McLean and Corddry (Child support)

[2024] AATA 478

McLean and Corddry (Child support) [2024] AATA 478 (12 February 2024)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2023/BC026741

APPLICANT:  Ms McLean

OTHER PARTIES:  Child Support Registrar

Mr Corddry

TRIBUNAL:Member J Leonard

DECISION DATE:  12 February 2024

DECISION:

The Tribunal sets aside the decision under review and, in substitution, refuses to credit the following payments made by Mr Corddry towards an enforceable maintenance liability:

·$500 paid to [Child 1] on 20 February 2023;

·$500 paid to [Child 1] on 14 March 2023;

·$500 paid to [Child 1] on 14 April 2023; and

·$500 paid to [Child 1] on 12 May 2023.

This means the application for review is successful.

CATCHWORDS

CHILD SUPPORT – non-agency payments - whether payments made to a third party in lieu of child support – payments made to child – no child support liability at the time of payments – not satisfied mutually intended to be paid as satisfaction of amount under enforceable maintenance liability - decision under review set aside and substituted

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 Corddry and Ms McLean are the parents of [Child 1] born [in] October 2005. There has been a child support assessment in place since November 2005.

2. Mr Corddry made an application to Services Australia − Child Support (Child Support) on 3 June 2023 for credit of four payments against his maintenance liability. The payments of $500 each were made between 20 February 2023 and 12 May 2023.

3. On 6 June 2023 Child Support made the decision to refuse to credit any of the payments.  On 7 June 2023 Mr Corddry objected to this decision and on 8 September 2023 Child Support allowed his objection and credited a total of $2,000 against Mr Corddry’s maintenance liability.

4. On 9 September 2023 Ms McLean applied to the Administrative Appeals Tribunal (the Tribunal) for a review of the objection decision.

5. A hearing was convened on 12 February 2024. Ms McLean and Mr Corddry gave evidence on affirmation by conference telephone. Child Support provided the Tribunal and the parties with a bundle of documents relevant to the review (127 pages). Prior to the hearing, Mr Corddry provided documents which were duplicated in Child Support’s papers.

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 Child Support and not the payee.  In some circumstances Child Support 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).  Child Support refers to the credits under sections 71 and 71A as ‘non‑agency payments’ and the credits under section 71C 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).

3. The issue which arises in this case is whether any of the following payments made by Mr Corddry can be credited against his child support liability:

   ·$500 paid to [Child 1] on 20 February 2023;

   ·$500 paid to [Child 1] on 14 March 2023;

   ·$500 paid to [Child 1] on 14 April 2023; and

   ·$500 paid to [Child 1] on 12 May 2023.

CONSIDERATION

1. Following notification from Mr Corddry on 12 October 2022 that [Child 1] was not in Ms McLean’s care, Child Support made a decision on 25 January 2023 that the care percentage to be applied to the administrative assessment for each parent was 0% and the Child Support case ended for [Child 1]. An objection lodged by Ms McLean was disallowed.

2. On 22 July 2023, a further care decision was made that Ms McLean had 100% care of [Child 1] from 12 April 2023. Mr Corddry was assessed to pay a monthly rate of child support of $2,126.08 from 12 April 2023.[1]

   [1] Child Support papers, page 68.

3. Ms McLean explained to the Tribunal there was no agreement that Mr Corddry would make any of the payments set out in paragraph 8 in lieu of child support. She did not discuss the payments with Mr Corddry before they started, and it was an arrangement between Mr Corddry and [Child 1] that started when [Child 1] was spending some time with her nan.

4. On 25 August 2023 the Tribunal (differently constituted in matter 2023-BC025933), set aside the care decision dated 25 January 2023 and decided that from 6 September 2022 Ms McLean has 50% care and Mr Corddry has 0% care of [Child 1].

5. Although subsequent decisions were made that Mr Corddry remained liable to pay child support for [Child 1] from 6 September 2022, at the time each payment was made, Mr Corddry did not have a child support liability and records show that he was in credit.[2] 

   [2] Child Support papers, page 119.

