Nesbit and Nesbit (Child support)

Nesbit and Nesbit (Child support) [2018] AATA 2289 (8 May 2018)

DIVISION:Social Services & Child Support Division
REVIEW NUMBER:  2017/SC013165
APPLICANT:  Mr Nesbit
OTHER PARTIES:  Child Support Registrar
Mrs Nesbit

TRIBUNAL:Member M Douglas
DECISION DATE: 08 May 2018
DECISION:

The Tribunal sets aside the decision under review and, in substitution, decides that the annual rate at which Mr Nesbit is to pay child support is increased by:

$4,400 from 1 April 2017 to 30 September 2017;
$7,500 from 1 October 2017 to 31 December 2017.

CATCHWORDS
Child support – Departure from assessment – Costs associated with special needs of the children – Costs associated with the education of the children - 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 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

The parties to this proceeding are Mr Nesbit, Mrs Nesbit and the Child Support Registrar. Mr Nesbit and Mrs Nesbit are the parents of [Child 1], [Child 2], [Child 3] and [Child 4], in regard to whom the Registrar has made an administrative assessment of child support that obligates Mr Nesbit to pay child support for the children to Mrs Nesbit.
The Registrar acts through the Department of Human Services (the Department), and hereafter the Tribunal’s reference to the Department is to be taken as a reference to the Registrar.

The background to the decision being reviewed

On 25 May 2017, Mrs Nesbit applied to the Department under section 98B of the Child Support (Assessment) Act1989 (the Act) for a departure from the provisions of the Act relating to an administrative assessment. The Department describes an application of this type as a “change of assessment” application and the decision it makes on such an application as a “change of assessment” decision, and to avoid confusion the Tribunal shall adopt the same terminology.
In support of her change of assessment application, Mrs Nesbit relied on the ground provided in subparagraphs 117(2)(b)(ia), 117(2)(b)(ii) and 117(c)(ia) of the Act, which grounds the Department describes, respectively, as reasons 2, 3 and 8A.
The Department, in response to Mrs Nesbit’s change of assessment application, made a change of assessment decision on 25 July 2017 that increased Mr Nesbit’s adjusted taxable income to $77,099 for the period 25 May 2017 to 30 June 2019 and increased annual rate of child support payable by him by:
·     $3,401 from 1 April 2017 to 31 December 2017,
·     $2888 from 1 January 2018 to 31 December 2018, and
·     $3,032 from 1 January 2019 to 31 December 2019.
As at the date the Department made that decision, Mr Nesbit’s adjusted taxable income was, and had been since 1 April 2017, his 2016 taxable income of $72,890.
Mr Nesbit objected to that decision and on 28 November 2017 the Department “partly allowed” his objection and set his adjusted taxable income at $72,890 from 25 May 2017 to 31 August 2017 and at $75,464 for the period 1 September 2017 to 30 November 2017 and increased the annual rate payable by him by:
·$3,401 from 1 April 2017 to 31 August 2017,
·$5,640 from 1 September 2017 to 31 December 2017,
·$5,752 from 1 January 2018 to 10 September 2018 ,
·$4,262 from 11 September 2018 to 31 December 2018, and
·$4,357 from 1 January 2019 to 31 December 2019.
The intent behind the Department’s decision to increase the annual rate of child support payable by Mr Nesbit was to require a contribution from him to additional costs associated with the children’s care due to the manner in which the children were being educated and due to special needs the children have.
It is the objection decision the Department made on 28 November 2017 that the Tribunal, on Mr Nesbit’s application, is reviewing.

The hearing and the evidence

The Tribunal heard Mr Nesbit’s application on 8 May 2018. He and Mrs Nesbit participated in the hearing by telephone and gave oral evidence. The Registrar did not appear. Mr Nesbit and Mrs Nesbit also provided documents to the Tribunal which have been received into evidence. Mr Nesbit’s documents are marked A1-26 and Mrs Nesbit’s documents B1-236. The Tribunal has also received into evidence documents the Department provided in accordance with subsection 37(1) of the Administrative Appeals Tribunal Act 1975, which are paginated 1-316.
The Tribunal has had regard to this evidence.

