr Masland was represented by [Mr A] from [Law firm]. Prior to the directions hearing the Child Support Agency provided the Tribunal and the parties with a bundle of documents in accordance with section 37 of the Administrative Appeals Tribunal Act 1975 (517 pages).
Mr Masland and Ms Dewing were directed to provide further information and both complied to the satisfaction of the Tribunal.
A hearing was held on 15 June 2021. [Mr A] made submissions to the Tribunal on behalf of his client Mr Masland. Ms Dewing gave evidence on affirmation by conference telephone. The Tribunal received documents folioed A1 to A91 from Mr Masland and B1 to B21 from Ms Dewing. Additional documents were also received from the Child Support Agency (pages 518–542).
At the telephone directions hearing and at the commencement of the hearing the Tribunal sought clarification from Mr Masland for the reasons for his application. [Mr A] told the Tribunal his client was primarily concerned about the manner in which the Child Support Agency had assessed his income. [Mr A] said there was no evidentiary basis to the objection decision made by the Child Support Agency and his client should be assessed on his taxable income alone. [Mr A] submitted that the financial circumstances of Ms Dewing were only relevant to their case in the context of the disparity in the way the Child Support Agency had treated each parent. [Mr A] also confirmed that his client no longer wished to pursue the matter relating to the high costs incurred to spend time with, or communicate with, the children. Ms Dewing said she was happy with the objection decision made by the Child Support Agency but wanted the Tribunal to examine various investment properties owned by Mr Masland.
Following the hearing the Tribunal sought further submissions from Mr Masland in relation to the value, in particular the rental value, of the property in which he is currently living. This was received on 28 July 2021 (A92–A107). A copy was sent to Ms Dewing for her comment and this was received on 29 July 2021 (B22).

ISSUES

The statutory provisions relevant to this review are contained in the Act.
The rate of child support payable by the liable parent is usually based on an administrative assessment under Part 5 of the Act.
Under Part 6A of the Act, the liable parent or the carer of the child or children may apply to the Child Support Registrar for a determination to depart from the administrative assessment (section 98B).
Section 98C provides that the Registrar may make a determination to depart from the administrative assessment and establishes a three-step process such that the issues for determination by this Tribunal are:
·     whether a ground is established to depart from the administrative assessment of child support; and if so,
·     whether it is just and equitable to make a particular departure determination; and if so,
·     whether it is otherwise proper to make a particular departure determination.
The grounds for departure from an administrative assessment of child support are set out in subsection 117(2) of the Act.
Each ground is prefaced by the words “in the special circumstances of the case”. The meaning of this expression is not defined in the Act, but the Family Court in Gyselman and Gyselman [1991] FamCA 93 has held that:
as a generality it is intended to emphasise that the facts of the case must establish something which is special or out of the ordinary. That is, the intention of the Legislature is that the court will not interfere with the formula in the ordinary run of cases.
In Philippe and Philippe (1978) FLC 90-433 the Court held that “special circumstances” are “facts peculiar to the particular case which set it apart from other cases”.
If the Tribunal is satisfied that a ground exists and that it would be just and equitable and otherwise proper to make a particular determination, the Tribunal may make one of the determinations prescribed in section 98S of the Act.
The range of determinations which can be made includes variations to the annual rate of child support payable; or to the adjusted taxable incomes of the parents and/or carer; or to other components of the statutory formula used to calculate child support.

CONSIDERATION

Issue 1 – Is there a ground for departure?

