Montgomery and Holt (Child support)

[2024] AATA 1884

Montgomery and Holt (Child support) [2024] AATA 1884 (25 April 2024)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2023/BC027105

APPLICANT:  Ms Montgomery

OTHER PARTIES:  Child Support Registrar

Mr Holt

TRIBUNAL:Member S Letch

DECISION DATE:  25 April 2024

DECISION:

The Tribunal sets aside the decision under review and, in substitution, decides that:

(a)for the period 1 April 2023 to 31 October 2025, Mr Holt’s adjusted taxable income is varied to $97,000;

(b)for the period 1 April 2023 to 31 October 2025, Ms Montgomery’s adjusted taxable income is varied to $160,000.

CATCHWORDS
CHILD SUPPORT – departure determination – ground for departure – income, property and financial resources – earning capacity – benefits derived from business – application for review set aside and substituted

Names used in all published decisions are pseudonyms. Any references appearing in square brackets indicate that information has been removed 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. Ms Montgomery and Mr Holt are the parents of [Child 1] (born December 2010). Ms Montgomery has 100% care of [Child 1]. Mr Holt has been assessed by Child Support as liable to pay child support to Ms Montgomery. Ms Montgomery seeks a review of an objection decision which “part allowed” Mr Holt’s objection to a “change of assessment” decision of 22 August 2023.

2. By way of background, it is convenient to set out some extracts from the objections officer’s decision letter dated 19 November 2023:

   The assessment

   The parents have been involved in the change of assessment process on two prior occasions. In the most recent decision made 11 June 2022, the Decision Maker found Reason 8A was not established and refused the application.

   For the period 1 November 2022 to 31 August 2023, Mr Holt is liable to pay a rate of child support of $2,675 per year. This is calculated using a 2021-22 Adjusted Taxable Income (ATI) of $45,024 for Mr Holt and $ 121,339 for Ms Montgomery.

   For the period 1 September 2023 to 1 December 2023, Mr Holt is liable to pay a rate of child support of $2,924 per year. This is calculated using a 2022-23 Adjusted Taxable Income (ATI) of $47,261 for Mr Holt and a provisional income for 2022-23 of $125,707 for Ms Montgomery.

   …

   On 6 April 2023, Ms Montgomery lodged an application under Reason 8A regarding Mr Holt’s income and financial resources.

   Mr Holt lodged a written response to the application.

   On 22 August 2023, the Decision Maker established Reason 8A and changed the assessment as follows:

   For the period 1 April 2023 to 31 December 2026, Mr Holt’s adjusted taxable income is set at $130,000.

   …

   Mr Holt is assessed on his 2022-23 adjusted taxable income of $47,261 however Ms Montgomery believes this is not an accurate reflection of his income and financial resources through his business.

   Mr Holt stated he is no longer in business and works for a wage. Mr Holt has advised previously and submits again in his objection that he resigned as a director of the business because of his health issues and is only working part time. I explained to Mr Holt in order to consider his reduced capacity to work I must have evidence to prove this. To this end, Mr Holt was asked to obtain medical evidence from his GP/specialist stating what extent his capacity is currently impacted due to health issues.

   Mr Holt was also asked to supply his last three months bank statements to show how he is meeting his expenses.

   Mr Holt agreed to supply the above evidence however as at the time of writing he has only supplied three payslips. The payslips show he is paid $56,160 a year from [Employer 1] based on working 20 hours a week at a rate of $54.00 an hour.

   In considering Mr Holt’s current income I find he is in receipt of a wage of $56,160 per annum. When asked if his wife is doing the work on site for the business, he said his wife is not doing the work and states it is mainly done by contractors.

   I acknowledge Mr Holt’s wife is assisting in the business by co ordinating the jobs and contractors and doing other general administrative duties.

   I have considered prior decisions, the evidence supplied in this process and information on the website for [Employer 1]. As at today s date the website continues to reflect Mr Holt as the face of the business stating he has [number] years experience and is a [Occupation 1]. Reference is made to Mr Holt’s experience in operating his own large contracting business.

   …

   Mr Holt could simply not meet his day to day living expenses, including discretionary expenditure, on an income of $47,261 a year. The bank statements indicate money is transferred regularly from the joint account to Mr Holt’s personal account to assist him in meeting bills. He also has access and utilises funds held in the joint account which ultimately came from the business. Further I find he has a personal benefit in that he has full use of a company vehicle.

