Parisi and Wouter (Child support) - [2019] AATA 3842

Parisi and Wouter (Child support) [2019] AATA 3842 (5 August 2019)

DIVISION:Social Services & Child Support Division
REVIEW NUMBER:  2018/PC015124
APPLICANT:  Ms Parisi
OTHER PARTIES:  Child Support Registrar
Mr Wouter

TRIBUNAL:Senior Member R Ellis
DECISION DATE: 05 August 2019
DECISION:

The Tribunal sets aside the decision under review and, in substitution, decides that:

for the period from 8 May 2018 until 31 December 2020 the adjusted taxable income for Ms Parisi is varied to $187,480 per annum; and
for the period from 8 May 2018 until 30 September 2019 the adjusted taxable income for Mr Wouter is varied to $52,039.

CATCHWORDS
CHILD SUPPORT – departure determination – income, property and financial resources of both parents – benefits derived from business – whether property settlement affects child support – 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

This review is about whether or not there should be a departure from the administrative assessment of child support.
Ms Parisi and Mr Wouter are the parents of [Child 1] (born January 2013) and [Child 2] (born July 2015). There has been a child support assessment in place since 6 July 2017 and Ms Parisi is the liable parent.
The following administrative assessment is under consideration:
· for the period from 19 April 2018 to 5 October 2018 the annual rate of child support payable was $688 based on Ms Parisi’s 2016–17 adjusted taxable income of $44,721 and Mr Wouter’s 2016–17 adjusted taxable income of $48,913.
On 8 May 2018 Mr Wouter applied to the Department of Human Services, Child Support (the Child Support Agency) for a change to the assessment and Ms Parisi made a cross application which she later withdrew. On 26 June 2018 the Child Support Agency made the decision to change the assessment so that:
· for the period from 8 May 2018 to 30 June 2023 Ms Parisi’s adjusted taxable income is set at $115,409; and
· for the period from 8 May 2018 to 31 October 2019 Mr Wouter’s adjusted taxable income is set at $59,200.
This was done on the basis of the income, property and financial resources of both Ms Parisi and Mr Wouter (the ground commonly referred to as Reason 8A).
On 28 July 2018 Ms Parisi objected to this decision and on 14 September 2018 the Child Support Agency allowed the objection in part and made the decision to change the assessment (the objection decision) so that:
· for the period from 8 May 2018 to 30 June 2023 Ms Parisi’s adjusted taxable income is set at $200,000; and
· for the period from 8 May 2018 to 31 October 2019 Mr Wouter’s adjusted taxable income is set at $59,200.
On 27 September 2018 Ms Parisi applied for a review of the objection decision by the Administrative Appeals Tribunal (the Tribunal).
A telephone directions hearing was held on 14 March 2019. Both Ms Parisi and Mr Wouter attended by conference telephone. Prior to the telephone directions hearing the Child Support Agency provided the Tribunal and the parties with a bundle of documents in accordance with section 37 of the Administrative Appeals Tribunal Act 1975 (532 pages).
Ms Parisi and Mr Wouter were directed to provide further information to the Tribunal and both complied.
Both parents requested the hearing date be deferred and a hearing was subsequently held on 11 July 2019. Ms Parisi and Mr Wouter gave evidence on affirmation by conference telephone. The Tribunal received documents folioed A1 to A106 from Ms Parisi and B1 to B17 from Mr Wouter. These were distributed to the parties prior to the hearing. Additional documents were also received from the Child Support Agency (pages 533–639).
Ms Parisi provided additional documents on 2 July 2019 and Mr Wouter provided additional documents on 10 July 2019. These were not accepted as they were not received within 14 days of the hearing (consistent with the Tribunal’s ‘Child Support Review Directions’).
At the telephone directions hearing and at the commencement of the hearing the Tribunal clarified with Ms Parisi and Mr Wouter the reasons for their applications. Ms Parisi said she did not believe the objection decision properly reflected her income. She also raised an issue relating to property settlement and said Mr Wouter was double dipping by receiving child support. Mr Wouter confirmed he felt the decision made by the Child Support Agency was an accurate assessment of the income available to Ms Parisi from her [businesses].

