Murdoch and Crutcher (Child support)

[2024] AATA 884

Murdoch and Crutcher (Child support) [2024] AATA 884 (19 March 2024)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2023/MC027111

APPLICANT:  Mr Murdoch

OTHER PARTIES:  Child Support Registrar

Ms Crutcher

TRIBUNAL:Member C Breheny

DECISION DATE:  19 March 2024

DECISION:

The decision under review is affirmed.

CATCHWORDS

CHILD SUPPORT – non-agency payment - whether hospital costs paid should be credited – liable parent undertook to pay hospital costs in addition to child support liability – refusal to credit non-agency payment - 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. Mr Murdoch and Ms Crutcher are the separated parents of [Child 1]. A child support case has been registered (and registered for collection) with Services Australia – Child Support (Child Support) since 16 March 2012. At all material times, Mr Murdoch was assessed as liable to pay child support to Ms Crutcher on the basis that [Child 1] has been in Ms Crutcher’s sole care.

2. On 15 March 2023 Mr Murdoch contacted Child Support stating that he had made a payment of $1,500 to a third party for medical/dental costs. He noted that he made payments totalling $3,100 but was claiming only half ($1,500). On 4 April 2023 a decision was made to credit an amount of $1,500 against Mr Murdoch’s child support liability.

3. On 5 April 2023 Ms Crutcher objected to the decision indicating that she had provided evidence that Mr Murdoch agreed to pay the cost of [Child 1]’s oral surgery (which was needed prior to her getting braces). On 14 November 2023 a Child Support objections officer allowed Ms Crutcher’s objection and decided to refuse to credit the amount of $1,500 against Mr Murdoch’s child support liability. The objections officer found that there was no mutual intention for the payments to be credited in lieu of child support.

4. On 27 November 2023 Mr Murdoch applied to the Social Services and Child Support Division of the Administrative Appeals Tribunal for an independent review of the decision. A hearing into the application for review was held on 5 March 2024. Mr Murdoch and Ms Crutcher attended the hearing by telephone and gave evidence on affirmation. 

5. I had before me the statement and documents provided by Child Support pursuant to subsection 37(1) and section 38AA of the Administrative Appeals Tribunal Act 1975, received on 22 December 2023 and 21 February 2023 respectively and numbered 1–111.

6. On 5 March 2024 I deferred making a decision as Ms Crutcher noted that she could provide additional evidence to support her case. Ms Crutcher was given time to do so but ultimately no further evidence was received.

LEGISLATIVE FRAMEWORK AND ISSUES

1. The relevant legislation in this case is in the Child Support (Registration and Collection) Act 1988 (the Act) and the Child Support (Registration and Collection) Regulations 1988 (the Regulations).

2. When Child Support registers a child support liability for collection the amounts payable become a debt due to the Commonwealth and are payable to the Child Support Registrar, pursuant to section 30 of the Act. In some circumstances payments made directly to a payee or to a third party may be credited against a child support liability that is registered for collection by Child Support (sections 71, 71A and 71C of the Act). Child Support refers to these credits as “non-agency payments” or “prescribed non-agency payments”. Section 71D of the Act provides that the Registrar may refuse to credit an amount under sections 71, 71A or 71C if satisfied that in the circumstances of the case the amount should not be credited.

3. In this case both parties agree that Mr Murdoch paid for [Child 1]’s hospital costs. He made a payment of $1,500 to [a named] Hospital admissions on 5 January 2023 (folio 75).

Mr Murdoch’s evidence

1. Mr Murdoch said that he followed the advice from Child Support in seeking credit for a non-agency payment. He said that he did agree to pay the costs for [Child 1]’s hospital admission and surgery, but it did put a strain on his budget. It was not until he contacted Child Support that he was told that he could ask for the payment to be credited against his liability.

2. Mr Murdoch initially said that he did not discuss with Ms Crutcher about whether or not the payments he made were in lieu if his child support liability. He thought that he had no other option but to pay [Child 1]’s medical bills when Ms Crutcher asked him to do so.

3. Mr Murdoch later said that he probably had a telephone conversation with Ms Crutcher indicating that he could not afford to pay medical bills as well as child support and would have asked her whether he could have “one month off” from paying his child support. He could not remember when this conversation may have taken place and he no longer had the phone to check when he would have made the call.