RELEVANT LAW AND ISSUES

Part 5 of the Act contains the provisions by which the Department assesses the annual rate at which a liable parent is to pay child support to the carer entitled to child support. A liable parent or the carer entitled to child support may, if they believe there are special circumstances, apply to the Department under section 98B of the Act for a determination to depart from the provisions relating to the assessment of child support. The Department, or the Tribunal in the Department’s place, if satisfied that the criteria of subsection 98C(1) are met, can make one or more of the determinations listed in subsection 98S(1) so as to depart from the provision of the Act relating to an administrative assessment of child support. The criteria specified in subsection 98C(1) are:
i.that one, or more than one, of the grounds for departure referred to in subsection (2) exists; and
ii.that it would be:
a.just and equitable as regards the child, the liable parent, and the carer entitled to child support; and
b.otherwise proper;
to make a determination (under subsection 98S(1)).
The grounds for departure referred to in subsection 98C(2) are those set out in subsection 117(2).
In reviewing the Department’s decision, the Tribunal must consider whether these criteria are met, and if they are, the Tribunal must then consider what determination or determinations should be made under subsection 98S(1).

CONSIDERATION

Is there a ground to change the assessment?

As earlier mentioned, Mrs Nesbit in her change of assessment application relied on the ground provided in subparagraphs 117(2)(b)(ia), 117(2)(b)(ii) and 117(c)(ia) of the Act. Those provisions of the Act read as follows:
117(2)(b) that in the special circumstances of the case the costs of maintaining the child are significantly affected:
...
ia. because of special needs of the child,
…
ii.because the child is being cared for, educated or trained in the manner that was expected by his or her parents.
117(2)(c) that, in the special circumstances of the case, application in relation to the child of the provisions of this Act relating to administrative assessment of child support would result in an unjust and inequitable determination of the level of financial support to be provided by the liable parent for the child:
(ia) because of the income, property and financial resources of either parent.

Subparagraph 117(2)(b)(ia)

