O’Dea and Pan (Child support)

[2019] AATA 6406

O’Dea and Pan (Child support) [2019] AATA 6406 (9 December 2019)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2019/HC016967

APPLICANT:  Mrs O’Dea

OTHER PARTIES:  Child Support Registrar

Mr Pan

TRIBUNAL:Member M Baulch

DECISION DATE:  9 December 2019

DECISION:

The tribunal set aside the decision under review and, in substitution, decided that there are to be determinations to depart from the administrative assessment of child support such that:

• For the period 4 January 2018 until 5 April 2018 Mrs O’Dea’s adjusted taxable income is varied to be $29,695 per annum;

• For the period 6 April 2018 until 28 February 2019 the annual rate of child support payable by Mrs O’Dea is varied to $427; and

• From 1 March 2019 until the current child support period ends, the annual rate of child support payable by Mrs O’Dea is varied to be $435.

CATCHWORDS

CHILD SUPPORT – departure determination – income, property and financial resources of the liable parent – overseas income – 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. This application for review is about how much child support Mrs O’Dea should be assessed to pay to Mr Pan.

2. Mrs O’Dea and Mr Pan are the separated parents of two children, one born in October 2000 and the other in June 2004.  Since 7 October 2015, Mrs O’Dea has been assessed as liable by the Department of Human Services – Child Support (the Department) to pay child support to Mr Pan in respect of the children who are both in Mr Pan’s care.

3. The Child Support (Assessment) Act 1989 (the Act) provides for an administrative assessment of the child support payable by one parent to the other.  It uses a statutory formula which contains variables such as the parents’ adjusted taxable incomes and their percentages of care.

4. The Act also provides for a departure from the administrative assessment of child support in certain circumstances.  On 4 January 2018, Mrs O’Dea applied to the Department seeking a determination to depart from the assessment of child support on the basis that:

   ·      The costs of spending time with, or communicating with, the children were more than five per cent of her adjusted taxable income; and

   ·      The child support assessment was unfair because of one or both of the parents’ income, property or financial resources.

5. On 15 March 2018, a departmental decision maker decided that none of the grounds for departure relied upon by Mrs O’Dea had been made out and her application should be refused (the decision under review).  Mrs O’Dea objected to that decision and, on 14 September 2019, that objection was disallowed.  Mrs O’Dea has now applied to this tribunal for an independent review of the Department’s decision.

6. A hearing into the application for review was held by the tribunal on 9 December 2019.  Mrs O’Dea and Mr Pan both participated in the hearing by conference telephone and both gave evidence during the hearing.  A representative of the Child Support Registrar (the Registrar) did not participate in the hearing.

7. The tribunal had before it relevant documents provided to it, and the parties to the review, by the Registrar pursuant to sections 37 and 38AA of the Administrative Appeals Tribunal Act 1975, which were labelled folios 1 to 203.  The tribunal also had before it additional documents provided by Mrs O’Dea (labelled folios A1 to A66) and Mr Pan (labelled folios B1 to B62).

ISSUES

1. The statutory provisions relevant to this review application are found within the child support law, in particular the Act.

2. Pursuant to section 98C of the Act a determination to depart from the administrative assessment of child support may be made if the following three requirements are met:

   (i)that one, or more than one, of the grounds for departure referred to in subsection [117(2) of the Act] 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 particular determination under this Part;

CONSIDERATION

1. Mrs O’Dea lives in [Country 1] ([Country 1]).  Where a parent lives overseas, and the Department cannot obtain information about that parent’s adjusted taxable income from the Australian Taxation Office, the Department may determine the amount of that parent’s adjusted taxable income from documents and information the Department possesses (section 58C of the Act). 

2. Where there is insufficient documents and information in the Department’s possession from which to determine the adjusted taxable income of a parent who lives overseas, the Department may determine the parent’s adjusted taxable income as being at least two-thirds of the annualised MTAWE figure for the relevant June quarter (section 58D of the Act). 

