McLean and Michell (Child support)

McLean and Michell (Child support) [2023] AATA 1657 (14 April 2023)

DIVISION:Social Services & Child Support Division
REVIEW NUMBER:  2022/SC025282
APPLICANT:  Miss McLean
OTHER PARTIES:  Child Support Registrar
Mr Michell

TRIBUNAL:Deputy President K Synon
DECISION DATE: 14 April 2023
DECISION:

The Tribunal sets aside the decision under review and, in substitution, decides that the two payments totalling $500 the father made on 5 February 2022 and 22 February 2022 are not to be credited towards his child support liability.

CATCHWORDS

CHILD SUPPORT – non-agency payment - whether payment made to payee in lieu of child support - intention of both parents - 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

Miss McLean (the mother) and Mr Michell (the father) are the parents of [Child 1] (the child) born in August 2019. A registered child support agreement between the parents has been in place since 1 February 2022.
On 10 May 2022, the father contacted Services Australia – Child Support (Child Support) to report two non-agency payments (NAPs). The first payment was for $200 sent to the mother by bank transfer on 5 February 2022, and the second was for $300 sent by bank transfer to the mother on 22 February 2022.
On 13 May 2022, the mother contacted Child Support and the following comments were recorded regarding the NAPs lodged by the father on 10 May 2022:
Miss McLean stated that the payment of $300 was Mr Michell's half of a $600 overdue bill for daycare and as such she does not accept the amount in lieu of Child Support.
Miss McLean has stated that she does not accept the $200 payment in lieu of Child Support either as this relates to monies owed by Mr Michell for various bills/expenses in January 2022.
On 23 May 2022, the mother again contacted Child Support to follow up on the NAPs reported by the father. The following details of the call were recorded by the customer service officer:
[Miss McLean] advised she was following up on NAPs the other parent reported.
-    He said he paid her money for child support, but she said this money for was paid for other expenses.
-    She had told us about this on 13/5/2022, but she received a letter from us again and wanted to follow up.
I advised her I would take a look.
I advised Miss McLean that we have not not [sic] accepted the payment and we are still waiting to contact Mr Michell and advise him that he needs to provide evidence.
Miss McLean advised she has a text messages as to what the payments are for.
She asked if needed to provide them.
I advised her that she could [sic], but the burden of proof is on him.
-    We can't accept the payments if we can't establish mutual intent.
-    Mr Michell can't even ask us to credit the payment as a P‐NAP because he has regular care of [Child 1].
I advised Miss McLean that we are currently collecting from Mr Michell on an ongoing basis from a third party organisation.
-    This organisation collects payments from Mr Michell fortnightly, but we usually receive it as a lump sum payment after the month is over.
-    The usual timeframe allows for the organisation to send payment for the month previous by the end of the following month, so the payment is not technically considered late yet.
She asked what happens to his debt, and whether that will be recovered.
I advised her that we can look into collecting an extra amount for the debt via the third party org as well. She advised she will wait for the payment.
On 24 May 2022, Child Support contacted the father and recorded the following details of the discussion:
called Mr Michell to discuss NAPS as other party has stated the payments were for other expenses not for child support. Mr Michell will provide evidence by COB 27/05/2022. webmaster and CSID provided.
On 1 June 2022, Child Support made the decision to disallow the NAPs reported by the father. The following details of the decision were recorded by the customer service officer:
Miss McLean advised the payments were not for child support they were for other expenses. Mr Michell was asked to provide evidence they were for child support by 27/05/2022 this was not followed up with no evidence received.
On 15 July 2022, the father provided evidence of the transactions in the form of screenshots from his bank account showing the outgoing payments made to the mother on 5 and 22 February 2022.
On 11 August 2022, the father contacted Child Support to enquire about the progress of his NAPs lodged in May, to which the customer service officer recorded the following details:
I stated to Mr Michell
-    letter was issued 01.06.22 adv refusal of $300 payment on 22.02.22 and $200 payment on 05.02.22 based on RP Miss McLean not accepting in lieu of CS
-    $375 payment made on 01.03.22 was accepted
Mr Michell stated how can this be when he has provided evidence of transaction bank statements
I stated to Mr Michell [REDACTED]
-    in relation to NAP only option now is to lodge an objection and would also have to request an EOT as not lodged within 28 days of decision
Throughout call Mr Michell was very critical [REDACTED] of how care decision and NAP decision were made and did not accept attempts to provide info or options I offered.
Mr Michell terminated call adv he was going to take it higher