There is no controversy that all four children have special needs. The controversial issue is the extent to which the cost of maintaining the children is affected by their special needs.
[Child 1] has [Medical condition 1] and [Medical condition 2]. She also had dental work done to her teeth in the form of[a dental procedure].
With respect to her [Medical condition 1] and [Medical condition 2], [Child 1] attends an appointment with a psychologist at the [medical clinic]. Mrs Nesbit said that [Child 1’s] consultations with her psychologist were fortnightly until recently, but are now monthly.
A tax invoice that the [medical clinic] issued to Mrs Nesbit is in evidence which reveals that a charge of $175.00 is made for each of [Child 1’s] consultations. Mrs Nesbit said that she obtains no rebate from Medicare for that cost. That tax invoice also reveals that [Child 1], prior to 28 September 2017, received occupational therapy at the Centre, but the Centre did not render a charge for those services.
Mrs Nesbit’s evidence, which the Tribunal accepts, is that [Child 1] also consults a paediatrician, [Dr A], twice a year. Invoices that [Dr A] issued to Mrs Nesbit for his consultations with [Child 1] reveal that the first consultation occurred on 30 May 2017, for which consultation [Dr A] charged $280.00. That was more than he charged for subsequent consultations on 16 August 2017, 15 November 2017 and 14 February 2018. This appears to be due to the first consultation involving an assessment of [Child 1’s] condition. The subsequent consultations were charged at $170.00 per consult. Mrs Nesbit’s evidence was that she receives a rebate from Medicare for the fees charged, although she was not aware of the amount of that rebate. No Medicare statement was in evidence relating to [Child 1], but there were Medicare statements in evidence relating to the other children, which detailed fees charged and rebates provided with respect to consultations those children had with [Dr A]. Based on the content of those statements, the Tribunal infers that the rebate Mrs Nesbit received from Medicare for costs of [Child 1’s] initial consultation with [Dr A] was $224.35 and the rebate for each of her subsequent consultations was $112.30.
Given that, the Tribunal finds that Mrs Nesbit incurred costs of $228.75 with respect to [Child 1’s] consultations with [Dr A] in the period 30 May 2017 to 14 February 2018 and also finds that, going forward, it is likely that her annual costs will be $115.40 for [Child 1] to consult [Dr A].
There is in evidence a history relating to [Child 1] that the pharmacy from which Mrs Nesbit purchases medications for the children has recorded the medications purchased for [Child 1] for the period 21 March 2016 to 26 March 2018. That reveals that over that approximate two year period Mrs Nesbit incurred total costs of $94.60 for [Child 1’s] medications, meaning her annual costs are $47.30.
The evidence also reveals that Mrs Nesbit had to debit her Visa card to the order of $2,000 to meet the cost of [Child 1] having [a dental procedure] That dental work for [Child 1] was carried out between 28 September 2017 and 25 January 2018.
Based on that evidence, the Tribunal finds that prior to [Child 1’s] first consultation with the psychologist, the cost of maintaining [Child 1] was not significantly affected by reason of her special needs. In the Tribunal’s view the costs preceding that date were relatively modest. However, since then, and largely as a consequence of [Child 1’s] consultations with a psychologist and also as a consequence of her having [a dental procedure], the costs of maintaining her have been significantly affected.
Doing the best it can with the evidence, the Tribunal considers that the cost Mrs Nesbit incurred from the end of September 2017 to the end of April 2018 with respect to [Child 1] attending [Dr A], her consultations with the psychologist and also the dental work she had done, were of the order of $4,400.00, which extrapolates to an annual figure of approximately $7,500.00. Thereafter, given that [Child 1] will be consulting a psychologist only once a month, the cost of maintaining [Child 1], as a consequence of her special needs, will be increased by the order of $2,250.00 a year.
[Child 2] has [Medical condition 2] and [disorders]. As was indicated above, he also consults [Dr A]. Mrs Nesbit’s evidence is that he does so approximately twice a year.
The Medicare statements in evidence with respect to [Child 2] reveal that [Child 2] first consulted [Dr A] on 27 April 2016, and from that date until 8 September 2016 [Dr A] bulk billed Medicare for the attendances. On 8 September 2016 he charged a fee of $170.00 for a consultation with [Child 2] on that date. The Federal Government provided a rebate of $112.30 under Medicare, resulting in Mrs Nesbit being liable for $57.70. On 16 December 2016 [Dr A] again bulk billed Medicare for the fee he charged for seeing [Child 2] that day. On 10 March 2017 he charged a fee of $280.00, of which $224.35 was met by Medicare, resulting in Mrs Nesbit having to pay $55.65. On 29 June 2017, [Dr A] bulk billed Medicare for a consultation with [Child 2] on that date. On 12 September 2017 he charged a fee of $170.00 for a consult on that date of which $112.35 was paid by Medicare resulting in Mrs Nesbit having to pay $57.70 again. On 14 December 2017 [Dr A] again charged a fee of $170.00 for a consultation with [Child 2] on that day and again Medicare rebated $112.30 resulting in Mrs Nesbit again having to pay $57.70. Hence, from 1 April 2017, from which date Mr Nesbit’s child support obligation was increased by the Department’s objection decision, Mrs Nesbit incurred costs of $115.00 for [Child 2] to consult with [Dr A] for an approximate seven month period to the end of December 2017.
[Child 2] has also attended the [medical centre] for occupational therapy, psychological treatment and speech pathology. A tax invoice that the Centre produced relating to [Child 2], which is in evidence, reveals that preceding 6 July 2017 no fees were actually charged to Mrs Nesbit for the therapies [Child 2] received at the Centre. From 6 July 2017 until 13 March 2018 the Centre charged a total of $8,714.54 for [Child 2’s] attendances. All but $175.00 of that was funded through the National Disability Insurance Scheme (NDIS).
