McKennie and McKennie (Child support)

Mr McKennie applied to the Administrative Appeals Tribunal (AAT) for a review of a decision made by the Child Support Registrar (represented by Services Australia). The dispute concerned an application by Ms McKennie for a departure determination to alter the child support assessment for their child, [Child 1]. Services Australia had initially refused Ms McKennie's application but later allowed her objection, varying Mr McKennie's adjusted taxable income to $72,800 for a specified period, which increased his child support obligations. Mr McKennie sought a review of this objection decision.

The AAT was required to determine whether a ground for departure from the standard child support assessment provisions existed, and if so, whether it was just and equitable to make such a departure. Ms McKennie relied on the ground that Mr McKennie's income, property, and financial resources were such that a standard assessment would result in an unjust and inequitable determination of child support. The Tribunal also had to consider whether it was otherwise proper to make a departure determination, having regard to the primary obligation of parents to support their child and any potential impact on government benefits.

The Tribunal found that a ground for departure was established because Mr McKennie derived financial benefits from his businesses, [Business 1] and [Business 2], beyond his declared taxable income. These benefits included the payment of personal expenses such as telecommunications and utilities by the companies, and significant personal spending evidenced by his bank statements, which he understated. The Tribunal considered it just and equitable to make a departure determination, noting that [Child 1] had special needs requiring home schooling, Ms McKennie had limited capacity for remunerative employment, and Mr McKennie had the financial capacity to provide greater support without undue hardship. The Tribunal also found it otherwise proper to make the determination, as the primary obligation for child support rested with the parents, and any reduction in family tax benefit for Ms McKennie would be less than the increase in child support received.

The Tribunal affirmed the decision of Services Australia to vary Mr McKennie's adjusted taxable income, concluding that the departure determination was just and equitable and otherwise proper. Consequently, Mr McKennie's child support obligation was to be assessed based on the varied income, reflecting a higher annual rate of child support.