   I do not accept Mr Holt’s claim the business was not worth anything and this is why he did not receive any remuneration for transferring ownership to his wife. The business had a substantial turnover and to give this away for nothing makes no sense.

   In this case, Mr Holt has transferred the business to his wife who now receives the income and benefits he previously had. For tax purposes, this is a perfectly legitimate arrangement however it results in an unfair assessment for child support. As such it is appropriate for me to consider the additional financial resources Mr Holt has access to.

   I have no evidence of the business income in 2023 and as Mr Holt has not supplied any recent bank statements for consideration, I am left with considering the 2022 company tax return for [Company 1]. Whilst Mr Holt has lodged his 2023 individual tax return this only reflects his wage paid from the company.

   In determining a fair income for Mr Holt to apply to the child support assessment I will start with his payslips which reflect a gross weekly wage of $1,080 or $56,160 a year. I do not intend to add his taxable income to this figure as the taxable income includes the wage, he is already being paid so clearly this would not be fair.

   The gross turnover of the business in 2022 was $684,030 and total expenses are $638,146 leaving a net profit of $45,884. Motor vehicle expenses are $51,688. There are five company vehicles, four of which are encumbered. The company employs staff, and the nature of the business involves extensive travel to and from various work sites and as such I must allow for business vehicle expenses. Having said that I acknowledge there is a personal benefit in that Mr Holt has some personal use of a company vehicle.

   The business had a net profit in 2022 of $45,884 and given Mr Holt’s wife is handling all the administrative work of the business it is reasonable to consider she receive a portion of the net profit. Whilst I do not have details of the exact hours Mr Holt’s wife works, I note she is paid a much higher salary than Mr Holt.

   Further Mrs Holt is not doing the actual physical work which generates the business income. I find it is more likely than not this is done by Mr Holt with the help of contractors. I am satisfied based on evidence before me that the business was for all intent and purposes Mr Holt’s business initially. Hence, I find it fair to split the profit and allow 25% of profit for Mrs Holt and 75% for Mr Holt being $34,413.

   Without access to further evidence from Mr Holt it is difficult to determine with any certainty the level of personal benefits/financial resources he has available to him. However, in this regard these types of decisions do not have to be justified by reference to precise calculations and a broad approach to figures is acceptable.

   Mr Holt has his own motorcycle for personal use however he has use of a fairly new company vehicle which is a significant personal benefit. I have also found he has indirect access to additional financial resources from the business.

   I have considered the evidence before me and find it fair to consider adding a notional value to Mr Holt’s income to reflect both his personal use of the company vehicle and his access to financial resources of $15,000. This results in a total income for child support purposes of $105,573 (i.e., $34,413 profit + $56,160 wage plus $15,000).

   In summary, I have found Mr Holt has current income and financial resources of $105,573. This is significantly higher than the amount currently used in the assessment of $47261 and I find this renders the assessment unfair and gives rise to a special circumstance for consideration of a change to the assessment.

   …

   Based on the limited evidence before me I am satisfied Ms Montgomery s income is accurately reflected in the assessment. If the 2023 taxable income comes through higher then it will replace the provisional income currently applied to the assessment.

   I have no evidence [Child 1] has any significant financial resources that need to be brought into account and I am satisfied they are reliant on their parents for their support.

   As discussed above I have found Mr Holt has annual income and financial resources of $105,573. Neither parent has identified any special or out of the ordinary costs they may incur which need to be brought into account.

   Mr Holt has not completed a response form so I have no details of his full living expenses or any special costs he may incur. Mr Holt refers to a tax debt of $135,000 however a debt owed to the tax office is not seen as a priority over a parents child support responsibility.

   I cannot find this decision will cause any significant hardship for Mr Holt as he has been in receipt of a much higher income than assessed for some time.

   Ms Montgomery requests a decision be backdated from 1 May 2019 however I only have the ability to consider a change for a period up to 18 months prior to an application date. This application was lodged 6 April 2023 and therefore I can only consider a change from 7 October 2021. Ms Montgomery has the option of applying to the Court to grant leave for the Agency to consider the prior period.

   …

   DECISION

   The objection is allowed in part.

   The Notice of Decision made on 22 August 2023 is set aside and replaced with the following:

   For the period 1 April 2023 to 31 December 2026, Mr Holt’s adjusted taxable income is set at $105,573.