4. Mr Murdoch said that he contacted Child Support about the payments that he had made and was told that he had the right to apply to have them credited. This is what he did, and he could not understand why the objections officer overturned the initial decision. Mr Murdoch noted that if he had not received the advice from Child Support, he probably would have “copped the payment” and would not have pursued the matter further.

Ms Crutcher’s evidence

1. Ms Crutcher said that she too was in financial difficulties at the time, but [Child 1] needed braces and the doctors advised that four teeth needed to be removed before the braces could be fitted. Ms Crutcher sent texts and an email to Mr Murdoch asking whether he could help with the costs. She did not ask him to pay for the braces (costing $7,600) but only for the hospital and doctors’ fees ($1,500 plus two fees of $800 each).

2. Ms Crutcher provided text messages from 28/29 November 2022 (folio 19), wherein Mr Murdoch states: “I can’t afford that, do you want me to pay half and keep paying child support? I’m struggling as it is.” Ms Crutcher responds that she did not expect him to pay half. Mr Murdoch states that it is a lot of money and that he “can maybe afford $3,000”.

3. In her email of 30 November 2022 Ms Crutcher details the costs ($1,500 hospital, $800 oral surgeon, $800 anaesthetist) of [Child 1]’s dental surgery and Mr Murdoch responds: “Yep, happy to pay that when will you need the money?” (folio 20).

4. Ms Crutcher said that she and Mr Murdoch “do not speak” on the phone or otherwise. Their communication about [Child 1] is by text or email. She was very clear in her evidence that there had been no phone conversation with Mr Murdoch to the effect that he should not have to pay child support if he paid for [Child 1]’s dental surgery costs. Ms Crutcher stated that if Mr Murdoch had asked for such an arrangement, she would have refused. She would have taken out a higher loan amount and covered all of [Child 1]’s medical costs herself.

5. Ms Crutcher stated that she may be able to obtain old phone records which would show that Mr Murdoch did not contact her by phone during that time. Ms Crutcher ultimately did not provide these records.

6. The issue for me to determine in this case is whether the payment of $1,500 made by Mr Murdoch on 5 January 2023 for [Child 1]’s hospital can be credited against Mr Murdoch’s child support liability, and, if so, whether in the circumstances of this particular case, the amount ought not to be credited.

CONSIDERATION

1. The relevant provisions in this case are sections 71C and 71D of the Act. Section 71C of the Act provides that Child Support can accept a prescribed non-agency payment where the payee does not agree to the terms of the payment. It relevantly states in subsection 71C(1):

   (1) If:

   (a)the payer of an enforceable maintenance liability in relation to a payment period or initial period has made one or more payments to the payee of the liability, or to another person; and

   (b)the payment is a payment of the kind specified in the regulations; and

   (ba) at the time the payment is made, the payer does not have at least regular care of any of the children to whom the relevant administrative assessment relates; and

   (c)the sum of those payments exceeds the sum of all such payments previously credited under this section against the amount payable under the liability for all past periods; and

   (d)the payer does not, at the time at which the Registrar applies this section, have at least regular care of any of the children to whom the relevant administrative assessment relates;

   then the Registrar must, despite section 30, credit the excess amount mentioned in paragraph (c) against the amount payable under the payer’s liability for the period, up to a maximum of 30% of the amount payable.  

2. Subsection 71C(b) refers to “payments of the kind specified in the regulations” and the payments specified in the Regulations for this purpose are:

   (a) child care costs for the child who is the subject of the enforceable maintenance liability;

   (b) fees charged by a school or pre‑school for that child;

   (c) amounts payable for uniforms and books prescribed by a school or pre‑school for that child;

   (d) fees for essential medical and dental services for that child;

   (e) the payee's share of amounts payable for rent or a security bond for the payee's home;

   (f) the payee's share of amounts payable for utilities, rates or body corporate charges for the  payee's home;

   (g) the payee's share of repayments on a loan that financed the payee's home;

   (h) costs to the payee of obtaining and running a motor vehicle, including repairs and standing   costs.  

3. I also considered the government’s Child Support Guide (the Guide), which relevantly provides at chapter 5.3.1 in relation to prescribed non-agency payments for medical and dental services:

   Essential medical and dental services are not limited to those services provided in an emergency. A payer can claim only their actual costs…

   Prescribed payments include essential consultation fees for services provided by medical and dental practitioners…

   Prescribed payments include ‘in-hospital’ costs either as a public or a private patient….

   The Registrar will not allow a credit for fees for surgery or dentistry performed solely for cosmetic reasons.