3. Section 5A of the Act defines the annualised MTAWE figure for the relevant June quarter as an amount that is 52 times the amount for that quarter under the headings "Average Weekly Earnings--Trend--Males--All Employees Total Earnings" in a document published by the Australian Statistician entitled "Average Weekly Earnings, Australia".

4. Mrs O’Dea made her application for a departure determination on 4 January 2018.  At that point in time, the assessment of child support determined under Part 5 of the Act was one which required Mrs O’Dea to pay a child support liability of $6,428 per annum, based upon her adjusted taxable income of $48,308, being two-thirds of the annualised MTAWE figure and Mr Pan’s adjusted taxable income of $120,583; determined by reference to his 2016-17 taxable income.[1]  This therefore, is the administrative assessment from which I am considering departing.

Is there a ground, or grounds, for departure?

[1] See folio 173

1. All the grounds for departing from the administrative assessment of child support are prefaced by the term “… in the special circumstances of the case …”.  As noted by the Full Court of the Family Court:[2]

   Whilst it is not possible to define with precision the meaning of that term, as a generality it is intended to emphasise that the facts of the case must establish something which is special or out of the ordinary. That is, the intention of the Legislature is that the court will not interfere with the administrative formula result in the ordinary run of cases. In Savery's case (at Fam LR 815 FLC 77,897), Kay J, adopting the view in In the Marriage of Philippe (1977) 4 Fam LR 153; [1978] FLC 90-433 at Fam LR 155 FLC 77,202 in a different context, said that "special circumstances" were "facts peculiar to the particular case which set it apart from other cases" . The approach to the interpretation and application of the particular grounds in s 117(2) must be guided by that qualification.

   [2] See Gyselman and Gyselman [1991] FamCA 93

Costs of spending time with, or communicating with, the children

1. Subparagraph 117(2)(b)(i) of the Act provides as a ground for departure that, in the special circumstances of the case, the costs of maintaining the child are significantly affected because of the high costs involved in enabling a parent to spend time with, or communicate with, the child.  This is commonly referred to as “Reason 1” by the Department.

2. Subsection 117(2B) of the Act also applies and provides that a parent’s costs involved in enabling the parent to care for a child can only be high if the costs that have been or will be incurred during a child support period total more than 5% of the amount worked out by:

   ·      Dividing the parent’s adjusted taxable income for the period by 365; and

   ·      Multiplying the quotient by the number of days in the period.

3. Mrs O’Dea lives in [Country 1] but the children live in Australia.  Therefore, to spend time with the children in [Country 1] Mrs O’Dea incurs expenses for airfares.  The documentary evidence shows that Mrs O’Dea has incurred the following expenses on airfares for the children:

   ·      [1,705.15 ]for return flights in March 2016 and April 2016;[3]

   ·      [3,235.89] for return flights in December 2016 and January 2017 (purchased [in] November 2016);[4]

   ·      [2,682.28] for return flights in December 2017 and January 2018 (purchased [in] November 2017);[5]

   ·      [1,846] for return flights in December 2018 and February 2019 for the youngest child only (purchased [in] October 2018). [6] The oldest child turned 18 years [in] October 2018 and, when the contact occurred, was no longer a child to whom the child support assessment applied; and

   ·      [1,682.00] for return flights for the youngest child only in September and October 2019 (purchased [in] August 2019).[7]

Child support period 7 October 2015 to 6 January 2017

[3] Folios 27 to 29

[4] Folios 25 to 26

[5] Folios 73 to 74

[6] Folios A25 to A26

[7] Folios A23 to A24

1. For the child support period 7 October 2015 to 6 January 2017 (458 days), the adjusted taxable income used for Mrs O’Dea in the statutory formula was $0[8].  I was satisfied that that the amount determined under subsection 117(2B) of the Act is $0, and five per cent of $0 is also $0.  This means that if the cost of having contact with the children during this period exceeds $0, they can be considered high.

   [8] Folios 178 t0 179

2. The evidence shows that Mrs O’Dea spent [4,941] on flights during this period.  Applying the average AUD/[Country 1] exchange rate for this child support period,[9] I determined that this equated to A$9,191 for the period 7 October 2015 to 6 January 2017.

