McNair and Shersby (Child support)

[2021] AATA 3681

McNair and Shersby (Child support) [2021] AATA 3681 (15 July 2021)

DIVISION:  Social Services & Child Support Division

REVIEW NUMBER:  2021/MC021517

APPLICANT:  Mr McNair

OTHER PARTIES:  Ms Shersby

Child Support Registrar

TRIBUNAL:  Ms Hamilton-Noy, Member

DECISION DATE:  15 July 2021

DECISION:

The Tribunal affirms the decision under review.

CATCHWORDS

CHILD SUPPORT – particulars of the administrative assessment – whether a multi-case allowance and multi-case cap should have applied –decision under review affirmed

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. This application relates to a decision by the Department of Human Services – now Services Australia (Child Support) relating to the application of a multi-case allowance and multi-case cap to the administrative assessment for the children [Child 1, Child 2 and Child 3].

2. Mr McNair and Ms Shersby are the separated parents of [Child 1, Child 2 and Child 3].

3. On 18 November 2019, an employee of Child Support made a decision to apply a multi-case allowance and multi-case cap to the administrative assessment of child support between the parties from 7 November 2019.

4. On 19 December 2019 Mr McNair lodged an objection to this decision.

5. On 27 April 2021 an objections officer of Child Support disallowed the objection.

6. On 18 May 2021 Mr McNair made an application to the Administrative Appeals Tribunal for an independent review of Child Support’s decision.  The Tribunal hearing was held on 15 July 2021, on which date the Tribunal spoke to both parties by conference telephone.  At the hearing, the Tribunal had before it documents provided by the Agency (folios 1 to 152), copies of which had been provided to the parties prior to the hearing.  Both parties confirmed receipt of the documents with the Tribunal. 

CONSIDERATION

1. The statutory provisions relevant to this review are contained in the Child Support (Assessment) Act 1989 (the Assessment Act) and the Child Support (Registration and Collection) Act 1988. 

2. The legal issue for the Tribunal in this case is whether the Agency has correctly applied a multi-case allowance and multi-case cap to the administrative assessment of child support for Mr McNair and Ms Shersby and, if so, from what date these are to be applied.

3. The Tribunal accepts that a child support case has been registered for the children [Child 1, Child 2 and Child 3] since 12 September 2016 and that Mr McNair is the payer of child support and Ms Shersby the payee of child support under the administrative assessment of child support (folio 258).  The Tribunal accepts that Mr McNair has two other children who, prior to Mr McNair’s separation from their mother, were relevant dependent children for the purposes of the child support assessment for the children [Child 1, Child 2 and Child 3]. 

4. The Tribunal accepts that administrative assessments of child support were issued to the parties on 6 December 2019.  The administrative assessment of child support for the period 16 May 2019 to 31 August 2019 required Mr McNair to pay an annual rate of child support of $21,128.  Used in the calculation of the formula was a relevant dependent child amount of $10,700 (folio 151).

5. The administrative assessment of child support for the period 1 September 2019 to 6 November 2019 required Mr McNair to pay an annual rate of child support of $23,969.  A relevant dependent child amount of $11,946 is against used in the calculation of the formula (folio 155).

6. The administrative assessment of child support for the period 7 November 2019 to 19 December 2019 required Mr McNair to pay an annual rate of child support of $17,416.  No relevant dependent amount is reflected in this child support assessment; rather the calculation of the formula included a multi-case allowance of $11,080 (folio 159).

7. The Tribunal accepts that the issuing of these child support assessments forms the background to the current application before this Tribunal, as Mr McNair perceives that his other two children ‘dropped off’ the child support assessment for a three-month period from September to November 2019.

8. The Tribunal finds from the evidence given by Mr McNair at the hearing that a child support case for his other two children started on 7 November 2019 and that at no time prior to 7 November 2019 did Mr McNair or his former partner apply to the Agency for the registration of a child support case for their two children.

9. The Child Support Guide at 2.4.9 notes that parents may have more than one child support case, that is, children from different relationships in child support assessments with more than one other parent.  In order to recognise a parent’s responsibility to support their children in another child support case, there are mechanisms to calculate child support assessments for parents with multiple child support cases.  These include the multi-case allowance, which is an allowance deducted from a parent’s adjusted taxable income to recognise the parent’s responsibility for child support for their children in another child support case, and the multi-case cap, which is used to ensure a paying parent does not pay more support for a child than they would if all of the children lived in the same household and is intended to recognise that a parent may bear some of the costs of a child directly through regular or shared care and is calculated on a per child basis.  The Guide states that both of the methods recognise the parent’s other obligations and therefore only one method is needed at any time.  For each child, the lesser of the two amounts calculated will be the assessed rate of child support.

