Merrick and Merrick (Child support)

[2020] AATA 1400

Merrick and Merrick (Child support) [2020] AATA 1400 (5 March 2020)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2020/SC018159

APPLICANT:  Mr Merrick

OTHER PARTIES:  Child Support Registrar

Ms Merrick

TRIBUNAL:Member J D’Arcy

DECISION DATE:  5 March 2020

DECISION:

The tribunal affirms the decision under review.

CATCHWORDS

CHILD SUPPORT – particulars of the administrative assessment – adjusted taxable income used in assessment – whether estimate of income was properly accepted – whether estimate of income was properly reviewed and amended – 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 Merrick has requested the Administrative Appeals Tribunal (the tribunal) to review the decision of the Department of Human Services – Child Support (Child Support) to refuse to apply his 2018/2019 adjusted taxable income of $35,466 to his assessment from 28 August 2018.

2. Mr Merrick and Ms Merrick are the parents of [Child] born in November 2001.

3. On 28 August 2018 Mr Merrick lodged an income estimate of nil for 2018/2019. At that time he was assessed to pay child support on his 2016/2017 adjusted taxable income of $70,290.

4. On 3 December 2018 Mr Merrick lodged his 2017/2018 income tax return showing his adjusted taxable income of $35,466.

5. On 10 December 2019 Mr Merrick contacted Child Support requesting that the 2018/2019 nil estimate be replaced by his 2017/2018 taxable income amount. He declined to amend his estimate.

6. On 14 June 2019 Child Support, having obtained information from Mr Merrick’s employer, amended his estimate to $86,035, calculated after annualising his earnings for the period 18 September 2018 to 4 February 2019.

7. Mr Merrick objected to that decision and on 19 December 2019 his objection was disallowed.

8. On 5 January 2020 Mr Merrick lodged an application to this tribunal.

9. On 4 March 2020 the tribunal discussed the application for review with Mr Merrick and Ms Merrick by telephone.

10. Child Support provided the tribunal and the parties with the subsection 37(1) of the Administrative Appeals Tribunal Act 1975 statement and documents (308 pages).

ISSUES

1. The issues to be decided in this application are whether the Child Support Registrar’s decisions to accept Mr Merrick’s income estimate of nil on 28 August 2018 and to amend his estimate to $86,035 on 14 June 2019 were correct.

CONSIDERATION

1. The law relevant to this decision is contained in the Child Support (Assessment) Act 1989 (the Assessment Act). A person’s child support liability is determined using a child support formula which takes into account a number of factors including the adjusted taxable incomes of the parents, which is the taxable income from the previous tax year that ended before the start of the child support period (plus any supplementary amounts).

2. Section 60 of the Assessment Act allows a person to lodge an income estimate. The period covered by the estimate commences on the day on which the person makes the estimate or the day on which the child support period commences, whichever is the later. The period ends at the end of the financial year.

3. Section 62 of the Assessment Act allows a parent to revoke and replace the income estimate.

4. Subsection 63AA(1) of the Assessment Act allows the Child Support Registrar to refuse the estimate if the Registrar is satisfied that the estimated amount is less than the amount that is likely to be the person’s adjusted taxable income for the year of income to which the income estimate relates. Paragraph 63AA(4)(b) provides that in making that decision the Registrar may, but is not required to, conduct an inquiry into the matter.

5. Section 63A of the Assessment Act allows the Registrar to review and amend the assessment if the Registrar becomes aware that the estimate may no longer be accurate. The Registrar will only review an estimate under section 63B if:

   ·      every attempt has been made to contact the parent but they cannot, or will not, provide any information or make a new estimate;

   ·      all efforts to gather income information from third parties have been exhausted; and

   · there is still not enough reliable information to proceed with an amendment under section 63A of the Assessment Act.

6. If a parent complies with a notice issued under section 161 or subsections 162A(1) or (4) of the Assessment Act, the Registrar can only amend the assessment to give effect to the review of the estimate from the date that the parent complied with the notice (subsection 63B(2)).

7. In reviewing a decision by the Registrar about an estimate election, the tribunal will decide if the estimate election should have been accepted or refused at the date of acceptance or refusal. The legislation does not allow the tribunal to substitute a new estimate.

8. When he lodged his estimate on 28 August 2018 a Child Support officer extensively questioned Mr Merrick about his income estimate and accepted that he was not working and not receiving any income.

9. There is no material available to the tribunal to indicate that the Registrar should have refused the estimate at that time.

10. On 10 December 2018 Mr Merrick refused to amend his estimate despite his advice to Child Support that he was employed. He advised the tribunal that he did not want to pay child support as he needed to save money to pay his debts.

11. The Registrar then sought information from Mr Merrick’s employer and his bank about his earnings under section 161 of the Assessment Act.

12. The bank provided statements indicating that Mr Merrick was receiving regular deposits from [a Company]. [The Company] provided information on 25 January 2019 that Mr Merrick worked on a salary basis between 18 September 2018 and 18 January 2019 earning $34,263.60. He ceased work voluntarily on 18 January 2019.

13. In determining whether all of the requirements of section 63A of the Assessment Act are met, the tribunal made the following findings:

    ·      On 28 August 2018 the Registrar issued Mr Merrick with a notice that he had to advise Child Support if there were any changes in his income.

    ·      The accuracy of Mr Merrick’s estimate was affected by his return to salaried employment on 18 September 2018.

    ·      Mr Merrick notified Child Support that he had returned to employment on 10 December 2018.

    ·      On the basis of the information provided by [the Company] on 25 January 2019 that Mr Merrick had earned $34,263.60 from 18 September 2018 to 18 January 2019, and in the absence of any reasons that Mr Merrick was unable to continue working, the amended estimate of $86,035 from the date that he recommenced work on 18 September 2018 was a reasonable estimate of his income from that time until the end of the financial year.

14. The tribunal was satisfied that the Registrar had met all of the requirements of section 63A of the Assessment Act and concluded that the decision to amend the assessment to $86,035 with effect from 18 September 2018 was correct.

DECISION

The tribunal affirms the decision under review.