   [9] Average exchange rate AUD1 = [details deleted]

3. I was satisfied that the costs of Mrs O’Dea spending time with the children were high for this child support period.

4. During this child support period, the costs of maintaining the children were assessed as $23,385 per annum under the statutory formula.[10]  I was satisfied that the costs incurred by Mrs O’Dea having contact with the children during this child support period were more than one-third of the annual costs of maintaining the children and consequently significantly affected those costs.

Child support period 7 January 2017 to 30 November 2017

[10] Folio 176

1. For the child support period 7 January 2017 to 30 November 2017 (328 days) the adjusted taxable income used for Mrs O’Dea in the statutory formula is $0.[11]  I calculated that the amount determined under subsection 117(2B) of the Act is $0, and five per cent of $0 is also $0.  This means that if the cost of having contact with the children during this period exceeds $0, they can be considered high.

   [11] Folios 175 to 178

2. The evidence shows that Mrs O’Dea spent [2,682] on flights during this period.  Applying the average exchange rate for this child support period,[12] I determined that this equated to A$4,488 for the period 7 January 2017 to 30 November 2017.

   [12] AUD1 = [Country 1 currency]

3. I was satisfied that the costs of Mrs O’Dea spending time with the children were high for this child support period.

4. During this child support period the costs of maintaining the children under the statutory formula were $23,982 per annum, prior to the youngest child turning 13 years and $26,365 per annum after he attained 13 years.[13]  I was satisfied that the costs incurred by Mrs O’Dea having contact with the children during this child support period were almost one-fifth of the annual costs of maintaining the children and consequently significantly affected those costs.

Child support period 1 December 2017 to 28 February 2019

[13] Folios 175 & 177

1. For the child support period 1 December 2017 to 28 February 2019 (455 days) the adjusted taxable income of Mrs O’Dea used in the statutory formula was $48,308.[14] Applying the formula in subsection 117(2B) of the Act gives $60,220,[15] and five per cent of this is $3,011. If the costs of Mrs O’Dea having contact with the children in this period exceeds $3,011 they can be considered high.

   [14] Folios 171 to 174

   [15] $48,308 ÷ 365 days x 455 days = $60,220

2. The evidence shows that Mrs O’Dea spent [1,846] on flights to have contact with the youngest child during this period.  Applying the average exchange rate for this child support period,[16] I determined that this equated to A$3,298 for the period 1 December 2017 to 28 February 2019.

   [16] AUD1 = [Country 1 currency]

3. I was satisfied that the costs of Mrs O’Dea spending time with the children were high for this child support period.

4. During this child support period, the costs of maintaining the children under the statutory formula were $32,088 per annum until 13 October 2018, when they fell to $21,841 per annum once the oldest child turned 18 years of age.[17]  The costs of having contact with the children constituted 10 to 15 per cent of the annual costs of maintaining the children and I was satisfied that those costs were significantly affected.

Child support period 1 March 19 to 30 September 2019

[17] Folio 171 & 172

1. For the child support period 1 March 2019 to 30 September 2019 (241 days) the adjusted taxable income used for Mrs O’Dea in the statutory formula is $50,076.[18] I calculated that the amount determined under subsection 117(2B) of the Act is $33,064,[19] and five percent of $33,064 is $1,653. This means that if the cost of having contact with the children during this current child support period exceeds $1,653 they can be considered high.

   [18] Folio 169 to 170

   [19] $50,076 ÷ 365 days x 458 days = $62,835

2. The evidence shows that Mrs O’Dea spent [1,682] on flights during this period.  Applying the average exchange rate to date for this child support period,[20] I determined that this equated to A$3,089 for the period 1 March 2019 to 30 September 2019.

   [20] AUD1 = [Country 1 currency]

3. I concluded that the costs of Mrs O’Dea spending time with the children were high for the child support period that commenced on 1 March 2019.

4. During this child support period, the costs of maintaining the youngest child under the statutory formula were $23,038.  The costs of having contact with the child constituted seven per cent of the annual costs of maintaining the child and I was satisfied that those costs were significantly affected.