A ground for departure exists where, in the special circumstances of the case, application of the administrative assessment of child support would result in an unjust and inequitable determination of child support to be provided by the liable parent in respect of the child because of the income, property and financial resources of either parent (subparagraph 117(2)(c)(ia) of the Act).
[Mr A] told the Tribunal that Mr Masland was employed as the General Manager of a family business called [Business 1]. [Mr A] submitted that Mr Masland was paid a salary only and this was at a market rate of around $160,000. He said while the business was operated under a trust structure his client had not received distributions from the trust nor was he associated in any way with the corporate trustee of the trust.
[Mr A] said his client’s income had not changed significantly in the financial year about to conclude. [Mr A] acknowledged, however, that his client was living in a property owned by his parents and had use of a motor vehicle. [Mr A] said this did not justify adding $160,000 to his taxable income as the Child Support Agency had done in the objection decision. He said there was no logic to the calculations made by the Child Support Agency which had arrived at an income for the purposes of child support of more than double Mr Masland’s taxable income.
The Tribunal notes in evidence from the Child Support Agency that [Company] is the corporate trustee of the [Family Trust] trading as [Business 1]. In response to directions Mr Masland provided a letter from [an accounting firm] acting for the [Family Trust] and Mr Masland. The letter, dated 31 March 2021, confirms that Mr Masland has never received income from the trust as a beneficiary. It also states there is no trust loan account in the name of Mr Masland or any entity associated with him. An Australian Securities and Investments Commission (ASIC) search also in evidence provided by Mr Masland shows that he is not a director or shareholder of [Company].
[Mr A] submitted that his client should not be penalised for working within a family business. [Mr A] reiterated that Mr Masland was a salaried employee of that business and there was no basis to consider that his taxable income was misleading.
In response to directions Mr Masland also provided the Tribunal with a copy of his 2019–20 individual tax return. It shows total income of $163,802 comprised of his salary of $160,796 and net rent of $3,006. After allowing for deductions of $4,174 Mr Masland had a taxable income in 2019–20 of $159,628. The Tribunal also notes in evidence a copy of Mr Masland’s 2018–19 individual tax return. It shows a taxable income of $154,264 which includes net rent of $4,984. The rental property schedule shows Mr Masland received income from properties located at [Address 1] and [Address 2].
Ms Dewing told the Tribunal she believed Mr Masland should not be assessed on his taxable income given the significant benefits he received through the family business which, in her view, were in lieu of a higher wage. She said this included living in a $1 million house rent-free and the use of a new $140,000 [Vehicle 1] with personalised plates. Ms Dewing pointed out that Mr Masland had previously been earning salary and commissions from the family business totalling around $268,000. She said Mr Masland ceased receiving these commissions at the time of an earlier child support assessment and the Tribunal[3] had found in its previous decision that his income had fallen in order to affect his child support.
[3] Separately constituted
[Mr A] pointed out that Ms Dewing also lived in a home owned by her parents and had use of a car paid for by her business. Ms Dewing responded by saying she lived with her parents in the same house and paid rent. She added that her car was a 2014 model [Vehicle 2] unlike the 2021 model luxury car driven by Mr Masland.
Ms Dewing said Mr Masland also owned other properties including [Address 3] and [Address 4]. Ms Dewing said the [Address 4] property was declared in his initial change of assessment application to the Child Support Agency. She added that all these properties should be serviceable based on Mr Masland’s declared income and, if not, then he may be receiving additional benefits through the business.
[Mr A] reiterated that his client was no longer receiving commissions and this decision had been made by the owner of [Business 1] based on business conditions at that time. [Mr A] said his client denied the implication that this was a trigger to pay less child support and argued that, in any case, business decisions made three years ago were no longer relevant today. [Mr A] pointed out that since then, there had been a global pandemic which had completely changed the nature of the business environment in 2021. [Mr A] submitted that Mr Masland was remunerated only on the basis of his performance irrespective of who owned the business.
[Mr A] confirmed that Mr Masland now had a third investment property at [Address 3] which had been purchased after the other two properties. He said all rental income from the investment properties owned by Mr Masland was declared in his individual tax return. [Mr A] said the property at [Address 4] was owned by Mr Masland’s parents and he was living there at one stage. [Mr A] said recording the property as his in the change of assessment application form was a simple error on the part of his client.
Mr Masland also provided the Tribunal with a Statement of Financial Circumstances received on 23 November 2020. Mr Masland states his total average gross weekly income is $3,769 which includes his salary and rent from his investment properties. His average weekly expenses total $2,108 which includes $700 for mortgage repayments [Mr A] explained was for all three investment properties. Mr Masland declares personal expenditure of $2,019 per week including income tax of $1,035, superannuation of $310, child support of $579 and health insurance of $95. Mr Masland lists assets of $431,000 including 100 per cent of two of his investment properties, 50 per cent of one investment property, a 50 per cent share in a 2017 model [Vehicle 3] valued at $60,000 and household contents of $1,000. His liabilities total $507,000 including 100 per cent of the mortgages on all three investment properties. Mr Masland has superannuation in one fund of $165,000.
