Mclaughlin and Mclaughlin (Child support)

This matter concerned an appeal by the father, Mr Mclaughlin, against a decision of the Child Support Registrar (the Registrar) regarding child support payments. The mother, Ms Mclaughlin, sought to have the child support assessment varied upwards. The dispute centred on the father's income, specifically whether certain payments he received should be included as assessable income for child support purposes. The appeal was heard by P Jensen M in the Federal Circuit Court of Australia.

The primary legal issue before the Court was whether payments received by the father from his employer, described as "redundancy payments" and "long service leave payments," constituted "income" for the purposes of the *Child Support (Registration and Collection) Act 1988* (Cth) and the *Child Support Assessment Act 1989* (Cth). The Court was required to determine if these payments were of a periodic or lump sum nature, and if they were to be treated as income or a capital receipt for the purposes of calculating child support.

P Jensen M reasoned that the nature of the payments was crucial. The Court considered the purpose and timing of the payments. The long service leave payment was found to be a payment in lieu of leave that would have been taken periodically had the father remained employed. The redundancy payment was a lump sum payment made upon termination of employment. Applying the principles established in relevant case law, the Court determined that while the long service leave payment could be treated as income, the redundancy payment was a capital receipt and not assessable income for child support purposes.

Consequently, the Court varied the child support assessment. The Registrar's decision to include the full amount of both payments as assessable income was set aside. The assessment was to be recalculated to include the long service leave payment as income, but exclude the redundancy payment.