Mulgrew and Mulgrew (Child support)
[2023] AATA 4661
•20 December 2023
Mulgrew and Mulgrew (Child support) [2023] AATA 4661 (20 December 2023)
DIVISION:Social Services & Child Support Division
REVIEW NUMBER: 2023/BC026492
APPLICANT: Ms Mulgrew
OTHER PARTIES: Child Support Registrar
Mr Mulgrew
TRIBUNAL:Member A Byers
DECISION DATE: 20 December 2023
DECISION:
The Tribunal sets aside the decision under review and substitutes the decision that:
(1) the child support otherwise payable by Mr Mulgrew from 22 February 2022 to 22 January 2023 is increased by $4,116 per annum; and
(2) Mr Mulgrew’s adjusted taxable income is varied to $80,000 from 15 February 2023 to 31 December 2024.
CATCHWORDS
CHILD SUPPORT – departure determination – high child care costs – liable parent’s income and financial resources – liable parent’s earning capacity and related health or medical issues – 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
For child support purposes Mr Mulgrew has been the parent liable to pay child support to Ms Mulgrew for their child [Child 1], born June 2017. A child support case for the parties has been registered since 22 February 2022.
According to Child Support records, at all relevant times Ms Mulgrew and Mr Mulgrew have had 86% and 14% respectively of [Child 1’s] care. Mr Mulgrew also has one child, [Child 2], subject to a separate child support assessment.
On 16 September 2022 Ms Mulgrew lodged an application with Child Support seeking a change of assessment under Reason 8 in relation to Mr Mulgrew’s financial resources, Reason 6 in relation to her out of pocket child care costs and Reason 3 in relation to [Child 1’s] private schooling costs.
At the time of Ms Mulgrew’s application, Mr Mulgrew’s child support liability of $3,840 per annum was assessed under Part 5 of the Child Support (Assessment) Act 1989.[1] This assessment used adjusted taxable incomes for Mr Mulgrew of $86,166 and for Ms Mulgrew of $81,353 for the 2020/21 income year.
[1] All further legislative references are to this Act.
The child support period relevant to this assessment ended on 30 September 2022. With the new child support period from 1 October 2022, Mr Mulgrew’s child support liability reduced to $3,116 per annum based on assessed adjusted taxable incomes for 2021/22 for himself of $81,038 and for Ms Mulgrew of $87,157.
On 30 January 2023 Ms [A] (a Child Support officer) made a departure determination. For present purposes it suffices to say the determination was complex but had the effect of requiring Mr Mulgrew to contribute to [Child 1’s] child care (Reason 6) and education costs (Reason 3).
On 15 February 2023 Mr Mulgrew lodged an online estimate of his adjusted taxable income of $0 for the remainder of the 2022/23 income year. This coincided with Mr Mulgrew’s decision to cease employment on 14 February 2023, which is discussed in detail below. Decision-maker [A]’s departure determination prevented the estimate from having effect (under subsection 60(6)).
Mr Mulgrew objected to this decision on 8 March 2023. Mr Mulgrew’s reasons for objecting were that he should not be required to contribute to [Child 1’s] education costs and his work capacity had changed due to illness. On 14 July 2022 an objections officer allowed Mr Mulgrew’s objection. The decision in table form is:
Period Annual rate
Payable
01.07.22 to 30.09.22 $8,151
01.10.22 to 31.12.22 $7,427
01.01.23 to 14.02.23 $3,116
15.02.23 to 19.02.23 $1,521
20.02.23 to 31.12.23 $0
The objections officer decided that Reason 6, but not Reason 3, was established. Reason 8 was also considered established from 15 February 2023 because Mr Mulgrew was unable to work due to illness from this date.
10. On 28 July 2023 Ms Mulgrew sought review by the Tribunal and the application was heard on 7 December 2023. Both parties appeared by conference telephone and gave sworn evidence. The Child Support Registrar was not present.
11. The following material was before the Tribunal:
- the ‘Section 37(1) Statement and Documents’ provided by the CSA comprising folios 1 to 621 (marked Exhibit 1);
- documents provided by Ms Mulgrew, comprising folios A1 to A92 (marked Exhibit A); and
- documents provided by Mr Mulgrew, comprising folios B1 to B21 (marked Exhibit B).
12. As arranged at the hearing, Ms Mulgrew provided further text messages between herself and Mr Mulgrew regarding [Child 1’s] schooling. This material, comprising 14 pages, is added to Exhibit A.