   Impact on Assessment

   This decision results in an increase to the rate of child support that was payable at the time the initial application was lodged. However, the decision results in a reduction to the rate of child support payable based on the change of assessment decision made on 22 August 2023.

   The decision will result in a reduction to the arrears owed by Mr Holt of approximately $1521.86.

   The current rate of child support payable is $10,216 per annum or $851.33 per month.

   …

3. Ms Montgomery and Mr Holt attended the hearing in person. In making its decision, the Tribunal took into account the Child Support materials, and the additional materials submitted by both parties.

CONSIDERATION

The legislative framework

1. The rate of child support payable by a liable parent is usually based on an administrative assessment under Part 5 of the Child Support (Assessment) Act 1989 (the Act). A formula is used. It takes into account variables including each parent’s adjusted taxable income for the last relevant year of income, the number of children and the level of care provided by each parent.

2. Part 6A of the Act allows for a departure from an administrative assessment (a process commonly known as a “change of assessment”). Under subsection 98C(1), the Registrar may make such a departure determination if three matters are established:

   ·     one, or more than one, of the grounds for departure referred to in subsection 98C(2) exists (subparagraph 98C(1)(b)(i));

   ·     a departure is just and equitable as regards the children and each parent (sub-subparagraph 98C(1)(b)(ii)(A)); and

   ·     it is otherwise proper to make a departure decision (sub-subparagraph 98C(1)(b)(ii)(B)).

3. Subsection 98C(2) provides that the grounds for departure are the same as the grounds set out in subsection 117(2) of the Act.

4. If satisfied that a ground or grounds exist and that it would be just and equitable and otherwise proper to make a particular determination, the Tribunal may make one of the determinations prescribed in section 98S of the Act. It permits a range of determinations, including varying the rate of child support payable, the adjusted taxable income or the cost percentage for a child.

Issue 1 – Is there a ground to depart?

1. Subparagraph 117(2)(c)(ia) of the Act, commonly referred to by Child Support as Reason 8A, provides as a ground for departure:

   (c)that, in the special circumstances of the case, application in relation to the child of the provisions of this Act relating to administrative assessment of child support would result in an unjust and inequitable determination of the level of financial support to be provided by the liable parent for the child:

   …

   (ia)because of the income, property and financial resources of either parent; or

   (ib)because of the earning capacity of either parent; …

2. The starting proposition is that the child support formula should apply. Only in special circumstances should a departure be made. The words “in the special circumstances of the case” are not defined in the legislation. While it is not possible to define with precision the meaning of that term, it is intended to emphasise that the facts of the case must establish something which is special or out of the ordinary. That is, the intention of the legislature is that the Tribunal will not interfere with the administrative formula result in the ordinary run of cases. In Gyselman and Gyselman (1992) FLC 92-279, it was held that “special circumstances” were “facts peculiar to the particular case which set it apart from other cases”.

The hearing

10.Ms Montgomery told the Tribunal that she considers Mr Holt’s income should be reflected by a figure of around $130,000. She considers that Mr Holt’s income should be adjusted for some years prior to her application for a change of assessment. She would seek his income to be retrospectively increased for the longest period law allows.

11.Mr Holt said he seeks a decision based on facts. He regards his salary of around $56,000 to be a fair representation of his income. He observed that Ms Montgomery runs her own business – yet the focus appears to have been solely on him.

12.Mr Holt told the Tribunal that when the business was started with his wife, they were joint directors and equal shareholders. However, his health issues became more serious. The structure of the business changed and he effectively became a part-time employee. The business employed more contractors to do the work; the contractors were largely managed by his wife. His role was to be the “face” of the business; he would go out in the field to do quotes (and does some “in office” by using photographs), usually in the mornings. He would return to the office to “write up the quotes”. Mr Holt said he also does “quality control” to ensure the contractors’ work is satisfactory. Mr Holt said that the business does mostly “real estate” work, with most quotes not exceeding around $300 (for work such as door handles and the like). Mr Holt said his wife has mostly worked in the construction industry in the past (Ms Montgomery disputed that and observed she had worked in a medical practice; Mr Holt said she had worked in a medical practice for a couple of years, but has otherwise worked in construction). Mr Holt said his wife has a diploma in [Discipline 1].