Conclusion

1. I therefore found that the costs of Mrs O’Dea spending time with the children were high during the child support periods that commenced from 7 October 2015 (the start of the assessment) until 30 September 2019.  There is no evidence of any costs incurred since 1 October 2019.  I have also found that the costs incurred by Mrs O’Dea during those child support periods significantly affected the costs of maintaining the children.

2. However, those costs of contact only constitute a ground for departure if there are “special circumstances” in this particular case.

3. It is undisputed that, [in] October 2015, the parents entered into consent orders before the Family Court of Australia.[21]  Order 5(a)(i) provides that when the children visited Mrs O’Dea in [Country 1], “the wife shall book and pay for the costs of such return travel from Australia to [City 1], [Country 1]”. 

   [21] Folios 127 to 138

4. Mrs O’Dea’s evidence was that negotiations about these orders included discussion that her payment of the travel costs would be in lieu of her paying child support to Mr Pan, which is something that Mr Pan disputed.  However, what is clear is that the Family Court did not make orders affecting Mrs O’Dea’s obligation to pay child support under the Act.

5. Mrs O’Dea submitted that it is unfair that she pay child support on top of the costs of the flights she has incurred.  She stated that her income was very low and she cannot afford to pay both child support and costs of the children travelling to [Country 1].  She believes it is important that the children be able to spend time with her.

6. Mr Pan does not agree that Mrs O’Dea should be relieved of the obligation to pay him child support because she pays for the children’s travel to [Country 1]. 

7. In the original decision, the departmental decision maker noted that the cost of Mrs O’Dea having contact with the children “has been addressed by the parents in court which means there is no basis for me to interfere in the arrangement under this process”.[22]  On objection, the objections officer noted that “The department will not undermine the court’s jurisdiction by making a variation to a child support assessment on matters decided by the court”.[23]

   [22] At folio 98

   [23] At folio 13

8. Part of Mrs O’Dea’s concern appears to be the quantum of her child support liability, which she is being expected to meet, on top of paying for the costs of the children’s flights to [Country 1].  The quantum of those liabilities arises from the amount of Mrs O’Dea’s adjusted taxable income used in the assessment, namely the annualised MTAWE figure that has applied to the assessment since 1 December 2017.  I will address issues relating to Mrs O’Dea’s adjusted taxable incomes used in the assessment later in these reasons.

9. Regardless of the dispute about what was agreed to - or otherwise - in negotiating the consent orders, I took the consent orders at face value.  As they were consent orders, Mrs O’Dea agreed that she would pay for the costs of the children travelling to [Country 1] to spend time with her without reference to a child support liability.  In light of the consent orders, I was not persuaded that there are special circumstances in respect of the costs of Mrs O’Dea spending time with the children when they travel to [Country 1]. 

10. I therefore found that ground for departure set out in subparagraph 117(2)(b)(i) of the Act has not been made out.

The income, property and financial resources of either parent

1. Mrs O’Dea’s’ application for a departure determination relied upon the ground for departure set out in subparagraph 117(2)(c)(ia) of the Act.

2. This provision – commonly referred to as “Reason 8A” by the Department – provides that a ground to depart from the statutory formula may be established if, in the special circumstances of the case, the child support assessment results in an “… unjust and inequitable determination of the level of financial support to be provided by the liable parent …” due to the income, property and financial resources of either parent. 

Mr Pan

1. Mrs O’Dea initially relied, in making her application for a departure determination, on this ground in relation to 33 months of rental income received by Mr Pan from properties that had been part of the marital pool.[24]  This was not an issue that she pressed during the hearing.  In any case, I was satisfied that issues related to the party’s marital property have already been dealt with when a [Country 1] Family Court made orders [in] July 2017.