The Tribunal finds that Mr Masland had a taxable income in 2019–20 of $159,628. The Tribunal is not satisfied, however, that Mr Masland’s true income and financial resources are accurately reflected by his taxable income alone. Mr Masland has private use of a motor vehicle the running costs of which are paid for by his parents. He also lives in rent-free accommodation paid for by his parents. The Tribunal considers these to be significant financial benefits not available to the ordinary taxpayer. In considering the income, property and financial resources available to a parent the Tribunal must often look beyond their taxable income. The definition of financial resources may be interpreted widely and the courts, in light of the objects of the Act, have held that the term financial resources should be broadly defined to include, “any financial benefit that would enhance the capacity of parents to provide a proper level of financial support for their children”.[4]
[4] Costa & Fairbank (SSAT Appeal) [2010] FMCAfam 39.
The Tribunal notes that a new [Vehicle 1] is valued at approximately $140,000. The payments on a novated lease for such a vehicle would equal approximately $40,000 per annum. Based on 20 per cent private use, which the Tribunal considers reasonable, this would equate to an amount of approximately $8,000 per annum which, grossed up, would be approximately $10,000 per annum.
Mr Masland also lives rent-free in a property at [Address 5]. The Tribunal notes on the real estate website realestate.com.au that this property is a five-bedroom, four-bathroom property with [features] on [size] hectares.[5] The same website shows a four-bedroom, two-bathroom home in [Town] for rent at $500 per week and a five-bedroom, four-bathroom home in [Town] for rent at $800 per week.
[5] deleted]
Following the hearing the Tribunal sought submissions from Mr Masland on the value he attributed to this accommodation. In a response, [Mr A], on behalf of his client, provided a rental appraisal from [Real Estate] in [Town]. The appraisal, dated 23 July 2021, states a rental value of $500 per week. Further evidence, in the form of screen shots from realestate.com.au, was provided showing four-bedroom, two-bathroom homes for rent for between $340 and $390 per week. [Mr A] also reiterated that Mr Masland and Ms Dewing should be treated equally in relation to any benefit received from their rental accommodation. [Mr A] pointed out that Ms Dewing was also living in a four-bedroom home with [a feature] and, as she had not produced evidence she was paying rent, this should be considered a benefit to her just as it was for Mr Masland. In commenting on this additional information, Ms Dewing said the property at [Address 5] was on two lots and the rental appraisal provided by [Real Estate] was for one lot only. Ms Dewing said she thought the rental value would be “far higher” than $500 per week and said some houses were being rented in [Town] for $800 per week.
The Tribunal considers the home at [Address 5], based on the evidence, to be in the upper end of rental properties for the [Town] area. The Tribunal nonetheless adopted a conservative approach and determined $600 per week as a fair rental value. This is equal to $31,200 per annum. In reaching this decision the Tribunal was conscious that Mr Masland may not have been living in the property for the entire 2019–20 financial year but was likely to have received a similar rent-free benefit prior to moving there. On a grossed-up basis the benefit to Mr Masland would be approximately $41,000. As Ms Dewing lives with her mother and step-father and has said she pays rent, the Tribunal does not consider the circumstances of the parents to be at all equal in relation to their rental accommodation.
The Tribunal finds that in 2019–20 Mr Masland had access to income, property and financial resources equivalent to a person with an adjusted taxable income of $210,628. This is comprised of his taxable income plus the additional benefits of his rent-free accommodation and private use of his motor vehicle. The Tribunal also considers this to be a fair reflection of the income, property and financial resources currently available to Mr Masland for the purposes of child support.
The Tribunal also considered the income, property and financial resources of Ms Dewing.
Ms Dewing told the Tribunal she ran her own [business] called [Business 2] in partnership with her mother and had done so since 2016. She said the business was operated out of separate premises in [Town] to the home where she lived with her parents. Ms Dewing added that [Business 2] was her only source of income but she was not currently drawing a wage from the business and was only able to do so intermittently. Ms Dewing acknowledged the business paid for her motor vehicle costs.
In response to directions Ms Dewing provided the Tribunal with a copy of her individual tax return for 2019–20. It shows a taxable income of $20,999 comprised of government benefits and a small amount of $288 from the business partnership. Ms Dewing also provided the Tribunal with a copy of the partnership tax return for 2019–20. It shows total business income of $121,018 and total expenses of $110,442. After allowing for various reconciliation items the net income of the partnership was $6,576. Major business expenses listed in the tax return include an amount of $79,363 for cost of sales, $9,888 for wages, $3,454 for rent and $1,710 for motor vehicle expenses. Payments to associated persons were $6,000.

