Napier and Tanfield (Child support)

[2023] AATA 851

Napier and Tanfield (Child support) [2023] AATA 851 (3 February 2023)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2022/MC024463

APPLICANT:  Mr Napier

OTHER PARTIES:  Child Support Registrar

Ms Tanfield

TRIBUNAL:Senior Member S De Bono

DECISION DATE:  03 February 2023

DECISION:

The decision under review is affirmed.

(This application for review is unsuccessful.)

CATCHWORDS

CHILD SUPPORT – particulars of the administrative assessment – whether a fixed annual rate of child support should not apply – the application for fixed annual rate not to apply correctly refused - 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 Napier and Ms Tanfield are the separated parents of [Child 1] and [Child 2] (the children). There has been a registered child support case from 20 July 2015. Ms Tanfield opted in for child support collection by the Child Support Agency (the Agency) from 27 August 2015. Mr Napier is the parent liable to pay child support.

2. Mr Napier’s child support liability as the paying parent has been set at the fixed annual rate for most periods between 20 July 2015 to 19 January 2023. Mr Napier disagreed with this and on 5 June 2022 he applied to the Agency for the administrative assessment of child support not to be based on the fixed annual rate from 20 July 2015. This application was refused.

3. On 20 June 2022 Mr Napier applied for a review of the decision to apply the fixed annual rate in the administrative assessment of child support. On 9 August 2022 an objections officer disallowed Mr Napier’s objection and the fixed annual rate continued to apply in calculating Mr Napier’s child support liability.

4. On 16 August 2022 Mr Napier applied to the Administrative Appeals Tribunal (the tribunal) for an independent review of the Agency decision. On 3 February 2023 Mr Napier attended a hearing in person and gave sworn evidence to the tribunal. Ms Tanfield attended the hearing by telephone and gave evidence under affirmation. The tribunal had before it a bundle of documents: the ‘Statement and Documents’ provided by the Agency under subsection 37(1) of the Administrative Appeals Tribunal Act 1975 (pages 1–374); the tribunal refers to these papers as the hearing papers. Relevant aspects of the material and evidence will be referred to in the tribunal’s consideration of the issues to be decided.

ISSUE

1. The issue which arises in this case is:

   ·      Was the Agency correct to refuse Mr Napier’s application for the fixed annual rate not to apply to his child support liability?

LAW AND CONSIDERATION

1. The statutory provisions relevant to this review are contained in the Child Support (Assessment) Act 1989 (the Act) and the Child Support (Registration and Collection) Act 1988. Also relevant is the Child Support Guide (the Guide) which provides policy and guidelines for the application of the relevant legislation in order to promote consistency and transparency in decision-making. While the tribunal is not bound by these guidelines it will follow them unless there is a cogent reason to do otherwise as found in Re Drake and Minister for Immigration and Ethnic Affairs (No 2).[1]

   [1] [1979] AATA 179.

2. The Agency on behalf of the Child Support Registrar is required to assess the annual rate of child support using each parent’s adjusted taxable income (ATI). In accordance with section 65A of the Act the ‘fixed annual rate’ of child support will be applied if the parent’s ATI is less than the maximum annual base rate for parenting payment single (PPS) and they are not in receipt of an income support payment (being a payment from Centrelink for social security purposes) during the last relevant year of income.[2] The fixed annual rate is specified in subsection 65A(2) of the Act. Subsections 65A(1) and (2) of the Act provide:

   [2] The annual PPS maximum basic rate plus pension supplement at the time of Mr Napier’s application to the Agency for the fixed annual rate not to apply was $23,358: A guide to Australian Government payments 20 March 2022 to 20 June 2022.

   Assessment of annual rate

   (1)The Registrar must assess an annual rate of child support payable by a parent for a child for a day in a child support period as the rate specified in subsection (2) if:

   (a)  the parent did not receive an income support payment during the last relevant year of income; and

   (b)  the following amount is less than the pension PP (single) maximum basic amount:

   (i)if subparagraph (ii) does not apply--the parent’s adjusted taxable income determined in accordance with section 43 for the last relevant year of income for the child support period;

   (ii)if the day occurs in the application period for an income election made by the parent--the amount that applied under subsection 60(2) or (3), or that was worked out under subsection 62A(1); and

   (c)   the parent does not have at least shared care of the child during the relevant care period.

   How much is the annual rate

   (2)The annual rate of child support payable is $1060.

   Note: The annual rate of child support specified in subsection (2) is indexed under section 153A.

3. For some of the child support periods from 20 July 2015 Mr Napier was assessed on the fixed annual rate of child support per child, which is the rate specified in accordance with subsection 65A(2) of the Act, because he did not receive an income support payment from Centrelink and his ATI, in accordance with subsection 65A(1) of the Act, was assessed as being less than the basic rate of PPS. Mr Napier pays child support for two children and the fixed annual rate is per child per annum. A child support period for the purposes of the Act is no more than 15 months.

Was the Agency correct to refuse Mr Napier’s application for the fixed annual rate not to apply?

