Morgon and Morgon (Child support)

[2018] AATA 1479

Morgon and Morgon (Child support) [2018] AATA 1479 (16 March 2018)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2017/PC012091

APPLICANT:  Mr Morgon

OTHER PARTIES:  Child Support Registrar

Ms Morgon

TRIBUNAL:Member S Hoffman

DECISION DATE:  16 March 2018

DECISION:

The decision under review is varied so that the annual rate of child support payable by Mr Morgon is varied to $17,983 for the period 21 October 2016 to 30 June 2019.

CATCHWORDS

Child support - Departure determination - Income, property and financial resources of parents - Partnership income - Decision to depart - Decision under review varied

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. This review is about the child support assessment in respect of two children, born September 2003 and December 2006. The case started on 23 April 2015 on a private collect basis. The Department of Human Services – Child Support (the Department) was responsible for collecting child support from 9 October 2015. The mother was providing 100% care of the children until 26 April 2016 when, according to the Department’s records, there was a care change such that the mother provided 90% care of the older child and 93% care of the younger child.  

2. On 9 August 2016 the mother lodged an application for a change of assessment with the Department, on the basis that the administrative assessment did not correctly reflect either parent’s income, property and financial resources.

3. The administrative assessment in place on that date was that the father’s annual child support liability was $9,242, based on the parents’ 2014/15 adjusted taxable incomes of $62,862 for the father and $49,683 for the mother.   

4. On 21 October 2016 a senior case officer from the Department decided that the father’s annual rate of child support was varied to $17,983 for the period 21 October 2016 to 31 October 2018 (the original decision).

5. On 16 November 2016 the father lodged an objection to the original decision. On 1 March 2017 an objections officer from the Department disallowed the objection which means there was no change to the original decision.

6. On 16 May 2017 the father lodged an application for review with this tribunal.[1] Following a directions hearing held on 11 December 2017, the matter was heard on 28 February 2018. The parents attended via conference telephone and gave sworn evidence.

   [1] An extension of time was granted on 13 July 2017.

7. The tribunal had before it documents provided by the Department (numbered 1 to 256); by the father (numbered A1 to A59); and by the mother (numbered B1 to B58). Copies of these documents were sent to the parties before the hearing.

8. The father said he had not received the mother’s submission and that he had submitted documents which were not included in the bundle numbered A1 to A59. [2] He submitted additional documents just after the hearing (numbered A60 – A61). The tribunal then provided the parties with the documents they had not seen before the hearing and deferred making its decision for two weeks, until 16 March 2018, to give them opportunity to comment on them. The mother made a further submission numbered B59 to B61 but nothing further was received from the father.

ISSUES

[2] The father said that he had sent these documents to the Administrative Appeals Tribunal in January 2018 and at the same time he notified a change of address. He agreed that the hearing should proceed if he was sent the mother’s submission after the hearing and was given two weeks to comment on it before the tribunal made its decision. There was discussion during the hearing that centred on the mother’s written submission at which time the tribunal read out or summarised relevant information from the mother’s submission to assist the father. He indicated that he was familiar with some of the claims made in the mother’s submission. 

1. The statutory provisions relevant to this review are contained in the Child Support (Assessment) Act1989 (the Act). The Act provides for an administrative assessment of child support to be paid. Pursuant to section 98C of the Act, a decision to depart from the administrative assessment may be made if the following three requirements are met:

1. A ground is established; and

2. It would be just and equitable as regards the child, the liable parent and the carer entitled to child support to make a particular determination; and

3. It would be otherwise proper to make a particular determination.

1. The grounds for departure from an administrative assessment of child support are set out in subsection 117(2) of the Act.

2. If the tribunal is satisfied that the three requirements are met, it may make one of the determinations prescribed in section 98S of the Act, which include variations to the annual rate of child support payable, or to the adjusted taxable incomes of the parents and/or carer, or to other components of the statutory formula used to calculate child support.

CONSIDERATION

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

1. Subparagraph 117(2)(c)(ia) of the Act provides a ground for departure exists where, in the special circumstances of the case, the administrative assessment of child support would result in an unjust and inequitable determination of the rate of child support because of the income, property and financial resources of either parent.

