Newman and Moore (Child support)

[2016] AATA 2008

Newman and Moore (Child support) [2016] AATA 2008 (13 July 2016)

APPLICANT  Ms Newman

OTHER PARTIES  Mr Moore

Child Support Registrar

APPLICANT  Mr Moore

OTHER PARTIES  Ms Newman

Child Support Registrar

DECISION DATE  13 July 2016

DECISION

The tribunal sets aside the decision under review and, in substitution, decides that Mr Moore’s application for a departure made on 31 August 2015 and Ms Newman’s cross-application for a departure made on 28 October 2015 are refused.

CATCHWORDS
Child support – departure determination – special needs of the child – income and financial resources of parents – ground for departure exists but not just and equitable to make determination – 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

1. Ms Newman and Mr Moore are the parents of [Child 1], aged 14 and [Child 2], aged almost 17 at the time of the hearing. Both parents have applied for review by this tribunal of a decision of the Child Support Agency (CSA) about whether there should be a departure from the administrative assessment of child support in this case. The children are recorded by the CSA as in the 68% care of Mr Moore and the 32% care of Ms Newman. The tribunal notes that [Child 2] will turn 18 years of age in July of 2017.

2. The rate of child support was, until 31 December 2015, calculated by reference to a decision of the Social Security Appeals Tribunal made on 7 May 2014 which required the administratively assessed rate of child support payable by Ms Newman to Mr Moore to be increased by $2,000 per annum (on account of [Child 2] and [Child 1]’s special needs) until 31 January 2015 and by $550 per annum (on account of [Child 1]’s special needs) from 1 February 2015 until 31 December 2015. Administrative assessments from 1 January 2016 to 31 October 2016 require neither parent to pay child support to the other, based on the recorded levels of care for both children, and using 2014/15 adjusted taxable income of $26,094 for Ms Newman and 2014/15 adjusted taxable income of $41,552 for Mr Moore.

3. On 31 August 2015 Mr Moore applied for a departure from the administrative assessment on the basis that the assessment did not take into account the children’s special needs and did not reflect the income and financial resources of the parents. Mr Moore stated in particular that he has met certain necessary costs for [Child 1] arising from his special needs. He submitted that these costs provided a ground to depart from the administrative assessment of child support, and that the annual rate of child support payable by Ms Newman should increase accordingly. He also raised, as a departure ground, the income, financial resources and earning capacity of both parents. On 28 October 2015 Ms Newman cross-applied, raising the issue of her costs of contact with the children as a ground to depart from the administrative assessment. She also raised the issues of the parents’ income and financial resources, her own high self-support costs and her costs of supporting her adult son, [Child 3].  

4. A senior case officer refused the application to depart from the administrative assessment on the basis that it was not just and equitable to do so in the circumstances of the case. Mr Moore objected to the decision and that objection was allowed, with the objections officer deciding that the annual rate of child support payable by Ms Newman was to increase by $408 per annum for the period 1 January 2016 to 31 January 2018 on account of [Child 1]’s special needs.

5. Ms Newman and Mr Moore both sought review by the Tribunal. The applications for review were heard together on 13 July 2016.  Ms Newman and Mr Moore both appeared by conference telephone and gave sworn evidence. The Child Support Registrar did not participate in the hearing, but the CSA provided subsection 37(1) documents which were marked Exhibit 1. Ms Newman provided further documents and written submissions, which were marked Exhibit A in her review application. Mr Moore provided further documents and written submissions, which were marked Exhibit B.

ISSUES

1. The statutory provisions relevant to this review are contained in the Child Support (Assessment) Act 1989 (the Act). The issues that must be considered under section 98C of the Act are:

   • whether a ground for departure from the administrative assessment exists;
   • whether a departure would be just and equitable; and, if so
   • whether a departure would be otherwise proper.

CONSIDERATION

Does a ground for departure from the administrative assessment exist?