6. The payments made by Mr Corddry to [Child 1] cannot be regarded as a non-agency payment under section 71 of the Act because the payments were not made to Ms McLean.

7. The Tribunal then considered whether the payments could be credited under section 71A of the Act. This section provides for payments made by the payer of an enforceable maintenance liability to a third party to be credited against the amount payable under the child support liability in certain circumstances. It relevantly states:

   Payments to third persons by payer

   (1)  Subject to section 71D, if:

   (a)  the payer of an enforceable maintenance liability or carer liability pays a third party an amount that partially or completely satisfies a debt owed by:

   (i)  the payee of the enforceable maintenance liability or carer liability; or

   (ii)  the payer; or

   (iii)  both the payee and payer; and

   (b)  the payer or the payee applies to the Registrar, in the manner specified by the Registrar, to have the amount, or part of the amount, received by the third party treated as having been paid to the Registrar; and

   (c)  the amount paid, or a part of the amount paid, was intended by both the payer and the payee to be paid in complete or partial satisfaction of an amount payable under:

   (i)  the enforceable maintenance liability in relation to the child support enforcement period; or

   (ii)  the carer liability;

   the Registrar must, despite sections 30 and 69B, and in accordance with subsections (2) and (3), credit the amount, or part of the amount, received by the third party against the amount payable under the enforceable maintenance liability or carer liability.

8. At the hearing, both parents focussed on whether there was an agreement that the payments were in partial satisfaction of the child support liability. Mr Corddry claims the payments made to [Child 1] while she was living with her nan were child support. Ms McLean claims it was pocket money.  Mr Corddry stated that the amount of the payments were agreed upon by Ms McLean and [Child 1] because he was also paying for [Child 1’s] school fees. Once Ms McLean claimed child support again, he thought there was no point continuing to pay [Child 1] directly, as he would have to start making payments to Child Support directly. The May 2023 payment occurred because he forgot to cancel the direct debit arrangement.

9. In this case, the Tribunal finds that section 71A of the Act does not apply for a number of reasons:

   ·     Mr Corddry had no child support liability at the time the payments were made to [Child 1]. It was not until the decision of 22 July 2023 was made that Mr Corddry had a retrospective child support liability from 12 April 2023, and it was not until the Tribunal’s decision of 25 August 2023  that Mr Corddry had a child support liability which covered the period the payments were made.  

   · None of the four payments made by Mr Corddry were in satisfaction of a debt owed by either Mr Corddry or Ms McLean. Mr Corddry held a child support credit over the period the payments were made,[3] and no debts were owed to [Child 1] from Mr Corddry or Ms McLean.

   ·     The Tribunal is not satisfied that the payments were mutually intended by both Ms McLean and Mr Corddry to be paid to satisfy an amount payable under an enforceable maintenance liability. As noted above, there was no enforceable maintenance liability at the time the payments were made. Further, the text message between Mr Corddry and [Child 1] instruct [Child 1] not to give the money to her mother and states the payment arrangement was between him and [Child 1].

   [3] Child Support papers, page 119.

10. It is also not clear to the Tribunal whether a child would be a ‘third party’ as envisaged by section 71A of the Act. It is the parents of a child that have the primary duty to maintain the child. Children are generally not responsible for providing for their own financial support by meeting their own living expenses such as paying bills, food, housing and health. The principal object of the Act is to ensure that children receive a proper level of financial support from their parents.

11. Finally, the payments are not of a kind specified in section 19 of the Regulations and so the payments cannot be credited under section 71C of the Act.

12. Overall, the Tribunal finds that there is no provision in the Act to allow the four payments made by Mr Corddry to be credited against an enforceable maintenance liability.

DECISION

The Tribunal sets aside the decision under review and, in substitution, refuses to credit the following payments made by Mr Corddry towards an enforceable maintenance liability:

·$500 paid to [Child 1] on 20 February 2023;

·$500 paid to [Child 1] on 14 March 2023;

·$500 paid to [Child 1] on 14 April 2023; and

·$500 paid to [Child 1] on 12 May 2023.

This means the application for review is successful.