13. Mr Mulgrew said he was seeing his treating doctor, [Doctor A], on 9 December 2023. I asked him to provide a medical statement by close of business on 13 December 2023 essentially addressing the matters outlined in my earlier written directions of 26 October 2023. As nothing was received by this date and Mr Mulgrew had not contacted the Tribunal to indicate a need for further time, he was informed by voicemail on 18 December 2023 that I would proceed on the available documentation in the absence of any contact by the morning of 19 December 2023.
CONSIDERATION
The legislative framework
14. Section 98B enables a liable parent, or carer entitled to child support, who is of the view that special circumstances exist, to ask Child Support to make a determination departing from the provisions of the Act governing the administrative assessment of child support (a departure determination, also known as a change of assessment decision).
15. Section 98C empowers the Registrar to make a departure determination if satisfied that:
(1)one or more grounds for departure referred to in subsection 117(2) exist;
(2)it would be just and equitable as regards the child, the liable parent and the carer entitled to child support; and
(3)it would be otherwise proper.
Are there grounds for departure?
16. As indicated, Ms Mulgrew applied for a change of assessment on 16 September 2022 seeking a departure determination in part under Reason 3, which concerns [Child 1’s] private education costs.
Subparagraph 117(2)(b)(ii) – Reason 3
17. Subparagraph 117(2)(b)(ii) provides a ground for departure where, in the special circumstances of a case, the costs of maintaining a child are significantly affected because the child is being educated in the manner that was expected by their parents.
18. The term ‘special circumstances’ is not defined in the Act. In Gyselman v Gyselman (1992) FLC 92-279 the Full Family Court indicated that, for there to be special circumstances, the facts of the case must establish something which is special or out of the ordinary.
19. I note that, in deciding Mr Mulgrew had an expectation regarding [Child 1’s] private education, decision-maker [A] considered having a joint expectation at some point should be understood as entering a contract from which there is no exit clause. I do not think this understanding is correct. Apart from the fact the provision is not couched in contractual terms, or in terms of an agreement between parents, it is clear parents can have the same expectation without ever having discussed the subject of the expectation. Further, it has never been suggested that a parent cannot change an expectation previously held. In this regard, Riethmuller J noted in Dobbins & Devlin & Anor [2014] FCCA 1274 (at paragraph 43):
The simplistic argument of the mother that it is not open to a parent to change their expectations with respect to their child’s education simply due to financial reasons cannot be correct. Throughout life people change their expectations both with respect to their own lives and their children as a result of the resources available to them.
20. In my view an expectation that a child will attend private schooling involves a positive or active attitude by a parent that this will occur. It amounts to an anticipation typically associated with active steps to bring this about, or an active acquiescence in the other parent taking the requisite steps. Regarding education, the active steps a parent may make may include seeking out suitable schools, being placed on a waiting list, signing enrolment forms and paying school fees.
21. In the present matter it is agreed that the parties signed an Application for Enrolment form on 15 January 2018 authored by [College 1], which is a secular private school. At the time [Child 1] was about 7 months old and was not expected to start a prep year at [College 1] until 2023. The purpose of completing the form this early was to put [Child 1] on a waiting list. There was a small non-refundable fee of $100 or $150 involved.
22. The parties then attended an interview with [College 1] in August 2020. Ms Mulgrew indicated the purpose of this appointment was to give [College 1] some idea of their circumstances and [Child 1’s] development.
23. The parties separated in April 2021. There is then a series of text messages between the parties starting on 6 December 2021:
[Mother] (06.12.21) Nothing dodgy, I just want you to pay what you are supposed to and
half of [Child 1]’s schooling so she can have what we had planned for her.
[Father] You destroyed the plans
[Mother] Do you care what school she goes to then? If you are not contributing to [College 1] I have to get her baptised in January to switch schools
[Father] Public is fine
[Mother] No she won't be going to a public school. I know. I've had to research this stuff a lot recently.
If you aren't contributing to [College 1] where she has been enrolled since 6m old I will make other arrangements…So I shall have [Child 1] baptised or are you going to contribute to her schooling? …
Are you paying [Child 1’s] school fees or not? She’s been enrolled there since 6 months old
She has an interview in January
[Father] (07.12.21) Isn’t she going to school 2023?
[Mother] she is yes but [College 1] has her final interview January. It’s not much [to] split really, like $100 a week
?