1. A ground will exist to depart from the administrative assessment of child support if, in the special circumstances of the case, the costs of maintaining the children are significantly affected because of their special needs: subparagraph 117(2)(b)(ia) of the Act. The words “in the special circumstances of the case” are not defined in the legislation. Whilst it is not possible to define with precision the meaning of that term, it is intended to emphasise that the facts of the case must establish something which is special or out of the ordinary. In Gyselman v Gyselman (1992) FLC 92-279, it was held that "special circumstances" were "facts peculiar to the particular case which set it apart from other cases".

2. The tribunal will consider whether costs incurred by Mr Moore to meet the special needs of [Child 1] establish a ground to depart from the administrative assessment in place. [Child 1] has a diagnosis of [medical condition]. [Child 1] has associated issues with [development] and both parents accept that he requires, and receives, [therapy]. Mr Moore incurs this cost directly and receives some rebates through the Medicare system. He presented evidence to the tribunal that his out-of-pocket expenses for [therapy] for the 2016 calendar year were likely to amount to about $1,880. He sought a 50% contribution to these fees from Ms Newman by way of an increase to the child support assessed as payable by Ms Newman.

3. The tribunal is satisfied, that having regard to the magnitude of the out-of-pocket expenses met by Mr Moore for [Child 1]’s [therapy] in the amount of about $1,880 each year, those costs significantly affect the overall costs of caring for the children. The previous decision of the SSAT dealt with [Child 1]’s [therapy] costs up until 31 December 2015. The tribunal is satisfied, having regard to their magnitude as a factor of Mr Moore’s income used in the assessment (about $42,000 for the 2014/15 year), that special circumstances do exist in relation to those out-of-pocket costs from 1 January 2016 onwards, and that those costs are not taken into account in the administrative assessment, such that those costs provide a ground to depart from the administrative assessment under subparagraph 117(2)(b)(ia) of the Act from that date.

Just and equitable

10.  The requirement to consider whether a departure would be just and equitable directs attention to what is fair to the parents and their children. Regard must be had to a variety of factors such as the needs of the children, the parents’ commitments and any hardship that would be caused by departing or not departing from the formula.

Mr Moore

11.  Mr Moore describes his work as that of a “[occupation]” and he is employed on a part-time basis with [his employer]. His taxable income each year is primarily derived from this employment. He also receives a modest sum of interest. Mr Moore gave sworn evidence during the hearing that in the 2015/16 his taxable income was likely to be about $39,000 per annum based on income from [his employer], about $5 in interest income and some modest deductions. This reduction from Mr Moore’s taxable income of about $42,000 for the previous tax year can be accounted for by a small reduction in Mr Moore’s working hours of about 15 minutes per day which he has stated is necessary to attend to various matters prior to collecting [Child 1] from school, which he does on most days.

12.  Mr Moore also receives a non-taxable income-tested carer’s payment as a result of the care he provides for [Child 1]. Mr Moore gave evidence during the hearing that, during the 2015/16 year, he received $4,861 in carer payment. For the 2015/16 year Mr Moore has also been entitled to receive carer allowance for [Child 1], amounting to approximately $2,200 per annum, and family tax benefit for both children, amounting to in excess of $15,000 including supplements, to assist in meeting the needs of the two children whilst they are in his care. Mr Moore stated that he does not receive the family tax benefit fortnightly, but elects instead to receive a lump-sum at the end of the financial year. Mr Moore has also received various bonuses from the commonwealth government, such as the school-kids bonus twice yearly (totalling about $1,700) and the child disability supplement for [Child 1] (of up to $1,000). He receives a state-government allowance to assist in transporting [Child 1] to school of around $500 per annum. Whilst these allowances and supplements are not income, they nonetheless provide a tax-free financial resource from which Mr Moore can meet the needs of the children. Mr Moore will therefore have had income for child support purposes for the 2015/16 year of about $44,000 (including carer payment) and additional non-taxable financial resources of about $20,000 to assist with the children’s needs. Mr Moore’s circumstances have not changed and he is therefore likely to continue to have such income and resources for the financial year to follow.