Mrs Nesbit explained that the most recent funding approved for [Child 2] under the NDIS was exhausted by the end of March 2018. She said that she is unable to reapply for further funding until next month. She said that when the prior funding was exhausted, she stopped all treatments for [Child 2] at the [medical centre] other than his consultations with a psychologist. She said that she will ensure that [Child 2] keeps his appointments with the psychologist and she will pay for the cost of that until she again receives further funding through the NDIS. As the Tribunal understood Mrs Nesbit, [Child 2] will, until further funding is approved, consult a psychologist once a month, and the cost to Mrs Nesbit for that will be $175.00.
In evidence is a patient history for [Child 2] from the pharmacy from which Mrs Nesbit purchases medications covering the period 1 January 2016 to 9 April 2018. That reveals that over that approximate 27 month period Mrs Nesbit incurred costs of $371.39 to purchase medications for [Child 2] which represents an annual cost of around $165.00.
Having regard to this evidence relating to [Child 2], the Tribunal considers that it is only in the period from March to June 2018 that the costs of maintaining [Child 2] are significantly affected because of his special needs. That is a period during which Mrs Nesbit will not receive funding for [Child 2] from under the NDIS. In that period she will likely incur a cost of $700.00 for [Child 2] to consult a psychologist.
The other costs relating to [Child 2’s] special needs consist of the cost of his medications and the net cost for him to consult [Dr A] which, on the Tribunal’s analysis of the evidence, would amount to around $395.00 a year. Considered alone, in the Tribunal’s view, outside the period March to June 2018, that is a modest cost and is not such as to significantly increase the cost of maintaining [Child 2]. However, for the period March to June 2018, the overall cost of maintaining [Child 2], comprising the costs of his consults with a psychologist, the cost of his medications and the costs of his visits to [Dr A], extrapolate to an annual figure of around $3,200.00, and that in the Tribunal’s view is an amount that significantly affects the cost of maintaining [Child 2]. In short, the Tribunal considers, based on the evidence, that the cost of maintaining [Child 2] is only significantly affected because of his special needs for the period March to June 2018.
[Child 3] has[a number of conditions]. Similar to [Child 2], [Child 3] also receives several treatments through the [medical centre], including occupational therapy, speech therapy and psychology. Until 23 January 2018, the NDIS funded the cost of the services provided for [Child 3] through the Centre. At that point the funding that had previously been approved for [Child 3] was exhausted. Similar to what Mrs Nesbit did with [Child 2], Mrs Nesbit stopped all treatments for [Child 3] other than his appointments with a psychologist, which she now pays for herself and will continue to do so until further funding is approved for [Child 3] through the NDIS. As the Tribunal understood Mrs Nesbit’s evidence, since the NDIS funding was exhausted, [Child 3] has continued to consult a psychologist fortnightly at a cost to Mrs Nesbit of $175.00 per consultation. Mrs Nesbit receives a rebate from Medicare for those consultations of $84.80, meaning that the net cost to her is $90.20 per consultation. Mrs Nesbit said that she has applied for further funding for [Child 3] through the NDIS and he is currently going through an assessment process. That process will determine the extent to which further funding will be provided for [Child 3]. It is her expectation that funding will be approved.
Mrs Nesbit said that [Child 3], the same as the other children, sees [Dr A] twice a year. The Medicare statement that is in evidence with respect to [Child 3] indicates that he consulted [Dr A] on the 24 February 2017, for which Mrs Nesbit incurred a cost of $55.65 net of a Medicare rebate. The following consultation with [Dr A] is revealed in that statement to have been on 29 June 2017, at which time [Dr A] bulk billed his fee to Medicare. The statement does not reveal any further consultation between [Child 3] and [Dr A].
The patient history for [Child 3] from the pharmacy reveals that over the 27 months to which it relates Mrs Nesbit incurred costs of $207.50 to purchase medications for [Child 3], which correlates with an annual figure of $92.22, and which the Tribunal considers is only a modest amount.
Given that evidence with respect to [Child 3], the Tribunal considers that it is only since the NDIS funding for [Child 3] was exhausted, which was at the end of January 2018, that the cost of maintaining him has been significantly increased by virtue of his special needs. Since then, the Tribunal considers, having regard to the net cost that Mrs Nesbit incurs for [Child 3’s] appointment with a psychologist, that Mrs Nesbit’s cost of maintaining [Child 3], when extrapolated as an annual figure, is increased by the order of $2,220.00. That will abate to a modest figure, comprising medication costs and [Dr A’s] fees, when further NDIS funding is approved, which the Tribunal infers is likely imminent given the assessment process is being conducted at the moment.
[Child 4] also has [a] disorder. Mrs Nesbit’s evidence was that presently [Child 4] is only consulting [Dr A], and is not receiving any other therapy. Mrs Nesbit said that it is likely that [Child 4] will consult [Dr A] twice yearly.
An invoice from [Dr A] dated 3 November 2017 revealed that he charged $500.00 for a consult with [Child 4] on that date. The Medicare statement that is in evidence with respect to [Child 4] reveals that Mrs Nesbit received a rebate of $224.35 from Medicare for that resulting in her having to pay a net amount of $275.65 for that consultation. A further consultation occurred on 9 March 2018, for which [Dr A] charged $225.00, but after a Medicare rebate of $112.30, Mrs Nesbit paid $112.70. Hence, Mrs Nesbit incurred a cost of $388.35 over an approximate six month period for [Child 4] to see [Dr A].
Mrs Nesbit’s ongoing annual cost for [Child 4] will be, it would seem, of the order of $115.00. This is on the basis that [Dr A’s] charge for a standard consultation with the other children less the Medicare rebate applicable for that is $57.50. On the basis that [Child 4] will see [Dr A] twice yearly, that means that the annual cost for [Child 4’s] visits will be $115.00. There is no indication from the evidence why the consultations with [Dr A] on 3 November 2017 or on 9 March 2018 cost more than what [Dr A] charges for other children. Possibly, it was due to an assessment being done, which is what occurred with [Child 1]. There is nothing within the evidence to suggest that with respect to [Child 4’s] future bi-annual consultations with [Dr A], [Dr A] will charge more than what the evidence indicates he charges for a standard consultation.