[Father] she can go to the interview
[Mother] I need to know though if you will be [paying] half the school fees at some point, it can’t be that hard a decision really
[Father] At this point that is fine, but you will have to help out and start driving half-way at some point. Also consistent fortnightly visits
[Mother] (10.01.22) I need to know re [Child 1’s] school too
[Father] school is fine
[Mother] why have you never told me school is fine after I keep asking?
[Father] I have
[Mother] no you crap on about a public school
[Mother] (29.03.22) She has been enrolled in [College 1] since she was 6m old, we paid a fee to do it. She has her final interview (no idea why they do this) Friday at 2pm here. We find out if she is formally accepted in April. You knew the school!
[Father] I can’t pay for it. You changed that.
[Mother] (17.04.22) There’s lots of paperwork. I can tell them you can’t sign [at the moment] maybe they’ll email you or I can I’m not sure
[Father] I can’t pay though
[Mother] Both parents are meant to sign it. It works out at $100 per week each
[Father] I can sign anything after you email it. But I already said I can’t pay anymore after what you did
[Mother] (18.04.22) Did you look at the school forms
[Father] not yet. Are you going to send her public? You said you can’t afford that
[Mother] She’s going to [College 1]. We’ve had her registered since she was 6 months old. If you want your name on the forms let me know I have to drop them off tomorrow
[Father] When she was 6 months old we were together…
24. The reference in the texts that [Child 1] would need to be baptised seems an unsubtle effort to coax Mr Mulgrew into changing his mind. In this regard, I understand both parties are not religious and that neither would want [Child 1] baptised. I initially understood that Ms Mulgrew was suggesting [Child 1] would need to go to a cheaper religion-based school but she indicated these schools were no cheaper.
25. The texts indicate a dogged persistence on Ms Mulgrew’s part to have Mr Mulgrew agree to [Child 1’s] attending [College 1] and to agree to share the costs. There is an equally dogged resistance on Mr Mulgrew’s part to contribute, although it is apparent that he did not oppose Ms Mulgrew’s determination that [Child 1] would attend [College 1].
26. [College 1] informed Ms Mulgrew in April 2022 that [Child 1] would be accepted as a prep-year student in 2023. I understand that Ms Mulgrew then completed the necessary forms without Mr Mulgrew’s signature and paid a $900 deposit. No other relevant expenses (apart from the initial deposit in 2018) were incurred prior to this point.
27. Ms Mulgrew’s view is that both parents had an expectation that [Child 1] would attend [College 1], which was the only private school contemplated. Ms Mulgrew said both parents attended interviews prior to the actual enrolment. Ms Mulgrew believes Mr Mulgrew has the funds to pay half and only changed his mind in response to a domestic violence application she lodged.
28. Mr Mulgrew said he was educated in a public school and he preferred that [Child 1] be similarly educated. Mr Mulgrew indicated that, although he signed the initial enrolment form in 2018, it was only an option in his thinking and only involved a small deposit. Ms Mulgrew suggested that [Child 2] (Mr Mulgrew’s son from another relationship) attended private school and Mr Mulgrew responded that this was only in his last two years of school and the mother enrolled [Child 2] without consulting him.
29. Mr Mulgrew said he never had an expectation that [Child 1] attend a private school, which is evidenced in the text messages quoted earlier. Apart from his preference for public schooling, Mr Mulgrew said he does not have the funds to cover the school fees.
30. Looking at the text messages, my view is that, even if Mr Mulgrew did have an expectation of sorts about [Child 1’s] private schooling in 2018, he clearly did not have that expectation in December 2021. At this point, the driving force to give [Child 1] a private schooling is clearly Ms Mulgrew, who confirmed at the hearing that she considers public schooling inferior. Ms Mulgrew concedes she could otherwise have subsequently enrolled [Child 1] in a public school in the local catchment.
31. The later texts suggest a passive acceptance on Mr Mulgrew’s part that [Child 1] would be attending [College 1]. There is no active anticipation in the sense associated with taking any active steps to bring [Child 1’s] attendance at [College 1] about. Mr Mulgrew was uninterested in contributing to the school fees and ultimately did not sign the enrolment forms in April 2022.
32. I am satisfied Mr Mulgrew had no compelling interest in sending [Child 1] to a private school at any point. In any event, even if this is wrong Mr Mulgrew was entitled to change his expectation. I am satisfied Mr Mulgrew signalled his views to Ms Mulgrew in plenty of time for public school arrangements to be made with a local school and that the reason [Child 1] is attending [College 1] is Ms Mulgrew’s desire for her to have a private school education.