On 23 August 2022, the father again contacted Child Support regarding NAPs. The following details were recorded by the customer service officer:
PP called upset and with the same issues raised in the last few discussions with CSP re: naps and care.
PP was upset that CSP took rp's word in her advising that the naps he paid on the:
22/2/22 for $300
05/02/22 for $200
was not a child support payment.
PP advised he sent thro [sic] evidence and why was this not looked into when the decision was made.
he said that he wants to know how was the decision made to refuse these naps. explained to him the naps process. he lodged the claim advising of payments made into rp's a/c.
RP has not disagreed that these payments were sent to her.
she has disagreed that the payments were considered to be in lieu of child support and there was no such agrmt between them that it will be looked at as child support.
He did send evidence thro that he sent rp the payments he was claiming . However he was asked to send in evidence of agrmt between the parents that the payment will be considered as child support.
CSP did not find the evidence he sent thro as sufficient and hence could not accept the above payments.
PP understood. explained to PP his objection rights if he wished to object to the decision.
Pp advised he will object as he has evidence of text messages that rp sent him that it will be considered as child support. explained that this was the kind of evidence CSP was expecting from him.
However the nap decision letter was sent to him on the 01/06/22 advising him of his objection rights and a 28 day timeframe to lodge one. this timeframe has expired.
Hence if he wants to lodge one, he will need to attach a request for an extension of time to lodge objection and his reasons for not lodging one before, a copy of the objection (directed him to the form on the website) and all the evidence he has to support mutual intention of child support.
explained the objection process/ stressed on the open exchange of info/timeframe of 50‐75 days for decision to be made/ and no guarantee as to what the decision will be.
Until any different decision made, the current assmt still stands and collection will be as per current case status.
if there is an ovp to the OP, the ovp can be absorbed towards his future liab.
PP discussed care for [Child 1]. [REDACTED]
On 13 September 2022, the father made the following submission to Child Support via email:
Both payments of $200 5th feb and $300 22nd feb l, evidence of her asking for payments and what they’re for
She asked for money in the 3rd photo, that was the $200 payment which was a private child support payment that she didn’t notify you about.
The $300 payment was toward a daycare bill which she lied to you about and said it was for something else.
She only notified you of the $375 payment when I said I wouldn’t send her money because she hadn’t been telling child support.
There is $500 worth of private payments there.
On 14 September 2022, the father submitted screenshots of text messages and a transaction record of the $200 sent to the mother on 5 February 2022.
On 23 September 2022, the father contacted Child Support and the following details of the call were recorded:
ret so call
advise that pyr has sent through corro re payments
advise that decision made
pyr needs to object
pyr advise that [REDACTED] i need to look at evidence advise that wont change decision
advise that if pyr doesnt object there is no way to apply payments
pyr advise that cs only backs the female side advise that this is also correct cannot change his perception.
On 26 September 2022, the father uploaded additional screenshots of messages with the mother as well as a written objection to the Agency’s decision to disallow the NAPs lodged on 1 June 2022. The father provided the following reasons for his objection:
At the time of Child Support reaching out to me about this information I was on a 3 month stint of night shift, I’d repeatedly asked Miss McLean to tell child support the truth. She refused, she’s repeatedly done this throughout our relationship & character assassinated me. Any dealings since then are anxiety inducing as I’ve continually had to prove innocence against false claims, re-reading her text messages [is] anxiety inducing. Please look at the evidence
In the same letter, the father provided the following reasons for not lodging his objection within 28 days of receiving the original decision:
Miss McLean has denied payment details, at the time I was on 3 month night shift stint – sleeping during the day. I gave Miss McLean chances to change this and she refused.
As soon as I swapped to day shift I have been trying to chase this up – very difficult for me as she continually lies and creates false claims puts me in a vulnerable position when I’m unable to defend myself. Please look at the evidence.
On 9 October 2022, Child Support contacted the father to discuss his objection to the decision made on 1 June 2022. The father confirmed that he did not wish to provide any further information as he had submitted evidence regarding the parties’ mutual intention along with his objection. The objections officer recorded the following details of the discussion:
Call out to Mr Michell (PP) PORO completed.
