Mousley and Mousley (Child support)

[2021] AATA 4793

Mousley and Mousley (Child support) [2021] AATA 4793 (28 October 2021)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2021/PC022305

APPLICANT:  Mr Mousley

OTHER PARTIES:  Child Support Registrar

Ms Mousley

TRIBUNAL:Senior Member R Ellis

DECISION DATE:  28 October 2021

DECISION:

The decision under review is affirmed.

CATCHWORDS

CHILD SUPPORT – particulars of the administrative assessment – estimate of income – whether estimate calculations correct – decision under review affirmed

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 acceptance of an estimate election used to assess child support in respect of the children [Child 1] and [Child 2].

2. Mr Mousley and Ms Mousley are the parents of [Child 1] (born February 2004) and [Child 2] (born May 2015).  There has been a child support assessment in place since 4 October 2017 and Mr Mousley is the parent liable to pay child support under the assessment.

3. On 1 July 2020 the Child Support Agency made the decision to accept an income estimate from Mr Mousley of $50,708 (annualised) to be used in the child support assessment from 1 July 2020 to 30 June 2021.  The Tribunal notes Mr Mousley made a number of subsequent income estimates for the income year from 1 July 2020 to 30 June 2021.

4. On 29 October 2020 the Child Support Agency made the decision to accept one of these subsequent income estimates from Mr Mousley of $100,837 (annualised) to be used in the assessment for the period from 21 October 2020 to 30 June 2021.

5. On 15 July 2021 Mr Mousley objected to the decision made on 29 October 2020.  Following the granting of an extension of time the Child Support Agency disallowed the objection on 31 August 2021 (the objection decision).

6. On 13 September 2021 Mr Mousley applied to the Administrative Appeals Tribunal (the Tribunal) for a review of the objection decision.

7. The Tribunal conducted a hearing into the application on 28 October 2021.  Mr Mousley and Ms Mousley gave evidence on affirmation by conference telephone.  The Child Support Agency provided the Tribunal and the parties with papers relevant to the matter (328 pages).

ISSUES

1. The statutory provisions relevant to this review are contained in the Child Support (Assessment) Act 1989 (the Act).

2. The Child Support Agency makes child support assessments for a child support period using a formula outlined in Part 5 of the Act.  The variables in the formula include the adjusted taxable incomes of both parents and ordinarily this is equal to the taxable income and supplementary amounts for the financial year that ended before the start of the child support period.  Supplementary amounts include such things as reportable fringe benefits.

3. Section 60 of the Act allows a parent to elect to use an estimate of their adjusted taxable income to apply from the day of the election to the end of the financial year (the estimate period).  The estimate is an annualised amount of their taxable income and supplementary amounts for the estimate period.  A parent can make an income estimate for the whole financial year or for part of the financial year.  Income estimates may be revoked and later income estimates for a financial year made at any time within that year of income.

4. When the Child Support Agency accepts a parent’s estimate election, their income estimate amount becomes their adjusted taxable income amount for the purposes of assessing the annual rate of child support payable in the application period (subsection 61(1A) of the Act).

5. The Child Support Agency may refuse to accept an estimate election if satisfied the amount estimated for the partial year is less than the amount considered likely to be the actual adjusted taxable income for the partial year (section 63AA of the Act).

6. The issue which arises in this case is whether or not the Child Support Agency made the legally correct decision to accept the estimate of income made by Mr Mousley on 29 October 2020.

CONSIDERATION

1. Mr Mousley told the Tribunal that when he made his estimate on 21 October 2020 he had included an inaccurate figure of $35,000 for his reportable fringe benefits.  Mr Mousley explained that at the time he had only recently commenced a permanent role and the reportable fringe benefits figure was provided to him as part of a salary packaging program.

2. Mr Mousley said although the amount of $35,000 appeared too high it was the figure he had been provided and so he had included it in his estimate when asked by the Child Support Agency.  Mr Mousley said as soon as he obtained the correct figure for his reportable fringe benefits, which was closer to $15,000, he contacted the Child Support Agency and updated his estimate.  He said this was on 4 December 2020.