In the Tribunal’s view an annual cost of $115.00 is not large, such that it significantly increases the cost of maintaining [Child 4]. However, given the initial expenses that Mrs Nesbit had to bear as a consequence [Child 4’s] initial attendances with [Dr A], the Tribunal considers that in the approximate five month period from 3 November 2017 to 9 March 2018, in which Mrs Nesbit incurred costs of $388.35 for [Child 4] to consult [Dr A], which amount extrapolates to an annual figure of $1,000.00 approximately, the annual cost of maintaining [Child 4] was significantly affected.

Subparagraph 117(2)(b)(ii)

[Child 1] attends [a] High School. [Child 2] and [Child 4] attend [a] Primary School. [Child 4] attends an aspect satellite class at [another] School. The children attend these schools in accordance with the expectation of both Mr Nesbit and Mrs Nesbit.
The Catholic Education Diocese of Parramatta, which manages the schools at which [Child 1], [Child 2] and [Child 4] attend, charges Mrs Nesbit fees of $50.00 a fortnight. That expands to $2,600.00 a year. That is around 10% of what the Cost of Children Table in Schedule 1 of the Act reveals the cost of maintaining three children would be, for persons on incomes that Mr Nesbit and Mrs Nesbit receive. Given that, the Tribunal considers the costs of maintaining these children are significantly affected because of these children attend Catholic schools.
The fees for [Child 3] to attend his school are $1,880.00 a term, which expands to $7,520.00 a year. The Tribunal is satisfied that this amount significantly affects the cost of maintaining [Child 3].
It follows that this ground for departure is established.

Subparagraph 117(2)(c)(ia)

Mrs Nesbit in her change of assessment application said, with respect to her application based on this ground for departure, that she believes that Mr Nesbit’s income in prior years do not reflect his present wages. In other words, she believed Mr Nesbit’s adjusted taxable income did not reflect his present circumstances.
Mr Nesbit is employed as [Occupation 1] for [Company 1]. He presented his pay slip for the period from 1 March 2018 to 31 March 2018 which revealed that his gross year to date income was $65,738.77. His pay slip revealed that his annual salary is $87,598.71. His year to date earnings to 31 March 2018 extrapolate to an annual figure that correlates with that specified in his pay slip for his annual salary.
Mr Nesbit also produced a copy of his tax return for the 2017 year. That revealed that in the assessment of his taxable income, he was entitled to deduct from his gross income expenditure totalling $14,498.00. The bulk of those expenses related to his vehicle.
Mr Nesbit’s evidence, which the Tribunal accepts, is that his position as [Occupation 1] requires him to travel extensively and, for that purpose, it is necessary that he has a car. His evidence was that his employer provided him with an option to use one of its vehicles, but were he to do so his employer would be liable for fringe benefit tax and that would result in his employer renegotiating his salary by means reducing the income his employer would pay him. His evidence was that his best option, in terms of the income he could achieve, was for him to own a car privately and to claim against his assessable income when calculating his taxable income that proportion of the cost of running the car that relates to his employment. The Tribunal also accepts his evidence in this regard.
To the extent that he defrays those costs from his gross income, that portion of his income is not available to him to meet his personal expenditure. Indeed, that is the principle underlying the relevant provisions of the Income Tax Legislation relating to the assessment of taxable income.
His taxable income for the 2017 year was assessed at $75,464.00. Mr Nesbit considers it will be likely to be around that figure for the 2018 year. His 2016 taxable income, which was his adjusted taxable income prior to the change of assessment decision the Department made and the objection decision which followed, correlated with his taxable income for the 2017 and that which he expects it to be for the 2018 year.
Given that, the Tribunal is not satisfied this ground for departure is established.

Would it be just and equitable to make a determination?

