Morden and Morden (Child support)

[2023] AATA 2142

Morden and Morden (Child support) [2023] AATA 2142 (2 June 2023)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2022/BC024866

APPLICANT:  Ms Morden

OTHER PARTIES:  Child Support Registrar

Mr Morden

TRIBUNAL:Senior Member S Trotter

DECISION DATE:  2 June 2023

DECISION:

The decision under review is set aside and a decision substituted that:

1. Ms Morden’s adjusted taxable income from 1 November 2021 to 2 June 2023 is increased by $12,000 per annum; and

2. Mr Morden’s adjusted taxable income is varied to $122,000 from 1 November 2022 until a terminating event occurs for [Child 2].

CATCHWORDS

CHILD SUPPORT – departure determination – income, property and financial resources of both parents – a ground for departure established – decision to depart – 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

1. Ms Morden and Mr Morden are the parents of [Child 1] (born 2005) and [Child 2] (born 2007) (the children). A child support case was registered with Services Australia – Child Support (Child Support) in relation to the children on 20 January 2020. Varying levels of care of both children have been recorded to each parent for each of the children since the child support case commenced. Since 8 July 2022, Mr Morden was recorded as having 100% care of [Child 1]. The child support case ended on 12 January 2023 in relation to [Child 1] when she turned 18 years of age. Since 16 December 2022, Ms Morden is recorded as having 86% care of [Child 2] and Mr Morden is recorded as having the balance 14% care.

2. The Child Support (Assessment) Act 1989 (the Act) provides for an administrative assessment of child support payable. It uses a formula which contains variables such as the parents’ child support incomes and their percentages of care of the children. The Act also provides for a departure from the administrative assessment (commonly termed a change of assessment) in certain circumstances. Departure determinations can include varying components of the child support formula such as a parent’s child support income (which incorporates a parent’s adjusted taxable income) or varying the annual rate of child support.

3. At issue is whether there should be a departure from the administrative assessment in relation to an application lodged by Mr Morden on 14 January 2022.

4. On 2 June 2022, Child Support decided that no reason was established to change the administrative assessment of child support based on the 14 January 2022 application and declined to make a departure determination.

5. Mr Morden objected to this decision and, on 13 October 2022, a Child Support objections officer allowed the objection and decided as follows:

   For the period 1 November 2022 until a terminating event occurs for [Child 2], Mr Morden’s adjusted taxable income is set at $122,000; and

   For the period 1 November 2022 until a terminating event occurs for [Child 2], Ms Morden’s adjusted taxable income is set at $92,419.

6. Ms Morden applied to the Tribunal on 18 October 2022 seeking independent review of Child Support’s decision.

7. On 19 October 2022, Ms Morden withdrew her application and the Tribunal dismissed the application.

8. On 17 November 2022, Mr Morden sought reinstatement of the application. Ms Morden was invited to make submissions in relation to the reinstatement request and opposed the request.

9. The Tribunal took into account Mr Morden’s reinstatement request and the reasons for the request and Ms Morden’s objection to reinstatement and the reasons for her objection to reinstatement. On 9 December 2022, the Tribunal (differently constituted) reinstated the application.

10.  At a directions hearing on 12 April 2023, procedural directions were made in relation to the conduct of the matter and the provision of further documents from the parties.

1. The hearing took place on 31 May 2023 with Ms Morden participating by conference telephone and Mr Morden attending the hearing in person. Both Ms Morden and Mr Morden gave evidence on affirmation at the hearing.

12.  The Child Support Registrar did not seek leave to participate in the hearing and did not attend but provided relevant documents from the Child Support file.

1. In considering the application, the Tribunal took into account the sworn oral evidence and submissions of Ms Morden and Mr Morden and the following documents (copies of which had been provided to each parent by Child Support or the Tribunal):

(a)the documentary material provided by Child Support (Exhibit 1, pages 1 to 547);

(b)documents and written submissions received from Mr Morden prior to and after hearing (Exhibit A, pages A1 to A263); and

(c)documents and written submissions received from Ms Morden prior to and after hearing (Exhibit B, pages B1 to B24).

1. There are a number of background and other circumstances of understandable importance to both Mr Morden and Ms Morden which were raised in evidence which are not relevant to the issues before the Tribunal but rather relate to historical matters not the subject of this application or which more properly relate to other matters between Mr Morden and Ms Morden not within the Tribunal’s jurisdiction. The Tribunal has confined the evidence addressed in these Reasons to only the evidence relevant to the issues before the Tribunal.

ISSUES

15.  The statutory provisions relevant to this review are contained in the Act.

16.  A parent can apply to the Child Support Registrar for a determination to depart from the administrative assessment of child support (a process known as a change of assessment). Such an application is made under Part 6A of the Act. Pursuant to section 98C of the Act, a decision-maker can make a change of assessment only if satisfied that:

(a)a ground for a change of assessment has been established;

(b)a change of assessment would be just and equitable as regards the children and each parent; and

(c)a change of assessment would be otherwise proper.

17.  There are 10 possible grounds for a change of assessment set out in subsection 117(2) of the Act. Each ground for departure is prefaced by the words “in the special circumstances of the case”. The meaning of this expression is not defined in the Act but the Family Court in Gyselman v Gyselman (1992) FLC 92-279 (Gyselman) held that:

as a generality 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 court will not interfere with the formula in the ordinary run of cases.

