McCosker and MacFeat (Child support)

[2022] AATA 3373

McCosker and MacFeat (Child support) [2022] AATA 3373 (29 August 2022)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2022/BC024062

APPLICANT:  Mr McCosker

OTHER PARTIES:  Child Support Registrar

Ms MacFeat

TRIBUNAL:Member M Baulch

DECISION DATE:  29 August 2022

DECISION:

The decision under review is affirmed.

CATCHWORDS

CHILD SUPPORT – particulars of the administrative assessment – estimate of income - whether the estimate should have been accepted earlier – 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 McCosker and Ms MacFeat are the separated parents of two children, in respect of whom Services Australia – Child Support (Child Support) has made assessments of child support.

2. On 29 March 2022, Mr McCosker contacted Child Support and made an election to have an estimate of his adjusted taxable income of $0 applied to the child support assessment.  On 29 March 2022, a Child Support employee decided that Mr McCosker’s estimated income of $0 per annum should apply to the child support assessment from that date (the decision under review).

3. Mr McCosker objected to that decision seeking to have the estimate applied from an earlier date and, on 3 June 2022, that objection was disallowed.  Mr McCosker has now applied to this tribunal seeking an independent review of Child Support’s decision.

4. A hearing into the application for review was held by the tribunal on 29 August 2022. Mr McCosker and Ms MacFeat both participated in the hearing by conference telephone, and both gave sworn evidence during the hearing. A representative of the Child Support Registrar (the Registrar) did not participate in the hearing. The tribunal had before it relevant documents provided to it by Child Support pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 (98 pages), copies of which both parties confirmed they had received prior to the tribunal hearing.

ISSUES

1. The statutory provisions relevant to this review application are found within the Child Support (Assessment) Act1989 (the Act).

2. The issue which arises in this case is from when can Mr McCosker’s estimate be applied to the child support assessment.

CONSIDERATION

1. Child Support makes child support assessments using a formula outlined in Part 5 of the Act.  The elements of this formula include, amongst other things, the adjusted taxable income of each parent.  The adjusted taxable income for each parent is defined in section 43 of the Act and includes primarily the taxable income for the year of income in relation to the child support period.  The term year of income is defined in subsection 5(1) of the Act and generally means a financial year.

2. As of 10 January 2022, Mr McCosker’s taxable income for the 2020–21 income year had not been assessed by the Australian Taxation Office (the ATO) so the Registrar was required to assign a provisional amount for his adjusted taxable income applying in the child support assessment (see section 58 of the Act).  The amount applied was $171,616.  On 14 January 2022, the ATO reported to Child Support that Mr McCosker’s 2020–21 taxable income was $182,443 and this became the adjusted taxable income that applied in the particular child support assessment, backdated to the commencement of the child support period which was 1 November 2021.

3. Section 60 of the Act provides that a parent may elect, either before the commencement of an income year or during that income year, that their adjusted taxable income used in a child support assessment be based upon their estimate of their income as long as that estimate is not more than 85% of the adjusted taxable income used in the child support assessment. 

4. The adjusted taxable income against which the 85% amount is measured must be an amount based upon the parent’s taxable income as determined by the ATO, or an amount declared by the parent to be their taxable income for that income year.   It cannot be a provisional amount determined by the Registrar under section 58 of the Act.  In the absence of a declaration of his 2020–21 taxable income made by Mr McCosker, this means that it was not open to Mr McCosker to make an estimate election until 14 January 2022, when the ATO reported his 2020­­–21 taxable income to child support.

5. On 29 March 2022, Mr McCosker contacted Child Support and made an estimate election.  He estimated that his income would be $0.  Mr McCosker’s estimate election satisfied the requirements of section 60 of the Act.  Pursuant to section 61 of the Act, that estimate was applied to the child support assessment.

6. Mr McCosker submitted that his income of $0 should be applied to the child support assessment from 10 January 2022.  On this date he had contacted Child Support and reported that he was not working and had a nil income and stated that this would impact on his ability to meet his child support obligation.

7. The file notes from Mr McCosker’s contact on 10 January 2022 disclose that making an estimate was discussed with Mr McCosker.  However, it is also clear that an estimate was not made on 10 January 2022.  At that point in time Mr McCosker was assessed based upon a provisional adjusted taxable income, not an amount determined from his ATO assessed taxable income nor an amount declared by himself, so an estimate could not then be made.

8. Mr McCosker did not suggest that he contacted Child Support at any time after 10 January 2022, until he made his estimate election on 29 March 2022.  I was satisfied and so found that Mr McCosker made his estimate election on 29 March 2022.

9. The date from which an estimate election applies to the child support assessment is prescribed by subsection 60(5) of the Act, which relevantly provides that:

   (5)  The start day for the election must be:

   (a)  the day on which the parent makes the election; or

   (b)  the first day of a child support period, so long as that day is not before the day referred to in paragraph (a).

   The child support period in question commenced on 1 November 2021, and Mr McCosker made his estimate election on 29 March 2022.  The start date for the estimate election can only be the date Mr McCosker made the election (29 March 2022), as that is after the first day of the child support period (1 November 2021).

10. Mr McCosker submitted that he was given incorrect advice by Child Support on 10 January 2022.  However, having regard to the file notes I was not persuaded that this complaint has foundation.  Mr McCosker submitted that it should be recognised that he contacted Child Support on 10 January 2022 and advised that he had no income and his child support assessment from January 2022 to March 2022 is therefore incorrect.

11. While I acknowledge that Mr McCosker contacted Child Support on 10 January 2022, he did not make an estimate on that date.  He was informed that an estimate could not be made until Child Support received information about his 2020–21 taxable income from the ATO or he could make his own declaration of his taxable income for the 2020–21 income year, an option Mr McCosker did not then avail himself of.  Mr McCosker took no further steps in the matter until he contacted Child Support on 29 March 2022 to make his estimate election. 

12. The legislation is clear.  Mr McCosker’s estimate applies from the date it was made, and I therefore found that Mr McCosker’s estimate election of $0 can only be applied to the child support assessment from 29 March 2022.

13. Therefore, and for these reasons, I decided to affirm the decision under review.

DECISION

The decision under review is affirmed.