   [24] Folio 64, 103 and 105 to 106

2. Mr Pan’s adjusted taxable income used in the administrative assessment when Mrs O’Dea made her application for a departure determination was $120,583, based upon his 2016-17 taxable income.[25]  His adjusted taxable income currently used in the assessment is $135,070, based upon his 2018-19 taxable income.[26] 

   [25] Folio 173

   [26] Folio 200

3. Mr Pan’s tax return and taxation Notice of Assessment for 2018-19[27] show that his taxable income was $117,633, to which is added his net rental property losses of $17,437 to give the adjusted taxable income of $135,070.

   [27] Folios  B14 to B19

4. Mr Pan’s Statement of Financial Circumstances (Child support reviews)[28] shows that he is in full-time employment and reports a weekly wage of $2,243 ($116,636 per annum).  He owns his home and a number of rental properties, which he values at $2,238,000.  Those properties are the subject of mortgages, upon which is owed $1,144,000.  I was satisfied that Mr Pan has equity in property worth $1,094,000.

   [28] Folios B1 to B10

5. In addition, Mr Pan reports ownership of two motor vehicles ($19,000) and household contents ($3,000).  His other liabilities are a bank loan of $8,000, loans to family of $459,000, credit card debt of $6,000 and the sum of $11,000 still outstanding to Mrs O’Dea regarding their property matters.  Mr Pan’s bank statements disclose modest balances, in addition to him being in advance of repayments on one of his home loans to the value of $5,979.00.[29]

   [29] Folios B20 to B69

1. I was satisfied that Mr Pan has made complete disclosure of his financial situation.  I was also satisfied that Mr Pan’s income, property and financial resources are commensurate with the adjusted taxable income that applies in the child support assessment.

2. I was not persuaded that Mr Pan’s income, property or financial resources render the administrative assessment of child support unjust or inequitable.  I did not find that the ground for departure set out in subparagraph 117(2)(c)(ia) of the Act has been made out in respect of Mr Pan’s circumstances.

Mrs O’Dea

1. Mrs O’Dea’s adjusted taxable income used in the administrative assessment when she made her application for a departure determination was $48,308,[30] based upon the two-thirds of the annualised MTAWE figure.  Her adjusted taxable income currently used in the administrative assessment is $50,076,[31] also based upon two-thirds of the annualised MTAWE figure that applies for child support periods that commence in 2019.

   [30] Folio 173

   [31] Folio 200

2. Mrs O’Dea’s [tax documents][32] indicate that her income is as follows:

   ·      [4,130.78] for [Country 1] 2015 tax year;

   ·      [12,188.44] for [Country 1] 2016 tax year;

   ·      [32,089] for [Country 1] 2017 tax year;

   ·      [14,312.19] for [Country 1] 2018 tax year; and

   ·      [5,240.51] for [Country 1] 2019 tax year.

   [32] Folios A37 to A41

3. Having regard to the average exchange rates[33] that applied for each [Country 1] tax year (which commence on [a certain date] each year), I determined that Mrs O’Dea’s taxable income was $29,695 for the period 6 April 2017 to 5 April 2018, and $9,433.86 for the period 6 April 2018 to 5 April 2019.

   [33] For 6 April 17 to 5 April 18:  AUD1 = [Details deleted]

4. Mrs O’Dea’s Statement of Financial Circumstances (Child support reviews)[34] form shows that she currently has no income other than a government child benefit of $35.92 per week.  Mrs O’Dea’s evidence was that she is unemployed and at home with a baby. 

   [34] Folios A1 to A13

5. Mrs O’Dea reports the ownership of a home, which she owns jointly with her husband, and she puts her half share as being worth $202,894. There is no mortgage on the home. Mrs O’Dea does not list any other assets, other than household contents she values at $600. Mrs O’Dea’s bank statements show only modest balances and credit card debt of [50].73.[35]  Mrs O’Dea reports that she owes her sister $17,875 and has outstanding legal fees and a liability to [Agency 1] of $12,845.  She gave evidence that she and her husband have recently borrowed [5,000] from Mrs O’Dea’s father-in-law.

   [35] Folios A42 to A66

6. Mrs O’Dea’s [tax documents] for 2018 and 2019 show that her income has been substantially less than the two-thirds annualised MTAWE figure that applied when she made her application for a departure determination.  Having regard to the evidence, I was satisfied that Mrs O’Dea’s income, property and financial resources are not adequately reflected in her adjusted taxable income used in the administrative assessment of child support and render that assessment unjust and inequitable.