The Tribunal’s approach to the interpretation and application of the particular grounds in subsection 117(2) of the Act must be guided by that qualification.

18.  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.

19.  It follows that the issues to be determined by the Tribunal are as follows:

(a)Does a ground exist to depart from the administrative assessment?

(b)Would it be just and equitable as regards the children and each parent to depart from the administrative assessment of child support? And

(c)Would it be otherwise proper to make a particular departure determination?

CONSIDERATION

Issue 1 – Does a ground exist to depart from the administrative assessment?

1. The change of assessment application the subject of the Tribunal’s consideration is an application by Mr Morden dated 7 January 2022 received by Child Support on 14 January 2022 (the 14 January 2022 change of assessment application) seeking a departure determination on the basis that the administrative assessment of child support did not properly take into account either his nor Ms Morden’s actual income, property and financial resources.

21.  Notably, as at 14 January 2022 child support was being assessed based on an adjusted taxable income of $83,200 for Mr Morden, pursuant to a previous change of assessment decision of Child Support dated 14 May 2021[1] which amongst other things sets Ms Morden’s adjusted taxable income at $69,000 for the period 29 July 2020 to 31 October 2021 and set Mr Morden’s adjusted taxable income at $28,599 for the period 29 July 2020 to 5 November 2020 and at $83,200 for the period 6 November 2020 to 31 October 2022.

[1] See pages 20 to 30 of Exhibit A. The Tribunal notes that the face of the notice of decision incorrectly refers to the decision being dated 14 May 2020 rather than 14 May 2021, the date the decision was actually made.

1. In the 14 January 2022 change of assessment application, Mr Morden submitted that he was unemployed from 1 October 2021 and due to commence further employment on 12 January 2022 and sought to have the assessment adjusted to reflect this. Further, he submitted that Ms Morden was then being assessed on income of approximately $49,000 per annum rather than an actual earnings package of $135,000 per annum, including a company supplied motor vehicle and earnings from her own business.

23.  Subparagraph 117(2)(c)(ia) of the Act – commonly referred to 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

24.  The Tribunal first considered Ms Morden’s income, property and financial resources.

1. The 14 May 2021 departure determination by Child Support set Ms Morden’s income until 31 October 2021. As at 14 January 2022, Ms Morden’s 2020/2021 adjusted taxable income of $105,164 was being utilised in the assessment of child support. Ms Morden’s 2021/2022 adjusted taxable income of $84,419 subsequently became available on 17 August 2022 and, failing a change of assessment, would have been utilised in the assessment from 1 October 2022.

2. Ms Morden told the Tribunal that she agrees with the 13 October 2022 decision of Child Support currently in place that set her income at $92,419 per annum (which was calculated based upon her 2021/2022 adjusted taxable income of $84,419 plus $8,000 representing the benefit Ms Morden receives for an employer provided vehicle). Ms Morden stated, however, that her position (as [an Occupation 1]/[Occupation 2]) will change from 3 June 2023 in that the motor vehicle previously provided to her by her employer, [Employer], is to be returned as the business has employed a new senior [Occupation 1] and the motor vehicle will be part of the new [Occupation 1]’s salary package. Further, Ms Morden stated that she is going to reduce her hours from full-time to 25 hours per week due to increasing caring requirements for [Child 2].

27.  Ms Morden’s evidence was that she had previously operated a business called [Business] as a sole trader, however, that business ceased trading when she started working full-time for [Employer] on 1 July 2021. However, she has since subsequently set up a further business under a company structure, [Company 1], a company of which she is the sole director and shareholder.

28.  Ms Morden’s payslip for the pay period 3 April 2023 to 9 April 2023 shows a year-to-date income from [Employer] of $45,212. This $45,212 year-to-date income is equivalent to an approximate gross annual salary of $58,312.[2] Ms Morden said that in addition to this income, she has also done some consulting work for an external party via [Company 1]. She said that she has issued invoices totalling approximately $15–16,000 for that work. She is yet to be paid but expects these invoices will be paid this financial year.

[2] $45,212/ 283 days x 365 days = $58,312.

29.  Ms Morden said that she expects that her income for the 2022/2023 financial year, from [Employer] and [Company 1], will not be dissimilar to her previous adjusted taxable income of $84,419. However she will be reducing her hours from 1 July 2023. She has advised her boss at [Employer] of this plan and [Employer] has therefore recruited the new senior [Occupation 1] /[Occupation 1]. She will only be working 25 hours per week in total. This is because of [Child 2]’s increasing care needs. When she reduces her hours to 25 hours per week, she therefore expects her annual income from [Employer] will reduce to $54,600 per annum gross. She is also looking at applying for carer payment because of the care she provides for [Child 2]. She is not sure if she will receive it or not but understands carer payment will also be assessable and may be in the order of $20,000 per annum. She does not disagree with her income continuing to be assessed as $84,000 per annum gross from a combination of either [Employer], [Company 1] and/or carer payment if she receives it. Setting up [Company 1] was done with the intention of keeping her options open to undertake additional work as and when her caring responsibilities for [Child 2] allow.