1. Section 65B of the Act provides a parent, in this case Mr Napier, may apply for the fixed annual rate not to apply:

   Application for section 65A not to apply

   (1)If the Registrar makes an assessment of an annual rate of child support payable by a parent for a day in a child support period under section 65A:

   (a)   the parent may apply to the Registrar for the section not to apply; or

   (b)   the parent is taken to have applied to the Registrar for the section not to apply if, immediately before the end of the previous child support period, the section did not apply because of a determination under this section.

   (2)The parent making the application must provide evidence to the Registrar concerning the parent’s income (within the meaning of subsection 66A(4)) to demonstrate that his or her current income is:

   (a)   less than the pension PP (single) maximum basic amount; and

   (b)   that it would be unjust and inequitable to expect him or her to pay the amount assessed under this section.

   (3) An assessment issued by the Commissioner of Taxation for the last relevant year of income shall not be sufficient evidence of the income of the parent for the purposes of this section.

   (4)If the parent makes an application, the Registrar may determine in writing that the section not apply to the parent if the parent’s current income (within the meaning of subsection 66A(4)) is less than the pension PP (single) maximum basic amount and it would be unjust and inequitable to expect him or her to pay the amount assessed under this section.

2. In determining whether the fixed annual rate of child support should not apply when assessing the rate of child support payable by Mr Napier, he must provide evidence to the Agency that his current income is less than the PPS maximum basic amount and it would be unjust and inequitable to expect Mr Napier to pay child support in the amount assessed under the fixed annual rate.

3. The tribunal is satisfied that during each of the child support periods Mr Napier did not receive any income support payments from Centrelink. Mr Napier submitted that his income was less than the amounts the Agency had used in assessing his child support liability. Mr Napier said his income for previous financial years has been low or zero.

4. Mr Napier said he works on a casual basis as an [Occupation 1]. He usually works in the evenings and his hours vary but the work is ongoing and regular. Mr Napier also said he has set up a business as a sole trader, it is early days and so far he has not generated an income from the business but in time is hopeful that the business will generate an income for him.

5. Mr Napier submitted that the Agency would have access to the income he earns as he is a ‘pay as you go’ (PAYG) employee in his work as a [Occupation 2] and this information, in his view, is readily available to them.

6. The tribunal asked Mr Napier how he supports himself. He said his mother is wealthy and he has borrowed money from her to supplement what he earns in order to meet day-to-day living expenses, including his rent. He said he has not applied for Centrelink benefits because he does not want to be reliant on these. Mr Napier said he keeps a record of how much money he has borrowed from his mother and his intention is to repay any money borrowed once his business is up and running. Mr Napier said there are no consequences for him if he does not repay the money borrowed from his mother, but he imagines that this would eventually be deducted from any distributions from his mother’s estate at that time. He said he is hopeful of repaying his mother in her lifetime.

7. Mr Napier said he was not sure why the Agency refused to apply his income as $0 from July 2016.

8. When making a decision under section 65B, the Tribunal needs to consider only Mr Napier’s ‘current income’ at the time he applied for the fixed annual rate not to apply on 5 June 2022. ‘Current income’ is not defined in the Act, however the Guide states that: ‘A parent’s current income is generally their income for the 12-month period from the date of the application.’ The Tribunal adopts this interpretation.

9. Mr Napier did not provide any documentary evidence to the tribunal about his income to support his submissions about his earnings. He said he has not lodged tax returns for any of the financial years after 30 June 2016 because he is worried about having any tax refunds redirected to pay off his child support debt. Mr Napier said he needs to use any tax refunds to pay loans made to him by his mother and repay money he owes to other people. Mr Napier said the tax returns for the relevant financial years are completed and he is just waiting to lodge these, but he does not want to do this until the matters before the tribunal are finalised. 

10. Mr Napier presented as reluctant to disclose information about his business, his income and how he manages his day-to-day living expenses except to say he has borrowed money from his mother to supplement his day-to-day living expenses and to start his business. He said he owes his mother a large sum of money. The decision by Mr Napier not to provide full and frank disclosure of his financial circumstances is of course a matter for him. But the outcome of this non-disclosure is that the Agency is correct to apply the fixed annual rate in assessing his child support liability in light of Mr Napier providing almost no information about his income during the relevant periods.

11. The tribunal is satisfied that the Agency was correct to refuse Mr Napier’s application for the fixed annual rate not to apply because Mr Napier did not provide sufficient evidence about his current income and he has remained reluctant to provide this information. The Tribunal cannot be satisfied that Mr Napier’s income from the date of his application in June 2022 was below the PPS maximum basic amount. As the tribunal has not determined Mr Napier’s income to be low enough to satisfy the first consideration under subsection 65B(4) of the Act, the tribunal is not required to assess whether it is unjust and inequitable for the fixed annual rate to apply.

12. The decision under review is affirmed.

DECISION

The decision under review is affirmed.

(This application for review is unsuccessful.)