Paisley and Child Support Registrar (Child support)

[2019] AATA 2192

Paisley and Child Support Registrar (Child support) [2019] AATA 2192 (18 April 2019)

DIVISION:  Social Services & Child Support Division

REVIEW NUMBER:  2018/SC015516

APPLICANT:  Mr Paisley  

OTHER PARTIES:  Child Support Registrar

TRIBUNAL:Member H Schuster

DECISION DATE:  18 April 2019

DECISION:

The decision under review is affirmed.

CATCHWORDS

CHILD SUPPORT – refusal to grant an extension of time to object – no satisfactory explanation for the delay – little merit – weighing all factors the extension of time was correctly refused – decision under review affirmed

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 Paisley and Ms [A] are the parents of three children aged 9, 12 and 14 years old. There has been a child support assessment in place for the children since 29 October 2013.  Under the assessment Mr Paisley is liable to pay child support to Ms [A].

2. For the period 1 July 2017 to 30 September 2018 Mr Paisley was assessed to pay child support at the rate of $1,797 per year based on his adjusted taxable income of $30,330 for the 2016/17 financial year and Ms [A]’s provisional income for 2016/17 of $78,177.

3. On 29 November 2017 the Department of Human Services, Child Support (the Child Support Registrar) made a decision to change the child support assessment by setting the adjusted taxable income for Mr Paisley at $133,950 from 1 July 2017 to 31 March 2018 (the original decision).

4. On 4 October 2018 Mr Paisley objected to the original decision and as his objection was not made within the prescribed period he applied for an extension of time (EOT). On 27 October 2018 Mr Paisley made an application for an extension of time to lodge his objection.

5. On 1 November 2018 the request for an EOT was refused (EOT decision) and on 28 November 2018 Mr Paisley sought a review by the Administrative Appeals Tribunal (the Tribunal).

6. The matter was heard on 18 February 2019.  The Tribunal had before it a bundle of documents provided by the Child Support Registrar (266 pages) and copies of the documents were provided to Mr Paisley prior to the hearing.  Mr Paisley gave evidence on affirmation by conference telephone.

ISSUES

1. The statutory provisions relevant to this review are contained in the Child Support (Registration and Collection) Act 1988 (the Act).

2. The issue which arises in this case is whether or not to grant Mr Paisley’s request for an EOT to lodge an objection to the original decision.

CONSIDERATION

1. Part VII of the Act is about the procedures related to objections made for certain decisions.  Section 81 is about time limits on lodging objections and provides that a person has 28 days in which to lodge an objection after a notice of the decision is served on them.  Section 82 provides for a person to apply for an EOT to lodge an objection after the 28 day period has elapsed.  Section 83 requires the Registrar to either grant or refuse an EOT application and serve notice in writing of the decision.

2. In the event the Child Support Registrar refuses the EOT application the person applying may apply to the Tribunal for review (item 1 of the table in subsection 89(1) of the Act).

3. Mr Paisley was advised about the outcome of the original decision in a letter from the Child Support Registrar on 1 December 2017 and under provisions of the Evidence Act 1995 he was therefore taken to be served with written notice of this decision by 14 December 2017.  Mr Paisley lodged his objection 336 days after he was served with the notice. Thus the Tribunal is satisfied an application for an EOT was required.

4. The Tribunal has to consider whether it is reasonable or proper for an EOT to be granted to Mr Paisley to lodge his objection to the decision made on 29 November 2017.  The general rule is that the statutory time limit of 28 days is to be enforced unless there are acceptable reasons for departing from this prescribed timeframe.

5. A consideration of other relevant authorities establishes that when considering matters relating to an EOT the Tribunal should consider and balance a range of factors.  These factors are a guide and are not exhaustive, but generally include:

   ·  the reasons for the delay and whether the person rested on their rights;

   ·  the merits of the substantive application;

   ·  any prejudice to the other party including any difficulties they will experience in providing evidence as a result of the delay;

   ·  any prejudice to the general public; and

   ·  fairness in granting an EOT.