4. I note here that I am not bound by policy; however, in Drake[1] the Full Federal Court held that a Tribunal should take into account relevant government policy, which is not inconsistent with the provisions or objects of the legislation. In this instance I accept the policy is unobjectionable and in the interests of consistency of decision-making under the Act, I consider that the policy should be applied.

   [1] Drake v Minister for Immigration and Ethnic Affairs (1979) 2 ALD 60

5. In this case there is no dispute that the payment was made, and that Mr Murdoch had less than regular care of [Child 1] at all material times. In accordance with section 71C of the Act Mr Murdoch’s payment for [Child 1]’s “in hospital” costs can therefore be credited as a prescribed non-agency payment against his child support liability, even in the absence of “mutual intent” for the payments to be credited.

6. Section 71C is subject to section 71D, which provides that the Registrar may refuse to credit an amount “if satisfied that, in the circumstances of the particular case, the amount ought not to be credited”.

7. The Guide states in this regard:

Discretion to refuse to credit an amount

The Registrar may refuse to credit an amount in certain circumstances, including, but not limited to, the following:

·The payee's agreement to credit an amount paid to a third party or payment made as a transfer of property was obtained through coercion or harassment. (However, where the Registrar is informed about this after the payment has been credited, it will be necessary for the payee to object to the Registrar 's decision to credit the amount.)

·The payer is claiming a credit under CSRC Act section 71C for an expense they regularly meet that was taken into account in a change of assessment decision. For example, the Registrar or a court has reduced the annual rate (or refused to increase it) because the payer usually pays school fees, medical expenses for the child, mortgage or rent payments or any other prescribed payments.

·The payer is claiming credit under CSRC Act section 71C for an expense, which they have undertaken to pay in addition to their liability as specified in an agreement between the parents (this does not have to be a child support agreement).

·The payer is claiming credit under CSRC Act section 71C for an expense that they are responsible to pay under the terms of a court order.

·The payer is claiming credit under CSRC Act section 71C for expenses for the child for which they are separately responsible. For example, the payer claims credit for childcare costs for the days when the child resides with the payer. If the payer claims credit for a payment for which they and the payee are jointly responsible, and the amount does not relate to the payee's home, the Registrar has no basis of apportioning the payment and must credit the full amount. However, if there is evidence that parents have explicitly agreed about how much each party will pay, the Registrar will apportion responsibility according to their agreement.

·The payer is claiming a credit under CSRC Act section 71C for loan repayments and they have a history of regularly withdrawing funds from the loan account using its redraw facility.

1. I note that the discretion to refuse to credit an amount pursuant to section 71C is generally confined to circumstances, where the particular payment is governed by an agreement (not necessarily a formal child support agreement) or court order or a payment for which the payer is separately responsible.

2. In this case the evidence before me indicated that Mr Murdoch and Ms Crutcher agreed that he would pay for [Child 1]’s dental surgery costs whilst she would meet the full costs of the braces. Mr Murdoch consented to this arrangement. There is no evidence that he made this agreement on the basis that the amount paid would be in lieu of his ongoing child support payments.

3. Mr Murdoch submitted that he called Ms Crutcher “at a later time” to say that he could not afford to pay child support as well as meet the medical costs. Ms Crutcher strongly denied that such a conversation took place, as she does not talk to Mr Murdoch on the phone. Ms Crutcher said that she would have taken out a higher loan amount and “pay for everything” rather than have child support payments reduced. Ms Crutcher thought that she could provide her old phone records, but she ultimately did not do so.

4. I consider that even if Ms Crutcher had provided the records and Mr Murdoch did call, the records would not show what was actually discussed during such a phone conversation. I thus prefer to rely on the written documents before me. Mr Murdoch also said that he did not know that he could potentially offset the medical payments against his child support liability until he spoke with Child Support. That contact was in March 2023, some months after he had made the payments.

5. Overall, I accept Ms Crutcher’s evidence as being more credible in this regard and I am persuaded that Mr Murdoch agreed to pay the hospital cost in addition to his child support liability. He noted that the orthodontic treatment was very expensive and that he could only afford to pay about $3,000.

6. I am therefore satisfied that the particular circumstances of this case are such that the amount of $1,500 paid for [Child 1]’s hospital costs ought not to be credited.

7. I have reached the same conclusion as the objections officer (albeit for different reasons) and thus affirm the decision under review.

DECISION

The decision under review is affirmed.