13.  Mr Moore lives in a property he owns jointly with his brother. Mr Moore stated at the hearing that he has a home loan secured by a mortgage over that home and that he recently drew down upon the loan in the sum of $11,000 in order to partly fund the purchase of a new vehicle as his older one had become uneconomical to run and repair. The balance of his home loan is about $68,000 following that draw-down. Mr Moore stated that he borrowed the balance of the cost of the car from family and he intends to repay this loan when he receives his lump-sum family tax benefit from the 2015/16 year, which he estimates will be over $15,000.  

14.  Mr Moore has arranged for [Child 1] to see [a specialist]. As those costs were not raised as part of the initial application and the medical evidence as to need was not produced by Mr Moore the tribunal will not consider those costs as part of the demonstrated special needs for [Child 1].

Ms Newman

15.  Ms Newman is employed on a part-time basis as a [occupation] at a [workplace]. She stated that, in the 2015/16 year, her taxable income was likely to be assessed as $14,566 being comprised of income from employment and interest income of $1 less tax deductions of about $3,100. The tribunal notes the relatively substantial level of deductions claimed by Ms Newman when considered as a percentage of her income. Ms Newman provided a break-down of those costs which included various travel costs, insurances, union fees, uniforms and supplies directly related to her employment. She also claimed gifts and donations totalling $357, including for fund-raising undertaken by her son, and the cost of $367 for training for a bronze medallion which she stated will be used in her employment.  Her deductions, whilst a substantial portion of her relatively modest income from part-time work, appear reasonable in all the circumstances.

16.  Ms Newman lives in her home, (which is not encumbered by a mortgage), with her adult son, [Child 3], who is in receipt of Disability Support Pension. Ms Newman gave evidence during the hearing that, during the 2015/16 year, she received $13,961 in non-taxable income-tested carer’s payment as a result of the care she provides for [Child 3]. When added to her taxable income from employment, Ms Newman has received about $28,000 in income for the 2015/16 year. Ms Newman has also been entitled to receive carer allowance for [Child 3], amounting to approximately $2,200 per annum, in order to assist with his expenses, and [Child 3] pays board of $100 per week and an internet use payment of $10 per week from his pension to Ms Newman to further assist with her costs of caring for [Child 3]. For the 2015/16 year Ms Newman was not entitled the payment of family tax benefit for [Child 2] and [Child 1] due to her recorded levels of care. Ms Newman stated that she may receive a portion of the $1,000 maximum child disability supplement for [Child 1] but she did not yet know exactly what portion of that she may receive. Ms Newman stated that she has recently applied for the state-government allowance to assist in transporting [Child 1] to school but does not yet know what she will receive. With the exception of the transport allowance, the allowances received by Ms Newman are provided for the purpose of meeting the needs of [Child 3], rather than of the children of the child support assessment.

17.  Ms Newman has recently consulted [another specialist] in relation to [Child 1]’s [health] condition. She has incurred the cost of the consultation and of various [medication] purchased on the advice of the specialist. She has arranged for a further consultation later in the year, and anticipates that the total out-of-pocket cost to her for [Child 1]’s care and treatment will be about $550. Ms Newman stated that these expenses are relevant in determining whether it is just and equitable to depart from the administrative assessment child support.

18.  Ms Newman undertakes the travel to and from her home to collect [Child 1] and [Child 2] when they are in her care. This court-ordered arrangement commenced in 2012 and, prior to that, Mr Moore undertook the travel in order to have care of the children. Ms Newman submitted that her costs of contact with the children are high as a percentage of her income and that this is relevant in the consideration of whether it is just and equitable to depart from the administrative assessment of child support. She calculated her costs associated with contact with the children for the 2015/16 year at $2,052.15, which exceeds 5% of her child support income for 2015/16 of around $28,000 (having regard to her taxable income from employment and her non-taxable pension income). Mr Moore did not dispute the accuracy of Ms Newman’s calculations the basis for which was set out in her material. However, he stated that the tribunal ought not consider Ms Newman’s costs of contact as, prior to the current court orders, he met costs of contact and there was no departure from the administrative assessment made on that basis.