30.  Ms Morden’s evidence was that [Child 2] has [named condition], a [condition] which manifests in [deleted], and behavioural and other challenges for [Child 2], with increasing impact as the condition progresses. [Child 2] has an NDIS plan that assists with support worker care however the funding has now been extinguished to this point (this financial year) and she has had to change her work so she can work from home and be available when carers are there as the carers do not seem to be able to manage by themselves. The NDIS plan is due to expire on 30 June 2023. They are seeking reassessment. It has all become too much. They are seeking more funding but it is uncertain and she just cannot continue to work the hours she has been and also take care of everything for [Child 2].

31.  Mr Morden told the Tribunal that he accepts that there are caring needs for [Child 2], some of which are assisted by an NDIS plan. He said that he has care of [Child 2] every fortnight and therefore understands the associated caring challenges.

1. The Tribunal discussed with Ms Morden at hearing a number of payments credited to her bank account identified as being either credited from [NDIS plan manager] or NDIS. Ms Morden’s evidence was that [Plan manager] is the account manager for [Child 2]’s NDIS plan. If she purchases something for [Child 2] such as continence pads or an iPad or the like and she pays for the item, she has to submit the invoice for the item in question, [Plan manager] or NDIS assess whether the claimed item falls under [Child 2]’s assessed plan and then reimburses her for the outlaid expense if it is covered. All payments from either [Plan manager] or NDIS in her bank account statements represent reimbursement of expenses she has outlaid which have been assessed as having been paid by her and as falling under [Child 2]’s NDIS plan for reimbursement. Mr Morden queried these types of payments on the basis that he would like to know what sort of communication devices and items [Child 2] is receiving. He has totalled these credits in Ms Morden’s bank account statements and it totals approximately $10,500.

2. The Tribunal discussed with Mr Morden at hearing that a relevant issue for the Tribunal’s consideration in relation to this application is whether the amounts received from [Plan manager] or NDIS represent income or a financial resource that is available to Ms Morden for her own use (as distinct from being reimbursement for items paid for by Ms Morden related to [Child 2]’s needs covered by the NDIS plan). However, the Tribunal noted that what is or is not or should or should not be covered under [Child 2]’s NDIS plan is not a relevant consideration in relation to this application. The Tribunal asked Mr Morden if he disputed the basis upon which Ms Morden received the stated payments from [Plan manager] or NDIS. Mr Morden responded that he had found the evidence regarding Ms Morden’s employment very confusing and suggested that the NDIS statements and documents should be obtained and checked against Ms Morden’s bank statements. Mr Morden confirmed that he does not dispute that [Child 2] has special needs pursuant to which he has an NDIS plan. However, Mr Morden said that some of the payments, including from NDIS, are quite substantial (such as $2,316.37 received on 24 August 2021 (Exhibit A, page 173) and $3,542.07 received on 8 July 2021 (Exhibit A, page 174)). Mr Morden said that in general he thinks the money (from NDIS) has been spent the way it should be but that there have been complications from the beginning of the separation in relation to the NDIS plan in relation to what can be funded including whether funding can happen twice for the same thing to recognise that [Child 2] is sometimes in Ms Morden’s care and sometimes in his care.

3. In response Ms Morden’s evidence was that [Child 2] has been in receipt of NDIS since it started. Initially, prior to the separation of Mr Morden and Ms Morden, they self-managed the NDIS plan. However, following separation, Ms Morden swapped to plan management with [Plan manager] and she only receives reimbursement for proved expenditure for approved items. She definitely does not receive any income from NDIS – it is simply not allowed. Any direct credits in her bank account statements from [Plan manager] or NDIS are direct reimbursements for items referrable to [Child 2]’s care. Ms Morden’s evidence was that she confirmed the $28,341.00 credit from NDIS on 13 July 2021 (Exhibit A, page 174) was for [Child 2]’s wheelchair or vehicle modifications. Mr Morden said that he contacted NDIS to see if he could get some sort of pro rata funding. However, he was not a person with authorisation on [Child 2]’s account and that would not be changed. He has not therefore had an opportunity to understand how the NDIS funding works and he has care of [Child 2] and is out of pocket for things like incontinence pads. He believes he will have future expenses for [Child 2] of a wheelchair and vehicle modifications at the stage at which he can no longer have care of [Child 2] without access to a wheelchair or vehicle modifications. At this stage it is not necessary, however [Child 2]’s condition will continue to deteriorate and at some point in the future he expects he will also have those expenses and he does not think that those same expenses will be funded again by NDIS.

4. As discussed at hearing, responsive to Mr Morden’s concerns about not fully understanding the NDIS process, the Tribunal’s role is not to give advice in relation to, or explore, how NDIS works. Mr Morden has raised nonspecific and general concerns in relation to [Child 2]’s NDIS plan. However, there is no evidence before the Tribunal to suggest that payments received by Ms Morden from either [Plan manager] or NDIS are other than reimbursements for expenses incurred and paid for initially by Ms Morden directly referable to [Child 2]’s needs. The Tribunal does not consider it necessary to obtain statements from [Plan manager] or NDIS nor to ‘audit’ the receipt of payments from those sources by Ms Morden. The Tribunal accepts Ms Morden’s sworn oral evidence that all payments credited to her from either [Plan manager] or NDIS are reimbursements for proved expenditure directly referrable to [Child 2]’s needs and approved under his NDIS plan. The Tribunal is satisfied that there is no additional income or financial resource available to Ms Morden from [Plan manager] or NDIS for her own use.