Reasons for the delay

1. The Tribunal finds that Mr Paisley’s application on 4 October 2018 to make an objection to the decision made on 29 November 2017 was approximately 337 days out of time.

2. In seeking an EOT, Mr Paisley said:

   ·  He told an assessor on 1 December 2017 that he did not agree with the assessor and asked for an email address to send his objection. He was told there was none.

   ·  At the time of the decision having been made he was working in [a town] and could not get to a post office.

   ·  He could not send emails or upload documents using either the DHS website or MyGov.

   ·  His tax return needed to be completed which was “later than the 28 days”.  Mr Paisley also believes the statement made by the Child Support Registrar that he did not disclose his complete financial position was untrue.

3. Mr Paisley was advised of objection rights even before he received the written notification: in a file note dated 28 November 2017 an officer noted that Mr Paisley was advised of the decision that would be made in relation to the change of assessment, including the objection process. It was also explained to Mr Paisley that he could seek another change of assessment if his circumstances substantially changed. The officer noted “[Mr Paisley] will ring me if he has any questions once he receives my written decision and objection/appeal rights discussed.”

4. Mr Paisley did not make an objection but did contact the Child Support Registrar on 30 January 2018 to notify a change of circumstances. He submitted an unsigned application for a change of assessment on 27 February 2018 and a signed copy on 22 March 2018 but ultimately withdrew that application on 10 April 2018.

5. On 29 May 2018 Mr Paisley was advised of an application for a change of assessment made by Ms [A] on 23 April 2018. He responded to that application, providing evidence and speaking to an officer.

6. On 15 August 2018 the Child Support Registrar made a new decision to depart from the administrative assessment from 1 April 2018. Mr Paisley’s adjusted taxable income was set at $128,000 for the period from 1 April 2018 to 1 June 2018, $73,000 from 1 September 2018 to 31 December 2020 and in addition, from 1 September 2018 to 31 December 2020 Mr Paisley’s annual rate of child support was increased by $5,400 for private school fees.

7. On 3 October 2018 Mr Paisley spoke to an officer of the Child Support Registrar and was advised of the possibility of making an objection to the 29 November 2017 decision out of time but that he was required to apply for an EOT. On 27 October 2018 Mr Paisley objected to the decision made on 29 November 2017 to set his income at $133,950 and sought an EOT.

8. The Tribunal was satisfied that Mr Paisley had the capacity to communicate effectively, including lodging an objection to the decision, from at least 30 January 2018. Furthermore, he was able to effectively lodge an application for departure from the assessment and participate in subsequent decisions made by the Child Support Registrar.

9. Mr Paisley said that the main reason why he did not make an objection earlier is because he did not understand any of the review procedures. He received a lot of letters from Child Support which were confusing: one day he would get a letter using $133,950 for his income and within the same week he would get a letter stating his income was assessed at only $33,000. He said he did not understand the time limits, nor the need to seek an objection within time.

10. While Mr Paisley may have had only a basic understanding of the frankly complex rules regarding the date of effect of decisions, the Tribunal does not accept that Mr Paisley was not advised of the 28 day period to object, nor was he practically prevented from making an effective objection.

11. The exchanges between Mr Paisley and officers of the Child Support Registrar show he was advised by phone and in writing of the time limits and requirements for making objections. The Tribunal concluded that Mr Paisley chose not to pursue that course of action in 2018 and instead concentrated his efforts in demonstrating the changes to his income in early 2018. It appeared to the Tribunal that Mr Paisley’s failure to lodge an objection was not a result of his lack of capacity or understanding but his choice not to pursue a decision that was overtaken by subsequent changes.

12. The Tribunal does not find Mr Paisley had a reasonable explanation for the delay which would warrant an EOT to be granted.