33. In the circumstances, Reason 3 is not met.
Subparagraph 117(2)(b)(ib) – Reason 6
34. Subparagraph 117(2)(b)(ib) provides a ground for departure where, in the special circumstances of a case, the costs of maintaining a child are significantly affected because of high child care costs. Subsection 117(3A) requires that the relevant child is under 12 and that the liable parent does not have at least 35% care.
35. As to what amounts to high child care costs, subsection 117(3B) requires that, during a child support period, the costs total more than 5% of the amount worked out by dividing the parent’s adjusted taxable income for the period by 365 and multiplying that figure by the number of days in the period.
36. Ms Mulgrew has provided a detailed account from [Agency 1] which includes the total child care charged for [Child 1], the child care subsidy paid by Centrelink and Ms Mulgrew’s out of pocket expenses. [Child 1’s] period of attendance was 21 February 2022 to 22 January 2023.
37. As noted, Ms Mulgrew lodged a change of assessment application on 16 September 2022. The child support period in place was 22 February to 30 September 2022. Relevant to this child support period was Ms Mulgrew’s adjusted taxable income for 2020/21 of $81,353. Based on the statutory requirements outlined, Reason 6 would be a consideration if Ms Mulgrew’s out of pocket expenses in this child support period (221 days) exceeded $2,462.87 (i.e., $81,353 x 221/365 x 5%).
38. Based on [Agency 1’s] account, I calculate that Ms Mulgrew’s out of pocket expenses in the child support period totalled $4,564.02. As this is considerably more than the statutory threshold, I consider there are special circumstances warranting a departure under Reason 6.
39. For completeness, I calculate that Ms Mulgrew’s out of pocket expenses for the child support period commencing 1 October 2022 until [Child 1] ceased attendance totalled $2,991.21.
Is a change of assessment just and equitable?
40. Subsection 117(4) provides as follows:
Matters to consider for purposes of subparagraph (1)(b)(ii)
(4) In determining whether it would be just and equitable as regards the child, the carer entitled to child support and the liable parent to make a particular order under this Division, the court must have regard to:
(a)the nature of the duty of a parent to maintain a child (as stated in section 3); and
(b)the proper needs of the child; and
(c)the income, earning capacity, property and financial resources of the child; and
(d)the income, property and financial resources of each parent who is a party to the proceeding; and
(da)the earning capacity of each parent who is a party to the proceeding; and
(e)the commitments of each parent who is a party to the proceeding that are necessary to enable the parent to support:
(i)himself or herself; or
(ii) any other child or another person that the person has a duty to maintain; and
(f)the direct and indirect costs incurred by the carer entitled to child support in providing care for the child; and
(g)any hardship that would be caused:
(i)to:
(A)the child; or
(B)the carer entitled to child support;
by the making of, or the refusal to make, the order; and
(ii) to:
(A)the liable parent; or
(B)any other child or another person that the liable parent has a duty to support;
by the making of, or the refusal to make, the order; and
(iii) to any resident child of the parent (see subsection (10)) by the making of, or the refusal to make, the order.
41. Under subsection 3(1) parents have a primary duty to maintain their children. Subsection 3(2) provides that this duty has priority over all commitments other than (amongst other things) the commitments necessary to enable a parent to support themselves.
42. On the material before the Tribunal, there is no suggestion that [Child 1] has special needs. As to whether a parent has an earning capacity (paragraph 117(4)(da)), subsection 117(7B) provides:
(7B) In having regard to the earning capacity of a parent of the child, the court may determine that the parent’s earning capacity is greater than is reflected in his or her income for the purposes of this Act only if the court is satisfied that:
(a) one or more of the following applies:
(i)the parent does not work despite ample opportunity to do so;
(ii)the parent has reduced the number of hours per week of his or her employment or other work below the normal number of hours per week that constitutes full‑time work for the occupation or industry in which the parent is employed or otherwise engaged;
(iii)the parent has changed his or her occupation, industry or working pattern; and
(b) the parent’s decision not to work, to reduce the number of hours, or to change his or her occupation, industry or working pattern, is not justified on the basis of:
(i) the parent’s caring responsibilities; or
(ii) the parent’s state of health; and
(c) the parent has not demonstrated that it was not a major purpose of that decision to affect the administrative assessment of child support in relation to the child.
