Olsen and Hatter (Child support)

[2019] AATA 380

Olsen and Hatter (Child support) [2019] AATA 380 (8 January 2019)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2018/BC014841

APPLICANT:  Mrs Olsen

OTHER PARTIES:  Child Support Registrar

Mr Hatter

TRIBUNAL:Member S Letch

DECISION DATE:  8 January 2019

DECISION:

The decisions under review are set aside and in substitution, it is decided that the two instalments of $247 (totalling $494) the subject of this review are not to be credited as prescribed non-agency payments. This means the application is successful.

CATCHWORDS

CHILD SUPPORT – non-agency payments – prescribed payments – payments for orthodontic treatment – discretion to refuse to credit a payment in particular circumstances of the case

Names used in all published decisions are pseudonyms. Any references appearing in square brackets indicate that information has been removed from this decision and replaced with generic information so as not to identify involved individuals as required by subsections 16(2AB)-16(2AC) of the Child Support (Registration and Collection) Act 1988.

REASONS FOR DECISION

BACKGROUND

1. Mr Hatter has been assessed to pay child support to Mrs Olsen for their child [Child 1]. Liability has been registered for collection by the Child Support Agency (CSA) from Mr Hatter since February 2016. Mrs Olsen is recorded as having 100% care of [Child 1].

2. Mr Hatter asked the CSA to credit towards his child support liability two payments of $247 made in January and February 2018 (totalling $494) in respect of orthodontic treatment for [Child 1]. Mrs Olsen did not agree that the amounts should be so credited.

3. The relevant legislation is contained in the Child Support (Registration and Collection) Act 1988 (the Act). Subsection 71(1) of the Act provides that a payment directly to the recipient of child support can be credited against the amount of child support payable if the payment was intended by both child support parties to be a payment in satisfaction of the child support liability. Subsection 71A(1) provides for amounts paid to third parties be credited in the same way if the payment was intended by both child support parties to be a payment in satisfaction of the child support liability. The CSA refers to these credits as non-agency payments. Section 71C of the Act allows for certain “prescribed payments” to be credited as non-agency payments even if mutual intention does not exist.

4. On 7 May 2018, the CSA decided (in what was effectively two decisions – one for each instalment) to credit the amount of $494 as prescribed non-agency payments. Mrs Olsen objected and, on 18 August 2018, the objection was disallowed. On 20 August 2018, Mrs Olsen sought further review by the Tribunal.

5. The Tribunal conducted a hearing by conference telephone on 4 January 2019. Mr Hatter had earlier advised the Tribunal he did not wish to participate in the application; the hearing proceeded in his absence.

CONSIDERATION

1. The Tribunal is limited to considering decisions reviewed by an objections officer. Section 71C of the Act enables certain “prescribed payments” to be credited against a payer’s child support liability regardless of the intention of the parties at the time the payment was made.

2. The types of payments that can be credited under section 71C of the Act are prescribed under regulation 5D of the Child Support (Registration and Collection) Regulations 1988 (the Regulations). They are:

   (a) child care costs for the child who is the subject of the enforceable maintenance liability;

   (b)      fees charged by a school or pre-school for that child;

   (ba)amounts payable for uniforms and books prescribed by a school or pre-school for that child;

   (c)      fees for essential medical and dental services for that child;

   (d)the payee’s share of amounts payable for rent or a security bond for the payee’s home;

   (e)the payee’s share of amounts payable for utilities, rates or body corporate charges for the payee’s home;

   (f)       the payee’s share of repayments on a loan that financed the payee’s home;

   (g)costs to the payee of obtaining and running a motor vehicle, including repairs and standing costs.

3. Mrs Olsen told the Tribunal that the orthodontic treatment had been completed in September 2017. There was no dispute the treatment was for essential dental services. [Child 1] came into her 100% care from January 2018 (previously care for [Child 1] had been shared equally) following incidents Mrs Olsen told the Tribunal she had reported to child safety authorities. Her evidence was that Mr Hatter had not requested any contribution from her for dental treatment at the relevant time. By now claiming amounts as non-agency payments for his alleged “out of pocket” expenses (which she disputes), she is effectively meeting 100% of the alleged costs. She considers this grossly unfair (Mrs Olsen indicated that the CSA more recently informed her of the option to apply for a “change of assessment” in respect of those costs, which she has now lodged).

4. Mrs Olsen referred to later non-agency payments accepted by the CSA; the Tribunal observed it is limited in this application to considering only those decisions reviewed by an objections officer (namely in respect of the two earlier payments of $247 in January and February 2018). Mrs Olsen does not accept the evidence submitted by Mr Hatter that his health insurance claim in June 2018 had been declined supports he is actually “out of pocket”; she said it was the end of the financial year so he likely had exhausted all his entitlements. She is also not satisfied he has incurred expense for the claims he has made for non-agency payments in the latter part of 2018. She considers Mr Hatter should be required to submit a full statement of benefits he has received from his insurance provider.

5. The Tribunal did not have the benefit of hearing sworn evidence from Mr Hatter. However, the documentary evidence supports Mr Hatter’s payments of $247 in January and February 2018 to the orthodontist; he has made repeated representations to the CSA he has not been reimbursed by his insurance provider. He supplied some evidence to the CSA of a rejected online insurance claim for unidentified “extras”. In the absence of evidence to the contrary, the Tribunal is reasonably satisfied Mr Hatter is “out of pocket” in respect of the two instalments under review.

6. However, that is not the end of the matter. Section 71D of the Act relevantly provides:

   The Registrar may refuse to credit an amount under [section 71C] if satisfied that, in the circumstances of the particular case, the amount ought not to be credited.

7. According to Mrs Olsen, the orthodontic treatment for [Child 1] ended in September 2017. Mr Hatter had entered into a payment plan with the orthodontist to meet the liability he accepted for the dental work. At that time – as care for [Child 1] was being shared – Mr Hatter would not have been able to make a successful claim for a prescribed non-agency payment, which is only available where a paying parent has less than 14% care (and is not having their child support liability reduced to reflect having at least that level of care).

8. The materials reveal evidence submitted by Mr Hatter that, prior to the commencement of the orthodontic treatment, he had sought a contribution from Mrs Olsen. It appears no contribution was forthcoming from Mrs Olsen. Regardless, it seems Mr Hatter decided to proceed with the treatment and accept responsibility for meeting [Child 1’s] orthodontic costs. It appears the orthodontic work ceased in around late 2017 (Mrs Olsen’s evidence was that the braces were removed in September 2017). The liability had been accrued (at a time when care was still shared equally, and Mr Hatter was paying a reduced level of child support), and Mr Hatter benefited from a payment plan instead of being required to meet his liability in full. By later making a claim for prescribed non-agency payments (following a change in care), it seems to the Tribunal Mr Hatter is effectively shifting the responsibility he had taken to meet [Child 1’s] costs over to Mrs Olsen without Mrs Olsen’s agreement.

9. In the Tribunal’s assessment, in the circumstances of this case, and in particular the relative unfairness to Mrs Olsen were the payments credited, it would be appropriate to refuse to credit the two payments under review in accordance with the discretion contained in section 71D of the Act.

10. As the Tribunal has reached a different conclusion to that reached by the objections officer, that decision will be set aside.

DECISION

The decisions under review are set aside and in substitution, it is decided that the two payments of $247 (totalling $494) the subject of this review are not to be credited as prescribed non-agency payments. This means the application is successful.