McCollam and McCollam (Child support)

[2022] AATA 3097

McCollam and McCollam (Child support) [2022] AATA 3097 (20 June 2022)

DIVISION:     Social Services & Child Support Division

REVIEW NUMBER: 2022/SC023158 & 2022/SC023222

APPLICANT:            Mr McCollam

OTHER PARTIES:  Child Support Registrar

Ms McCollam

TRIBUNAL:  Member J Bakas

DECISION DATE:   20 June 2022

DIRECTION TO ALTER DECISION OR REASONS FOR DECISION:

Pursuant to section 43AA of the Administrative Appeals Tribunal Act 1975, the following alteration is made to the written statement of reasons for the decision:

The word “Adam” in paragraph 1 of the written statement of reasons for the decision is altered to read: children

Member J Bakas 22 July 2022

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2022/SC023158 and 2022/SC023222

APPLICANT:  Mr McCollam

OTHER PARTIES:  Child Support Registrar

Ms McCollam

TRIBUNAL:Member J Bakas

DECISION DATE:  20 June 2022

DECISION:

The decision under review is affirmed.

CATCHWORDS

CHILD SUPPORT – non-agency payment - prescribed payment for school fees - payment correctly refused - 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

BACKGROUND

1. Mr McCollam and Ms McCollam are the parents of [Child 1] and [Child 2], in respect of whom a child support assessment is in place. Ms McCollam has 94% care of Adam, and Mr McCollam has 6% and Mr McCollam has a liability to pay child support to Ms McCollam.

2. On 18 October 2021, Mr McCollam applied to have payments totalling $1,060.20 for fees paid towards school fees, credited against the assessment as prescribed non-agency payments. This amount was made up of four payments of $265.05 each on 6 August 2021, 20 August 2021, 3 September 2021 and 17 September 2021.

3. On 26 October 2021, Mr McCollam applied to have payments totalling $530.10 for fees paid to towards school fees, credited against the assessment as prescribed non-agency payments. This amount was made up of two payments of $265.05 each on 21 September 2021 and 5 October 2021.

4. The Child Support Agency (CSA) refused these applications on 22 October 2021 and 3 November 2021.

5. Mr McCollam objected to this decision on 7 November 2021. An objections officer disallowed the objection on 7 January 2022 and Mr McCollam applied to the Tribunal for review on 20 January 2022 for the first decision (2022/SC023158) and 3 February 2022 for the second decision (2022/SC02322).

6. The matter was heard on 7 June 2022 and both Mr McCollam and Ms McCollam participated by MS Teams audio. Both parties gave oral evidence to the Tribunal on affirmation. At the hearing both parties confirmed receipt of documents provided by the CSA.

7. The Tribunal deferred the matter to provide an opportunity for Ms McCollam to submit a copy of correspondence to support her position. Mr McCollam was provided an opportunity to make further comments on the additional document.

8. For the sake of clarity, I note that there has been a previous decision by the CSA crediting non-agency payments and prescribed non-agency payments made by Mr McCollam for school fees. Each decision to credit a prescribed non-agency payment is a separate decision subject to objection rights and eventually appeal rights to the Tribunal.

9. I need to consider whether the payments subject to the two applications before me should be credited as non-agency payments.

ISSUES

1. The statutory provisions relevant to this review are contained in the Child Support (Registration and Collection) Act 1988 (the Act).

2. 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 CSA, not the payee.

3. In some circumstances the CSA 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 CSA 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).

4. Section 71C of the Act provides a mechanism whereby payments made by a liable parent to the payee or to another person for items specified in 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.

5. The issue which arises in this case is whether or not the payments made by Mr McCollam can be accepted as prescribed non-agency payments and credited against his child support liability.

CONSIDERATION

1. There is no dispute that the payments made by Mr McCollam meets all criteria for a prescribed non-agency payments.

2. In this regard, applying the provisions of section 71C of the Act, I find that Mr McCollam is the payer under an enforceable maintenance liability, and has made a payment to the school. The payment is of a kind specified in the Regulations, namely fees charged by a school for [Child 1] and [Child 2]: Regulation 19(b) of the Regulations. Mr McCollam does not have, and has not had, at least regular care of [Child 1] or [Child 2]. I am further satisfied on the evidence before me that none of the other restrictions on crediting an amount under section 71C of the Act are applicable.

3. However, section 71C of the Act is subject to section 71D, which creates a discretion to refuse to credit an amount under section 71C if the Registrar is satisfied that in the circumstances of the particular case the amount ought not to be credited. The matters raised by Ms McCollam call on me to consider whether this discretion should be exercised in the circumstances of this case so as to refuse to credit the amounts.

4. I also considered departmental policy, in the form of the Child Support Guide at 5.3.1, which provides examples of situations where the discretion not to credit a prescribed non-agency payment might be exercised. The policy does not bind the Tribunal, but the Tribunal will have regard to departmental policy. The aspect of the policy regarding the discretion to refuse to credit an amount states:

   The Registrar can refuse to credit a non-agency payment claimed under CSRC Act sections 71, 71A or 71C if the Registrar is satisfied that, in the circumstances of the particular case, the amount ought not to be credited (CSRC Act section 71D).

