MCKC and Child Support Registrar (Child support second review)
[2021] AATA 4676
•16 December 2021
MCKC and Child Support Registrar (Child support second review) [2021] AATA 4676 (16 December 2021)
Division:GENERAL DIVISION
File Number(s): 2021/1626
Re:MCKC
APPLICANT
AndChild Support Registrar
RESPONDENT
AndPXWT
OTHER PARTY
DECISION
Tribunal:Member P Ranson
Date:16 December 2021
Place:Brisbane
The Tribunal sets aside the decision and in substitution decides for the period from 2 November 2012, the care percentages were 100% to MCKC with effect from 18 March 2020 and 0% to PXWT with effect from 2 November 2012.
.....................[SGD]...................
Member P Ranson
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.
Catchwords
CHILD SUPPORT – care percentage determination – date of effect – where parents agree as to percentage of care – where Registrar notified more than 28 days after change – legislation amendments – decision set aside and substituted
Legislation
Child Support (Assessment) Act 1989 (Cth)
Child Support (Registration & Collection) Act 1988 (Cth)Family Assistance and Child Support Legislation Amendment (Protecting Children) Act 2018 (Cth)
Cases
Commissioner of Police (NSW) v Eaton [2013] HCA 2
Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634
XWTH and Child Support Registrar (Child support second review) [2021] AATA 3240ZBYM; Child Support Registrar and (Child support second review) [2021] AATA 1034
Secondary Materials
Guides to Social Policy Law, Child Support Guide, Version 4.57, released 1 July 2021
REASONS FOR DECISION
Member P Ranson
16 December 2021
BACKGROUND
The Applicant (MCKC) and the Other Party (PXWT) are the separated parents of sons born in 2007 and 2005, collectively (the Boys). The care of the Boys has been shared between their parents since separation and has mostly been recorded in accordance with court orders made in 2008, namely, 79/21 in favour of MCKC. However, the actual care of the Boys has been 100% to MCKC and 0% to PXWT since 2 November 2012 because care by PXWT was suspended by court orders that day, according to MCKC and disputed by PXWT. From then on PXWT only had day visits with the Boys, that is, no overnight care.
In July 2019, PXWT relocated from the Gold Coast to Cairns, which MCKC later informed Centrelink and advised them she had had 100% care of the Boys since 2012. Centrelink elected not to make a care determination based on that advice as they concluded there was insufficient evidence. MCKC again notified Centrelink in March 2020 of the court order, made in November 2012. This time Centrelink agreed to record a new Care determination from to November 2012 is 100% to Ms and 0% to PXWT.
PXWT objected to that care decision on the basis he had a private care arrangement with MCKC. Nonetheless, changes in the law which occurred twice during 2018 had the effect of recording the change of care from November 2012 for PXWT and from March 2020 for MCKC. PXWT’s objection was disallowed.
Dissatisfied with the outcome of the objection, PXWT applied to the Social Security and Child Support Division (SSCSD) of this Tribunal for a review of that decision (AAT1). The AAT1 decision affirmed 100% to MCKC from November 2012 however the effect of that decision was March 2020, being the date on which MCKC notified Centrelink of the 2012 care decision and provided evidence of it.
MCKC disagreed with the AAT1 decision because she felt it should have applied to PXWT from July 2019 when he relocated to Cairns. She did not want the care decision backdated to November 2012 notwithstanding that is when the care changed. MCKC then applied to the General Division of this Tribunal for a review of the AAT1 decision.
PROCEDURAL HISTORY
The decision under review was made by AAT1 on 16 February 2021 which varied the decision of the Child Support Registrar (the Registrar) so that care of the Boys was to be recorded as 100 % to MCKC and 0% to PXWT from 2 November 2012 but with a date of effect of 18 March 2020.
The Hearing for this current application was held before this Tribunal on 14 October 2021 (the Hearing). PXWT attended the Hearing in person, and MCKC, together with Ms Smith representing the Respondent attended by video conference. The video hearing was facilitated using Microsoft Teams. Both PXWT and MCKC gave affirmed evidence. No witnesses were called.
The Respondent identified the issues to be decided as follows:
a)What percentage of care should be attributed to PXWT and MCKC for the Boys for the period from 2 November 2012; and
b)What the date of effect should be of the care determination?