The matters the Tribunal must consider when doing this are listed in subsection 117(4) of the Act. Rather than dealing with each matter separately, it is convenient for the Tribunal to group the matters and consider them by reference to the following headings.

Mrs Nesbit’s circumstances

Mrs Nesbit is employed as [Occupation 2]. She provided a copy of her pay slip for the period ending 6 April 2018. Her year to date gross wages to that date were $11,454.54. When extrapolated to an annual figure, that does not exceed her self-support amount.
Mrs Nesbit incurs all the normal expenses for her support. She has no special needs. She has no property surplus to her needs that she could sell so as to provide money for the support of the children.
As the above discussion indicates, she has to meet significant expense as a consequence of the children’s special needs, particularly in regards to [Child 1]. The cost with respect to [Child 2] and [Child 3] are, for the greater part of the year, funded through the NDIS. Mrs Nesbit also incurs the substantial cost as a consequence of the children’s education.
Given her level of income, and the expenses she has to meet with respect to the children’s special needs and their education, she would experience financial hardship if the Tribunal were to refuse to make an order departing with the assessment of child support. In short, she requires Mr Nesbit to contribute towards the additional cost of the children’s care, consequent upon their special needs and education, in accordance with his ability to do so.

Mr Nesbit’s circumstances

Mr Nesbit has no special needs personally. He incurs all the normal costs to support himself. He has a reasonable wage, but it is not large. He resides with his wife who only works part-time because her four grandchildren have been placed in her care by the NSW Department of Family & Community Services.
He too does not have any property surplus to his needs that he could readily sell to provide money to assist with the support of the children.
The Tribunal notes that in his present circumstances, making a determination to depart from the administrative assessment of child support so as to increase the amount of child support he has to pay would cause him financial hardship. However, weighing the relative hardships, that is the hardship caused to Mrs Nesbit and the children by not departing from the assessment of child support so as to increase Mr Nesbit’s child support obligation, and the hardhship caused to Mr Nesbit by doing so circumstances, the Tribunal considers that it would be a just and equitable to increase his child support liability.
The Tribunal notes that Mr Nesbit said that he had previously paid an amount of $15,000.00 to Mrs Nesbit for the cost of the children’s education, which he did shortly following their separation. He said that this is evident from a letter that his solicitors received from Mrs Nesbit’s solicitors dated 7 February 2017 in which Mrs Nesbit’s solicitors advised as follows:
“Further, upon separation, your client retained $30,000.00 of those monies and in respect of the same he split that sum into an amount of $15,000.00 paid to our client for expenditure in relation to the children for school uniforms, shoes and other educational expenses. The other $15,000.00 he retained for his own use and benefit”.
Mr Nesbit submitted that this indicated that he has already made a contribution to the additional cost associated with the children’s care. Mrs Nesbit said that in proceedings between the parties relating to an adjustment of their interest in their property a judge had recently made a finding with respect to Mr Nesbit’s payment of that money to her for the children’s schooling and that the judge “squashed it”. Mr Nesbit said that the judge made no finding.
As the Tribunal understood the parties, the proceedings between them with respect to their property were disposed of by way of the entry of orders that were made with their consent. In other words, the court did not make any finding with respect to the payment or otherwise by Mr Nesbit of $15,000.00 to Mrs Nesbit for the children’s education. Given that it was Mrs Nesbit’s solicitor who asserted that the money that Mr Nesbit paid at separation was paid to her for the children’s education, the Tribunal is of the view that Mr Nesbit did pay Mrs Nesbit $15,000 at the time of their separation as a contribution to the costs of the children’s education. Given that the assessment of child support commenced on 18 November 2014, the Tribunal infers that Mr Nesbit and Mrs Nesbit separated from a date not later than that.
In that circumstance, the Tribunal considers, whilst accepting Mr Nesbit’s submission that he did pay $15,000.00 to Mrs Nesbit for the cost associated with the children’s education, the amount of money he did pay is not sufficient for him to be relieved of an obligation to contribute more towards the additional cost of maintaining the children consequent upon their going to schools for which fees are charged. In the Tribunal’s view, what Mr Nesbit did pay ought to be considered to be a contribution by him for costs of the children’s education incurred to the date of the correspondence.