3. Mr Mousley told the Tribunal he was a low-income earner.  He said that as a result of the inaccurate figure for his reportable fringe benefits he had been assessed on an annualised income of $100,837 for a period of around six weeks until he was able to update his estimate on 4 December 2020.  Mr Mousley said his income had never been this high.

4. The Tribunal notes in evidence from the Child Support Agency that when Mr Mousley lodged his estimate on 21 October 2020 the income components he provided included fortnightly gross payments of $1,711, fortnightly parenting payments of $220 and $35,000 in reportable fringe benefits (grossed up).  This is equal to a partial year income amount of $69,895.92 which is equivalent to an income of $100,837 on an annualised basis.  At the time of making his estimate the child support officer confirmed with Mr Mousley his understanding of the annualised income amount of $100,837.

5. Mr Mousley also pointed out the objection decision states that when he made his estimate on 21 October 2020 it did not include any reportable fringe benefits.  He said this was obviously not the case as the assessment notice issued by the Child Support Agency shows a reportable fringe benefits amount of $35,000 was included.

6. Mr Mousley said he always tried to provide accurate estimates of his income.  He said the Child Support Agency decision to continue using the reportable fringe benefits amount of $35,000 in the assessment, despite the fact it was inaccurate, had placed him in hardship.  He said the actual fringe benefits amount recorded in his tax return had been slightly less than the $15,000 he had provided in his updated estimate on 4 December 2020.

7. The Tribunal notes in evidence from the Child Support Agency that when he lodged his estimate on 4 December 2020 Mr Mousley advised the child support officer he had renegotiated the reportable fringe benefits agreement with his employer.  Mr Mousley then submitted a new reduced reportable fringe benefits amount of $15,004.

8. Ms Mousley told the Tribunal that she was aware Mr Mousley submitted regular updates to his income to the Child Support Agency as she received assessment notices each time the changes occurred.  Ms Mousley said she would rely on the Tribunal to make a fair decision.

9. The Tribunal is satisfied that when Mr Mousley elected to lodge his estimate on 21 October 2020 it incorporated all the applicable income components required under the Act.  This included a reportable fringe benefits amount of $35,000.  The Tribunal is also satisfied this estimate election was made in accordance with all the relevant provisions of the Act.

10. While Mr Mousley argues the amount of $35,000 was incorrect it is nonetheless incumbent upon the parent to ensure an estimate election is as accurate as possible.  In this case it appears when Mr Mousley provided a new reportable fringe benefits amount of $15,004 in his subsequent estimate made on 4 December 2020 he did so on the basis he had renegotiated his reportable fringe benefits with his employer.

11. In circumstances when a parent elects to lodge a later income estimate, as in this case, the estimate may be refused if the Child Support Agency is satisfied the partial year income is less than the amount considered to be the parent’s actual adjusted taxable income for the remaining period in relation to the income election (subsection 63AA(3) of the Act).

12. There is no evidence before the Tribunal to suggest Mr Mousley’s estimated income of $100,837 (annualised) for the period from 21 October 2020 to 30 June 2021 was less than the amount considered likely to be his actual income for this period.  The Tribunal is satisfied the discretion to refuse the estimate made by Mr Mousley should not be exercised.

13. The Tribunal notes in evidence from the Child Support Agency that when including all the estimates of income made by Mr Mousley he was expected to have an income based on these estimates of $64,916.28.  His actual income for 2020–21 was $68,429.  This means, even with the estimate made on 21 October 2020, his estimated income was lower than his actual income.  When a parent's actual income is more than their estimated income, the assessment is amended using their actual income (Division 7A of Part 5 of the Act).

14. While the objection decision does state that the estimate lodged by Mr Mousley on 21 October 2020 “did not include any reportable fringe benefits” this appears to be an error in writing on the part of the objections officer.  An amount of $35,000 in reportable fringe benefits was correctly included in this estimate lodged by Mr Mousley.

15. The Tribunal finds the estimate election made by Mr Mousley on 21 October 2020 should be accepted.

DECISION

The decision under review is affirmed.