The following documents were admitted into evidence:
Number
Description
Exhibit 1
Section 37 T-Documents of 238 pages
Exhibit 2
Supplementary T-Documents of 74 pages
Exhibit 3
Respondent’s Statement of Facts, Issues and Contentions (SFIC) of 24 September 2021.
Exhibit 4
Letter dated 19 July 2021 from Ms Smith to the applicant and the other party setting out five potential options available to the Tribunal.
Exhibit 5
Exam all correspondence dated 1 June 2020 one of services Australia to the other party concerning child support payments.
Exhibit 6
Application (dismissed) for a domestic violence order against the other party issued 31 July 2008.
Exhibit 7
Email from Applicant’s Brother to the other party dated 10 August 2020 concerning the use of funds in the estate of Applicant’s Mother.
Exhibit 8
Consent orders issued by the Federal magistrates Court of Australia on 28 March 2008.
Exhibit 9
Email from the applicant to human services dated 12 May 2020 complaining about a lack of appropriate action by the Child support registrar to a request to special circumstances made in May 2019.
Exhibit 10
Response by the Other Party to CSA special circumstances application dated 12 May 2019.
Exhibit 11
Change of assessment decision dated 19 June 2019
Exhibit 12
Submissions in reply to the SFIC by the other party dated 9 October 2021.
Exhibit 13
Submission of 56 pages received post hearing from the applicant on 4 November 2021.
Exhibit 14
Submission of 56 pages received post hearing from the Other Party on 3 November 2021.
Prior to the Hearing, all parties were provided with an Exhibit List showing Exhibits 1 to 12. Exhibit 13 and Exhibit 14 were received after the Hearing and were provided to all parties.
Exhibit 3 sets out in detail the law which is relevant to this case with which the Tribunal concurs. As a copy of the SFIC and its attachments were provided to PXWT and MCKC, prior to the hearing, that law will not be reproduced in this decision other than to confirm the relevant legislation is contained in:
a)Child Support (Assessment) Act 1989 (Cth) (the Assessment Act).
b)Child Support (Registration & Collection) Act 1988 (Cth) (the Collection Act)
Exhibit 3 also refers to the Child Support Guide (the Guide) and especially Chapter 2.2.[1] The Tribunal notes that, where a general policy exists to guide the decision maker in exercising its powers, the Tribunal “will ordinarily apply that policy in reviewing the decision, unless the policy is unlawful or unless its application tends to produce an unjust decision … cogent reasons will have to be shown against its application”.[2] The Tribunal considers that there are no pressing reasons to depart from the policy outlined in the Guide.
[1] See Guides to Social Policy Law, Child Support Guide, Version 4.57, released 1 July 2021
[2] Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634, 645 (Brennan J).
The Tribunal has considered all the material supplied to it and the oral evidence of PXWT and the MCKC. Not all the evidence is referred to at length in this decision. That does not mean it has not been considered in determining the outcome. It is sometimes unnecessary to canvass all aspects, arguments, and history of a case.
THE FACTS AND EVIDENCE
Legislative changes in 2018
The actual care of the Boys from 2 November 2012 is agreed between the parties, that is, 100% to MCKC and 0% to PXWT. The only issue arising in this case is which version of section 54F of the Assessment Act should apply, and specifically the date PXWT’s previous percentage of care determination of 21% should be revoked. Prior to 23 May 2018, dates of revocation in the circumstances of this case were governed by subsection 54F(2), and under the terms of that subsection, in a situation where the care change comes to the attention of the Child Support Registrar more than 28 days after it occurred, dates of revocation for both parents would be the day before care change was notified.
The Amending Act contains two changes to Section 54F.[3] The first change, at item 37 contained in Part 1 of Schedule 1 of the Amending Act, commenced on 23 May 2018. That change revoked section 54F in its entirety and replaced it with a new section 54F. The dates of revocation of a previous care determination were not affected by this change, but the operative subsection moved from subsection 54F(2) to subsection 54F(3). This change applied in relation to any change of care day that occurs on or after the commencement day (item 39 of Schedule 1).