43. Riethmuller FM (as he then was) considered the construction of paragraph (c) in Carlson & Acuff [2010] FMCAfam667 at paragraphs 68 and 69:
The very technical and convoluted wording of the section hides its practical meaning. The section can be seen in a simplified or practical form as requiring consideration of the question of whether the person has proved that their major purposes did not include a desire to simply affect child support. That is, to reframe the consideration into loose colloquial language: was the person’s action motivated (wholly or significantly) by a desire to shirk their child support obligations. If the Tribunal is not satisfied one way or the other, the person with the onus fails. It is important to note that my colloquial reframing of the section is to illustrate the focus of the provision, and not intended to be a precise restatement of the actual provisions of the section which must be carefully applied.
The Tribunal must assess the evidence starting from a blank canvas, not an assumption that the person acted with a major purpose of simply affecting child support. If the Tribunal is unable to be satisfied whether or not a major purpose was to affect child support, then the onus has not been discharged, not a finding of shirking in accord with a presumption.
Ms Mulgrew’s income
44. Ms Mulgrew has provided her tax return for 2022/23 which reveals a taxable income of $121,449. Added to this for the purposes of totalling Ms Mulgrew’s adjusted taxable income is a reportable superannuation contribution of $1,100.
45. Ms Mulgrew’s income for 2022/23 includes income from a former employer [Employer 1], [Employer 2] Australia and her short-lived business [Business 1]. Ms Mulgrew said she ceased operating [Business 1] in early 2023. Ms Mulgrew’s uncontested evidence, which I accept, is that she was retrenched from [Employer 2] Australia on 11 September 2023. A pay advice from [Employer 2] Australia for the pay week ending 11 September 2023 shows year-to-date earnings of $24,003 and termination payments totalling $5,417.
46. Ms Mulgrew said she applied for parenting payment and is receiving $988 per fortnight, which I understand is backdated to around 9 October 2023. It appears Ms Mulgrew is quite employable and the last time she lost employment she was able to secure new employment after only three weeks. Nevertheless, Ms Mulgrew has been unemployed this time for a longer period and it is unclear how long this will continue.
Mr Mulgrew’s income and financial resources
47. Mr Mulgrew has provided his tax return for 2022/23 which reveals a taxable income of $61,315. This primarily comprises earnings from employment with [Employer 3] as [an occupation 1]. This taxable income is down on that for 2021/22 ($81,038) because Mr Mulgrew stopped working for [Employer 3] on 14 February 2023. Mr Mulgrew states that he has had no earned income from any source since this date and currently is totally reliant on his parents with whom he resides.
48. Although Ms Mulgrew suspects that Mr Mulgrew is working for his parents, who are [Business 2] franchisees, a Child Support file note of 15 May 2023 does not support this. The file note indicates an officer spoke to “[Officer A]”, who identified as a person doing the payrolls and “HR management” for [Business 2] including that operated by Ms Mulgrew’s parents. [Officer A] is recorded as stating that Mr Mulgrew was not listed as an employee. Of course, it is possible that Mr Mulgrew does work for his parents and receives payment in kind. However, Mr Mulgrew denies any involvement whatsoever with [Business 2] and this is consistent with the available evidence.
49. Having ceased work, a question to be considered is whether Mr Mulgrew’s earning capacity is greater than that reflected in his subsequent income ($0) for child support purposes. Mr Mulgrew’s case is that his decision not to work is justified by his state of health. Ms Mulgrew’s view is that Mr Mulgrew is either not ill, or if he is, his symptoms are greatly exaggerated to avoid paying child support. According to Ms Mulgrew, when they were together Mr Mulgrew would boast about how easy it was to avoid paying child support to the mother of his son [Child 2]. Ms Mulgrew also draws attention to the fact Mr Mulgrew ceased work shortly after receiving decision-maker [A]’s adverse decision and has also drawn attention to overseas holidays Mr Mulgrew has taken despite the alleged seriousness of his medical condition.
50. Mr Mulgrew indicated he was initially hospitalised in December 2022 for several days with what was subsequently diagnosed as a severe instance of diverticulitis. Mr Mulgrew reports that he was “near death” at the time and was informed it would take a few months for him to recover.
51. Mr Mulgrew’s hospitalisation is verified by a medical certificate from [a named] Hospital, dated 1 January 2023. According to the medical officer, Mr Mulgrew was admitted on 28 December 2022, discharged on 1 January 2023 and would be unfit for duty to 7 January 2023. Mr Mulgrew was stated to be suffering from a medical condition.
