Mostyn and Yale (Child support) - [2020] AATA 6010

Mostyn and Yale (Child support) [2020] AATA 6010 (29 December 2020)

DIVISION:Social Services & Child Support Division
REVIEW NUMBER:  2020/MC019305
APPLICANT:  Mr Mostyn
OTHER PARTIES:  Child Support Registrar
Ms Yale

TRIBUNAL:Member R Anderson
DECISION DATE: 29 December 2020
DECISION:

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

The annual rate of child support payable by Mr Mostyn is varied to $6,000 per annum in respect of the period 19 November 2019 to 31 August 2020; and
The annual rate of child support payable by Mr Mostyn is varied to $9,000 per annum in respect of the period 1 September 2020 to 31 December 2021.

CATCHWORDS

CHILD SUPPORT – departure determination – income, property and financial resources of the liable parent – business income – 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

Mr Mostyn and Ms Yale are the separated parents of [Child 1], [Child 2] and [Child 3]. According to records of the Department of Human Services – Child Support, now known as Services Australia – Child Support (the Agency), the child support assessment was registered on 19 November 2019. The Agency has been responsible for the collection of child support from Mr Mostyn from the outset.
The child support liability is generally calculated in accordance with the administrative assessment, as provided in the Child Support (Assessment) Act 1989 (the Act). The calculation is based on the income recorded by each parent in their most recently completed tax returns, as lodged with the Australian Taxation Office (ATO), or the most recent estimate accepted by the Agency. It is open to either parent to lodge an application for a departure from the administrative assessment under Part 6A of the Act if they consider the administrative assessment results in an unfair amount of child support payable by one parent.
The initial assessment was based on the income recorded on the 2018/2019 tax returns of the parents, as lodged with the ATO. The adjusted taxable income of Mr Mostyn was $39,273 and the adjusted taxable income of Ms Yale was $24,639. The registered care of the children was 57% to Mr Mostyn and 43% to Ms Yale. The corresponding child support liability payable by Mr Mostyn to Ms Yale in respect of the children was calculated at $1,575 per annum.
On 9 December 2019, Ms Yale lodged a departure application on the basis that the administrative assessment produced an unfair outcome due to the earning capacity, income, property and financial resources available to Mr Mostyn (Reasons 8A and 8B) .
On 18 March 2020, a delegate of the child support registrar found that a…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Mostyn and Yale (Child support)

Details

AGLC: Mostyn and Yale (Child support) [2020] AATA 6010
Case: [2020] AATA 6010
Decision Date

CaseChat Overview and Summary

This matter concerned an application for review of a decision by the Child Support Registrar regarding the child support payable by Mr Mostyn to Ms Yale for their three children. The initial administrative assessment, based on the 2018/2019 tax returns of the parties, resulted in Mr Mostyn paying $1,575 per annum. Ms Yale applied for a departure from this assessment, arguing it was unfair due to Mr Mostyn's earning capacity, income, property, and financial resources. A delegate of the Registrar agreed and varied the parties' adjusted taxable incomes, increasing Mr Mostyn's child support liability to approximately $12,500 per annum. Mr Mostyn objected, raising additional grounds concerning the children's private tuition and childcare costs, and his legal duty to care for Ms Yale's parents. An objections officer allowed the objection, establishing grounds for departure and varying Mr Mostyn's adjusted taxable income, resulting in an annual child support liability of $9,333. Mr Mostyn then applied to the Administrative Appeals Tribunal (AAT) for an independent review of this decision.

The AAT was required to determine whether a ground existed to depart from the administrative assessment, and if so, whether any proposed departure was fair to Mr Mostyn, Ms Yale, and the children, and also to the public. The primary ground for departure considered was subparagraph 117(2)(c)(ia) of the Child Support (Assessment) Act 1989, which allows for departure where the administrative assessment results in an unfair level of child support due to the income, property, and financial resources available to either parent. The tribunal also considered the principle that a self-employed person's taxable income may not accurately reflect their earning capacity and financial resources.

The tribunal found that a ground for departure was established under subparagraph 117(2)(c)(ia) of the Act. It concluded that Mr Mostyn's reported nil income for the 2019/2020 tax year was not an accurate reflection of his financial resources, particularly given his business operations, access to funds from related entities, and significant personal assets. The tribunal noted that while Mr Mostyn's taxable income was low, his financial arrangements, including substantial superannuation contributions and loans from family entities, indicated a capacity to contribute more to child support than the administrative assessment suggested. The tribunal also considered Ms Yale's financial position, estimating her income from employment and parenting payments to be approximately $56,000 for the 2020/2021 year, and noted her significant asset base following property settlement. The tribunal determined that the administrative assessment resulted in an unfair outcome for Mr Mostyn.

The tribunal set aside the decision under review and substituted its own decision. It ordered that the annual rate of child support payable by Mr Mostyn be varied to $6,000 per annum for the period from 19 November 2019 to 31 August 2020, and to $9,000 per annum for the period from 1 September 2020 to 31 December 2021.

Orders