What is the father’s income for child support purposes?

1. For most of the period relevant to this review the father has been employed. He was working in the [specified] industry for a particular employer from about November 2015 to November 2017 when he was made redundant as that business closed down. He said that he did not receive a redundancy payment or an annual leave payout. He said that he was notified in advance of his last day and used up his outstanding leave before then to find other work.

2. The father said he found contract work and then a permanent job. He was out of work for about 10 days but went about three weeks without pay after finishing the contract work and before he got his first payment from his current employer.

3. In his Statement of Financial Circumstances (SFC) dated 29 December 2017 the father wrote that his average income was $2,000 a week ($104,000 a year). The father said at hearing that he earns $26 an hour and with bonuses and overtime his pay averages to $2,000 a week but that varied as the amounts of overtime he worked and bonuses he was paid went up and down. He submitted payslips from his current employer for fortnights ended 17 and 31 December 2017. The second payslip shows that the standard working week is 38 hours.

4. For the fortnight ended 17 December 2017 the father’s gross pay was $2,743 which included travel allowance and overtime bonuses. The father’s evidence was that there was a period between jobs when he was not working. It is clear from the payslip that this was his first payslip (as period and year to date income are the same) and does not cover a full fortnight; it is 18 hours short in that regard. At $26 an hour this would add a further $468 excluding overtime or bonuses which would take the pay for a full fortnight to $3,211 ($2,743 + $468) or $83,486 a year. The second payslip records that the father was not paid for 22 hours of the 76-hour fortnight. Therefore the tribunal does not consider that the payslips submitted by the father reflect his current regular income. Based on the gross incomes of both payslips, the father’s income for December 2017 was $4,888 ($2,145 + $2,743), equivalent to $58,656 a year. The father’s other evidence, written and oral, was that he earns considerably more than this.

5. The mother pointed out that $2,494 was deposited into the father’s bank account on 19 December 2017. This tallies with the net pay figure from the father’s payslip for fortnight ended 17 December 2017.

6. The father had been directed to submit his tax returns, including schedules, for 2015/16 and 2016/17, and his final payslip for the employer he finished with in November 2017. At the directions hearing he agreed to do so but the tribunal has not received these documents. At the hearing the father said he would submit his tax return and recent payslips after the hearing but he failed to do that, instead submitting after the hearing a taxation estimate for 2016/17 and the two payslips discussed above. The taxation estimate shows taxable income of $86,608 without any evidence of the father’s 2016/17 gross income and any deductions he may have claimed in his tax return.

7. The tribunal was unable to locate a record of the father’s 2015/16 taxable income. From 4 November 2015 to 30 June 2016 he was assessed for child support on an income estimate of $87,444 which he provided to the Department. He had also provided the Department with a copy of a payslip which showed that his gross salary to 31 January 2017 was $51,275. This is equivalent to $87,900 a year. In an SFC dated 3 August 2017 (before he was made redundant) the father submitted that his weekly income was $1,673 which is equivalent to $87,000 a year. The tribunal considers that $87,000 reflects the father’s income for child support purposes until 30 November 2017.

8. As noted the father said that he currently earns $2,000 a week ($104,000 a year). Based on the payslips he did produce it is apparent that he is not always paid that much by his current employer and when considering what his annual income is, allowance should be made for public holidays and annual leave when he will not be paid extra amounts such as overtime.

9. The tribunal arrived at an income figure for the father in relation to his current employment as follows. If he was paid the equivalent of $104,000 a year for 10 months of the year, he would earn $86,667 over 10 months. To allow for public holidays, annual leave, and the short period he was unemployed, the tribunal will assume he earns on average $4,888 (as he did for December 2017) for each of the other two months of the year. That totals $96,443 a year, rounded down to $96,000. In light of the above the tribunal considers it appropriate that the father’s income for child support purposes is $87,000 a year until 30 November 2017 and $96,000 from 1 December 2017.