1. Mr Morden also queried whether Ms Morden has any interest in her current partner’s business. When queried in relation to a transfer from her to [Company 2] on 27 July 2022 in the amount of $60,000 and other transfers of smaller amounts between Ms Morden and her partner, Ms Morden’s evidence was that she and her partner have joined all of their funds including that she has transferred money to her partner’s mortgage and his business (noting that her partner owns the home they now live in) but that she has no interest in her partner’s business, which is a partnership between her partner and his best friend. The Tribunal recognises that Ms Morden’s bank account statements do show transfers of monies from time to time between Ms Morden and her current partner, however, as discussed at hearing, there is no evidence to suggest that those transactions are other than as would be consistent between members of a couple sharing finances. There is otherwise no basis to suggest that Ms Morden has any interest in her partner’s business and the Tribunal accepts Ms Morden’s sworn oral evidence that she has no interest in her partner’s business.

2. As regards Ms Morden’s use of a company car as part of her employment by [Employer], a letter from Ms Morden’s employer dated 11 August 2021 (Exhibit A page 375) provided to Child Support states as follows:

   I can confirm the running costs of the above vehicle provided to [Ms Morden] are approximately $8,000 per annum.

   This includes – fuel, maintenance, insurance and registration costs. Please also note that the vehicle is available for and is utilised by other staff members of this organisation, during work hours. As such the total running costs could be apportioned.

3. Ms Morden’s evidence was that [Vehicle 1] has been made available to her by [Employer] for her use since approximately December 2020. She is returning the vehicle to her employer from 3 June 2023 as it will be used by the new [Occupation 1]. The Tribunal noted that Ms Morden is recorded as advising Child Support on 29 August 2022 (Exhibit A, page 372) that she initially drove the car to and from work every day but from July 2022 (since moving to the Sunshine Coast) she worked from home and only went to the office one day per week. Ms Morden told the Tribunal that as the care required for [Child 2] has increased, she has worked less and less at the office. Her attendance at the office has become very ad hoc for the last four to five months. She has rarely been to the office in that time because it is too difficult to do so given [Child 2]’s needs. However she has retained [Vehicle 1] until now. She does use [Vehicle 1] however mainly uses another personal car, [Vehicle 2] (the car that was modified for [Child 2]’s use). When she is at the office, [Vehicle 1] has been available for other employees to use. The Tribunal noted that Ms Morden had advised Child Support that she was paying for the fuel for the vehicle whereas the 11 August 2021 letter from her employer states that the employer pays for the fuel. Ms Morden clarified that she pays for the fuel and is reimbursed by her employer.

4. The Tribunal discussed at hearing with the parties that if it accepted that the use of [Vehicle 1] represented a benefit provided to Ms Morden by her employer that should be taken into account for child support purposes, it would consider using a pre-tax figure commensurate with the value of the benefit. Ms Morden agreed that the car is a benefit to her and agreed that it should be taken into account but had no submissions to make as to the appropriate value of that benefit. Mr Morden submitted that his observation, from collecting [Child 2] for his access, is that unless an NDIS carer is involved, [Vehicle 1] is used by Ms Morden. Mr Morden submitted that the value of the benefit of Ms Morden utilising [Vehicle 1] should be taken into account from when Ms Morden first had the benefit of it.

5. Failing a departure determination, the administrative assessment of child support from 1 October 2022 is based upon Ms Morden’s 2021/2022 adjusted taxable income of $84,419. However, this income figure does not take into account the personal benefit that Ms Morden derives from her employer provided car.

6. Ms Morden has only worked from the office one day per week from July 2022, and for the last four to five months has only been attending her employer’s office on an even more ad hoc basis. The Tribunal accepts that [Vehicle 1] was also available for use by other employees when Ms Morden has worked from her employer’s office however it is clear that there has been no required use of [Vehicle 1] by other employees and the Tribunal is satisfied that Ms Morden essentially has 100% use of [Vehicle 1] for her own personal benefit. This is a benefit that is not usually available to PAYG earners.

7. Mr Morden submitted that the letter from Ms Morden’s employer as to the value of the benefit of [Vehicle 1] to Ms Morden lacked any credibility. It was not clear as to the basis of Mr Morden’s submissions that the evidence of Ms Morden’s employer in the letter lacked credibility other than Mr Morden’s observation that there was a long-standing acquaintance between Ms Morden and her employer. The only evidence directly before the Tribunal as to the value of [Vehicle 1] to Ms Morden is her employer’s letter of 11 August 2021 estimating the running costs of the vehicle as being $8,000 per annum. RACQ research in 2022 suggests that the average operating costs of registration and insurance, fuel, servicing and tyres for an automatic [Vehicle 1] are $5,530.32 per annum. This is not inconsistent with Ms Morden’s employer’s estimated running costs of the vehicle. Failing a detailed forensic accounting exercise, and detailed record keeping, assigning a figure to the exact value of this benefit to Ms Morden can only be an exercise in estimation. The Tribunal accepts the evidence of Ms Morden’s employer as the best evidence of the actual cost of this benefit provided to Ms Morden, that is $8,000 per annum; $8,000 is the cost that Ms Morden would otherwise have to pay herself, from after tax dollars, for the benefit of the car. Given the income bracket within which Ms Morden’s income falls[3], gross pre-tax income of approximately $12,000 would be required to meet an $8,000 post-tax expense.

