Murnan and Murnan (Child support)

[2022] AATA 1562

Murnan and Murnan (Child support) [2022] AATA 1562 (22 April 2022)

DIVISION:Social Services & Child Support Division

REVIEW NUMBERS:  2022/BC023145, 2022/BC023168, 2022/BC023169, 2022/BC023170, 2022/BC023178, 2022/BC023179 and 2022/BC23261

APPLICANT:  Mr Murnan

OTHER PARTIES:  Child Support Registrar

Ms Murnan

TRIBUNAL:Member P Jensen

DATE OF DECISIONS:                   22 April 2022

DECISIONS:

The decisions under review are affirmed.

CATCHWORDS

CHILD SUPPORT – collection of arrears – non-agency payments - whether payment made to a third party in lieu of child support – no intention of both parents - decisions 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 DECISIONS

Background

1. Mr Murnan and Ms Murnan are the parents of four children. A child support case was registered in 2015 with what is commonly called the Child Support Agency or CSA. Mr Murnan was recorded as providing 10% care and Ms Murnan was recorded as providing 90% care for the children. Mr Murnan was assessed to pay child support to Ms Murnan.

2. The payment of child support can be a private matter between the parents. When the child support case was registered, Ms Murnan elected to collect the child support privately.

3. On 7 June 2021, Mr Murnan reported a change in the parents’ care for the children. The CSA subsequently decided to record Ms Murnan as providing 79% care with effect from 20 December 2020 and Mr Murnan as providing 21% care with effect from 7 June 2021.

4. On the same day, Ms Murnan applied to have the CSA collect the ongoing child support payable. She also applied to have the CSA collect the child support owing in respect of the preceding three months, i.e. the period from 7 March 2021 to 6 June 2021. For convenience, I will refer to that period as “the arrears period”, although it could more precisely be referred to as “the arrears, if any, period”.

5. On 18 June 2021 the CSA decided to accept Ms Murnan’s application to collect the ongoing child support payable from 7 June 2021. The CSA calculated that Mr Murnan had been required to pay $7,374.15 in child support during the arrears period but he had only paid $4,219.00, and it decided to collect the difference of $3,155.15. Mr Murnan objected to the second decision. An objections officer allowed the objection, concluded that Mr Murnan had only paid $2,800.00 during the arrears period and decided to collect the difference of $4,574.15. Mr Murnan applied to the Tribunal for further review.

6. Meanwhile, on 19 October 2021, Mr Murnan applied to have various payments that he had made to Ms Murnan and to third parties credited against his child support liability to the CSA. Such payments are commonly called non-agency payments. The details of those payments are discussed below. The CSA decided to credit some payments and not credit the other payments. Mr Murnan objected to the decisions to not credit certain payments. (Ms Murnan did not object to the decisions to credit certain payments.) An objections officer disallowed all of Mr Murnan’s objections. Mr Murnan applied to the Tribunal for further review.

7. I heard the applications for review on 22 April 2022. Mr Murnan and Ms Murnan gave sworn evidence by conference phone.

The arrears period

1. On 7 June 2021, Ms Murnan applied for the collection of arrears. Her application was made pursuant to section 39A of the Child Support (Registration and Collection) Act 1988 (“the Act”). Because she only applied for the collection of arrears in respect of the preceding three months, the CSA was required to grant her application: subsection 39A(5) of the Act. As noted earlier, the CSA calculated that Mr Murnan had been required to pay Ms Murnan $7,374.15 in child support during the arrears period. Neither parent disputed that calculation and I accept it as correct.

2. To properly understand what was occurring during the arrears period it is necessary to provide a little more background. On 24 August 2020 the CSA issued assessment notices. One of the notices informed the parents that Mr Murnan would be required to pay Ms Murnan $399.70 per fortnight in child support from 8 February 2021.[1] The assessment was based, in part, on a provisional income for Mr Murnan of $61,381 per annum which appears to have been based on his most recently assessed adjusted taxable income at the time, which appears to have been his 2014-15 adjusted taxable income.

   [1]Page 76 of the hearing papers.