Advised Mr Michell that payments made towards childcare cost might not be considered as in lieu of child support as he has regular care of [Child 1] as per below legislation:
The Registrar can credit certain payments towards a payer's child support liability regardless of the intention of the parents at the time the payment was made (CSRC Act section 71C), except if:
-    the liability is an overseas maintenance liability (CSRC Act section 71C(6)), or
-    the liability is a recovery order, or for spousal or de facto maintenance (CSRC Act section 71C(5)(a)), or
-    at the time the payment was made, the payer had at least regular care of any of the children to whom the relevant administrative assessment relates (CSRC Act section 71C(1)(ba)), or
-    at the time the payment was made, the child support liability was being fully or partially met by a lump sum credit (CSRC Act section 71C(2)) (refer to 5.3.3).
Credit can be given up to a maximum of 30% of the liability, provided the balance of child support is paid as it becomes due and payable the payer has less than 14% care of all of the children to whom the relevant administrative assessment relates at the time the credit is being applied (CSRC Act section 71C(1)(d)), and the child support liability is not already being met by a lump sum credit (CSRC Act section 71C(5)(b)).
Mr Michell advised that he was not given above information when he contacted CSA to challenge the original decision.
Mr Michell advised that he prefers not to communicate with CSA as it gives him stress and he is always provided different information every time he calls CSA.
Advised Mr Michell that he is assessed to pay child support and I would recommend him not to make any direct payments as we are collecting child support on behalf of RP.
Mr Michell was upset however he confirmed his understanding.
On 11 October 2022, Child Support contacted the mother and advised her of the grounds of the father’s objection. The mother elected to provide a verbal response to the objection, as follows:
Miss McLean stated that the payment of $300 was Mr Michell's half of a $600 overdue bill for daycare and as such she does not accept the amount in lieu of Child Support.
She does not accept the $200 payment in lieu of Child Support either as this relates to monies owed by Mr Michell for various bills/expenses in January 2022.
On 21 October 2022, the mother uploaded screenshots of text messages between the parties in support of her contention.
On 18 November 2022, Child Support decided to allow the father’s objection to the decision to disallow the two payments totalling $500 as NAPs. The objections officer provided the following reasons for the decision:
Child Support can credit a non-agency payment to a child support debt or carer debt if, at the time the payment was made, the payer and the payee both intended that it was a payment towards the enforceable maintenance liability or the carer liability.
Miss McLean provided partial copy of the text messages between parents stating $200 is for past due from January 2022 (noting Child Support started 1 February 2022)
Mr Michell provided partial copy of text messages between parents discussing agreement to direct payment as Child Support
Original decision evidence provides the entire text message discussion between parents confirming the two different amount totalling $500 as follows:
$300 agreed by Miss McLean, as child support and that Miss McLean would declare it with Child Support Agency.
$200 Miss McLean agreed the payment was made for child support owed for January 2022.
On review, we can accept the $500 as in lieu of child support as at the time Miss McLean had agreed to notify Child Support.
We made the decision to accept payments totalling $500.00 for third party and direct payment via bank transfer, as non-agency payments.
The objection is allowed.
On 16 December 2022, the mother lodged an application for a review of the objections officer’s decision to the Social Services and Child Support Division of the Administrative Appeals Tribunal (the Tribunal). She provided the following reasons for her application:
I claim that the decision is wrong because the facts that the decision depended upon were false and misleading. The evidence provided by the payer was cherry picked to mislead the child support agency, some of the evidence that was crucial to applying the relevant legislation were from other matters that were irrelevant to the payments being questioned and from time after the matters in question. The evidence i provided also wasn’t properly taken into account. I also claim that the objection should not have been allowed, as the payer had rested on his rights and his claim that he could not lodge his objection in due time due to his shift work is also misleading as he has had a great deal of time for his hobbies, as seen on social media.
On 28 March 2023, Ms McLean and Mr Michell attended a telephone hearing and were each given the opportunity to present oral evidence. At the commencement of the hearing, they confirmed that they had each received the relevant documents from Child Support (144 pages) which were also received by the Tribunal. In addition, the Tribunal also has before it the documents provided by the mother (and exchanged with the father before the hearing) which are labelled A1–A17.