   [3] Top marginal tax rate of 32.5%

8. In order for a ground to be established under subparagraph 117(2)(c)(ia) of the Act in relation to Ms Morden’s income, property and financial resources, the Tribunal needs to be satisfied that there are special circumstances such that the current assessment would result in an unjust and inequitable determination of the level of financial support to be provided by the liable parent because of Ms Morden’s income, property and financial resources.

9. The Tribunal finds that Ms Morden derives a benefit from her employer provided car equivalent to approximately $12,000 pre-tax income that is not taken into account in the administrative assessment of child support. The Tribunal is otherwise satisfied that Ms Morden’s income from employment, either for [Employer] or her own behalf via with [Business] or [Company 1] is and would be reflected in her adjusted taxable income from time to time. However, the Tribunal is satisfied that there are special circumstances because the employer provided car is effectively a financial resource available to Ms Morden for expenses she would otherwise need to meet from post-tax dollars that is not taken into account in the administrative assessment of child support. The Tribunal is satisfied that this benefit to Ms Morden commenced in October 2020 and will cease from 3 June 2023 and that Ms Morden’s upcoming change in employment circumstances, and the loss of that benefit, is consequent to [Child 2]’s increase caring needs and is not to obtain a child support advantage.

45.  It follows that the Tribunal considers there is a ground for a departure from the administrative assessment of child support pursuant to subparagraph 117(2)(c)(ia) of the Act as regards Ms Morden’s income, property and financial resources.

Issue 2 – Would it be just and equitable as regards the children and each parent to depart from the administrative assessment of child support?

46.  The Tribunal has found that there is a ground to depart from the administrative assessment on the basis of Reason 8A based upon Ms Morden’s income and financial resources.

47.  Subsection 117(4) of the Act requires that regard must be had to the following in determining whether it would be just and equitable to make a particular determination pursuant to sub-subparagraph 98C(1)(b)(ii)(A) of the Act as follows:

(a)      the nature of the duty of a parent to maintain a child (as stated in section 3); and

(b)      the proper needs of the child; and

(c)      the income, earning capacity, property and financial resources of the child; and

(d)the income, property and financial resources of each parent who is a party to the proceeding; and

(da)    the earning capacity of each parent who is a party to the proceeding; and

(e)the commitments of each parent who is a party to the proceeding that are necessary to enable the parent to support:

(i)     himself or herself; or

(ii)    any other child or another person that the person has a duty to maintain; and

(f)the direct and indirect costs incurred by the carer entitled to child support in providing care for the child; and

(g)      any hardship that would be caused:

(i)        to:

(A)      the child; or
(B)      the carer entitled to child support;

by the making of, or the refusal to make, the order; and

(ii)       to:

(A)      the liable parent; or

(B)any other child or another person that the liable parent has a duty to support;

by the making of, or the refusal to make, the order.

48.  The Tribunal is not limited by the matters listed in subsection 117(4) of the Act and may consider any other relevant matters (subsection 117(9) of the Act).

49.  The Full Family Court, in the case of Gyselman, stated that: “However, some of the matters listed in sub-section (4) may overlap with matters already considered under sub-section [117](2) and some of the paragraphs in sub-section (4) may be more significant in one case than they would be in another or of little relevance in a particular case. It is an essential part of the s.117 exercise to carry out the obligation under sub-section (4). However, that does not mean that it is necessary in each case to slavishly go through each of the paragraphs. The extent to which it is necessary to do so will depend upon the facts and conduct of the individual case and the analysis already performed under sub-section (2).”

50.  The Tribunal does not propose to explore every matter in detail, but will discuss those it regards as pertinent in this application.

1. As regards paragraph 117(4)(a) of the Act, the Tribunal recognises that Ms Morden and Mr Morden have a duty to maintain the children. Further, the Tribunal notes the statements contained in sections 3 and 4 of the Act to the following effect:

(a)The duty of a parent to maintain his or her child has priority over all commitments of the parent other than commitments necessary to enable the parent to support himself or herself and any other child or person that the parent has a duty to maintain.

(b)The level of support should be determined in accordance with the costs of children, and according to the parents’ capacity to provide financial support.

52.  In determining the proper needs of a child for the purposes of paragraph 117(4)(b) of the Act, subsection 117(6) of the Act requires the Tribunal to have regard to the manner in which the child is being, and in which the parents expect them to be, cared for, educated or trained and any other special needs they may have.

53.  It is not in dispute that [Child 2] has special needs and has an NDIS plan pursuant to which he receives certain benefits. Ms Morden has not submitted that she has out-of-pocket expenses of meeting [Child 2]’s special needs that she seeks be taken into account other than as included in her average expenses.