3. In or about May 2021, Mr Murnan belatedly lodged his 2015-16 tax return. On 17 May 2021 the CSA issued new assessment notices which resulted in Mr Murnan being required to pay Ms Murnan higher rates of child support from 9 December 2016.[2] All the new assessments were based on Mr Murnan’s 2015-16 adjusted taxable income of $117,796 and the provisional incomes that were calculated from that adjusted taxable income. Mr Murnan was assessed to pay Ms Murnan an additional $90,000 or so in child support in respect of the period from 6 December 2016 to 17 May 2021.[3] So far as the period from 7 March 2021 was concerned, Mr Murnan’s rate of child support payable increased from $399.70 per fortnight to $1,123.68 per fortnight.

   [2]Pages 79 to 96 of the hearing papers.

   [3]If the calculations were based on the differences in the annual rates payable, the additional child support payable by Mr Murnan would be roughly:

   PeriodIncrease in annual rate payable            Sum

   06/12/16 - 07/06/17, 184 days            $24,436 - $8,628 = $15,808/yr           $7,968

   08/06/17 - 30/09/17, 115 days            $24,580 - $8,700 = $15,880/yr           $5,003

   01/10/17 - 31/08/18, 335 days            $24,944 - $8,832 = $16,112/yr          $14,787

   01/09/18 - 30/09/19, 395 days            $25,276 - $8,976 = $16,300/yr          $17,639

   01/10/19 - 30/09/20, 366 days            $26,016 - $9,268 = $16,748/yr          $16,793

   01/10/20 - 07/02/21, 130 days            $26,724 - $9,536 = $17,188/yr           $6,121

   08/02/21 - 17/05/21,   99 days            $29,316 - $10,438 = $18,878/yr          $5,120

   Total$90,170

4. During the arrears period, Mr Murnan had been paying, and continued to pay after the reassessment on 17 May 2021, $550 (or thereabouts) per fortnight directly to Ms Murnan. The actual payments are summarised on page 45 of the hearing papers. At the hearing, Mr Murnan confirmed that each payment of $550 (or thereabouts) consisted of a payment of $400 that “the CSA said I had to pay” and the balance of $150 (or thereabouts) was to be forwarded to Ms Murnan’s mother “for picking up the children”. Ms Murnan agreed that each $400 payment was a child support payment. She said the other $150 (or thereabouts) was for her mother pursuant to an agreement that Mr Murnan had reached with her mother. Mr Murnan acknowledged that he and Ms Murnan had never expressly agreed that the payments that were to be forwarded to Ms Murnan’s mother would be credited against the child support that he was required to pay to Ms Murnan, but he explained that the payments to Ms Murnan’s mother were in respect of the children and for the children’s benefit. He explained that he also made other payments for the benefit of the children, such as payments towards their school fees and dental fees. He also made payments which he said were for the benefit of Ms Murnan, such as payments in respect of the phone that she used. He acknowledged that Ms Murnan had not expressly agreed to any of those payments being credited against the child support that he was required to pay to her. He explained that he had simply identified that there were payments that needed to be made for the benefit of the children and he had decided to make those payments.

5. To summarise Mr Murnan’s submissions concerning the payments made during the arrears period, he paid 7 x $400 = $2,800 directly to Ms Murnan pursuant to the earlier child support assessment notices, he paid a further 7 x $150 (or thereabouts) to Ms Murnan to forward to her mother for the assistance that she provided for the children, and he made other payments that were also for the benefit of the children, and the sum of those payments exceeded the amount of child support that he had been required to pay to Ms Murnan during the arrears period, and therefore he did not owe any child support arrears.