Hearing evidence

The mother gave evidence that the $200 the father paid on 5 February 2022 was for general living expenses incurred when the mother and father were cohabitating in January 2022 and was never intended to be credited in lieu of child support payments. She drew the Tribunal’s attention to the text messages on 5 February 2022 on page 99 of the hearing papers, in which she wrote to the father “Child support are assessing from February onward, I am asking for funds from January. Can you please transfer money for the last few weeks”.
In response to this payment of $200 made on 5 February 2022, the father said he had not lived in the house for the “last couple of weeks” prior to his departure on 18 January 2022 when he moved his belongings out. Later in the hearing when asked if the $200 related to expenses for a couple of weeks in January, the father responded “yes”.
The mother gave evidence that the second payment of $300 the father made on 22 February 2022 was for the child’s day care fees, which a staff member told her when she picked up her son were in arrears of $600. The mother said the child’s placement in the day care centre was in jeopardy and that both parents relied on the child attending day care. She stated that when these text conversations happened, it was not brought up or discussed that these payments would be made in lieu of child support. The mother stated she was “really clear” in the text messages contained in folio A5 that the payment was for a day care bill and that there was no mention of child support. Furthermore, she stated that the fees were in excess of her child support payments and that the father, at that point, only contributed to the fees as a once-off.
The father agreed that the second payment of $300 made on 22 February 2022 was made with the intention of paying the child’s day care fees, but believed it was agreed with the mother that this payment would be reported to Child Support as a NAP to be credited against his regular child support payments. He stated that he would be happy to either pay the mother directly, as previously indicated in his text messages, or have Child Support collect child support, but not both.
The Tribunal asked the mother to explain the text messages on page 69 of the hearing papers in which the parties discussed the mother notifying Child Support of previous payments. She stated that this was in reference to the $375 payment made by the father on 1 March 2022 which she reported to Child Support as a NAP on 13 March 2022. She stated that she had commenced a new night shift role on 27 February 2022, and this is why there was a delay in declaring this payment. The mother confirmed that there was mutual intention for the $375 payment to be credited in lieu of the father’s ongoing child support liability, but not the $500 that is the subject of this appeal.
The Tribunal asked the father why he had taken so long to report these claimed NAPs. He responded that he was working [specified duties] and, at the time of the payments, he was working 11 nights straight with one day off. He confirmed that he had asked the mother to report the payments and wished to give her time to do so. Also, because he was working regionally, he lacked reliable mobile phone coverage and would not have been able to phone Child Support whilst working.

ISSUE

The issue under review before the Tribunal is whether payments totalling $500 made by the father to the mother on 5 February 2022 and 22 February 2022, should be allowed as NAPs for the purpose of being credited against the father’s ongoing child support liability.

CONSIDERATION

The statutory provisions relevant to this review are contained in the Child Support (Registration and Collection) Act 1988 (the Act).
Section 71A of the Act relevantly provides that:
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.
Note: Section 16A provides for the Registrar to specify the manner in which an application may be made.

If:
(a) the application referred to in paragraph (1)(b) specifies that the amount, or part of the amount, received by the third party is to be credited against a specified percentage (that is less than 100%) of the amount payable under the liability; and
(b) the Registrar is satisfied that the payer and the payee agree that the amount received is to be so credited;
then the Registrar must credit the amount, or the part of the amount, received against that percentage of the amount payable under the liability.
Otherwise, the Registrar must credit the amount, or the part of the amount, received against all of the amount payable under the liability.
This section does not apply to an enforceable maintenance liability of a kind referred to in paragraph 18A(3)(a).
Section 71D, as referenced in the relevant paragraph above, provides that:
The Registrar may refuse to credit an amount under section 71, 71A or 71C if satisfied that, in the circumstances of the particular case, the amount ought not to be credited.
The Tribunal notes that the first payment in question – that of $200 paid on 5 February 2022 – was for general living expenses incurred while the father was cohabitating with the mother in January 2022, until he moved his belongings out on 18 January 2022. The father did not dispute this, although said he was not living at the mother’s house for the “last couple of weeks” before he moved out. However, later in the hearing the father agreed that this $200 related to living expenses in January 2022. At this time, the Tribunal advised him that, because this was a payment for expenses incurred before the commencement of the child support assessment, the amount cannot be credited. The father responded “okay”.
On this basis, the Tribunal finds that the $200 payment made by the father to the mother on 5 February 2022 was in respect of his general living expenses in January 2022. This predated the commencement of the child support assessment on 1 February 2022. It is therefore not accepted as a NAP.
The Tribunal turns now to consider the second claimed NAP of $300 paid on 22 February 2022. The Tribunal accepts that the father intended this to be deducted from his child support liability however, in accordance with paragraph 71A(1)(c) of the Act, the Tribunal must be satisfied that the payment was intended by both the payer and the payee to be paid in complete or partial satisfaction of the enforceable agreement. After carefully examining the documentary and oral evidence before it, the Tribunal is not satisfied the mother held the same intention. It found the mother’s evidence to be credible when she stated she was “really clear” in the text messages (contained in folio A5) that the payment was for a day care bill and that there was no mention of child support. This contrasts with a later payment of $375 the father paid to the mother which she declared to Child Support and which was subsequently accepted as a NAP on 13 March 2022.
Because the Tribunal is unable to establish any shared intention that the father’s payment of $300 made on 22 February 2022 be credited against his child support liability, it is unable to accept this as a NAP.
The Tribunal acknowledges that the father will be disappointed with this decision. It is no reflection on the relative good will exhibited by both parents during the hearing but simply an application of the applicable law.

DECISION

[2023] AATA 1657

14 April 2023

Key Legal Topics

Areas of Law

Family Law

Administrative Law

Legal Concepts

Intention

Statutory Construction

Remedies

Appeal