Morrow and Radford (Child support)

[2018] AATA 946

Morrow and Radford (Child support) [2018] AATA 946 (22 February 2018)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2018/PC013364

APPLICANT:  Mr Morrow

OTHER PARTIES:  Miss Radford

Child Support Registrar

TRIBUNAL:Member P Jensen

DECISION DATE:  22 February 2018

DECISION:

The Tribunal sets aside the decision under review and, in substitution, decides to accept Mr Morrow’s estimate of income of $277,215 per annum from 7 January 2017 and his estimate of income of $0 per annum from 28 March 2017.

Note: The Child Support Registrar is referred, in particular, to paragraph 10 of the Tribunal’s Reasons for Decision.

CATCHWORDS
Child support – Particulars of the administrative assessment – Whether estimate of income should be refused - Estimate of income accepted - 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 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

1. Mr Morrow and Miss Radford are the parents of [Child 1] and [Child 2]. A child support case was registered in 2006. The Child Support (Assessment) Act 1989 (“the Act”) provides for an administrative assessment of the rate of child support payable. It uses a formula which contains variables such as the parents’ adjusted taxable incomes. The Act also allows a parent to provide an estimate of their adjusted taxable income and, if accepted, that estimate will be used to calculate the rate of child support payable, subject to a reconciliation once the parent’s actual adjusted taxable income becomes known.

2. Mr Morrow provided an estimate of income of $0 per annum from 1 July 2016. The Department of Humans Services – Child Support (“the CSA”) decided to accept that estimate of income. Neither parent objected to that decision.

3. Mr Morrow provided another estimate of income on 28 March 2017. The CSA’s file note of the conversation is very brief. It relevantly states that “wages will be gross $60,000” and “[all] other income components have been confirmed”.

4. On 28 March 2017 the CSA concluded that Mr Morrow had provided one estimate of income, and that he had estimated that he would earn $60,000 during the 181 days from 1 January 2017 to 30 June 2017. It decided to accept an estimate of income of $60,000 / 181 x 365 = $120,994 per annum from 1 January 2017. Both parents were issued notices informing them that Mr Morrow’s rate of child support payable from 1 July 2016 had been assessed on the basis of his estimate of income of $0 per annum and his rate of child support payable from 1 January 2017 was being assessed on the basis of his estimate of income of $120,994 per annum. Mr Morrow objected to that decision. He was of the mistaken belief that the CSA had concluded that he would earn $120,994 during 2016-17. Further details of Mr Morrow’s income emerged during the course of his discussions with the CSA and on 7 June 2017 an objections officer decided to allow Mr Morrow’s objection and not accept his estimate of income. His rate of child support payable throughout 2016-17 was therefore based on his original estimate of income of $0 per annum from 1 July 2017. Mr Morrow sought further review and I heard the matter on 22 February 2018. I spoke to Mr Morrow and Miss Radford by conference phone.

5. At the hearing, Mr Morrow said he could not recall what was said on 28 March 2017. According to the CSA’s records, Mr Morrow contacted the CSA on 5 April 2017 concerning its correspondence dated 28 March 2017. He informed the CSA that he was unemployed from 1 July 2016 to 6 January 2017, and that he was employed [overseas] from 7 January 2017 to 12 March 2017 and earned $60,000 during that period, and that he expected his 2016-17 adjusted taxable income to be approximately $60,000.

6. The CSA subsequently ascertained that Mr Morrow was granted newstart allowance on 6 December 2016 and was paid arrears of $2,616 from 21 September 2016. It appears that Mr Morrow’s newstart allowance was cancelled when he travelled overseas but, on review, his newstart allowance was suspended and subsequently restored from the date of his return to Australia. In subsequent correspondence with the CSA, Mr Morrow explained, in effect, that when he contacted the CSA on 28 March 2017 he only referred to his earnings because it had not occurred to him to discuss his income support payments and the CSA had not asked him about his income support payments.