1. Mr Morden’s evidence was that he anticipates significant future costs referrable to his care of [Child 2] in relation to a wheelchair and modification of his vehicle. Those costs are likely to be incurred in the future at a yet to be ascertained time. He has applied separately for NDIS funding but has not heard back about that application as at the date of the Tribunal hearing. In the meantime Mr Morden’s evidence was that he purchased a $200 wheelchair for [Child 2]’s use when in his care. It was purchased in approximately mid-2021 as an interim solution. When he has care of [Child 2] at present he uses the wheelchair if long walks, for example at shopping centres, are required. In future he anticipates that a more expensive wheelchair would be required for [Child 2] to use when he is in his care. Current costs for [Child 2] whilst in his care include incontinence products which cost approximately $37 for a pack of 14 and which last for approximately a month or slightly longer based on his current two nights of care per fortnight. He also anticipates that he will have to explore vehicle modification of his own vehicle to accommodate [Child 2] in the future. He has not yet investigated this as [Child 2] can still exit in and out of a normal vehicle with assistance. However, it will get to a stage where the complexity of the disease impacting [Child 2] will mean he will need to purchase a new vehicle and have it modified, or purchase a second-hand already modified vehicle. He is not in a financial position to do that. However, that is an expense not yet incurred and which will be at an as yet unknown time. He will be exploring through the NDIS whether there is access to funding for him incurring this expense however he understands there will be difficulty with funding this expense twice for [Child 2], once for Ms Morden (which has already happened) and again for him. He also expects that modified beds and chairs will be required in the future. At the moment, he is getting by without them when [Child 2] is in his care but they could be required in the near future. Again, he understands that Ms Morden has already received funding for these and holds a concern that these items will not be funded twice for the same NDIS participant, [Child 2].

2. As discussed at hearing, the future costs that Mr Morden anticipates may necessarily be incurred to enable his care of [Child 2], including a wheelchair, vehicle/vehicle modification and modified beds/chairs are future, as yet not known, costs and do not form part of the Tribunal’s current consideration. As regards current costs of meeting [Child 2]’s special needs, the Tribunal accepts Mr Morden’s oral evidence that he expends approximately $40 per month for incontinence pads for [Child 2] when [Child 2] is in his care.

56.  There is otherwise no evidence before the Tribunal that the costs of providing for the proper needs of [Child 1] (until 13 January 2023 when she turned 18 years of age) and [Child 2] are other than the usual costs of providing for children of their ages.

57.  The Tribunal has already canvassed Ms Morden’s income, property and financial resources in detail in its earlier consideration.

1. As regards Mr Morden’s income, property and financial resources and liabilities, Mr Morden told the Tribunal that he was made redundant in October 2021. He was not really looking for work at that time because it is an unusual time for new employment in his industry. However he was talking to a previous employer about working for them and he ultimately started work with them on 12 January 2022 (the start date was pushed back a bit).

2. Mr Morden says that he has no objection to being set on an income of $122,000 per annum for child support purposes (rather than child support being based upon his 2021/2022 adjusted taxable income of $90,872) from 1 November 2022 as Child Support has currently done. Mr Morden’s payslip to 4 April 2023 shows a year-to-date gross income of $92,788.73 which equates to an annual income of $121,826.93,[4] consistent with Mr Morden being assessed based on an income of $122,000 per annum. Ms Morden had no submissions in relation to Mr Morden’s income being set at $122,000 per annum for child support purposes.

   [4] $92,788.73 / 278 days x 365 days = $121,826.93

3. As regards the necessary commitments of each parent, Ms Morden provided a statement of financial circumstances dated 19 March 2023 noting average weekly income of $1,347 (including $924 income, carer allowance $72, child support of $198 and motor vehicle as assessed by Child Support of $153), average personal expenditure of $339 per week and estimated household expenditure for her and [Child 2] of $1,106 per week. The Tribunal discussed with Ms Morden that the $924 income figure is not consistent with a $84,000 gross annual income. Ms Morden noted that her income from [Company 1] is variable and also depends in which financial year invoices are paid. Ms Morden noted that medication and nutrition expenses for [Child 2] are ongoing and variable depending upon his condition from time to time. Ms Morden confirmed that she was not seeking contribution to expenses of meeting [Child 2]’s special needs and that she was happy to pay whatever is needed for [Child 2] with a contribution that is fair and reasonable.

4. Mr Morden provided a statement of financial circumstances dated 5 April 2023 noting average weekly income of $2,400 and average personal expenditure of $976 per week and estimated household expenditure for him of $1,658. Mr Morden’s evidence at hearing was that his living circumstances have changed since completing the statement and his household bills are now slightly higher as there is one less adult in his house contributing to joint but continuing expenses such as household utilities and the like. The Tribunal also recognises that Mr Morden’s expenses include expenses for [Child 2] when [Child 2] is in his care, including for incontinence pads. The cost of those pads is approximately $10 per week for Mr Morden based on his evidence. Whilst not an insignificant amount the Tribunal does not consider this expense of such a degree that a change to the child support liability is warranted because of that expense. The Tribunal is also satisfied that Ms Morden has additional costs, including medication, referrable to [Child 2], that equally are part of her expenses and which the Tribunal does not propose should be the basis of a change to the child support liability.

5. Both Ms Morden and Mr Morden have some savings, of modest but not insignificant amounts. Both Ms Morden and Mr Morden have disclosed limited other property or other financial resources, other than their respective interests in their places of residence, both of which are mortgaged, and superannuation funds to which they have no present entitlement.