Merits of the application

1. In the original decision the Child Support Registrar set Mr Paisley’s adjusted taxable income at $133,950 on the ground of his income, property and financial resources (Reason 8A). 

2. Mr Paisley operates a business, [Company 1], which enters into contracts under which the company receives money for work performed by Mr Paisley. In 2017/18 he had a contract with [Company 2] until January 2018. Under that contract [Company 1] received around $86,000 for 13 fortnights of work, and from 1 February 2018 he was paid under a contract with [Company 3] at the rate of $120,000 per annum. He has since had other changes which are not relevant to this review but were addressed in later decisions of the Child Support Registrar.

3. The November 2017 decision assessed Mr Paisley’s liability to pay child support based on an assumption that he would work at least 38 hours per week at $75 per hour, which was annualised to $133,950.

4. Mr Paisley notes that he had a number of expenses incurred in earning income through the business which would normally be borne by an employer but which were not considered. He argued that because those expenses were not taken into account it significantly overstated his income.

5. While under contract with [Company 2], Mr Paisley charged $75 for every hour of work undertaken. In addition, in his fortnightly invoices he included charges for GST, accommodation costs ($330 per week), diesel, printing and cleaning expenses. The gross amount he received from [Company 2] over the first half of the 2017/18 financial year was around $86,000.

6. The Tribunal added up the invoices for the 13 fortnights from 16 July 2017 to 31 December 2017 and found that Mr Paisley’s income, excluding all expenses and GST itemised on the invoices, was about $74,000 for six months, or $148,000 per year. The Tribunal notes that the adjusted taxable income set by the Child Support Registrar was significantly less than that and thus the Tribunal must reject the proposition that the Child Support Registrar impermissibly refused the deduction of expenses from business income.

7. While Mr Paisley argued that he had additional overhead expenses and expenses related to other work which the company is engaged in, the Tribunal notes that Mr Paisley did not provide any evidence to the Registrar which set out any additional income derived by the company nor any other expenses incurred in the period. In addition, the Tribunal notes that the expenses charged to [Company 2] were not substantiated.

8. The Tribunal finds that Mr Paisley’s application does not have significant merit.

Prejudice to Ms [A] and the wider public

1. Should Mr Paisley be successful in his application there would be some prejudice to Ms [A] as it would be reasonable for her to rely on the child support income that had been set once the period for challenging the original decision had past.

2. However, as Mr Paisley noted, he has been in arrears with his child support payments and Ms [A] is unlikely to face an overpayment. However, there is an administrative cost and inconvenience to both Ms [A] and the Commonwealth in re-agitating a case that has long been overtaken by subsequent changes.

3. The legislation prescribes timeframes in which to lodge objections.  The public has an expectation that these timeframes will generally be observed.  In addition, as Ms [A] may be in receipt of family tax benefits from Centrelink, a change in the child support entitlement may affect her entitlement to those benefits.

Fairness in granting an EOT as between Mr Paisley and other persons in similar positions

1. The Tribunal is not satisfied that Mr Paisley’s delay in seeking an objection to a decision made in November 2017 was reasonable, given the length of the delay and the administrative actions he chose to pursue or not pursue in the interval. The Tribunal also found that his substantive application has little merit. Granting an EOT in those circumstances would be unfair to others for whom the timeline is not extended.

2. The Tribunal accepts that Mr Paisley’s financial circumstances changed slightly in February 2018 and subsequently changed again in a manner that was addressed by the most recent decision.

3. It is unreasonable for a 2017 assessment to be reopened on arguments which were before the original decision maker, and in circumstances where Mr Paisley consciously did not pursue other administrative remedies available to him.

4. On balance, given the reasons above, the Tribunal has determined that an extension of time should not be granted for Mr Paisley to object to the decision made by the Child Support Registrar on 29 November 2017.  Accordingly the decision under review is affirmed.

DECISION

The decision under review is affirmed.