Murnan and Mackall (Child support)

[2022] AATA 2110

Murnan and Mackall (Child support) [2022] AATA 2110 (19 May 2022)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2022/BC023348

APPLICANT:  Mr Murnan

OTHER PARTIES:  Child Support Registrar

Ms Mackall

TRIBUNAL:Senior Member R Ellis

DECISION DATE:  19 May 2022

DECISION:

The decision under review is affirmed.

CATCHWORDS

CHILD SUPPORT – particulars of the administrative assessment – estimate of income - whether the estimate should have been refused - estimate of income refused - decision under review affirmed

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

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 Murnan and Ms Mackall are the parents of [Child 1] (born March 2018) and [Child 2] (born May 2020).  There has been a child support assessment in place since 17 October 2021 and Mr Murnan is the parent liable to pay child support.

3. On 8 November 2021 the Child Support Agency made the decision to accept an income estimate from Mr Murnan of $53,963 (annualised) to be used in the child support assessment from 8 November 2021 to 30 June 2022.

4. On 24 November 2021 Ms Mackall objected to this decision and on 16 February 2022 the Child Support Agency allowed the objection and made the decision to refuse the estimate of income lodged by Mr Murnan (the objection decision).

5. On 22 February 2022 Mr Murnan applied to the Administrative Appeals Tribunal (the Tribunal) for a review of the objection decision.

6. The Tribunal conducted a hearing into the application on 19 May 2022.  Mr Murnan gave evidence on affirmation by Microsoft Teams audio.  The Tribunal informed Ms Mackall of the date and time of the hearing in correspondence dated 7 April 2022.  The Tribunal sent SMS text messages to Ms Mackall on 16 May 2022 and 18 May 2022 reminding her of the details of the hearing.  The Tribunal attempted to contact Ms Mackall at approximately 11:30 am on 19 May 2022 on the telephone number provided and then again on two further occasions but was not successful.  Ms Mackall did not participate in the hearing. 

7. The Child Support Agency provided the Tribunal and the parties with papers relevant to the matter (119 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.  When it is the first estimate election and made during the financial year but not on the first day, the estimate must be no more than 85 per cent of the adjusted taxable income that applies when the parent makes the estimate election. 

4. The parent making the estimate election must also provide their partial year income for the remaining period and an estimate of their adjusted taxable income from the start of the financial year to the beginning of the estimate period (their year-to-date income) in accordance with subsections 60(3) and 60(4) of the Act.  This allows the Child Support Agency to reconcile the estimate when information is available from the Australian Taxation Office (ATO) for the relevant financial year.

5. The Child Support Agency may refuse to accept an estimate election if satisfied the amount estimated is less than the amount considered likely to be the actual adjusted taxable income for the financial 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 refuse Mr Murnan’s estimate of income submitted on 8 November 2021.

CONSIDERATION

1. Mr Murnan told the Tribunal he submitted an estimate of his income to the Child Support Agency because his role had changed and his salary had fallen.  Mr Murnan explained that he had been working in a fly in-fly out (FIFO) role for about eight months but when he moved back to a position in Brisbane he returned to his usual base salary.

2. Mr Murnan said because he was earning overtime and site allowances in his FIFO role his income in 2020-21 of $131,676 was much higher than he was currently receiving.  Mr Murnan said when he submitted his estimate he had provided a monthly income which he believed was a net amount rather than a gross amount.  Mr Murnan said he now realised this was incorrect but did not think he should be assessed on his higher 2020-21 income.

3. Mr Murnan said when he was contacted by the Child Support Agency following the objection made by Ms Mackall he had subsequently provided copies of his payslips.  Mr Murnan argued that he should pay child support based on his actual income and not the higher income he was earning in the 2020-21 financial year.

4. The Tribunal notes in evidence from the Child Support Agency three payslips for Mr Murnan.  These payslips show:

   ·     a gross salary of $8,388.57 (net salary of $6,286.57) for the pay period from 1 October 2021 to 31 October 2021;

   ·     a gross salary of $9,189.37 (net salary of $6,810.37) for the pay period from 1 November 2021 to 30 November 2021; and

   ·     a gross salary of $8,571.63 (net salary of $6,404.63) for the pay period from 1 December 2021 to 31 December 2021.

5. Although Ms Mackall did not participate in the hearing the Tribunal notes that during a conversation with a child support officer on 29 November 2021, Ms Mackall is recorded as stating that she believed Mr Murnan had given an incorrect income estimate.

6. An income estimate can be made if, in the case of a first election for a year of income, the estimate is 85 per cent or less than the parent’s adjusted taxable income for the last relevant year of income (paragraph 60(1)(b) of the Act).  A parent may not make an income estimate if an income amount order is in force in relation to the parent and any part of the period to which the election would apply if made (subsection 60(6) of the Act).

7. The last relevant year of income for the child support period, which commenced on 17 October 2021, is Mr Murnan’s 2020-21 adjusted taxable income of $131,676.  The Tribunal is satisfied the annualised estimate of income of $53,963 meets the 85 per cent test.  The Tribunal is also satisfied there was no income amount order in place at the time Mr Murnan elected to lodge his estimate and that he provided his year-to-date income.

8. The Tribunal also considered the discretion, under section 63AA of the Act, to refuse the estimate election made by Mr Murnan.  This discretion may be exercised in circumstances where evidence suggests a parent’s estimated income is less than the amount considered likely to be their actual adjusted taxable income for the election period.

9. Mr Murnan lodged his estimate of $4,500 per month on 8 November 2021 to be used in the child support assessment from 8 November 2021 to 30 June 2022.  At the time he was advised his annualised income, calculated using his estimate, would be $53,963 and Mr Murnan confirmed his understanding of this amount.  His payslip for the period from 1 November 2021 to 30 November 2021 shows a monthly gross income of $9,189.37.  In the pay period immediately prior to his estimate taking effect Mr Murnan earned a monthly gross income of $8,388.57.  This is equal to an annualised amount of approximately $100,594 compared to his annualised estimate of $53,963.

10. Although Mr Murnan has told the Tribunal he made an error when submitting his monthly income, it is incumbent upon the parent lodging the estimate to ensure an estimate election is as accurate as possible.

11. The Tribunal finds that when Mr Murnan lodged his estimate of income on 8 November 2021 it was reasonable to expect that his actual income could be higher than the annualised amount of $53,963.  The Tribunal is, therefore, satisfied that the discretion available under section 63AA of the Act to refuse the estimate made by Mr Murnan has been properly exercised.

DECISION

The decision under review is affirmed.