Pankey and Mulgrew (Child support)

[2021] AATA 462

Pankey and Mulgrew (Child support) [2021] AATA 462 (2 February 2021)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2020/BC020295

APPLICANT:  Mr Pankey

OTHER PARTIES:  Ms Mulgrew

Child Support Registrar

TRIBUNAL:Member P Jensen

DECISION DATE:  2 February 2021

DECISION:

The decision under review is affirmed.

CATCHWORDS

CHILD SUPPORT – particulars of the administrative assessment – estimate of income – whether the estimate was correctly reconciled – 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

1. Mr Pankey and Ms Mulgrew are the parents of three children. A child support case was registered in 2014. The Child Support (Assessment) Act 1989 (“the Act”) provides for an administrative assessment of child support payable. It uses a formula which contains variables such as the parents’ adjusted taxable incomes and their percentages of care of the children. In February 2020 the administrative assessment was based on Mr Pankey’s 2018-19 adjusted taxable income of $24,013 and Ms Mulgrew’s 2018-19 adjusted taxable income of $22,735, and Mr Pankey’s 86% care and Ms Mulgrew’s 14% care of the children. Neither parent was required to pay child support to the other parent.

2. The Act allows a parent to provide an estimate of income and, if accepted, the administrative assessment is based on that estimate of income, subject to a possible reassessment once the parent’s adjusted taxable income becomes known.

3. On 26 February 2020, Ms Mulgrew provided an estimate of income. She was required to estimate her year-to-date income (i.e. her income from 1 July 2019 to 25 February 2020) and her remaining period income (i.e. her income from 26 February 2020 to 30 June 2020). She estimated that her year-to-date income was $9,200 and her remaining period income would be $0. In fact, as at 26 February 2020, she had already received wages of $14,020, and she had applied for a Centrelink income support payment. She was subsequently granted that payment. She received $8,740 in income support payments in respect of the period from 18 February 2020 to 30 June 2020.

4. Ms Mulgrew’s 2019-20 adjusted taxable income was $22,681. Based on the (incorrect) information that she had provided to the CSA, $9,200 was referrable to the period from 1 July 2019 to 25 February 2020, and so the balance of $22,681 - $9,200 = $13,481 was referrable to the 126 days from 26 February 2020 to 30 June 2020. That income during that period equates to $39,052 per annum during that period. The CSA reassessed Ms Mulgrew’s rate of child support payable accordingly. She was required to pay child support of $952.29.

5. Ms Mulgrew promptly objected. An objections officer decided to vary Ms Mulgrew’s year-to-date income amount to $14,053, being the sum of the wages and income support payments that were in fact referrable to the period from 1 July 2019 to 25 February 2020. The objections officer also decided to not reconcile Ms Mulgrew’s estimate of income. The objections officer’s decision effectively reversed the original decision, but in the interim, Ms Mulgrew had paid $734.76 (including a seized tax return of $531.00), and Mr Pankey was consequently required to repay the $734.76 to Ms Mulgrew.

6. Mr Pankey promptly applied to the Tribunal for further review. I conducted a hearing on 2 February 2021. Mr Pankey and Ms Mulgrew gave sworn evidence by conference phone.

7. The objections officer varied Ms Mulgrew’s year-to-date income amount pursuant to a discretion contained in section 63AE of the Act. Mr Pankey submitted, in effect, that the preferable decision was to decline to exercise that discretion for the following reasons:

   ·    The original decision that resulted in Ms Mulgrew owing him $952.29 was the result of Ms Mulgrew’s provision of incorrect information.

   ·    The CSA first informed him that Ms Mulgrew was objecting to the reconciliation decision via a letter dated 19 October 2020, by which time Ms Mulgrew had paid most of the child support that she owed him pursuant to the original decision.

   ·    It would be difficult for him to repay that money to Ms Mulgrew (but he acknowledged that doing so would not cause him financial hardship).

8. Ms Mulgrew submitted, in effect, that the objections officer’s decision was the preferable decision because, despite her provision of incorrect information, there was no dispute that if she had not provided an estimate of income, no child support would have been payable between the parents, and if she had provided a correct year-to-date income amount, no child support would have been payable between the parents, both at first instance and after a reconciliation. The objections officer’s decision reflected the fact that at all relevant times, her income had very modest (and less than the child support self-support amount which was, at the time, $25,575 per annum).

9. Ms Mulgrew added that when the CSA informed her that she owed child support, she promptly informed Mr Pankey of that fact, adding that the CSA had made a mistake and she was going to object to its decision. At the hearing, Mr Pankey acknowledged that Ms Mulgrew had promptly informed him of those matters, but he reiterated that the CSA first informed him of Ms Mulgrew’s objection via a letter dated 19 October 2020.

10. It is also worth noting that Mr Pankey commenced full-time employment around the time that Ms Mulgrew lodged her estimate, and he remains in that employment. He said he earns a little over $50,000 per annum.

11. Weighing up those various matters, including the fact that Mr Pankey was promptly put on notice that Ms Mulgrew was disputing the CSA’s original decision, I find that the preferable decision was to vary Ms Mulgrew’s year-to-date income amount to reflect her true financial position. In the ordinary course, varying her year-to-date income amount to $14,053 would trigger another reconciliation based on her receiving $22,681 - $14,053 = $8,628 during the 126 days from 26 February 2020 to 30 June 2020. That income over that period equates to $8,628 / 126 x 365 = $24,993 per annum. That income is also below the child support self-support amount, and a reconciliation would result in Ms Mulgrew not being required to pay any child support. In a case such as this one, a decision-maker can vary the rate of child support payable during the remaining period and decide to not conduct a reconciliation: section 63C of the Act. The objections officer effectively made that decision — Ms Mulgrew’s rate of child support payable was varied to $0 per annum — and that was the preferable decision in the circumstances.

DECISION

The decision under review is affirmed.