[3] Family Assistance and Child Support Legislation Amendment (Protecting Children) Act 2018 (Cth) (‘Amending Act’)
The second change was made by item 176, in Division 3 of Part 4 of Schedule 1. This change repealed and replaced only subsection 54F(3), and the effect of this was to change the rules about dates of revocation where a change in care is not notified to the Child Support Registrar within 28 days of the change of care date. Under this version of subsection 54F(3), the previous care percentage determination for the parent whose care has increased (MCKC) is revoked from the day before the change was notified (18 March 2020[4]), but the previous care percentage determination for the parent whose care has decreased (PXWT) is revoked from the day before the change of care day (2 November 2012). This change commenced on 1 July 2018, and pursuant to item 183 of Schedule 1 it applied in relation to:
a)Changes of care days that occur on or after the commencement day; and
b)Changes of care days that occur before the commencement day if the Registrar or Secretary is notified, or otherwise becomes aware, of the change of care more than 26 weeks after the commencement day.
[4] First notified on 19 July 2019 and not accepted by Centrelink due a lack of evidence in support.
Both parties provided extensive written and oral evidence about the indiscretions they assert the other party has engaged in over the years. Given the real issue in this case is the effect of the two changes made in 2018 as discussed above, that evidence is not relevant to this case.
The legislative interpretation question that arises in this decision is what is the effect of items 176 and 183? On a literal reading of the legislation, it appears item 176 can’t apply to a change of care day prior to 23 May 2018. This is because item 176 repealed and replaced subsection 54F(3), and subsection 54F(3) only ever applied to a change of care day on or after 23 May 2018 (due to item 39). It can still apply to a change of care day prior to 1 July 2018, but it can’t apply to a change of care day prior to 23 May 2018. This literal approach has been adopted in several first review decisions before the SSCSD of this Tribunal.
Notwithstanding the drafting issues discussed above, the approach advocated by the Child Support Registrar, and accepted by the Tribunal in the decisions of ZBYM; Child Support Registrar and (Child support second review) [2021] AATA 1034 (Senior Member C J Furnell) and XWTH and Child Support Registrar (Child support second review) [2021] AATA 3240 (Member Poljak), is that Parliament intended the 1 July version of subsection 54F(3) should apply to any change of care day (emphasis added) prior to 1 July 2018 if the care change was notified after 30 December 2018 (26 weeks after the commencement of that subsection), which it was in this case. As evidence of this intention, the decisions cite the Revised Explanatory Memorandum of the Amending Act, which states at page 46:
Item 183 provides that the amendments made by items 175 to 182 will apply in relation to changes of care days that occur on or after the day this item commences and changes of care days that occur before the day this item commences if the Registrar or Secretary is notified or otherwise becomes aware of the change of care more than 26 weeks after the day this item commences.
This provides parents who have delayed in notifying a change of care with a transitional 'grace period' of 26 weeks from commencement to notify of the change of care before they become subject to the new care percentage date of effect rules.
As a result, a parent who had reduced their care of a child before commencement but failed to notify of the change until more than 26 weeks later would have the reduced care percentage reflected in their child support assessment from the date of the care change. This could lead to a child support overpayment or arrears debt being raised against that parent in some cases. However, this is appropriate given the reduced care percentage is an accurate measure of the lower care costs incurred by that parent as the date of the care change, and the ability to notify within a timely manner, was within the parent's control.
As a matter of statutory construction, the General Division of the Tribunal has taken the view the legislation should be read to give effect to the intention of Parliament. In XWTH, the Tribunal cites the High Court decision of Commissioner of Police (NSW) v Eaton [2013] HCA 2; [2013] 252 CLR 1 on that point.
To date, neither the Registrar nor the Tribunal has addressed exactly which version of section 54F applies in its entirety to change of care days prior to 23 May 2018 and notified after 30 December 2018. The Tribunal considers the simplest reading, as opposed to a literal reading, is to assume item 176 of the Amending Act should be read as revoking subsection 54F(2) for change of care days prior to 23 May 2018, and replacing subsection 54F(2) with the new subsection 54F(3). Viewed this way, the section would read:
54F Determination must be revoked if there is a change to the responsible person’s cost percentage
(1) If:
(a) a determination of a responsible person’s percentage of care (the existing percentage of care) for a child has been made under section 49 or 50; and
(b) if section 51 or 52 applied in relation to the responsible person—the interim period for the determination has ended; and
(c) the Registrar or the Secretary is notified, or otherwise becomes aware, that the care of the child that is actually taking place does not correspond with the responsible person’s existing percentage of care for the child; and
(d) the Registrar is satisfied that the responsible person’s cost percentage for the child would change if the Registrar were to determine, under section 49 or 50, another percentage to be the person’s percentage of care for the child; and
(e) section 54G does not apply;
the Registrar must revoke the determination.