10. The father said that he travels 180 kilometres to get to and from work each day and wrote in his SFC that he spends $100 a week on petrol. He also submitted banks records to show how much he spends on petrol going to and from work. The tribunal notes that the cost of parking in central Perth for a work day ranges between $12 and $22 and when petrol is factored in, the cost of travelling to work for many people is not dissimilar to what the father pays in petrol to get to his place of work.

11. The parents are still legally entwined in a partnership which runs a [business]. The mother lives on the property where the business is located and runs the business from there. She referred to profits made from the partnership and whether the father had declared these, or if he had included business losses in his tax returns to reduce his tax liability even though he had no involvement with the business for some years. The father said he had not done this. The parents agreed that the father gets no income from the partnership.

12. In light of the above, the tribunal considers that for child support purposes, $87,000 reflects the father’s income from 21 October 2016 to 30 November 2017, and $96,000 reflects his income from 1 December 2017. 

What is the mother’s income for child support purposes?

1. The mother lives with the children on a [size] property which has a three-bedroomed house where they live, the [business], a shed and a caretaker’s house which is currently empty.

2. The mother wants to sell the property and it has been on the market for some time. The father said he was interested in buying the mother’s share of the property. Court orders dated [in] June 2017 at clause 2 states that the parties “do all acts and things and sign all documents as may be necessary so as to effect a sale of the  [Business] as a going concern”.

3. In the following paragraphs the tribunal draws on various figures contained in the submissions to give a sense of the value of the business.

4. At clause 6, the court orders dated [in] June 2017 state “the parties accept any offer to purchase the  [Business] of $1.85 million or above.” In her SFC dated 19 July 2017 the mother valued the business at $1.7 million and recorded a mortgage of $500,000 against the property, in her and the father’s joint names.

5. The father’s [relative] paid for a house (referred to above as the caretaker’s house) to be built on the property in which she used to live but has since vacated. She is to be paid $300,000 by the parents ($150,000 each). The tribunal understands therefore that if the property is sold to a third party, $800,000 is to be paid from the sale proceeds with each parent liable for half.

6. The father referred to a further valuation that is about to be or has just been done for the property and business, and that this new valuation should be available in a few weeks. He said that he thought it might be another year before the property settlement is finalised.

7. The mother said that because the business is on the market she is reluctant to take bookings for [various services] to be held a long way ahead. Her written submissions referred to difficulties in producing [products] for sale. The mother said that because the business has not generated sufficient income she has taken on work during the week doing [occupation 1]. The business now operates only on weekends.

8. Given that each parent has an interest in the property via the partnership and that it will be some time before the property is sold, the tribunal considers it appropriate to place greater weight on the parents’ respective incomes rather than the value of the [business] for the purposes of this review.

9. The mother submitted a schedule recording profit and loss statements from 2007/08 to 2016/17 which shows that income from the business has decreased over that time, from $119,295 in 2007/08 to $67,994 on 2016/17. The main sources of income have been [specified products] with lesser amounts from selling livestock and other unspecified sources of income. The father queried the cost of a [specified item] being $4. The mother said that was the net income she received when she sold a [specified item], after all costs were taken out. Net profit for the partnership in 2007/8 was $21,540 and in 2016/17 was $4,696.

10. The mother also submitted the 2016/17 tax returns for her and the partnership. The partnership tax returns recorded business income of $100,771, expenses of $96,074 and a net income of $4,697. The tax return shows a general pool assessable balance item of $32,777 which accounts for the difference between the income figure in the tax return ($100,771) compared with the income figure in the profit and loss statement for 2016/17 ($67,994). It also explains the difference in the expenses figures between the tax return and the profit and loss statement. A depreciation worksheet records that the amount of $32,777 is to do with a [vehicle 1] that was disposed of on 1 July 2016. The parents said that the father sold this vehicle.

11. The expenses recorded in the tax return include depreciation of $40,744. As depreciation is not an out of pocket expense, it represents funds which are available to the business owner. It is common practice to add back all or part of depreciation expense to arrive at an income figure for child support purposes. In this case both the income and the expenses as recorded in the tax return were increased by $32,777 because of the [vehicle 1] which has affected the amount of depreciation. Because of this adjustment, and that the father sold the vehicle, the tribunal considers it more appropriate to refer to the depreciation figure in the profit and loss statement which is $5,176 and will add this back to the mother’s income figure for child support purposes.  