13.Mr Holt told the Tribunal that about 15 years ago, he had two thirds of his liver removed. The scarring has now developed into sclerosis. Over the last few years, his health has deteriorated. He has a management team at the hospital; the strategy now is to slow the deterioration as much as possible to delay a liver transplant. He has been told that could be for anywhere from a month to five years. Mr Holt said he takes Endone; his primary symptom is severe fatigue which limits his capacity to work in the business. He has to be careful of side effects and when he drives, for example. He has been prescribed a medication to assist with the bile in his liver. Every few months, he has MRI scans and ultrasounds, as well as a pressure test on his liver.

14.Mr Holt estimated his wife works about 40 to 50 hours per week in the business. He “splits up his days” depending upon how he is feeling on the day. He has also recently experienced an increase in seizures which are currently being investigated – he has been told they do not think they are related to his liver condition. Mr Holt estimated he works about 20 hours a week in the business. Mr Holt told the Tribunal that in terms of any profit division between himself and his wife, he considers allocating him three quarters is unfair. He suggested an even split would reflect the nature of the business when it was established as being upon an “equal footing”.

15.Ms Montgomery said Mr Holt suffered from his liver condition when they were together, and was able to return to a normal working schedule after surgery. Mr Holt observed he took six months off work after surgery. Ms Montgomery said she had never known Mr Holt to have seizures. Ms Montgomery suggested the low level of Medicare claims made by Mr Holt suggested he was over-stating his issues; Mr Holt said most of his treatment is conducted at a public hospital and he is not involved with Medicare in that process. Ms Montgomery also queried the high level of annual leave accrued by Mr Holt from his payslips; Mr Holt said that was all the leave he had accrued since becoming an employee some five years ago.

16.Mr Holt told the Tribunal that the business had three vehicles; Child Support had originally added some $50,000, which he thought far too much. Mr Holt accepted he has some personal use of a motor vehicle – he said it is not an “FBT vehicle”. He does not own a car in his name – he owns one motorbike. Ms Montgomery observed that a work vehicle was Mr Holt’s primary vehicle; during supervised visits, he drove that car.

17.Ms Montgomery pointed to a number of bank accounts of the business and operated by Mr Holt, broadly suggesting he was receiving some additional financial benefits. Mr Holt said all the income derived by the business went to the business bank accounts; no monies were transmitted to any personal accounts. Mr Holt said his wife transferred monies from a joint non-business account to him to pay expenses. For a period, the business transmitted some monies to Mr Holt; those sums have been characterised by the accountant as a loan which he must repay. That arrangement has now ceased.

18.Mr Holt told the Tribunal that the business is “close to liquidation”. He said the reason for this is that it owes some $160,000 to the ATO as a result of errors by the accountant in the first two years of the business. There has been an agreement with the ATO, but they are now seeking payment in full.

19.Ms Montgomery referred to a loan application by Mr Holt (starting at folio 211 of the Child Support hearing papers) and the suggestion that “Applicant 1” (Mr Holt’s wife) was employed “part-time”, and Mr Holt “full time”. However, at folio 216, the monthly income for “Applicant 1” was recorded as $3,554.70, and $3,633.33 for “Applicant 2”, reflecting an almost equal assessment for both Mr Holt and his wife. Ms Montgomery suggested Mr Holt was undertaking significant renovations on his home; Mr Holt questioned how Ms Montgomery could know about what renovations he was undertaking. He denied any significant renovations had been made. Mr Holt suggested he was “not well enough” to do much of the work himself.

20.Mr Holt said his household consists of himself and his wife, and her two daughters for 50% of the time. He said they do not go on holidays, and live frugally. He did not identify any notable expenses; he has some medical costs, but most are covered by the public hospital system.

21.Ms Montgomery referred to records indicating Mr Holt was a regular user of “Uber Eats”; Mr Holt said sometimes, that was more economical than cooking. Ms Montgomery said she is not able to afford Uber Eats. Ms Montgomery also referred to Mr Holt’s international travel; Mr Holt said he went on one trip to [Country 1] to visit an elderly relative.

