McBeth and Gerard (Child support)

[2024] AATA 379

McBeth and Gerard (Child support) [2024] AATA 379 (12 January 2024)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2023/BC026659

APPLICANT:  Mr McBeth

OTHER PARTIES:  Child Support Registrar

Ms Gerard

TRIBUNAL:Member P Jensen

DECISION DATE:  12 January 2024

DECISION:

The decision under review is affirmed.

CATCHWORDS

CHILD SUPPORT – non-agency payment – liable parent made payments for school fees and school uniforms – made those payments prior to change in care but for school term which would commence after change in care – decision under review affirmed

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

1. Mr McBeth and Ms Gerard are the parents of [Child 1] who was born in 2005 and [the twins] who were born in 2007. A child support case was registered with Services Australia – Child Support (Child Support) in 2016. Ms Gerard was recorded as providing 100% care for the three children. The parents entered into a binding child support agreement (BCSA) in February 2020. Its terms included the following:

• From 30 June 2020, Mr McBeth is to pay $1,333.50 per child per month, with annual CPI increases.

• Mr McBeth is to pay the children’s school fees, which are defined as “[t]uition fees, school levies, technology levies and administration fees invoiced by [School 1], or such other school as selected by the Mother provided such school has no costs over and above those charged by [School 1].”

• “[F]rom the periodic payments to be received by Ms Gerard from [Mr McBeth], Ms Gerard is to ensure that she pays the Additional Education Expenses”, which include school uniforms, school shoes for daily wear and sport, and requisite sporting attire.

• The BCSA in relation to each child will terminate upon Ms Gerard ceasing to be an eligible carer of the child (which relevantly meant ceasing to provide at least 35% care: section 7B of the Child Support (Assessment) Act 1989 (the Assessment Act)).

1. Mr McBeth’s child support payable was a liability that he owed to Child Support. He could discharge that liability by making payments directly to Child Support. He could also make payments to third parties and, if certain requirements were satisfied, the payments could be credited against his liability to Child Support. Relevantly, such payments are called non‑agency payments if they are credited under section 71A of the Child Support (Registration and Collection) Act 1988 (the Registration Act) or prescribed non-agency payments if they are credited under section 71C of the Registration Act.

2. On 15 December 2022 and 8 January 2023, Mr McBeth made payments totalling $2,349.40 to [Business 1] for school uniforms. He applied to have the payments credited as non-agency payments or prescribed non-agency payments. Child Support decided to refuse his applications. He objected to those decisions. An objections officer disallowed his objections. He applied to the Tribunal for further review. I heard the matter on 12 January 2024. Mr McBeth attended the hearing in person. Ms Gerard attended the hearing by conference phone.

3. One of the requirements of section 71A is that the amount paid, or a part of the amount paid, was intended by Mr McBeth and Ms Gerard to be paid in complete or partial satisfaction of Mr McBeth’s child support liability to Child Support: paragraph 71A(1)(c). Mr McBeth submitted:

   Under clause 15 of the BCSA, Ms Gerard is to pay from the periodic child support payments made by me under the BCSA for all Additional Education Expenses as defined in clause 2.10, which includes uniforms and shoes. Ms Gerard refused to pay directly for uniforms and shoes for [the twins] for their new school, [School 2], so I was required to purchase these items from the periodic child support monies or they would have had no school uniforms or shoes for their new school.

   The decision is wrong – the BCSA is a legally binding agreement, it was in force at the time of the relevant purchases and demonstrates mutual intent and agreement by Ms Gerard that Ms Gerard is responsible for paying for uniforms and shoes from the period[ic] child support payments.

4. In fairness to Mr McBeth, he was responding to a Child Support letter that simply informed him that the payments had not been credited as non-agency payments because there had been “No Mutual Intention”. Child Support did not refer him to the precise wording of paragraph 71A(1)(c). However, the fact remains that the issue is not whether Ms Gerard was required to purchase the school uniforms in question but whether she intended Mr McBeth’s payments for the school uniforms to be credited against his liability to Child Support. Ms Gerard has repeatedly stated that she did not hold that intention. There is no evidence to suggest otherwise. In particular, the BCSA does not address the possibility that Mr McBeth might purchase Additional Education Expenses. I accept Ms Gerard’s evidence on the issue. The payments cannot be credited pursuant to section 71A of the Registration Act.