7. Given the brevity of the CSA’s file note dated 28 March 2017, I accept Mr Morrow’s evidence that he informed the CSA that he had earned approximately $60,000 from 7 January 2017 and that, as at 28 March 2017, he did not expect to receive any further. I also accept his evidence that he did not disclose his income support payments because he did not turn his mind to that income – he phoned the CSA to report his earnings – and the CSA did not ask him about any possible income support payments.

8. In summary, it appears to me that Mr Morrow actually provided two estimates of income on 28 March 2017. He informed the CSA that he had commenced employment on 7 January 2017 and had earned approximately $60,000 since that date, and that, as at 28 March 2017, he did not expect to earn any further income. In subsequent correspondence, Mr Morrow stated that he returned to Australia on 12 March 2017, but I am not persuaded that he disclosed that information on 28 March 2017.[1] According to the information Mr Morrow provided on 28 March 2017, he earned approximately $60,000 during the 79 days from 7 January 2017 to 27 March 2017, and he did not expect to receive any further income from 28 March 2017 to 30 June 2017.

   [1]Nothing of significance turns on that finding. Only Mr Morrow’s higher estimate of income could be given retrospective effect. Even if he had disclosed that he had ceased earning an income on 12 March 2017, his higher estimate of income, if accepted, would have retrospective effect from 7 January 2017 and his subsequent lower estimate of income would only have prospective effect from 28 March 2017: see section 63 of the Child Support (Assessment) Act 1989.

9. The first estimate of income equates to an estimate of income of $60,000 / 79 x 365 = $277,215 per annum during the period from 7 January 2017 to 27 March 2017. The second estimate of income obviously equates to an estimate of income of $0 per annum from 28 March 2017. The estimates of income were provided pursuant to section 60 of the Act. The section effectively required Mr Morrow to estimate his adjusted taxable income in respect of the period of the financial year prior to the date of his estimate and also estimate his adjusted taxable income for the balance of the financial year. The CSA recorded Mr Morrow as estimating incomes of $0 per annum during his periods of unemployment. In fact, he received income support payments during at least parts of those periods. However, if a person’s income is less than what is called the Self Support Amount, which at the time was $23,752 per annum, then the actual figure does not affect the rate of child support payable. Mr Morrow’s rate of newstart allowance was less than $23,752 per annum. Section 63AA of the Act allows a decision-maker to refuse to accept a person’s estimate of income. It transpired that Mr Morrow’s 2016-17 adjusted taxable income was $68,148. The evidence does not disclose exactly how much Mr Morrow receiving in newstart allowance during 2016-17 but the evidence suggests that his estimate of his earnings was reasonably accurate. For those reasons, I find that the preferable decision at first instance was to view the information Mr Morrow provided on 28 March 2017 as the provision of two estimates of income, and to accept his estimate of income of $277,215 per annum from 7 January 2017 and his estimate of income of $0 per annum from 28 March 2017. Those estimates of income reflect what actually occurred: he received a minimal income until 7 January 2017 (and he had a minimal capacity to pay child support from that income), and then he had a short period during which he was earning a substantial income (and he had a substantial capacity to pay child support from that income), and then he resumed his receipt of a minimal income. The objections officer’s decision will be set aside and Mr Morrow’s two estimates of income will be accepted.

10. There is one further complication. The objections officer’s reasons for decision concluded with the following sentence: “Mr Morrow’s estimate will be sent for further review to have all income included for the financial year.” On 18 July 2017 the CSA decided to amend Mr Morrow’s original estimate of income to $98,298 per annum from 21 September 2016, which was the date from which he was retrospectively paid newstart allowance. I am not reviewing that decision. However, to give proper effect to the Tribunal’s decision, that decision would need to be revoked. The CSA may which to initiate that process. Otherwise, Mr Morrow can object to that decision and, if necessary, apply for an extension of time in which to object.

DECISION

The Tribunal sets aside the decision under review and, in substitution, decides to accept Mr Morrow’s estimate of income of $277,215 per annum from 7 January 2017 and his estimate of income of $0 per annum from 28 March 2017.

Note: The Child Support Registrar is referred, in particular, to paragraph 10 of the Tribunal’s Reasons for Decision.