Ms Dewing told the Tribunal that she did not receive half the net income from the partnership in 2019–20 because her mother had put money into the business during the financial year to keep it afloat and so received a larger distribution. Ms Dewing explained that wages were for casual employees while payments to associated persons were to her mother.
[Mr A] raised the prospect of Ms Dewing being involved in two other businesses including [Business 3] and [Business 4]. He said Ms Dewing was listed as an associated licence holder of [Business 4]. Ms Dewing explained that [Business 3] was owned by her step-father and run out of a shed at the property in which they lived. She said she had no involvement in this business. Ms Dewing said that [Business 4] held a [business] licence which she had used at one point, with her mother, in order to sell second-hand [product]. She said this venture made no money and they were no longer selling second-hand [product]. The Tribunal was satisfied with these explanations.
Ms Dewing also provided the Tribunal with a Statement of Financial Services received on 17 December 2020. Ms Dewing declares total average weekly income of $1,269 including $350 from [Business 2], government benefits of $385 and $534 in child support. Her average weekly household expenses total approximately $843 including food of $250 and rent of $150. Her total personal expenditure is approximately $86 per week. Ms Dewing declares assets totalling $12,779 including a 2014 [Vehicle 2] which she values at $12,000 and a small amount of cash at bank. Although Ms Dewing attributes no value to her share of the business the Tribunal notes the total value of closing stock in the 2019–20 partnership tax return was $22,000. Her only liability is $13,000 outstanding on her motor vehicle. Ms Dewing has superannuation of $14,866.
The Tribunal finds that Ms Dewing had a taxable income of $20,999 in 2019–20. Ms Dewing also has the benefit of a motor vehicle paid for by her business. In order to treat the parents equally and in light of the respective values of their motor vehicles the Tribunal will add back an amount of $1,000 for the benefit Ms Dewing receives for the use of this motor vehicle. The Tribunal therefore finds that Ms Dewing had access to income, property and financial resources equivalent to a person with an adjusted taxable income of $21,999 in 2019–20. The Tribunal is satisfied this amount also represents the income, property and financial resources currently available to Ms Dewing for the purposes of child support.
The administrative assessment in place at the time Mr Masland made his application for a change of assessment on 24 February 2020 was based on an adjusted taxable income amount of $264,506 for Mr Masland as set by the Tribunal[6] in its decision of 29 August 2019 and a 2017–18 adjusted taxable income of $15,092 for Ms Dewing. The Tribunal does not have before it all the relevant facts used in reaching the decision of 29 August 2019. As the income for Mr Masland was deemed appropriate at that time the Tribunal chooses not to disturb this earlier decision. From 2 September 2020, however, Mr Masland was assessed on a 2019–20 declared income of $154,264 while Ms Dewing was assessed on a 2019–20 derived income of $20,711.
[6] Separately constituted
Using adjusted taxable income amounts of $210,628 for Mr Masland and $21,999 for Ms Dewing as determined by the Tribunal and applying these in the child support formula would see the annual rate of child support payable increase by approximately $6,430. The Tribunal notes there is no difference in the amount of child support payable by Mr Masland when using Ms Dewing’s actual taxable income in 2019–20 of $20,999 or the amount of $21,999 as found by the Tribunal. Even adding a half share of the profit made by the partnership in 2019–20 to Ms Dewing’s income makes no difference to the amount of child support payable. This is because her income is below the self-support amount in either scenario. The Tribunal is therefore satisfied that, for the purposes of child support, Ms Dewing is fairly assessed on her adjusted taxable income under the administrative assessment.
The Tribunal finds the increase in child support when using the income amount of $210,628 for Mr Masland to be significantly more, however, than his liability under the administrative assessment. The Tribunal determines there are special circumstances and application of the administrative assessment of child support would result in an unjust and inequitable determination of child support to be provided by Mr Masland in respect of [Child 1] and [Child 2].
On this basis the Tribunal finds there is a ground for departure from the administrative assessment.