10. Division 2 of Part 5 of the Assessment Act deals with the formulas for determining an annual rate of child support. Subdivision C applies where, in relevant part, both parents are to be assessed in respect of the costs of a child and at least one of the parents is to be assessed in respect of the costs of another child in another child support case. A ‘child support case’ is defined at section 5 of the Assessment Act to be, in relation to a child, the administrative assessments for child support for all children who are children of both of the parents of the child. An ‘administrative assessment’ is defined also at section 5 of the Assessment Act to be an assessment, other than an assessment for the purposes of a notional assessment, under Part 5.

11. Divisions 5 and 6 of Part 5 of the Assessment Act deal with working out elements of the child support formula and the costs of the child. Subsection 47(1) of the Assessment Act provides the method statement for calculating a parent’s multi-case allowance for a child for a day in a child support period. The method statement is as follows:

    Step 1.   Work out the following amount:

    Step 2.   If the parent has a relevant dependent child, take the parent's relevant dependent child amount (see section 46) for the day from the amount worked out under step 1.

    Step 3.   For each of the children (the multi-case children) for whom the parent is assessed in respect of the costs of the child for the day, work out the multi-case child costsfor the particular child for the day under section 55HA, as if:

    (a)     the parent's annual rate of child support were assessed under Subdivision D of Division 2; and

    (b)    the reference in subsection 55HA(2) to the parent's child support income were a reference to the amount worked out under step 1 or 2 (as the case requires); and

(c)     references in section 55HA to children in the child support case that relates to the child were references to all of the parent's multi-case children.

Step 4.   The parent's multi-case allowancefor the particular child for the day is the sum of the multi-case child costs for each of the other multi-case children (excluding the particular child and any other children in the child support case that relates to the particular child).

1. Section 55E of the Assessment Act sets out the formula for working out the multi-case cap for an individual. At subsections 55E(1) and (2), the formula is set out as follows:

   (1)   Work out a parent's multi-case cap for a child (the particular child) for a day in a child support period in accordance with subsection (2) if:

   (a)  the parent's annual rate of child support for the particular child is assessed for the day under section 37, 38, 39 or 40; and

   (b)  if section 37 or 38 applies--the parent has a positive child support percentage for the particular child under step 6 of the method statement in section 35; and

(c)  in any case--the parent is assessed for the day in respect of the costs of another child who is in another child support case.

(2)  The parent's multi-case capfor the particular child for the day is worked out using the formula:

1. Mr McNair is seeking that a multi-case allowance and multi-case cap be applied to his child support case for the assessment relating to [Child 1, Child 2 and Child 3] prior to 7 November 2019.  However, the Tribunal considers that the relevant legislation does not allow for this. The method for calculating a multi-case allowance, set out above, requires that an assessment made for each of the children ‘for whom the parent is assessed in respect of the costs of the child for the day’.   The method for calculating a multi-case cap, also set out above, requires the parent to be assessed ‘for the day in respect of the costs of another child who is in another child support case’.   Each of these methods requires that, for an individual day in a child support period, the parent must be assessed for the costs of the other children.  The formula requires an administrative assessment be in place for the other children. 

2. In circumstances where there was no administrative assessment of child support in place for Mr McNair’s other two children until 7 November 2019, the Tribunal finds that a multi-case allowance and multi-case cap is unable to be applied to the administrative assessment of child support for the children [Child 1, Child 2 and Child 3] until 7 November 2019.  The Tribunal finds that the Agency has correctly concluded that a multi-case allowance and multi-case cap is applicable to Mr McNair’s child support payments from 7 November 2019, for the reasons stated above.  The Child Support decision is therefore legally correct and, while the Tribunal notes the submissions of both parties that the outcome in this matter is unfair to Mr McNair, this decision is affirmed. 

   Other matters

3. The Tribunal notes that submissions made by Mr McNair at the hearing went largely to concerns around customer service he had received from Child Support and the inability of Centrelink to assist him.  Mr McNair told the Tribunal that he had phoned Child Support on 2 October after receiving a child support assessment which had substantially increased the amount of child support he was required to pay.  He had been asked to go to Centrelink to have his other two children recognised as being in his care and was then told by Centrelink they could not assist him with this.  He was finally advised by a senior employee at Child Support that he needed to register a child support case.  As a result, his child support payments were increased between August and November 2019.  Ms Shersby gave evidence that she agreed with Mr McNair’s evidence and did not believe he should be paying a higher rate of child support for the three months in question.

4. The Tribunal noted at the hearing, and notes again here for the sake of completeness, that it does not have any jurisdiction over customer service issues the applicant may have experienced and that it is bound to apply the law that is relevant to this matter. 

DECISION

The Tribunal affirms the decision under review.