22.Ms Montgomery told the Tribunal she is lodging her 2022/23 income tax return in May 2024; her income will be around $160,000. She does work for government agencies; she said she is obligated to be very transparent in her dealings with government. Her expenses are all legitimate expenses for parking, rideshare costs, petrol and the like. The car is owned by the business and FBT is paid for private use. Ms Montgomery said she too has a medical condition which requires her to use rideshares more often; she observed that despite her condition, she pushes herself to work full time. She claims home office expenses. Her telephone is operated through the business; she estimates 90% business use, and 10% personal use. Ms Montgomery said she is the sole director and sole shareholder of the business. Each year, the Trust receives the entire profit of the business and distributes it nearly solely to Ms Montgomery (which forms her taxable income). Each year, a $400 distribution is made to [Child 1] (the maximum amount for a minor). Ms Montgomery said there is also a distribution to her mother for a sum she loaned her for her car (which originally cost $110,000); when asked, Ms Montgomery did not nominate a figure or an estimated figure – she said the amount varied and she could not say without checking.

23.Mr Holt referred to an expensive caravan purchased by Ms Montgomery which had not been declared on her statement of financial circumstances. Ms Montgomery said she had purchased a caravan for a specific trip and then sold it back to the dealer in January 2023.

24.Ms Montgomery said her household consists of herself and [Child 1]. She said she had medical expenses which she was reluctant to go into. She did not identify any other notable expenses.

25.In terms of any assessment going forward, Mr Holt initially suggested a “couple of years”; however, he observed a shorter period might be preferable given the uncertainty around his health and possible changes in [Child 1]’s care arrangements. He acknowledged that the profit of the business “helps with expenses” and suggested an equal split might be appropriate. He accepted that arguably a figure of some $10,000 would be reflective of the personal benefit he receives from the motor vehicle. However, Mr Holt observed that Child Support have adopted a figure of some $40,000 as “profit”; he has concerns that figure might now be lower. The accountant has not yet lodged the 2022/23 income tax returns. Ms Montgomery told the Tribunal that [Child 1] turns 18 in around four years – in addition to the assessment being backdated prior to her application for a change of assessment, a longer period might be appropriate. Ms Montgomery suggested that Mr Holt had received the benefit of a much lower income being applied for some years; she said she had not earlier applied for a departure as she did not want to “rock the boat” whilst there were supervised visits with [Child 1]. Mr Holt observed he has been told that he could go to Centrelink and claim a disability support pension but has chosen not to go down that path.

Consideration

26.At the time of Ms Montgomery’s application for a change of assessment on 6 April 2023, Mr Holt was assessed to pay an annual rate of child support of $2,675 on the basis of his 2021/22 adjusted taxable income of $45,024 (his wage from the business). I consider his financial capacity should also reflect his share of business profit given the personal benefits he receives from the operation of the business. Accordingly, his financial capacity is not fairly represented by a figure of some $45,000. In the special circumstances of the case, the child support assessment is rendered unfair; there is a ground to depart from the child support formula.

Issue 2 – Is it just and equitable to depart from the administrative assessment?

27.The next relevant consideration for the Tribunal is whether a departure from the administrative assessment is just and equitable. This enquiry directs attention to what is fair to the parents and their children. Regard must be had to a variety of factors such as the needs of the children, the parents’ commitments and any hardship that would be caused by departing or not departing from the formula. The Tribunal is obliged to conduct reviews in a way that is informal, quick and proportionate: section 2A of the Administrative Appeals Tribunal Act 1975.

28.I note that Ms Montgomery seeks the effect of a departure to be backdated prior to her application. In the ordinary course, a departure is only made prospectively from the date of application (or from the start of the calendar month in which the application was made, as was the case here). There would need to be compelling circumstances for a departure to be given retrospective effect.

Mr Holt

29.The starting position for Mr Holt is his wage of some $56,000 per annum. His financial capacity should recognise his share of business profit and an amount for personal use of a motor vehicle, along with any other personal benefit he may have received.

30.I accept Mr Holt’s evidence about the precarious nature of his health. I accept this has had a material impact on his capacity to function, resulting in limitations on the effort he has been able to apply toward the business.

31.I do not seriously doubt the legitimacy of the establishment of the business as an “equal partnership”. I consider Mr Holt’s wife to be making a material contribution in a proportion which at least matches Mr Holt’s contribution. I consider a half share of profit should be attributed to Mr Holt (not three quarters, as determined by Child Support).

32.The 2022/23 figures for the business are not available. That would be the best evidence for Mr Holt’s financial capacity as of April 2023. The best evidence presently available is the net profit of [Company 1] for the 2021/22 financial year. That sum is $45,884. I consider Mr Holt should be attributed with $22,942. On the basis of Mr Holt’s evidence, it does not appear likely profit for 2022/23 will be higher than $45,884.