Issue 2 – Is it just or equitable to make a particular determination?

As the Tribunal finds there is a ground to depart from the administrative assessment of child support, the next step is to consider whether it is just and equitable as regards the child, the liable parent, and the carer entitled to child support to make a particular determination in accordance with sub-subparagraph 98C(1)(b)(ii)(A) of the Act. This in turn requires the Tribunal to consider the matters discussed below,[7] which are as set out in subsection 117(4) of the Act:
[7] The Tribunal is required to give “overt consideration” to relevant factors listed in subsection 117(4) of the Act: Tyagi & Meares(SSAT Appeal) [2008] FMCAfam 886.
(4)In determining whether it would be just and equitable as regards the child, the carer entitled to child support and the liable parent to make a particular order under this Division, the court must have regard to:
(a)the nature of the duty of a parent to maintain a child (as stated in section 3); and
(b)the proper needs of the child; and
(c)the income, earning capacity, property and financial resources of the child; and
(d)the income, property and financial resources of each parent who is a party to the proceeding; and
(da) the earning capacity of each parent who is a party to the proceeding; and
(e)the commitments of each parent who is a party to the proceeding that are necessary to enable the parent to support:
(i)himself or herself; or
(ii)any other child or another person that the person has a duty to maintain; and
(f)the direct and indirect costs incurred by the carer entitled to child support in providing care for the child; and
(g)any hardship that would be caused:
(i)to:
(A)the child; or
(B)the carer entitled to child support;
by the making of, or the refusal to make, the order; and
(ii)to:
(A)the liable parent; or
(B)any other child or another person that the liable parent has a duty to support;
by the making of, or the refusal to make, the order; and
(iii)to any resident child of the parent (see subsection (10)) by the making of, or the refusal to make, the order.

The nature of the duty of a parent to maintain a child

Section 3 of the Act states that it is the primary duty of a parent to maintain the child and this has priority over nearly all other commitments.
In this case the parents have the primary duty to financially support [Child 1] and [Child 2]. Mr Masland also has two relevant dependent children and the Tribunal will take this into account under subparagraph 117(4)(e)(ii) of the Act when making its assessment.

The proper needs of the child

In relation to the proper needs of the child, regard must be had to the manner in which the child is being, and in which the parents expected the child to be, cared for, educated or trained, and any special needs of the child (subsection 117(6) of the Act).
The parents did not raise an expectation that [Child 1] and [Child 2] were to be cared for or trained in a particular way or that they had any special needs. The Tribunal notes that under the existing assessment Mr Masland and Ms Dewing are sharing equally in the costs of privately educating the children. This was not challenged by either Mr Masland or Ms Dewing and so the Tribunal chooses not to disturb this particular aspect of the assessment.
The Tribunal is satisfied it is therefore appropriate to calculate the costs of the needs of the children, aside from their education costs, by reference to the Costs of the Children Table (provided for in section 155 of the Act).

The income, earning capacity, property and financial resources of the child

The Tribunal is satisfied that [Child 1] and [Child 2] have no income, earning capacity, property and financial resources which are to be taken into account for the purpose of child support.

The income, property, financial resources and earning capacity of each parent

The Tribunal has already considered in detail the income, property and financial resources of both parents.
The Tribunal is satisfied that the earning capacity criteria (set out in subsection 117(7B) of the Act) are not met for either Mr Masland or Ms Dewing in this case.