   The Registrar may refuse to credit an amount in certain circumstances, including, but not limited to, the following:

   ·The payee's agreement to credit an amount paid to a third party or payment made as a transfer of property was obtained through coercion or harassment. (However, where the Registrar is informed about this after the payment has been credited, it will be necessary for the payee to object to the Registrar 's decision to credit the amount.)

   ·The payer is claiming a credit under CSRC Act section 71C for an expense they regularly meet that was taken into account in a change of assessment decision. For example, the Registrar or a court has reduced the annual rate (or refused to increase it) because the payer usually pays school fees, medical expenses for the child, mortgage or rent payments or any other prescribed payments.

   ·The payer is claiming credit under CSRC Act section 71C for an expense which they have undertaken to pay in addition to their liability as specified in an agreement between the parents (this does not have to be a child support agreement).

   ·The payer is claiming credit under CSRC Act section 71C for an expense that they are responsible to pay under the terms of a court order.

   ·The payer is claiming credit under CSRC Act section 71C for expenses for the child for which they are separately responsible. For example, the payer claims credit for child care costs for the days when the child resides with the payer. If the payer claims credit for a payment for which they and the payee are jointly responsible, and the amount does not relate to the payee's home, the Registrar has no basis of apportioning the payment and must credit the full amount. However, if there is evidence that the parents have explicitly agreed about how much each party will pay, the Registrar will apportion responsibility according to their agreement.

   ·The payer is claiming a credit under CSRC Act section 71C for loan repayments and they have a history of regularly withdrawing funds from the loan account using its redraw facility.

5. Mr McCollam argues that the amounts should be credited because, there were Court Orders agreed to in 2020 that support his position. When they were negotiating these orders, they had an agreement that his payments of half the school fees would be applied against his child support liability as non-agency payments. Ms McCollam had agreed to this. Further, the CSA did not afford him an opportunity to provide his side of the matter.

6. Ms McCollam’s position included that she never wanted to have the school fee payments made by Mr McCollam credited as non-agency payments. After feeling some pressure and duress from Mr McCollam, she agreed for this to occur. However, she found that she was not able to afford to pay for food. They never had a legally binding agreement and so she could change her mind about including these payments as non-agency payments. As she was already paying half the school fees, by having these amounts paid by Mr McCollam being included towards his child support liability, she was effectively paying 100% of the school fees. She also sought to have the children removed from private schooling but Mr McCollam refused.

7. The Tribunal papers disclose that between about 20 March and 5 April 2020, Ms McCollam expressed to Mr McCollam via emails that she could not afford to keep sending the children to private school if he didn’t pay his half of the school fees and that she continued to request he pay half of school fees in addition to his child support liability.

8. I note the Court Orders made by consent dated 29 April 2020 do not refer to school fees. In relation to education they state that [Child 1] and [Child 2] will continue to attend St Francis Xavier of Florey.

9. As stated above, Ms McCollam agrees that she initially agreed for Mr McCollam’s school fee payments to be included as part of his child support liability but that this was under duress. She advised Mr McCollam within two months of the agreement that it was unsustainable for her due to the cost of living.

10. The Tribunal papers show that there were a number of payments made by Mr McCollam for school fees that were considered non-agency payments and prescribed non-agency payments after the Court Orders. However, I note that the papers also include correspondence between Ms McCollam and the CSA that shows on 6 October 2020 Ms McCollam advised them that she can no longer accept Mr McCollam’s requests for the school fee payments to be included as non-agency payments. She also sent an email to Mr McCollam on 1 October 2020 seeking that he perhaps only claim half of the payments against his child support liability even thought this would still be difficult financially for her.

11. As detailed above, Ms McCollam was provided an opportunity to send in further documentation to support her position. She provided a document that was forwarded to Mr McCollam for comment.

12. Having considered the evidence and arguments of both parties, I have formed the view that the circumstances of the matter are such that the Registrar should refuse to credit the prescribed non-agency payments.

13. I am satisfied that the Consent Court Orders do not include an agreement regarding the payment of school fees, only that the children are to attend a particular school. Prior to this agreement each party was responsible for making 50% of payments towards school fees. During the negotiations of the consent orders it appears to me that Ms McCollam was seeking agreement from Mr McCollam not to have his share of the school fees be included as payments towards his child support liability. While a number of payments have been credited, I find that the circumstances making it appropriate to exercise the discretion to refuse the non-agency payments arose when Ms McCollam made it clear that she could not bear the financial burden of the full school fees cost. I also accept that Ms McCollam felt some pressure at the time of the Consent Court Orders negotiations to reach an agreement. However, as stated above, the orders do not stipulate responsibility for school fees.

14. I find that this is also consistent with departmental policy as I am satisfied that Mr McCollam had a prior agreement and responsibility to pay 50% of the school fees. I also accept that Ms McCollam felt some pressure or coercion to finalise the orders that were consented to in April 2020 but again, as stated above, these orders do not refer to the school fees themselves.

15. I have formed the view that the circumstances of the matter are such that the Registrar should refuse to credit the prescribed non-agency payments.

DECISION

The decision under review is affirmed.