33.Mr Holt’s own evidence was that for a period of time, he had received sums from the business which have now been characterised as “loans”. I accept that arrangement is no longer continuing. Nevertheless, it demonstrates that Mr Holt has received a financial benefit from the business, and that the business had capacity to advance monies to him in that way. Accepting Mr Holt’s reasonable proposition that a sum of $10,000 is a fairer representation of the value he obtains by private use of the company motor vehicle which I accept is predominantly used for business purposes, and adding a global sum of $8,000 as a representation of other benefits received by Mr Holt from the business arrangement, I consider a fair assessment of Mr Holt’s financial capacity is represented by a total figure of $97,000 (in round terms).

Ms Montgomery

34.I accept that as a general proposition, the majority of Ms Montgomery’s business expenses are genuine “out of pocket” expenses. I accept that the profit from her business is distributed by the Trust operated by Ms Montgomery, with all but $400, and an indeterminate sum on the evidence before me of a distribution to Ms Montgomery’s mother to repay a car loan. I observe that if Ms Montgomery was a “PAYG” earner, she would not be able to benefit from deducting car loan repayments from her adjusted taxable income.

35.At the time of Ms Montgomery’s application for a departure, her income was assessed upon a figure of $121,339 (2021/22). The approach of Child Support was to leave Ms Montgomery’s income to be determined under the rolling formula. Ms Montgomery’s evidence during the hearing was that her 2022/23 adjusted taxable income is going to be in the order of $160,000.

36.In the ordinary course, I would be inclined to “gross up” Ms Montgomery’s income to reflect a distribution to her mother, and a sum to acknowledge that Ms Montgomery likely receives some additional benefits (such as telephone and internet, for example) not available to PAYG taxpayers. I also note that because of the care arrangement, modest increases in Ms Montgomery’s adjusted taxable income do not have a significant impact on Mr Holt’s liability.

37.However, here, I acknowledge that for a period of time before Ms Montgomery made an application for a departure, Mr Holt’s liability had been assessed upon his taxable income only, without adjustment for the benefits I have found he receives from the business structure. I do not intend to backdate an increase in Mr Holt’s income as I do not consider there are circumstances which warrant making a retrospective assessment and increasing Mr Holt’s liability for a past period. However, I consider it appropriate to assess Ms Montgomery upon an adjusted taxable income of $160,000 (without an upward adjustment) from 1 April 2023 – this is the same date from which I have decided to increase Mr Holt’s income, and I consider it just and equitable for Ms Montgomery’s income to be increased to reflect her current income from the same day.

38.Neither party identified any other particularly unusual expenses for themselves, or for [Child 1], which would warrant any further adjustment. I am satisfied that, with appropriate budgeting, Mr Holt will be placed to meet his annual child support liability, which I estimate to be around $8,500 on the numbers I have settled upon.

39.Going forward, there is a balance to be struck. It is desirable to give certainty; at the same time, it may be that there will be material changes to one or both parties (particularly Mr Holt, whose health is a genuine concern). In my assessment, it would be appropriate to vary the incomes of the parents in the terms set out above from 1 April 2023 until 31 October 2025; at such time, the assessment would revert to the formula and one or both parents would be at liberty to make a fresh application to be determined on the situations of both parties at the time.

40.I consider it just and equitable to make a departure in the same terms set out above.

Issue 3 – Is it otherwise proper to make a departure determination?

41.The requirement to consider whether a departure would be otherwise proper directs attention to what is fair to the community. It is necessary to consider the effect of any departure from the administrative assessment on entitlements to income-tested pensions, allowances and benefits. Parents rather than the community have the primary duty to maintain a child.

42.The rate of child support should reflect the obligation of both parents to take financial responsibility for the children and, where increased, may decrease any income-tested benefits payable. A departure is therefore proper.

43.As the Tribunal has reached a different conclusion to the objections officer, the decision under review will be set aside.

DECISION

The Tribunal sets aside the decision under review and, in substitution, decides that:

(a)for the period 1 April 2023 to 31 October 2025, Mr Holt’s adjusted taxable income is varied to $97,000;

(b)for the period 1 April 2023 to 31 October 2025, Ms Montgomery’s adjusted taxable income is varied to $160,000.