12. The mother drives a [vehicle 2]. In the partnership’s tax return, $4,718 is claimed as a business expense in respect of this vehicle which is 59.22% of the vehicle’s 2016/17 expenses. The father argued that as the business operated only on weekends and the mother worked during the week, a lesser percentage should be allocated as business expense. The tribunal notes that it was the mother’s accountant who worked out this percentage which is very precise and on that basis the tribunal will accept that as being the split between business and personal use of the vehicle. Further the tribunal observes that making adjustments to the mother’s taxable income, given the percentage of care she provides, makes very little difference to the rate of child support.[3] The profit and loss statement identified $6,594 being the benefit to the mother of the vehicle she drives. The mother said that she does not claim all the fuel costs through the business.

    [3] By way of illustration of this point, an increase of $4,000 to the mother’s income would reduce the rate of child support by about $100 a year.

13. The mother’s personal tax return shows her taxable income to be $31,680, made up of $29,968 from her paid employment and $1,703 from the business. As noted above, the partnership tax return showed a net income of $4,697. The profit and loss statement shows that the mother personally paid $2,994 of the expenses incurred by the business. $4,697 less $2,994 gives $1,703.

14. The father is required by the court orders referred to above to pay $150 a week towards the mortgage that covers the property where the mother lives. He said that although the mortgage has been described as a loan to set the business up, it was actually a home loan for the home where the mother and children live.

15. As the mother and children live in a property which is paid for the business, and the father contributes to this, the tribunal considers that this is a benefit to the mother, of say, $250 a week or $13,000 a year. The tribunal considers that the mother’s income for child support purposes is as follows:

    Taxable income   $31,680’

    Depreciation adjustment            $5,176

    Adjustment for the home $13,000

    Adjustment for motor vehicle       $6,594

    $56,450

16. The tribunal notes that the objections officer found the mother to have an income of $21,809 from the partnership and $27,000 from her other employment, totalling $48,809 a year. The tribunal has the benefit of the 2016/17 tax returns which were not available to the objections officer. The tribunal is satisfied that $56,450 better reflects the income available to the mother for child support purposes, rather than her taxable income.

How does the administrative assessment compare with an assessment of child support using the tribunal’s income figure for the father?

1. The administrative assessment in place on 9 August 2016, when the mother lodged her change of assessment application, was that the father’s child support liability was $9,242 a year, based on the parents’ 2014/15 adjusted taxable incomes of $62,862 for the father and $49,683 for the mother.  

2. The tribunal estimates that using an income of $87,000 for the father and $56,450 for the mother results in a child support liability of $15,896 a year.

3. Given the difference between $9,242 and $15,896 a year, the tribunal is satisfied that in the special circumstances of this case, the administrative assessment does result in an unjust and inequitable rate of child support, and that a ground for departure from the administrative assessment has been established pursuant to subparagraph 117(2)(c)(ia) of the Act.

Issue 2 – Is it just and equitable to make a particular departure determination?

1. As the tribunal is satisfied that there is a ground to depart from an administrative assessment of child support, the next step is to consider whether it is just and equitable as regards the children, the father and the mother to make a particular determination in accordance with sub-subparagraph 98C(1)(b)(ii)(A) of the Act. This in turn requires the tribunal to consider a variety of factors, as set out in subsection 117(4) of the Act.[4]

   [4] The tribunal is required to give “overt consideration” to relevant factors listed in subsection 117(4) of the Act: Tyagi & Meares [2008] FMCAfam 886.

1. Section 3 of the Act makes it clear that parents have the primary duty to maintain their children, and that this duty has priority over all commitments of the parents other than commitments necessary for self-support or the support of another person the parent has a duty to maintain. In this case the father and the mother have the primary duty to financially support the children. 

Income, property and financial resources – the father

1. The father said that he took out a $50,000 personal loan, which is now down to about $45,000, to consolidate debts he had and that he repays this at the rate of $250 a week. He recorded $600 in his bank account, that he owns a [vehicle 3] worth $3,000 and has $155,000 in superannuation. He owes $3,000 on his credit card and pays the minimum as required. His other assets and liabilities of significance are associated with the [business] and have already been discussed.