Any hardship that would be caused

Mr Masland is General Manager of what is apparently a successful family business and the Tribunal has found he has access to income, property and financial resources equivalent to a person with an adjusted taxable income of approximately $210,628.
Mr Masland lists total household expenditure of approximately $109,616 per annum which includes mortgage payments on his three investment properties of approximately $36,400. Mr Masland values these three investment properties at $370,000 (with one of the three being a half share only). His household expenditure also includes an annual amount of $14,456 for repayments on a jointly owned [Vehicle 3]. He has total personal expenditure of $104,988 per annum including child support of approximately $30,108. Mr Masland reports liabilities of $507,000 (including 100 per cent liability on all three investment properties).
Ms Dewing is self-employed and receives a small salary from her business. The business also pays for her motor vehicle. Ms Dewing had a taxable income of $20,999 in 2019–20 and the Tribunal found the indirect benefits she receives from her business to be minimal. She lists total estimated household expenditure of $43,836 and personal expenditure of $4,472. Ms Dewing has no assets of significance and clearly relies on government benefits and child support from Mr Masland.
The Tribunal is limited to making a determination in respect of a day in a period that is not more than 18 months prior to the date the change of assessment application was made (paragraph 98S(3B)(a) of the Act). The Tribunal must decide whether it is just and equitable to backdate its determination. Mr Masland applied for a change to the assessment on 24 February 2020 and sought to have any change from 1 January 2016. The earliest date open to the Tribunal from which to make a determination would be 24 August 2018.
The Tribunal is of the broad view that retrospectively changing entitlements should be avoided without compelling reasons. Furthermore, as previously noted, the Tribunal has also chosen not to disturb the earlier decision of the Tribunal[8] made on 29 August 2019. This varied the income of Mr Masland for the period from 1 July 2018 to 1 September 2020 to $264,506. Having considered the interests of both parents the Tribunal finds that it would be just and equitable to commence its decision from 2 September 2020, being the date this earlier determination in relation to Mr Masland’s income ceases.
[8] Separately constituted
The Tribunal proposes to make the following determination:
· for the period from 2 September 2020 to 31 March 2023 the adjusted taxable income of Mr Masland is varied to $210,628.

When the income of $210,628 for Mr Masland as determined by the Tribunal is applied in the child support formula, the annual rate increases from 2 September 2020 to approximately $22,650. This would be approximately $24,646 when including the increase of $1,996 per annum payable by Mr Masland for his share of the education costs of the children (arising from an objection decision made by the Child Support Agency on 21 January 2019 and left in place by the later decision of the Tribunal[9] on 29 August 2019).
[9] ibid.
Ms Dewing asked the Tribunal to consider making any decision in relation to the income of Mr Masland for a very lengthy period in order to provide her some certainty in relation to child support for the children. The Tribunal, in making its determination, has varied the income of Mr Masland until 31 March 2023. This should give both parents this certainty while not being too far into the future as to render the decision out of touch with business conditions which may impact on Mr Masland’s salary and the other benefits he receives.
The Tribunal acknowledges, given Mr Masland’s individual tax returns will not properly reflect his earnings for the purposes of child support, that Ms Dewing may need to consider submitting a further change of assessment application after 31 March 2023. The Tribunal also notes that the increase in the annual rate of child support payable by Mr Masland related to the education costs of the children ends on 31 December 2021.
The Tribunal is satisfied its proposed determination will not cause hardship to Mr Masland, Ms Dewing or the children and is just and equitable.

Issue 3 – Is it otherwise proper to make a particular determination?

The third step is to consider whether it would be otherwise proper to make a particular departure determination in accordance with sub-subparagraph 98C(1)(b)(ii)(B) of the Act. Subsection 117(5) sets out the matters that must be considered when deciding whether it would be “otherwise proper” to make a departure determination. It focuses on the balance of support carried between the parents on one hand and the taxpayer on the other. It is appropriate for children to be primarily supported by their parents rather than by government assistance. The Tribunal must consider whether the level of a benefit, in particular family tax benefit, received by the party caring for the children may be affected by the level of child support.
Ms Dewing is in receipt of family tax benefit. The Tribunal is satisfied its determination will result in an appropriate apportionment of financial responsibility between the parents and the community and would be otherwise proper.

DECISION

[2021] AATA 3183

30 July 2021

Key Legal Topics

Areas of Law

Family Law

Administrative Law

Legal Concepts

Judicial Review

Statutory Construction

Remedies

Jurisdiction