7. I considered the difference between the adjusted taxable incomes applicable in the administrative assessment is so significantly different to Mrs O’Dea’s actual income that it constitutes special circumstances in this case.

8. I was therefore satisfied that subparagraph 117(2)(c)(ia) of the Act has been made out in respect of Mrs O’Dea’s income, property and financial resources.

Just and equitable

1. The requirement to consider whether a departure would be just and equitable directs that my attention is turned to what is fair to the parents and their children.  Regard must be had to a variety of factors, set out in subsection 117(4) of the Act, such as the needs of the children, the parents’ commitments and any hardships that would be caused by departing, or not departing, from the statutory formula.

The children

1. At all relevant times the Department has recorded the children as being in Mr Pan’s care.  There is no evidence that the children themselves have any income, property, earning capacity or financial resources relevant to my consideration.

2. As noted above, since 1 December 2017, the costs of maintaining the children under the statutory formula were $32,088 per annum until 13 October 2018, when they fell to $21,841 per annum once the oldest child turned 18 years of age.  In the child support period that commenced on 1 October 2019, the costs of the remaining child under 18 years of age are assessed as $23,648 per annum.[36] 

   [36] At folio 200

3. There is no evidence that the children have any special needs giving rise to additional costs, or out of the ordinary costs relating to their education, care and maintenance.

Mrs O’Dea

1. I have found that Mrs O’Dea’s income was $29,695 for the period 6 April 2017 to 5 April 2018, and $9,433.86 for the period 6 April 2018 to 5 April 2019.

2. I received no submissions, nor identified any evidence, that Ms O’Dea has any unutilised earning capacity that is relevant to my consideration.

3. Mrs O’Dea’s costs for her own support were discussed in detail during the hearing.  Under the administrative assessment of child support, Mrs O’Dea has the benefit of a self-support amount of $24,154 per annum from 1 December 2017 and $25,038 per annum from 1 March 2019.  I identified no evidence to persuade me that Mrs O’Dea‘s necessary commitments to support herself are not adequately represented by those amounts.

4. Mrs O’Dea has recently had a baby.  Under the statutory formula she would be entitled to an additional $4,342 per annum prior to 1 October 2019, and $4,256 per annum after that date, on top of the self-support amount before her income affects the child support liability.  I identified no evidence that Mrs O’Dea’s necessary commitments to support her dependent child are not adequately reflected by those amounts.

5. Mrs O’Dea submitted that were I not to make a departure determination, she would suffer significant financial hardship.

Mr Pan

1. I was satisfied that Mr Pan’s income, property and financial resources are adequately represented by his adjusted taxable income used in the administrative assessment of child support. 

2. The adjusted taxable income for Mr Pan used in the administrative assessment when Mrs O’Dea made her application for a departure determination was $120,583, based upon his 2016-17 taxable income.  His adjusted taxable income currently used in the assessment is $135,070, based upon his 2018-19 taxable income.

3. The children have been in Mr Pan’s sole care and he is solely responsible for meeting the costs of their care discussed above.

4. I received no submissions, nor identified any evidence, that Mr Pan has any unutilised earning capacity that is relevant to my consideration.

5. Mr Pan’s Statement of Financial Circumstances (Child support reviews) and his costs for his own support were discussed during the hearing.  Under the administrative assessment of child support, Mr Pan has the benefit of a self-support amount of $24,154 per annum from 1 December 2017 and $25,038 per annum from 1 March 2019.  I identified no evidence to persuade me that Mr Pan’s necessary commitments to support himself are not adequately represented by those amounts.

6. Mr Pan’s evidence was that he does what he can with his current financial resources, which doesn’t include any child support from Mrs O’Dea, because none has been paid.  He tries to make sure the children don’t miss out and is breaking even at the moment.  Mr Pan stated that without receiving child support from Mrs O’Dea, the children have missed out and there are certain things they don’t have.  Mr Pan submitted that he and the children would suffer financial hardship if I were to make a departure determination.