52. According to overseas movement records, Mr Mulgrew was overseas from [January] to [February] 2023. Mr Mulgrew holidayed in [Country 1] with his parents and [Child 2] and states he completed the (16 hour) flight in pain and heavily medicated on OxyContin and medicinal cannabis. After Ms Mulgrew brought the trip to light, in a written statement to Child Support on 28 May 2023 Mr Mulgrew similarly indicated he was “heavily medicated for severe pain the entire time to get through the trip”.
53. Three photographs of the trip have since emerged, which [Child 2] sent to Ms Mulgrew. In one photograph, Mr Mulgrew is pictured smiling in full ski gear. Mr Mulgrew states this was the first day of the holiday and he was teaching [Child 2] to ski. Mr Mulgrew said he went on a few downhill runs before being forced to retire for the remainder of the day (and I understand the remainder of the holiday) heavily medicated to cope with severe pain.
54. Mr Mulgrew indicated that, after his return to Australia, he needed to attend hospital again. I understand this was on or about 6 February 2023. Mr Mulgrew’s treating doctor, [Doctor A], completed a medical certificate on 15 February 2023 stating that Mr Mulgrew was receiving medical treatment and would be unfit for work from 15 February to 1 March 2023. As noted, Mr Mulgrew’s last day with [Employer 3] was 14 February 2023.
55. On 23 June 2023 [Doctor A] provided the following statement:
This patient has been suffering with a severe medical condition since December 2022 requiring hospital admission and multiple doctors appointments. Due to the severity of the symptoms [Mr Mulgrew] has been unable to work. Investigation and treatment of the condition is still ongoing and we are awaiting further specialist input.
56. At the telephone directions hearing in October 2023, I indicated to Mr Mulgrew that, if he wished to rely on his medical condition (not disclosed at the time), it was highly desirable that he provide a report from his treating specialist identifying when the specialist was first consulted, the nature of his illness, the effect on his function, the treatment being undertaken, whether surgery is anticipated, the likely effect on his ability to undertake work, and the likely prognosis. This was included in written directions to the parties.
57. At the hearing Mr Mulgrew said the specialist, [Specialist A], declined to author such a statement for “legal reasons”. Mr Mulgrew did provide a brief report from [Specialist A], dated 19 July 2023, which is indicative of a first consultation. [Specialist A] indicates Mr Mulgrew had a past medical history of diverticulitis and was complaining of dyspepsia, diarrhoea (up to 10 episodes daily), abdominal pain relieved with defaecation and tenesmus. Mr Mulgrew’s weight was recorded as stable and his appetite good. Current medication was listed as OxyContin and mirtazapine (an antidepressant). [Specialist A] organised a gastroscopy and colonoscopy.
58. Mr Mulgrew indicated mirtazapine was trialled to address his abdominal condition, not depression. I understand Mr Mulgrew is presently trialling amitriptyline (another antidepressant), Palexia (another opioid analgesic) and cholestryramine. I also understand the colonoscopy confirmed underlying diverticulosis in the bowel.
59. Mr Mulgrew also provided a memorandum from [Doctor A], dated 2 November 2023, which is in similar terms to her earlier statement of June 2023. [Doctor A] indicates Mr Mulgrew is under the care of a specialist and she expresses the view that he remains unable to work at this stage.
60. Ms Mulgrew has provided a photograph of Mr Mulgrew standing beside his car with [Child 2] after driving him to his school formal in November 2023. After having evidently driven for around 1 hour or so, Mr Mulgrew appears as a smiling, well-muscled and sturdy gentleman.
61. Mr Mulgrew went on a second [overseas holiday] in September 2023 and is due to depart Australia for a third overseas holiday starting [in] December 2023. Ms Mulgrew has provided a copy of what I understand to be [Child 2’s] airplane tickets (provided by his mother) indicating a departure on this date and travel to [locations] with a return to Australia via [Country 2] [in] February 2024.
62. I suggested to Mr Mulgrew that, if I had a medical condition serious enough to render me incapable of working, I might be reluctant to undertake a six-week overseas trip of this sort. I understand Mr Mulgrew does not wish to miss the opportunity of a holiday fully funded by his parents.
63. As noted, Mr Mulgrew indicated he was seeing [Doctor A] on 9 December 2023 and I asked him to provide a medical statement essentially in the terms outlined in the directions referred to earlier. It appears Mr Mulgrew was unable to obtain the requested statement (or unable to obtain a statement he was prepared to submit).
64. According to the Better Health Channel:[2]
About diverticular disease
[2] occurs when small defects in the muscle of the wall of the large intestine or colon allow small pockets or pouches (diverticula) to form.
Diverticulitis is infection or inflammation of these abnormal pouches. Together, these conditions are called diverticular disease.
