Megyer and Wilcher (Child support)

[2021] AATA 1762

Megyer and Wilcher (Child support) [2021] AATA 1762 (30 April 2021)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2021/SC020816

APPLICANT:  Ms Megyer

OTHER PARTIES:  Child Support Registrar

Mr Wilcher

TRIBUNAL:Member S Brakespeare

DECISION DATE:  30 April 2021

DECISION:

The decision under review is affirmed.

CATCHWORDS

CHILD SUPPORT – particulars of the administrative assessment – estimate of income – whether the estimate should have been refused – estimate of income accepted – 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. Mr Wilcher is the parent liable to pay child support to Ms Megyer in respect of their child [Child 1], who is 13 years old. The child support case commenced on 18 August 2010.

2. On 15 August 2020 an officer of the Child Support Agency accepted an estimate of income from Mr Wilcher of $158,305 (annualised) for the period 1 August 2020 to 30 June 2021 (the original decision).

3. Ms Megyer objected to the original decision. An objections officer disallowed the objection on 15 February 2021.

4. Ms Megyer lodged an application for review of the decision with the tribunal. A hearing was held on 30 April 2020. Mr Wilcher and Ms Megyer gave evidence on affirmation to the tribunal via conference telephone. The Child Support Agency provided the tribunal and the parties with a bundle of papers relevant to the review (95 pages).

5. Relevant aspects of the evidence and material before the tribunal will be referred to in the tribunal’s consideration of the issues which it has to decide.

ISSUE

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

2. The issue that is to be decided is whether Mr Wilcher’s income estimate should be accepted.

CONSIDERATION

1. A person may make an estimate of income for a financial year, or part of a year, if the provisions in section 60 of the Act are met.

2. If a person has not made an estimate for the year of income and wishes to estimate their income during the financial year, after the first day of the financial year, they can make an income estimate for part of the year (subsection 60(3)). The estimate that would apply must not be more than 85% of the person’s adjusted taxable income for the last relevant year of income for the child support period.

3. If the person has already made an income estimate election for the year of income and wishes to make another estimate due to a change in their circumstances they must make a later income estimate (section 62A).

4. In providing an estimate for part of the year the person must inform the Child Support Agency of their estimated income for each income component amount for the remaining period (paragraph 60(3)(a)). The remaining period is from the start date of the income estimate election to the end of the year of income (subsection 60(4)). The total of the person’s income component amounts for the remaining period is their partial year income amount (subsection 60(4)). They must also inform Child Support Agency of their year to date income, that is, the total of the income component amounts they have received from the beginning of the year of income to the day before the start day of the income estimate election (paragraph 60(3)(b)).

5. In order to calculate the amount to be used in the assessment, the partial year income amount must be divided by the number of days in the remaining period, to identify a daily income amount. That daily income amount is then multiplied by 365 to identify the annualised income which is the amount the parent is required to provide as their income estimate election (paragraph 60(3)(a) and subsection 60(4)).

6. The start date of the election for a part year estimate must be either the day on which the person makes the election (paragraph 60(5)(a)); or the first day of a child support period, so long as that day is not before the day the parent makes the election (paragraph 60(5)(b)).

7. The Child Support Agency can refuse to accept an income estimate for part of a year of income if the parent’s partial year income amount is less than what the Child Support Agency considers is likely to be the parent’s actual adjusted taxable income for the remaining period in relation to the income election (paragraph 63AA(2)(a)).

8. Unless the income estimate is refused, the Child Support Agency must apply the estimate to the administrative assessment for a period beginning on the day the election is made and ending on the last day of the income year, or, if the estimate is subsequently revoked and replaced by another estimate, on the start day for the later election (section 61).

9. The tribunal finds that the partial year income election made by Mr Wilcher of $158,305 (annualised) was less than 85% of his 2019/20 adjusted taxable income of $188,320 (being the last relevant year of income for the child support period commencing 1 August 2020).

10. Ms Megyer was of the view that Mr Wilcher’s estimate was inaccurate and should not be accepted. She said that Mr Wilcher said his income was reducing because he was relocating to Canberra from [City 1] and as such he would have access to less overtime than he had been previously working. She said that Mr Wilcher did not relocate until 5 September 2020 and would still have been entitled to work overtime prior to that date. She also said that in his estimate Mr Wilcher failed to disclose income he was earning from renting out the family home in Canberra whilst he was located in [City 1].

11. Mr Wilcher told the tribunal that there were a number of factors that gave rise to his expected decrease in income including that there was less overtime available in [City 1], due to the effect of COVID-19; and he was to be promoted to [a higher position] and was to be based in Canberra from early September 2020. Due to his new [position] and location there was also much less opportunity work overtime.

12. Mr Wilcher said that when he was calculating his estimate he took into account his base salary of $113,000, added the 22% composite of $24,860 and then added a further amount of $20,000 for overtime. He said it was impossible to be exact with the estimate; however he has been monitoring it each fortnight to ensure that it was on track with his actual income. Recently he increased the estimate.

13. Mr Wilcher acknowledged that he was renting out his Canberra home whilst located in [City 1]. The rental income and expenses were properly declared in his income tax returns. He said that the rental income did not cover the expenses and therefore he did not declare it as income in making his estimate. He also stated that the home ceased being rented about a month before he relocated back to Canberra, in anticipation of his return.

14. The tribunal had regard to the pay advices provided by Mr Wilcher for the period August 2020 to October 2020. His fortnightly pay fluctuated over the period but overall was consistent with his annualised estimate. Normally a net rental property loss would have to be declared as part of the estimate; however the tribunal accepts Mr Wilcher’s evidence that he ceased renting the property out about a month prior to returning to Canberra. The tribunal therefore accepts that there was no rental income to be added to the estimate from 1 August 2020, as the property had ceased to be rented.

15. The tribunal is not satisfied that Mr Wilcher’s partial year income amount was less than what was likely to be his actual adjusted taxable income for the period covered by the estimate, at the time the estimate was made. This means that there are no grounds for refusing to accept the estimate.

16. The tribunal therefore finds that the Mr Wilcher’s income estimate of $158,305 (annualised) is to be accepted and applied to the period 1 August 2020 to 30 June 2021.

DECISION

The decision under review is affirmed.