Conclusion

1. Having considered those matters set out in subsection 117(4) of the Act, I was satisfied that it would be just and equitable to make a departure determination that reduces Mrs O’Dea’s liability to pay child support.

Otherwise proper

1. The requirement to consider whether a departure would be otherwise proper, is set out in subsection 117(5) of the Act, which directs my attention to what is fair to the community.  It is necessary to consider the effect, if any, that a departure from the administrative assessment would have on entitlements to income tested pension, allowance or benefit.  Parents, rather than the community, have the primary duty to maintain their children.

2. The evidence shows that Mr Pan does not receive any family tax benefit.  In spite of the fact that any departure determination would have no effect on any entitlement to an income tested pension, allowance or benefit, I was satisfied that making a departure determination would be otherwise proper, having regard to the fact that parents have a primary duty to maintain their children.

Conclusion

1. Section 4 of the Act sets out the objectives of the Act, these objectives include:

   ·      Parents of a child have a primary duty to maintain that child;

   ·      That duty has a priority over all commitments of the parent other than commitments necessary for self-support;

   ·      The level of financial support to be provided by parents to their children should be determined in accordance with the legislatively fixed standards; and

   ·      The level of financial support is to be determined according to the capacity to provide financial support and noting that parents with a like capacity to provide financial support should provide like amounts.

2. I have found that there is a ground for departure in this case, and it would be just and equitable and otherwise proper for me to make a departure determination.  Section 98S of the Act describes the determinations that I may make if a decision is made to depart from the administrative assessment of child support.

3. I have found a ground for departure in respect of Mrs O’Dea’s income property and financial resources and intend to make a departure determination to ameliorate the unfairness that results from Mrs O’Dea’s adjusted taxable income being set at the two-thirds annualised MTAWE figure that applies under the administrative assessment.

4. Mrs O’Dea made her application for a Departure determination on 4 January 2018 and I intend to start my departure determination from that date.  From 4 January 2018 until 5 April 2018, I intend to set Mrs O’Dea’s adjusted taxable income at $29,695 per annum.  I estimated that this would result in her child support liability being approximately $1,522 per annum for this period.

5. I was satisfied that Mrs O’Dea’s income has been $9,433.86 per annum since 6 April 2018.  I concluded that an amount equivalent to the minimum annual rate of child support that applies to very low income earners should apply from that date.  This would be $427 per annum from 6 April 2018 and $435 per annum from 1 March 2019.  I intend this rate to apply until the end of the current child support period.

6. This is a reduction in relation to the existing assessment, but the outcome will be that Mrs O’Dea’s child support arrears and ongoing liability will reduce, but due to those arrears, it will not result in Mr Pan incurring a child support overpayment.

7. I considered that such departure determinations represent an appropriate balance of the hardships of each parent.

8. Accordingly, I concluded that the appropriate departure determinations to apply in this case, pursuant to paragraphs 98S(1)(a) and (g) of the Act, are:

   ·      To vary Mrs O’Dea’s adjusted taxable income to be the amount of $29,695 per annum for the period 4 January 2018 until 5 April 2018;

   ·      To vary the rate of child support payable by Mrs O’Dea to $427 per annum from 6 April 2018 until 28 February 2019; and

   ·      To vary the rate of child support payable by Mrs O’Dea to $435 per annum from 1 March 2019 until the current child support period ends.

9. Therefore, and for these reasons, I set aside the decision under review and substituted my own.

DECISION

The tribunal set aside the decision under review and, in substitution, decided that there are to be determinations to depart from the administrative assessment of child support such that:

• For the period 4 January 2018 until 5 April 2018 Mrs O’Dea’s adjusted taxable income is varied to be $29,695 per annum;

• For the period 6 April 2018 until 28 February 2019 the annual rate of child support payable by Mrs O’Dea is varied to be $427; and

• From 1 March 2019 until the current child support period ends, the annual rate of child support payable by Mrs O’Dea is varied to be $435.