2. The father pays the amount of child support according to the assessment. There is usually a balance of about $1,000 owing on his account. The father said he spoke to the Department about this and was told it was to do with timing of when his payment came in and when the next period’s liability was posted to his account, and there was no need to alter anything. On this basis the tribunal is satisfied that the father is up to date with his child support payments.

3. In his SFC dated 29 December 2017, the father did not fill in the section headed “Other income earners in your household”. He said that he lived with his girlfriend but she did not want to provide her gross income. He said that he paid $300 a week by way of rent which included his evening meal. According to his SFC, he also spends $80 a week on food, $100 a week on petrol and $70 a week on other household expenses, totalling $570 a week.

4. The father wrote that he spent $1,900 a week on other expenditure (tax, child support, health insurance, credit card payments, personal loan repayment of $250 a week and court ordered mortgage repayments of $150). When checking these figures at the hearing, the father agreed that he had double-counted $400 in arriving at $1,900, and the amount should be $1,500. He included $650 a week on income tax. The tribunal considers this figure to be too high. According to the taxation estimate he submitted, on an annual income of $86,608, he is required to pay $21,428 in tax and for the Medicare levy, which is $412 a week. The tribunal estimates that on an income of $96,000 a year, he would be required to pay tax of about of about $25,000 a year or $480 a week.

5. Also the father listed child support of $375 a week when it was $350 a week, and minimum card repayments of $50 a week when that figure would more realistically be a monthly minimum repayment on a credit card balance of about $3,000.

6. This means that instead of $1,900 a week, the other expenditure total should be either $1,198 or $1,298 a week as follows.

   Annual income  $87,000  $96,000

   Weekly income                       $1,673             $1,846

   Tax & Medicare levy     $412  $480

   Child support              $346[5]  $378[6]

   Personal loan             $250  $250

   Mortgage re [business]   $150  $150

   Credit card                  $15             $15

   Health fund                  $25             $25    

   $1,198           $1,298

   Household expenses    $570     -  $1,768                   $570     - $1,868

   Shortfall       $95        $22 

   [5] This is the approximate rate of child support as per the objection decision and the tribunal’s decision until 30 November 2017.

   [6] This would be the approximate rate of child support from 1 December 2017 if the father was assessed on an income of $96,000 and required to make a contribution to the cost of braces.

7. This suggests that the father has been unable to meet his commitments. However it is premised on the father paying $300 a week to his girlfriend for rent and evening meals which sounds high.

8. In addition the tribunal observes that the father – the applicant in this review – failed to submit relevant documents as directed, in particular his 2015/16 and 2016/17 tax returns and his final payslip when he was made redundant, although he agreed to do so at the directions hearing. The tribunal is unsure whether the father has properly disclosed his income. In considering its determination, the tribunal had regard to principles noted in a Federal Magistrates Court decision as follows:[7]

   In financial proceedings under the Family Law Act, the authorities make it clear that a Court “should not be unduly cautious about making findings in favour of the other party if it is not satisfied that proper disclosure has been made (see Chang & Su (2002) FLC93-117)”. Such principles, in my consideration, have similar application to these matters before the SSAT.[8]

   [7] Conway & Child Support Registrar & Clivery (SSAT Appeal) (No.2) [2008] FMCAfam 985.

   [8] The SSAT (Social Security Appeals Tribunal) was the body that conducted reviews of child support decisions before this function was transferred to the SSCS Division of the AAT.

9. Also as noted the father has kept up to date with his child support payments.

Income, property and financial resources – the mother   

1. The mother said that she struggles to make ends meet, including paying her share of the mortgage, and that she is behind. The father said that the business paid the mortgage but the mother said it is not making enough money to cover it. In her SFC dated 19 July 2017 the mother recorded property and liability insurance of $612.85 a month which was supposed to be paid by the partnership but which she paid. The mother also recorded a car loan of $900 a month which she said was paid by her personally rather than by the business.