Duration of proposed departure

63.  Paragraph 98S(3B)(a) of the Act prohibits a departure determination being made for a day that is more than 18 months before an application seeking departure from the administrative assessment was lodged unless a court has granted leave. Mr Morden lodged the application the subject of this review on 14 January 2022 and the Tribunal is therefore prohibited from backdating the effect of any departure determination prior to 14 July 2021.

1. Further, relevant to this matter, a previous departure determination was made by Child Support on 14 May 2021 in relation to an earlier departure application lodged 14 January 2021 by Mr Morden. The 14 May 2021 departure determination set Ms Morden’s income until 31 October 2021, set Mr Morden’s income until 31 October 2022 and increased the rate of child support otherwise payable referrable to [Child 1]’s orthodontic costs. Given neither party sought review of that decision, it is not appropriate to revisit any aspects of that determination including Ms Morden’s income prior to 31 October 2021 and Mr Morden’s income prior to 31 October 2022.

65.  The Tribunal sought submissions at hearing in relation to the period of any departure from the administrative assessment including that it might be considered appropriate that any departure continue until a terminating event occurs in relation to [Child 2] (which would usually occur when [Child 2] turns 18 years of age).

1. Mr Morden submitted that he had been deprived of child support because the benefit of the employer provided car to Ms Morden had not been taken into account for the last couple of years and he would like it recognised that Ms Morden had the benefit of the use of the car prior to 1 November 2022. Ms Morden recognised that she had had the benefit of the use of an employer provided car and had no submissions to make in relation to the quantum of that value or the duration of that benefit other than that the benefit was to cease on 3 June 2023 when she handed the car back.

2. Neither Ms Morden nor Mr Morden disputed that any departure should continue until a terminating event occurs.

Child support liability if no departure determination

68.  In order to consider whether a particular departure determination would be just and equitable and otherwise proper first requires consideration of what the child support liability would be if there was no departure determination.

69.  The adjusted taxable incomes of each parent for the 2020/2021 and 2021/2022 financial years were as follows:

Parent                Financial Year           Adjusted taxable income                 

Ms Morden          2020/2021                 $105,164         

2021/2022                 $84,419          

Mr Morden           2020/2021                 $70,662          

2021/2022                 $90,872          

70.  Further, a decision of Child Support of 14 May 2021 made a departure determination:

(a)setting Ms Morden’s adjusted taxable income at $69,000 for the period 29 July 2020 to 31 October 2021;

(b)setting Mr Morden’s adjusted taxable income at $28,599 for the period 29 July 2020 to 5 November 2020 and at $83,200 for the period 6 November 2020 to 31 October 2022; and

(c)increasing the rate of child support otherwise payable by $1,980 referrable to [Child 1]’s orthodontic costs for the period 29 July 2020 to 28 July 2021.

1. Therefore, in the absence of a departure determination, the child support liability from 1 November 2021 until the end of the current child support period on 31 December 2023 would be approximately $6,600 net child support payable by Mr Morden[5].

Proposed departure

[5] Noting that this calculation may change depending upon future lodgment of tax returns given lodgment of a new tax return by a parent would ordinarily trigger the end of the current child support period and commencement of a new child support period utilising any relevant new adjusted taxable incomes and updated formula integers such as costs of children and self-support costs for parents, which are usually updated in the formula each year.

1. The Tribunal has found that in addition to her usual adjusted taxable income, Ms Morden has also had the benefit of a work provided car for her use since October 2020 with that arrangement to finish on 3 June 2023. Thereafter Ms Morden expects that she will have income equivalent to her 2021/2022 adjusted taxable income from one of or a combination of three sources, income from employment with [Employer], income from [Company 1] and/or carer payment. Ms Morden’s future income is somewhat uncertain however, the Tribunal is satisfied that leaving aside the additional benefit of the employer provided care, Ms Morden’s income from time to time would be accurately reflected in her adjusted taxable income. The Tribunal therefore proposes to vary Ms Morden’s adjusted taxable income by adding the pre-tax value of the car as calculated, $12,000, to Ms Morden’s adjusted taxable income.

2. Mr Morden submitted that the work vehicle benefit for Ms Morden not being taken into account for the last couple of years has cost him more money than it should have. He submitted that the vehicle should have been taken into account from earlier than 1 November 2022. As already noted, the 14 May 2021 departure determination set Ms Morden’s income until 31 October 2021 and in circumstances where no review was sought of that decision, the Tribunal has found that it is not appropriate to revisit Ms Morden’s income prior to 31 October 2021. However, the Tribunal proposes that a departure determination be made including that an amount of $12,000 be added to Ms Morden’s adjusted taxable income from 1 November 2021 to 2 June 2023 recognising the pre-tax benefit of the car to Ms Morden. Thereafter, failing a change to Ms Morden’s circumstances not currently contemplated, the Tribunal is satisfied that Ms Morden’s adjusted taxable income will accurately reflect Ms Morden’s income available for child support purposes until a terminating event occurs.