The children

The Tribunal takes into account that both Mr Nesbit and Mrs Nesbit have a primary obligation to support their children. That obligation has priority over all their commitments other than those commitments necessary to support themselves and, in Mr Nesbit’s case, a duty to support his wife, given that his wife, because of her circumstances of only being able to work one day a week, would not be able to support herself fully.
As the discussion above has revealed, the children have special needs that increase the cost of their maintenance. This is particularly so with [Child 1], for whom no funding is provided through the NDIS. It seems too from the evidence that there will always be a period throughout the year during which the funding from the NDIS will be insufficient to cover the total cost associated with the special needs of [Child 2] and [Child 3].
The Tribunal found, doing the best it could with the evidence before it, that between 1 October 2017 and 30 April 2018 the cost of maintaining [Child 1] be increased by an annual rate of $7,500.00 and from 1 May 2018 the annual rate by which the cost of her care would be increased would be $2,250.00 as a consequence of her special needs. With respect to [Child 2] the annual rate at which his costs are increased as a consequence of his special needs are of the order of $2,500.00 for around four months a year. Otherwise, it seems that the costs consequent upon his special needs are in the main met through funding from the NDIS. With respect to [Child 3] it seems that for around a period of about four months a year the annual rate at which his costs are increased are $2,200.00 as a consequence also of NDIS funding not being available for a period of the year to meet all the costs of his care. With [Child 4] the annual rate at which her costs are increased were of the order of $1,000.00 a year from 1 November 2017 to 28 February 2018, but otherwise it does not seem to the Tribunal that the costs of her care are in any significant way affected by her special needs.
As mentioned above, the costs of maintaining the children are also significantly affected because of the manner in which they are being educated. The total for all four children is around $8,800.00 a year.
Hardship would be caused to the children were the Tribunal to refuse to make a determination to depart from the assessment of child support.

What is the just and equitable determination to make?

This is really a case in which the Tribunal must determine how Mr Nesbit and Mrs Nesbit must bear the additional financial burden associated with the cost of the children’s special needs and education. In doing that, the Tribunal must also take into account that Mr Nesbit also has a responsibility towards his wife, who is limited in terms of the amount of work she can do because she has legal responsibility for her four grandchildren.
The Tribunal considers, weighing all matters discussed above, that the just and equitable determination to make would be to increase the annual rate at which Mr Nesbit was required to pay child support by an amount of $4,400.00 from 1 April 2017 to 30 September 2017 and then by an annual rate of $7,500.00 from 1 October 2017 to 31 December 2018. The Tribunal considers, given that Mrs Nesbit is applying for NDIS funding for[Child 3] and [Child 2], that it would be appropriate for one or other of Mr Nesbit and Mrs Nesbit to apply again to the Child Support Registrar for a departure from the assessment of child support towards the end of the year, should they wish. In other words, the Tribunal does not consider that it would be just and equitable to make a determination to depart from the assessment of child support beyond the end of the current year, given there is some uncertainty regarding the extent to which the costs associated with [Child 2’s] and [Child 3’s] special needs will be funded through the NDIS.
The intent behind this decision is to ensure that, having regard to the parties’ circumstances including the fact that Mr Nesbit has a duty to maintain his wife, Mr Nesbit is making a just and equitable contribution towards the additional costs associated with the children’s care consequent upon them having special needs and being educated in the manner in which they are being educated.

Would it be otherwise proper to change the assessment?

In deciding whether it is otherwise proper to depart from the administrative assessment, the Tribunal must have regard to the fact that the primary obligation to support the children rests with Mr Nesbit and Mrs Nesbit and also have regard to whether, and if so how, any determination it makes would affect the entitlement of Mr Nesbit or the children to an income tested pension, allowance or benefit.
Mrs Nesbit receives family assistance from the Federal Government. The Tribunal understands that any increase in the annual rate at which Mr Nesbit is required to pay child support would result in a reduction to some extent of that benefit. Given that it is the parties who have the primary obligations for the children, as distinct from the Australian community, the Tribunal considers that it would be an otherwise proper outcome.
The Tribunal understands that none of the children receive an income tested pension, allowance or benefit and in respect of whatever determination the Tribunal makes, that will remain the case.

DECISION

The Tribunal sets aside the decision under review and, in substitution, decides that the annual rate at which Mr Nesbit is to pay child support is increased by:

$4,400 from 1 April 2017 to 30 September 2017;
$7,500 from 1 October 2017 to 31 December 2017.

[2018] AATA 2289

8 May 2018

Key Legal Topics

Areas of Law

Family Law

Administrative Law

Legal Concepts

Jurisdiction

Remedies

Procedural Fairness

Costs