…
Symptoms of diverticulosis
Diverticulosis is usually asymptomatic (has no symptoms). However, when many diverticula (pouches) are present, the normal smooth working of the bowel can be affected. This may cause a range of symptoms including:
· abdominal pain and bloating
· constipation and diarrhoea
· flatulence
· blood in the faeces – this is usually minor, but bleeding can sometimes be heavy if a diverticulum gets inflamed or is near a blood vessel
· anaemia from repeated bleeding may occur.
65. According to the National Library of Medicine:[3]
[3] is usually asymptomatic, or it may cause episodes of bleeding. Approximately fifteen percent will develop diverticular bleeding. If inflammation develops within the diverticula, around eighty-five percent of people will respond to medical treatment. The remaining people may need a surgical procedure to get the inflamed diverticula fixed. Overall, the prognosis for most patients is good as long as they change their lifestyle, become physically active, eat a high fiber diet, and avoid constipation.
66. I accept Mr Mulgrew has diverticulosis and has had one clear instance of diverticulitis requiring hospital treatment. Mr Mulgrew is consulting a specialist and it is evident at this stage that his diverticulosis is not of a severity requiring surgery although medication is needed to address abdominal pain.
67. Ordinarily, I would accept a treating doctor’s view that a person cannot work where the full details of the condition are clear from the report and an inability to work is a conclusion drawn from those details. In my view, [Doctor A’s] report is too brief to draw the appropriate conclusion. In this regard, it is not clear from the report the extent to which [Doctor A] is reliant on Mr Mulgrew’s description of his condition.
68. As diverticulosis can vary from symptomless to a severity requiring surgery, and as the condition generally has a good prognosis with appropriate lifestyle changes, it is relevant to consider not just what Mr Mulgrew says but also what he does.
69. As indicated, Mr Mulgrew has been on two overseas holidays in 2023 and will undertake a further six-week overseas holiday shortly. As noted, Mr Mulgrew states he was in severe pain throughout his (16-hour) flight to [Country 1] and yet appears smiling in full ski gear the following day. And, although individual pictures should be treated with caution, Mr Mulgrew appears fit in the photograph of November 2023. I note also that Mr Mulgrew has only had to respond to these photographs and to the fact of his holidays because Ms Mulgrew has provided the information.
70. Although Mr Mulgrew has diverticulosis, overall it is not established to my satisfaction that he is unable to work and in particular that he was unable to continue working for [Employer 3]. Further, as Mr Mulgrew was relying on his medical condition as the justification for not working, I do not consider he has demonstrated that a major purpose of this decision was to reduce his child support liability. To the contrary, Mr Mulgrew’s decision to stop working occurred within two weeks of when he would have received decision-maker [A]’s adverse departure determination.
71. Accordingly, it is just and equitable to consider an earning capacity under subsection 117(7B). I note from a bank statement obtained by Child Support that Mr Mulgrew received the equivalent of four weeks wages on his normal pay day on 14 February 2023. On the footing that Mr Mulgrew earned $61,157 in the period of 250 days from 1 July 2022 to 7 March 2023, his rate of earnings in 2022/23 was $89,000 rounded down. Less allowable expenses claimed in 2021/22 of $2,580 and allowing for the possibility of a need for some unpaid leave, I will provisionally set Mr Mulgrew’s earning capacity at $80,000 per annum from 1 July 2022.
Ms Mulgrew’s costs
72. As I have concluded that [Child 1] is attending a private school in the absence of an expectation by Mr Mulgrew, these costs will be excluded from consideration.
73. Ms Mulgrew completed a ‘Statement of Financial Circumstances’ (SOFC) form on 7 November 2023. [Child 1’s] costs as disclosed do not include costs associated with running her to and from school or additional amounts for utilities usage. Apart from child care fees (not included in the SOFC) and school fees, I am satisfied from Ms Mulgrew’s evidence that [Child 1’s] expenses are typical for a child her age. Whilst the SOFC needs adjustment, I estimate [Child 1’s] reasonable costs are at least $8,000 per annum excluding education and former child care fees.
74. I am also satisfied that, due to Ms Mulgrew’s overall costs (including a mortgage of $30,000 per annum) that she needs a fair and reasonable child support contribution from Mr Mulgrew to help with [Child 1’s] costs. This is particularly the case because Ms Mulgrew is presently unemployed.