3. As regards Mr Morden, failing a departure from the administrative assessment he would currently be assessed on his 2021/2022 adjusted taxable income of $90,872, that is based on his income for a financial year when he was not working between October 2021 and January 2022 after he was made redundant. Mr Morden has, obviously, not yet lodged his 2022/2023 tax return however his current employment circumstances are such, and his payslips in evidence before the Tribunal show, that Mr Morden is expected to have an adjusted taxable income of $122,000 for the 2022/2023 year and Mr Morden does not dispute that $122,000 is an appropriate income figure to be utilised for him in the assessment of child support from 1 November 2022 (as is the current decision of Child Support).

75.  Based upon the current care percentages recorded for child support purposes[6], making a proposed departure determination that adds $12,000 to Ms Morden’s adjusted taxable income from 1 November 2021 to 2 June 2023 and varies Mr Morden’s adjusted taxable income to $122,000 from 1 November 2022 until a terminating event occurs in relation to [Child 2], would result in net child support payable by Mr Morden of approximately $8,900 between 1 November 2021 and 31 December 2023, that is $2,300 more child support than would be payable by Mr Morden for this period if a departure determination as proposed by the Tribunal is made than if the administrative assessment of child support stood.

[6] and pending any change consequent upon lodgment of any relevant future tax returns – see previous footnote.

1. However, that is not the end of the matter, as the Tribunal is also required to consider any hardship that would be caused to the children, Ms Morden or Mr Morden if a departure from the administrative assessment was made upon the basis proposed. The evidence is that there are no current arrears of child support based upon the current assessment of Child Support, that is the 13 October 2022 objection decision. The Tribunal is not reviewing that decision as such and is rather conducting a fresh review of the 14 January 2022 application. However, the current status of there being no arrears of child support and considering what the position would be if the departure proposed by the Tribunal is implemented would cause any hardship requires, amongst other things, consideration of the difference in the assessed child support liability calculated pursuant to the 13 October 2022 objection decision and the liability that would be assessed based upon the Tribunal’s proposed departure determination. The Tribunal will look at this difference as at 30 June 2023 allowing for implementation time of the Tribunal’s decision.

2. The net child support liability between 1 November 2021 and 30 June 2023 based upon the current 13 October 2022 objection decision is approximately $5,300 net payable by Mr Morden. As already noted, the net child support liability between 1 November 2021 and 31 December 2023 based upon the departure determination by the Tribunal would be approximately $8,900 net payable by Mr Morden. However to 30 June 2023, that liability would be approximately $3,900. Therefore as a result of the Tribunal’s decision, given there were no current child support arrears as at the date of hearing and assuming a similar position to 30 June 2023 (allowing time for implementation of the Tribunal’s decision), Mr Morden will have overpaid child support of approximately $1,400 as at 30 June 2023 if the Tribunal makes the proposed departure determination. That represents approximately seven weeks child support calculated at the new child support liability rate which will result from the Tribunal’s proposed departure determination. This effectively means that Ms Morden will receive no child support for that period as an adjustment is made. Ms Morden is in need of child support to assist with [Child 2]’s expenses. The proposed departure determination will effectively result in there being a short period of Ms Morden receiving no child support. However, given her financial circumstances as outlined in these Reasons, including her savings as disclosed in her statement of financial circumstances, albeit modest, the Tribunal is satisfied that no hardship will result. As regards Mr Morden, the Tribunal considers it appropriate that the child support position be adjusted to reflect the benefit of an employer provided vehicle to Ms Morden, at the appropriate pre-tax value, from 1 November 2021 to 2 June 2023. Mr Morden is also in need of all monies possible, including to meet his needs and the needs of [Child 2] when in his care.

78.  Having had regard to the relevant subsection 117(4) matters, the Tribunal is satisfied that the proposed departure is just and equitable.

Issue 3 – Would it be otherwise proper to make a particular departure determination?

79.  The Tribunal considered whether it would be otherwise proper to make the proposed departure determination in accordance with sub-subparagraph 98C(1)(b)(ii)(B) of the Act. Subsection 117(5) of the Act sets out the matters that must be considered when deciding whether it would be “otherwise proper” to make a departure determination. Subsection 117(5) focuses on the balance of support between parents on the one hand and the taxpayer on the other. It is appropriate for the children to be primarily supported by their parents rather than by government assistance. Paragraph 117(5)(b) of the Act means that the Tribunal must consider whether the level of a benefit, in particular family tax benefit, received by the party caring for a child may be affected by the level of child support. Neither party has disclosed that they are in receipt of family tax benefit.

80.  The Tribunal therefore considers that it is otherwise proper to make the particular departure determination proposed.

CONCLUSION

81.  The Tribunal has decided to make a departure determination that is different to that of the objection decision. The Tribunal will therefore set aside the decision under review and substitute a decision varying each parents’ adjusted taxable income (a component of their child support income), specifically varying Ms Morden’s adjusted taxable income for the period 1 November 2021 to 2 June 2023 by increasing it by $12,000 per annum and varying Mr Morden’s adjusted taxable income to $122,000 from 1 November 2022 until a terminating event occurs for [Child 2].

DECISION

The decision under review is set aside and a decision substituted that:

1. Ms Morden’s adjusted taxable income from 1 November 2021 to 2 June 2023 is increased by $12,000 per annum; and

2. Mr Morden’s adjusted taxable income is varied to $122,000 from 1 November 2022 until a terminating event occurs for [Child 2].