2. The mother submitted that other relatives had been living on the property but have since moved out. The father has submitted that she received board from them but the mother wrote in her SFC dated 19 July 2017 that their situation was such that they could not afford to do that. In addition to what she earns, the mother receives family tax benefit equivalent to $117.25 a week.

3. The mother wrote that she has $400 in her personal bank account, $64,908 in superannuation and household contents worth $1,000.  She said that the business has a debt to the Australia Taxation Office (ATO) and she is paying that off at the rate of $100 a week. In her post hearing submission the mother submitted a letter from the ATO which shows that $4,470 is due for payment. In her SFC she listed an overdraft of $5,000 which she submitted was supposed to be paid by her and the father as it was related to the business partnership

4. The mother did not complete the schedule in her SFC for average weekly expenses, explaining it was too difficult. The tribunal understood this to be because certain household-type expenses are split between her and the business but as the business cannot afford them, she is paying them.

Other issues pertaining to the parents’ incomes, property and financial resources

1. Subsection 117(7B) of the Act prescribes the circumstances in which a parent’s earning capacity may be taken into account; certain criteria have to be met. These include that the parent has failed to demonstrate that decisions made about their work arrangements were not substantially motivated by the effect they would have on the rate of child support.

2. The father changed employment having been made redundant in November 2017 after working for the same employer for about two years. He soon secured further employment that was better paid.

3. The main change to the mother’s work arrangements is that she has taken on another job working as [an occupation 1] in addition to working at the [business]. Her income has increased. The tribunal is satisfied that it is not open to it to make an earning capacity determination in respect of either parent and need not consider the application of subsection 117(7B) of the Act in relation to either parent any further.

4. The tribunal is required to have regard to the commitments of each parent that are necessary to enable the parent to support himself or herself, or any other child or another person that the person has a duty to maintain (paragraph 117(4)(e) of the Act). There was no evidence before the tribunal that either party had the duty to maintain other children or another person.

Costs related to the children

1. In determining the proper needs of the children, it is necessary to have regard to the manner in which they are being, and in which the parents expected them to be, cared for, educated or trained, and any special needs they may have (subsection 117(6) of the Act).

2. The mother has sought a contribution from the father towards the cost of braces for the older child. The father has indicated that he was prepared to contribute if he could afford it. He also questioned whether the braces were medically necessary or just cosmetic. He said that when he received the mother’s submission which included documents from the orthodontist, he would show them to another practitioner for an opinion on whether the work is medically necessary or cosmetic. These documents were sent to the father after the hearing. He did not make a post hearing submission as to whether or not he was satisfied that this work is medically necessary. The documents from the orthodontist state that treatment began in September 2016 and was expected to take 18 to 24 months. The orthodontist identified a number of problems with the child’s teeth, with the main complaint being crowding and dental protrusion.[9] The tribunal finds that the orthodontic work is not merely cosmetic and constitutes a special need.

   [9] As the father said that he had not received these documents, at hearing the tribunal read out relevant sections from the five pages submitted by the mother in relation to the orthodontic work, including a copy of an x-ray of the child’s teeth. Also the father had two weeks after the hearing to consider these documents and make a submission.

3. The father said that when it was first proposed that his daughter had braces he was a [specified occupation] and could afford to pay towards the braces because of that income. He submitted that because of a domestic violence order taken out against him by the mother, he lost [a specified asset] and therefore that source of income. He told the Department that his paying towards the orthodontic work was contingent upon him getting this extra income from [this occupation].

4. Asked if she could recall the conversation that she and the father had about paying for the braces, the mother said he said then that as he was working he would contribute, saying “Let’s get the teeth done, let’s get her beautiful teeth”. The father said that he was on contract work at that time and did not have a permanent job.

5. The mother provided evidence of her out of pocket expenses for the orthodontic work which amounted to $6,803. The objections officer decided that the father was to contribute half of this, being $3,402 spread over two years, say $1,700 a year. This is the equivalent of paying an extra $32 a week. As the father has kept up to date with his child support payments while being required to pay this extra amount and at a time when he has been earning less than he is currently earning, the tribunal determines he continues to make a contribution to the orthodontic costs.