6. The difficulty with Mr Murnan’s submissions is that it was not for him to unilaterally decide how he could discharge his child support liability of $7,374.15 to Ms Murnan. He paid $2,800 in child support to her. The parents could have agreed that if he made a payment to a third party, the payment would be credited against Mr Murnan’s child support liability to Ms Murnan, but the parents did not make any such agreement.[4]

   [4]On 15 June 2021 the CSA phoned Ms Murnan and made a file note of the conversation. The file note includes the following: “Telstra payment - $680 (Ms Murnan agrees with this to be credited to the arrears amount)”. At the hearing I sought to confirm that she had agreed to the payment being credited. She replied that she agreed that Mr Murnan had made the payment. I repeated my question. She appeared to have difficulty understanding the distinction between whether the payment had been made and whether she agreed to the payment being credited against the child support payable. She eventually stated that she had never agreed to the payment being credited. As noted earlier, Mr Murnan acknowledged that the parents had not made such an agreement. Having heard from Ms Murnan, I accept her sworn evidence on the issue. The CSA file note might have been the result of some misunderstanding between Ms Murnan and a CSA employee.

7. Finally, there is also a provision which effectively provides that if Mr Murnan had paid 70% of the $7,374.15 directly to Ms Murnan, some of his payments to third parties could have been credited against the remaining 30% of the $7,374.15 debt.[5] However, Mr Murnan did not pay $7,374.15 x 0.7 = $5,161.91 to Ms Murnan during the arrears period.

   [5]See subsection 39A(8) of the Act and 5.1.4 of the Child Support Guide.

8. An objections officer concluded that Mr Murnan paid $2,800.00 in child support during the arrears period and decided to collect child support arrears of $4,574.00 in respect of the arrears period. For the reasons stated above, that decision will be affirmed.

Non-agency payments

1. Mr Murnan continued to make payments to Ms Murnan and third parties after 7 June 2021. He later applied to have those payments credited against his child support liability to the CSA. A payment can be credited pursuant to section 71 or 71A of the Act if certain requirements are satisfied. One of the requirements, so far as it applies to this case, is that the payment was in respect of the period from 7 June 2021 onwards. Another requirement is that both parents intended the payment to be credited.

2. Mr Murnan applied to have 15 payments of $550.00 which were made directly to Ms Murnan credited as non-agency payments. The payments are listed on page 249 of the hearing papers. Seven of the payments were made during the arrears period and were not in respect of the period from 7 June 2021 onwards. The CSA correctly decided to not credit those payments as non-agency payments. For the reason stated above, the CSA decided to partially credit the other eight payments: in respect of each payment, $400 was credited and $150 was not credited. Those decisions were the preferable decisions and will be affirmed: sections 71 and 71D of the Act.

3. Mr Murnan applied to have seven payments to Telstra credited as non-agency payments. The payments are listed on page 245 of the hearing papers. Three of the payments were made during the arrears period and were not in respect of the period from 7 June 2021 onwards. The CSA correctly decided to not credit those payments as non-agency payments. The CSA decided to credit the other four payments and, as noted above, Ms Murnan did not object to those decisions.

4. Mr Murnan said he made a loan repayment of $1,985.00 on 3 October 2021. Ms Murnan said that if such a payment was made, she did not agree to it being credited. The CSA refused to credit the payment as a non-agency payment. At the hearing, Mr Murnan was unable to take the matter further. The CSA’s decision to not credit the payment as a non-agency payment was correct and will be affirmed.

5. Mr Murnan applied to have five car insurance payments, 12 school payments and 15 dental payments credited as non-agency payments. The payments are listed on pages 257, 261 and 265 of the hearing papers. Some payments were made during the arrears period and were not in respect of the period from 7 June 2021 onwards. The CSA correctly decided to not credit those payments as non-agency payments. The applications to credit the other payments were refused on the basis that Ms Murnan had not agreed to them being credited. At the hearing, Mr Murnan was unable to take those matters further. The CSA’s decisions to not credit those payments as non-agency payments were correct and will be affirmed.

6. Section 71C of the Act also allows for payments to be credited if certain requirements are satisfied. One of the requirements, so far as this case is concerned, is that the payment was in respect of the period from 7 June 2021 onwards. Another requirement is that when the payment was made, the payer was providing less than 14% care for all of the children. Since 7 June 2021, Mr Murnan has been recorded as providing 21% care for the children. None of Mr Murnan’s payments can be credited pursuant to section 71C of the Act.

DECISIONS

The decisions under review are affirmed.