5. Subsection 71C(1) of the Registration Act states:

   If:

   (a)the payer of an enforceable maintenance liability in relation to a payment period or initial period has made one or more payments to the payee of the liability, or to another person; and

   (b)the payment is a payment of the kind specified in the regulations; and

   (ba)at the time the payment is made, the payer does not have at least regular care of any of the children to whom the relevant administrative assessment relates; and

   (c)the sum of those payments exceeds the sum of all such payments previously credited under this section against the amount payable under the liability for all past periods; and

   (d)the payer does not, at the time at which the Registrar applies this section, have at least regular care of any of the children to whom the relevant administrative assessment relates;

   then the Registrar must, despite section 30, credit the excess amount mentioned in paragraph (c) against the amount payable under the payer's liability for the period, up to a maximum of 30% of the amount payable.

   Note: Subsection (1) is subject to section 71D.

6. Section 71D of the Registration Act grants a discretion to not credit payments under section 71C. There is no dispute that Mr McBeth’s payments satisfied paragraphs 71C(1)(a), (b) and (ba). It is not necessary to consider whether they satisfied, or will satisfy, paragraphs 71C(1)(c) or (d). Unless the payments ought not be credited pursuant to section 71D, the matter will be remitted to Child Support for reconsideration with directions that paragraphs 71C(1)(a), (b) and (ba) were satisfied.

7. Section 71D states:

   The Registrar may refuse to credit an amount under section 71, 71A or 71C if satisfied that, in the circumstances of the particular case, the amount ought not to be credited.

8. Whether the payments ought not be credited requires a broader consideration of the context in which the payments were made. Mr McBeth lives in Brisbane. Ms Gerard lives on the Gold Coast. In 2022, Ms Gerard was still providing 100% care for the children who were attending [School 1] on the Gold Coast. Broadly, there is no dispute that Mr McBeth paid the periodic child support prescribed by the BCSA and he also paid [School 1’s] 2022 fees which totalled approximately $60,000, and Ms Gerard paid the Additional Education Expenses that related to the children’s attendance at [School 1] during 2022.

9. During 2022 the parents decided that [Child 1] would live with her [specified relatives] from early 2023. [Child 1] completed Year 12 in 2022. She started living with her [specified relatives] on 4 February 2023.

10. During 2022 the parents also decided that the twins would live with Mr McBeth from early 2023 and attend [School 2], which is a public school in Brisbane. Child Support recorded Mr McBeth as providing 84% and Ms Gerard as providing 16% care for the twins from 14 January 2023. Mr McBeth purchased the twins’ [School 2] school uniforms in the weeks before the change in care on 14 January 2023 and the consequential termination of the BCSA in respect of the twins. He agreed that he could have purchased the school uniforms after the change in care. He explained that it was more convenient to purchase the school uniforms when he did, rather than waiting until shortly before school started. However, [School 2] did not require the 2023 school uniforms to be purchased by 14 January 2023.

11. I noted, and Mr McBeth agreed, that school fees are usually made on an annual or quarterly basis. Such expenses can be contrasted with day-to-day expenses such as food. Regardless of when Mr McBeth paid [School 1’s] 2022 school fees of approximately $60,000, the payments were referrable to the 2022 school year. I did not question Ms Gerard about how frequently she had purchased items of [School 1’s] uniform but regardless of when particular payments were made, they were for items of clothing that would be used for extended periods.

12. During the hearing, Mr McBeth focused on the fact that the twins’ [School 2] school uniforms were purchased before the change in care and the consequential termination of the BCSA, but in my opinion, the more relevant observation is that they were purchased for the 2023 school year which started after the change in care and the consequential termination of the BCSA. The administrative assessment from 14 January 2023 was based, in part, on Mr McBeth’s 84% care and Ms Gerard’s 16% care of the twins and a formulaic calculation that the basic cost of the twins was $19,214 x 2 = $38,428 per annum: pages 189 and 190 of the hearing papers and section 55F of the Assessment Act. Ms Gerard was administratively assessed to contribute to the twins’ basic costs that Mr McBeth was directly incurring via his 86% care. Those basic costs included the basic costs associated with the twins’ attendance at a public school. (However, the overall administrative assessment was initially nil because Mr McBeth was administratively assessed to contribute to [Child 1’s] basic costs which Ms Gerard was directly incurring via her 100% care of [Child 1], and Mr McBeth was being assessed on a higher adjusted taxable income than Ms Gerard.) Viewed from that perspective, Mr McBeth’s payments were for items that the twins did not require until after Mr McBeth had started providing primary care for the twins and after the termination of the BCSA in respect of the twins.

13. If Mr McBeth had purchased the school uniforms after the change in care, paragraph 71C(1)(ba) would not have been satisfied. His election to purchase the school uniforms before the change in care does not change the fact that the school uniforms were for the 2023 school year which started after the change in care. For those reasons, the payments ought not be credited as prescribed non-agency payments.

DECISION

The decision under review is affirmed.