6. The children are not educated in the private system and there was no evidence of them having special needs apart from the orthodontic costs just discussed.

7. As the mother did not complete the weekly household expense section of the SFC, which allows for costs to be apportioned between the adults and the children in the household, the tribunal has no further information regarding the costs of the children.

Hardship

1. The tribunal is required to consider any hardship its determination might cause and is guided by Gyselman and Gyselman[10] in this respect:

   This requires the Court to balance the ‘hardship’ which the parents or the children may suffer as a result of either making or refusing to make the order. It is a recognition of the circumstance that in this area there is likely to be hardship both ways and the Court is required to take into account the balance of that hardship and give it the weight which is appropriate to the circumstances of the individual case.

   [10] [1991] FamCA 93.

2. Both parents expressed difficulty in managing their financial situations. The father told the Department that the assessment was too much for him to afford and he could not pay it, although he has kept up with his child support payments. The tribunal also notes that his annual income has increased since he started his new job in December 2017.

3. The objection decision required the father to pay $17,983 a year in child support which included a contribution of $1,700 a year to the cost of braces for one of the children until 31 October 2018. The tribunal estimates his annual child support liability would be $17,596 for the period 21 October 2016 to 30 November 2017 using incomes for the parents, as determined by the tribunal, of $87,000 for the father and $56,450 for the mother, including a contribution to the cost of the braces.

4. If the assessment was to increase from 1 December 2017 to reflect the father’s increase in income and his contribution to the cost of the braces, he would be required to pay an annual rate of child support of about $19,692 between 1 December 2017 and 20 October 2018. This would create arrears for him of about $550 in relation to the period from December 2017 to March 2018. Given his financial commitments the tribunal is not satisfied that this is just and equitable as regards the father.

5. Without making a contribution to the braces, and assessed on an income of $96,000, the tribunal estimates that child support liability for the father would be $17,992 a year which is similar to the amount he is currently assessed to pay including a contribution to the cost of the braces. Taking these factors into account the tribunal determines that it is just and equitable for the father to continue paying child support at the rate he is currently paying but continuing beyond the date he is required to contribute to orthodontic costs; this takes account of the increase in his pay.

6. The mother is struggling financially as she has the burden of paying for expenses to do with the partnership. She has some assistance with these as the father is required by court order to pay $150 a week towards the mortgage on the property where the mother and the children live. The mother combines working for an employer and working for the business. The latter does generate some income but the mother’s evidence was that was insufficient to cover the expenses of the business.

7. The father said that it could be another year before the property settlement is finalised. That would change the parents’ financial situations significantly. Until then, the tribunal is satisfied that the father has the capacity to pay child support at the current rate of $17,983 a year as he has not fallen behind in his payments and his income has increased from December 2017.

8. The tribunal’s decision represents an increase to the child support liability compared to the administrative assessment as referred to under Issue 1 at paragraphs 41 to 43.   

Any other relevant matters

1. The tribunal may take into account any other matters it considers relevant in making a particular departure determination (subsection 117(9) of the Act).

2. The mother lodged her change of assessment application on 9 August 2016. Both departmental decisions began from 21 October 2016. The objection decision stated the reason for selecting this date was that by this time the father “had reasonable notice of the potential for the assessment to vary including the contribution to orthodontics.” As this is a reasonable approach and neither party made submissions for a different date, the tribunal is satisfied that departing from the administrative assessment from 21 October 2016, consistent with the departmental decisions, is appropriate in this case.

3. The tribunal’s determination ends 30 June 2019, as it may be by then the property settlement has been finalised. It is open to either parent to lodge a further change of assessment application as and when their circumstances change.

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

1. The requirement to consider whether a departure determination would be otherwise proper is concerned with what is fair to the community; it is preferable for a child or 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 or children, may be affected by the level of child support.

2. The mother is in receipt of family tax benefit. The tribunal is satisfied that its determination will result in an appropriate apportionment of financial responsibility between the parents and the community, and would be otherwise proper.

DECISION

The decision under review is varied so that the annual rate of child support payable by the father is varied to $17,983 for the period 21 October 2016 to 30 June 2019.