Mr Mulgrew’s capacity to pay child support
75. Mr Mulgrew has completed a SOFC indicating he has no employment income or expenses of any sort. Mr Mulgrew has disclosed a total bank account balance of $2,400 and investments totalling $15,000. Consistent with Mr Mulgrew’s evidence, I accept he is being supported by his parents and can evidently call on them to cover items such as legal expenses and car repayments.
76. Mr Mulgrew’s circumstances are more complex in the sense that he has [Child 2] in a separate child support case and he has 14% of [Child 1’s] care. In the circumstances, it is appropriate to approach an assessment of Mr Mulgrew’s child support liability using the figures derived under Part 5 as a benchmark, as the formula is obviously designed to account for these factors. As an earning capacity has been applied, Mr Mulgrew’s ability to pay child support according to his actual capacity is not a relevant concern.
Just and equitable conclusions
77. As noted, when Ms Mulgrew lodged her change of assessment application in September 2022, Mr Mulgrew’s child support liability was $3,840 per annum as assessed under Part 5. This reduced to $3,116 per annum with the new child support period from 1 October 2022. Taking into consideration Mr Mulgrew’s adjusted taxable incomes, his care of [Child 1] and his separate child support commitment, I consider these are ordinarily fair contributions.
78. However, as discussed, Ms Mulgrew’s child care costs constitute a ground for departure and are a relevant consideration. I am satisfied it is fair to increase the child support liability otherwise payable by Mr Mulgrew under Part 5 by half Ms Mulgrew’s out of pocket child care costs from 22 February 2022 to 22 January 2023. Based on the figures derived earlier, I calculate this to be $4,116 per annum. This is based on annualising the total out of pocket costs of $7,555,24 ($4,564.02 + $2,991.22) by a factor of 365/335, where the divisor represents the number of days in the relevant period.
79. I am satisfied Mr Mulgrew’s earning capacity as assessed ($80,000) should take effect from the day after he ceased work, which is also the day he lodged an income estimate with Child Support (15 February 2023). According to Child Support’s official calculator, this will result in a child support liability for Mr Mulgrew of $3,019 per annum from this date. When the next child support period commences and Ms Mulgrew’s 2022/23 income of $122,549 is used, Mr Mulgrew’s child support liability will drop further to $1,602 per annum. If [Child 2] is no longer a relevant child for child support purposes due to his age, this figure increases to $2,377 per annum.
80. Although Ms Mulgrew is relatively employable, her employment situation cannot be anticipated. To accommodate this, I will not adjust Ms Mulgrew’s adjusted taxable income. This will enable Ms Mulgrew to lodge an estimate of her adjusted taxable income to 30 June 2024 if needed. Mr Mulgrew on the other hand will not be able to lodge an effective estimate.
81. As to an end date for the proposed change of assessment, I think it is appropriate at this point to set a date of 31 December 2024. This gives the parties some stability in the meantime.
82. I am satisfied the considerations outlined balance [Child 1’s] costs both with the parties’ respective duties under the child support law as parents and with their capacities to contribute to those costs in a way that is just and equitable.
(4) Is a change of assessment otherwise proper?
83. Subsection 117(5) provides as follows:
(5) In determining whether it would be otherwise proper to make a particular order under this Division, the court must have regard to:
(a) the nature of the duty of a parent to maintain a child (as stated in section 3) and, in particular, the fact that it is the parents of a child themselves who have the primary duty to maintain the child; and
(b) the effect that the making of the order would have on:
(i) any entitlement of the child, or the carer entitled to child support, to an income tested pension, allowance or benefit; or
(ii) the rate of any income tested pension, allowance or benefit payable to the child or the carer entitled to child support.
84. I am satisfied that a departure determination in the proposed terms set out above is otherwise proper. In particular, it addresses [Child 1’s] child care costs, and the imposition of an earning capacity recognises the primary duty Mr Mulgrew has to help to maintain her.
85. Further, as Ms Mulgrew is in receipt of family assistance from Centrelink, the departure determination will assist in reducing the burden on the public purse.
DECISION
The Tribunal sets aside the decision under review and substitutes the decision that:
(1) the child support otherwise payable by Mr Mulgrew from 22 February 2022 to 22 January 2023 is increased by $4,116 per annum; and
(2) Mr Mulgrew’s adjusted taxable income is varied to $80,000 from 15 February 2023 to 31 December 2024.
Key Legal Topics
Areas of Law
-
Family Law
-
Administrative Law
Legal Concepts
-
Remedies
-
Judicial Review
-
Statutory Construction
-
Jurisdiction
0