Mostyn and Yale (Child support)

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.