Nicholls and Pritchard (Child support)

[2022] AATA 3085

Nicholls and Pritchard (Child support) [2022] AATA 3085 (15 June 2022)

DIVISION:Social Services & Child Support Division

REVIEW NUMBERS:  2022/PC023646

2022/PC024007

APPLICANT:  Mr Nicholls

OTHER PARTIES:  Child Support Registrar

Miss Pritchard

TRIBUNAL:Member M Martellotta

DECISION DATE:  15 June 2022

DECISION:

The tribunal sets aside the decision under review and, in substitution, decides that Mr Nicholls did not lodge any estimates of income on 4 June 2021.

CATCHWORDS

CHILD SUPPORT – particulars of the administrative assessment – estimate of income - whether the estimate should have been refused – estimate of income not lodged - 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 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 concerns two decisions made by Service Australia (the Agency) to accept an estimate of income.

2. On 8 June 2021 the Agency decided to accept an estimate of income from Mr Nicholls of $39,107 for the period 4 June 2021 to 30 June 2021 and for the period 1 July 2021 to 30 June 2022.

3. Mr Nicholls objected to the decisions.[1] On 31 March 2022 and 1 April 2022 the Agency disallowed those objections.

   [1] The Agency granted an extension of time within which to object.

4. The tribunal conducted a hearing on 15 June 2022. Mr Nicholls participated by telephone and gave evidence on affirmation. Ms Pritchard did not attend the hearing[2]. The Agency provided 117 pages of documents.

ISSUES

[2] Ms Pritchard having confirmed she would like the matter considered on the papers

1. The statutory provisions relevant to this review are contained in the Child Support (Assessment) Act 1989 (the Act).

2. The issue which arises in this case is whether there is any reason for the Agency to refuse the income elections.

CONSIDERATION

1. A person may make an estimate of income for a financial year, or part of a year, if the provisions in section 60 of the Act are met. In conjunction with other requirements such an estimate may be accepted if the Agency is satisfied that the declaration amount made by a parent is correct.[3]

   [3] Subparagraph 60(1)(b)(i) of the Act

2. A parent can give notice of an election to the Agency orally by phone or by person. The Agency can refuse to accept an income election:

   if satisfied that the amount worked out under that subsection is less than the amount that the Registrar considers is likely to be the parent’s actual adjusted taxable income for the year of income to which the income election relates (subsection 63AA(1) of the Act).

3. In this case Mr Nicholls’s submission was that he never intended to lodge an estimate on 4 June 2021; that was not the purpose of his contact with the Agency. He provided the following evidence:

   a)He and his ex-partner had a private arrangement for payment of child support.

   b)His ex-partner had been advised to obtain a child support assessment for family assistance purposes.

   c)As part of this process the Agency contacted Mr Nicholls to confirm his income details. It was in the course of explaining his circumstances and that his work had changed that the service officer he was speaking with registered this as an estimate of income, but he had not idea that this was what had occurred and this was not clearly explained to him.

   d)He had no understanding of the process or system and his objective in making contact with the Agency was to find out how much the assessment was and ensure that they understood his circumstances as he did not want to incur a penalty if incorrect information was utilised. He did not understand the letters sent to him confirming acceptance of an estimate of income.

   e)When he received a reconciliation of the estimate, he became extremely distressed because the amount shown in the document was $326,908.73. No one has listened to him and he does not want the estimate to be used in the assessment records.

   f)He had been working for [Employer] but was stood down and was paid jobkeeper payment from April 2020 to September 2020 but then his employment was terminated.

   g)It took him some time to secure another job (in about December 2021) and at the time of his discussion with the Agency he was working on a casual/part-time basis.

4. The Agency record identifies the following information:

   a)Miss Pritchard lodged an application with the Agency and Mr Nicholls was asked to make contact.

   b)Australian Taxation Office information for Mr Nicholls’s income for the 2019/20 financial year was $50,747.

   c)On 4 June 2021 the contact notes reference a drop in income by 15% and “discussion with customer regarding reasons and appropriateness of estimate’[4]

   d)On 22 September 2021 the Agency reconciled the estimate with a 2020/21 taxable income of $43,844 and a reconciled amount of $326,908.73 was applied for the child support period 4 June 2021 to 30 June 2021.

   e)The Agency initially concluded that this was not an objection situation, but an error had occurred and the estimate should not have been accepted because there was no documentation provided and Mr Nicholls had not advised of his rights and obligations as required.

   f)Another Agency officer reviewed the recording of 4 June 2021 and noted that the service officer did explain that an estimate was being lodged but did not detail the rights and obligation and did not correctly document the decision. This officer recommended the matter be dealt with as an objection and not as an error.

   g)A penalty that had been imposed on the basis that his actual income was 10% higher than the estimated income was remitted.

   [4] Page 14

5. The initial question is whether as a matter of fact Mr Nicholls actually lodged a part year and full year estimate pursuant to section 60 of the Act. He says that he had no intention of doing so and had no clear understanding of what was happening. The Agency says that while there were issues with the interaction between the service officer and in effect the process could have been more clearly explained to Mr Nicholls, they concluded that an estimate had been lodged.  Mr Nicholls was a credible witness and it was apparent from the way he gave his evidence that he is still very distressed about the misunderstanding.

6. In this matter the tribunal finds that Mr Nicholls had no intention of lodging an estimate on 4 June 2021. It is apparent from the Agency file that the interaction with the service officer on that date was unsatisfactory and information provided to Mr Nicholls was incomplete. It is also apparent that Mr Nicholls was responding to a request made to him by the Agency to make contact to discuss the application for assessment that they had received from his ex-partner. Mr Nicholls was not contacting the Agency with any specific intention to lodge an estimate. His evidence, which the tribunal accepts, is that he was making contact to find out about the assessment.

7. As the tribunal has concluded that the estimates were not in fact lodged then the decisions under review are to be set aside. For the sake of completeness, the tribunal notes that in any event were it to have found that estimates had been lodged, the tribunal would have exercised the discretion to refuse the estimates pursuant to subsection 63AA(1) of the Act.

DECISION

The tribunal sets aside the decision under review and, in substitution, decides that Mr Nicholls did not lodge any estimates of income on 4 June 20