19.  Ms Newman stated that she could not always meet her regular expenses when they fell due and gave evidence that she had in excess of $4,000 in credit card debt. She stated that she did not have the financial capacity to make further contributions to [Child 1]’s [therapy] costs, having regard to the other expenses for her own support and that of the children.

Conclusions as to whether a departure would be just and equitable

20.  The tribunal has set out above its findings as to the available incomes of each parent and the proper needs of the children.

21.  The tribunal is satisfied that, at present, each parent meets the ordinary expenses of the children whilst in their care, and this is reflected in the cost percentage applied to the administrative assessment of child support arising from their recorded levels of care for [Child 1] and [Child 2]. In addition, both parents meet various expenses associated with [Child 1]’s special needs. Mr Moore meets the out-of-pocket costs of [therapy] of about $1,880 per annum school fees, and Ms Newman meets the costs of contact with the children and has met costs associated with [Child 1]’s [health] condition. Further, both parents stated at the hearing that they meet the costs of [Child 1] attending swimming, including special swimming carnivals, whilst [Child 1] is in their care. The tribunal was not satisfied that the costs associated with [Child 1]’s swimming were exceptional, or differed greatly from the costs incurred by most parents in relation to a child of his age.

22.  Mr Moore’s costs associated with [Child 1]’s special needs, and particularly for [therapy], have exceeded those met by Ms Newman for [Child 1]’s special needs in the last calendar year. However, Mr Moore receives carer allowance for [Child 1] which is greater than the cost of [Child 1]’s [therapy]. Whilst Ms Newman meets the costs of contact with the children, and these are high as a percentage of her annual income, she does not seek an adjustment to the administrative assessment on this ground, but simply submits that those costs be considered, together with other costs incurred by her and by Mr Moore for the children, and invites the conclusion that no departure is necessary as each parents costs off-set the other.

23.  The parents’ financial circumstances are not identical. Ms Newman owns her property outright, but has lower income from employment than Mr Moore and cares for her adult son as well as for [Child 2] and [Child 1] when they are in her care. Mr Moore has higher income from employment than Ms Newman but makes repayments on his (relatively modest) home loan and receives family tax benefit for the children, together with carer payment and carer allowance for [Child 1].

24.  The parents are already meeting the costs of the children, including for [Child 1]’s special needs and for Ms Newman’s costs of contact, in a manner that is just and equitable having regard to the income and financial resources available to each of them to meet those expenses. The tribunal is satisfied that each parent is already meeting their own expenses and those of the children in accordance with their respective capacities to do so, and that it would not be just or equitable to require Ms Newman to contribute further to those expenses, and particularly to [Child 1]’s [therapy] costs, by way of an increase to the child support assessment, particularly in circumstances where Mr Moore has received and continues to receive assistance through carer allowance in excess of the amount needed to meet these costs.

25.  Ms Newman expressed concern about her capacity to contribute further to the children’s ordinary and special needs, having regard to her own needs and those of the children whilst in her care. The tribunal accepts that she does not have further capacity to contribute through any increase to the child support assessment.

26.  Mr Moore applied for a departure on 31 August 2015. Ms Newman cross-applied on 28 October 2015. The tribunal has found that it would not be just and equitable to depart from the administrative assessment of child support and therefore proposes to refuse those applications.

Conclusion

27.  The tribunal has found that a departure ground exists because the costs of caring for [Child 1] are significantly affected by his special needs. Mr Moore sought an increase in the rate of child support payable by Ms Newman to reflect a just and equitable contribution by Ms Newman to those costs. However, the tribunal is not satisfied that Ms Newman has the capacity to make such a contribution, nor that it is just and equitable that she do so, having regard to the other expenses she meets in relation to the children of the assessment and the respective financial positions of both parents. The tribunal has therefore determined that it is not just and equitable to depart from the administrative assessment of child support.

28.  As the tribunal has reached a decision which differs from that of the objections officer, that decision is set aside and a decision substituted which gives effect to the tribunal’s findings.

DECISION

The tribunal sets aside the decision under review and, in substitution, decides that Mr Moore’s application for a departure made on 31 August 2015 and Ms Newman’s cross-application for a departure made on 28 October 2015 are refused.