Note: The Registrar must make a new determination under section 49 or 50 to replace the revoked determination: see paragraph 49(1)(b) or 50(1)(b).
(3) The revocation of the determination takes effect at the end of:
(a) if the Registrar or Secretary is notified, or otherwise becomes aware, of the matter referred to in paragraph (1)(a) within 28 days after the change of care day for the responsible person—the day before the change of care day; or
(b) if the Registrar or Secretary is notified, or otherwise becomes aware, of that matter more than 28 days after the change of care day for the responsible person and:
(i) the responsible person’s care of the child has increased—the day before the Registrar or Secretary is notified, or otherwise becomes aware, of that matter; or
(ii) the responsible person’s care of the child has reduced—the day before the change of care day.
The above interpretation also requires the reference to paragraph 1(a), in paragraph 54F(3)(a), to be read as paragraph 1(c).
Effect of care percentage decision:
The decision under review is the decision to revoke the previous care determination of 79% to MCKC and 21% to PXWT and replace them with new care percentage determinations. The decision made by the Registrar and affirmed by AAT1 is PXWT had no care, and MCKC had 100% care, from 2 November 2012. Adopting the construction of the current subsection 54F(3) discussed above, the effect on PXWT’s arrears is discussed below.
Care percentage determinations for child support are made under section 49 (if there is no pattern of care, that is, if the percentage is 0%) or section 50 (if there is a pattern of care) of the Assessment Act. Section 54A discusses how to work out the extent of care a person has, and subsection 54A(1) says the actual care of a child a person has during a care period may be worked out based on the number of nights that child is in the care of a person. This is generally interpreted as meaning the Registrar can work out the extent of care based purely on the nights a child is in that person’s care but is not necessarily limited to only considering nights in care. This is acknowledged in the Child Support Guide at chapter 2.2.1.
MCKC says the care orders were suspended from 2 November 2012 and PXWT says they were not suspended. None of that matters because the parties agree PXWT’s care of the Boys from 2 November 2012 was 0% as he had no overnight care from that date and some hours of day care albeit well less than 24 hours per week.
A percentage of care is determined based on the amount of care the person has. The percentage of care is then converted to a “cost percentage”, and the cost percentage is the figure that is used in the child support assessment. Section 55C sets out the conversion from percentage of care to cost percentage. As PXWT’s percentage of care 0%, that is, less than 14%, his cost percentage is nil, and his arrears will remain the same.
SUMMARY OF FINDINGS
As the facts around the actual overnight care of the Boys is not in dispute in this case, the issue is the correct statutory construction of the changes made to the Assessment Act in 2018, which has been discussed in detail above.
MCKC wanted the change to be effective from 19 July 2019 being the date she says PXWT relocated to Cairns. That position is not sustainable at law because PXWT had no overnight care from 2 November 2012.
PXWT may be aghast the change of care from 2 November 2012 notified by MCKC on 18 March 2020 can have the effect of creating arrears at all when he is certain he had an agreement with MCKC about the amount of child support he was to pay. Whist it may seem unfair to him, his position is not sustainable either because it is the Tribunal’s duty to review a decision in accordance with the law and the fact remains, he has not had any overnight care of the Boys since 2 November 2012.
DECISION
The Tribunal sets aside the decision in AAT1 and in substitution decides for the period from 2 November 2012, the care percentages were 100% to MCKC with effect from 18 March 2020 and 0% to PXWT with effect from 2 November 2012
I certify that the preceding 29 (twenty-nine) paragraphs are a true copy of the reasons for the decision herein of Member P Ranson
…………………[SGD]………………..
Associate
Dated: 16 December 2021
Date of Hearing: 14 October 2021; Post Hearing submission received 4 November 2021.
Applicants: By Microsoft Teams
Other Party In-Person Solicitor for the Respondent: Services Australia
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