ISSUES

The statutory provisions relevant to this review are contained in the Child Support (Assessment) Act 1989 (the Act).
The rate of child support payable by the liable parent is usually based on an administrative assessment under Part 5 of the Act.
Under Part 6A of the Act, the liable parent or the carer of the child or children may apply to the Child Support Registrar for a determination to depart from the administrative assessment (section 98B).
Section 98C provides that the Registrar may make a determination to depart from the administrative assessment and it establishes a three step process such that the issues for determination by this Tribunal are:
·     whether a ground is established to depart from the administrative assessment of child support; and if so
·     whether it is just and equitable to make a particular departure determination; and if so,
·     whether it is otherwise proper to make a particular departure determination.
The grounds for departure from an administrative assessment of child support are set out in subsection 117(2) of the Act.
Each ground is prefaced by the words “in the special circumstances of the case”. The meaning of this expression is not defined in the Act, but the Family Court in Gyselman and Gyselman [1991] FamCA 93 has held:
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 formula in the ordinary run of cases.
In Philippe and Philippe (1978) FLC 90–433 the Court held that “special circumstances” are “facts peculiar to the particular case which set it apart from other cases”.
If the Tribunal is satisfied that a ground exists and that it would be just and equitable and otherwise proper to make a particular determination, the Tribunal may make one of the determinations prescribed in section 98S of the Act.
The range of determinations which can be made includes variations to the annual rate of child support payable; or to the adjusted taxable incomes of the parents and/or carer; or to other components of the statutory formula used to calculate child support.

CONSIDERATION

Issue 1 – is there a ground for departure?

A ground for departure exists where, in the special circumstances of the case, application of the administrative assessment of child support would result in an unjust and inequitable determination of child support to be provided by the liable parent in respect of the child because of the income, property or financial resources of either parent (subparagraph 117(2)(c)(ia) of the Act).
Ms Parisi is the [Occupation 1] proprietor of two [businesses] which she owns and operates. Ms Parisi told the Tribunal the two [businesses], the [Business 1] and the [Business 2], operate through the [Business 1] Trust. She said up until recently she was trustee of the trust but this was changed around four months ago to a corporate trustee model.
Ms Parisi said the [Business 1] was established on 9 April 2014 and was a small community [business] with one full-time staff member and two part-time staff. She said the floor space of the [Business 1] is 71 m². She said the [Business 2] was established on 9 December 2016 and was slightly larger with a floor space of 97 m². It has three full-time staff and four part-time/casual employees.
Ms Parisi explained that she received a salary from each [business] based on the actual hours she worked on the floor. Ms Parisi said she also received drawings from the two [businesses] to cover payment of loans related to the businesses and property settlement. She said these drawings were recorded in the balance sheet of the trust.
Ms Parisi said she felt her income should be approximately $100,000 based on her salary and the profit of the two [businesses]. She believed the Child Support Agency had erred in the objection decision by basing her income, at least in part, on the gross profit of the [businesses]. She said gross profit did not equal cash in the bank as it did not account for the costs of running her businesses. Ms Parisi said she did not earn $200,000 per annum.
In response to directions issued by the Tribunal, Ms Parisi provided her individual tax return for 2017–18. Ms Parisi also provided detailed financial information for the [Business 1] Trust including a financial report for the year ended 30 June 2018 and the tax return for the same financial year.
According to her 2017–18 individual tax return Ms Parisi has a total income of $49,032 comprised of $17,555 from the [Business 1] and $31,475 from the [Business 2] plus a small amount in gross interest. After allowing for deductions her taxable income in 2017–18 was $45,844.
The Tribunal also examined the trust tax return and financial statements for 2017–18. In relation to the [Business 1] Trust the Tribunal finds:
·     the 2017–18 trust tax return shows total business income of $2,126,418 and total expenses of $2,084,794 leaving net income following adjustments of $55,450;
·     major expenses listed in the trust tax return include cost of sales of $1,193,170, total interest expenses of $122,907, rent expenses of $78,735, depreciation expenses of $49,292, motor vehicle expenses of 12,470 and all other expenses of $585,267;
·     the profit and loss statement for the year ended 30 June 2018 shows that of all other expenses, the majority is comprised of wages of $383,317 with other expenses of note being subscriptions of $33,378, entertainment of $11,683 and telephone of $9,313;
·     the [Business 1] generated gross business income of $226,492. The net business loss for the [business] was $178,596 after accounting for total expenses of $405,088;
·     The [Business 2] generated gross business income of $706,756. Net business income for the [business] was $220,220 after accounting for total expenses of $486,536;
·     the balance sheet as at 30 June 2018 lists total assets of $1,785,968 and total liabilities of $1,996,108 leaving negative equity of $210,140;
·     notes to the financial statements for the year ended 30 June 2018 show beneficiaries funds in relation to the [Business 1] with an opening balance of minus $143,044, capital contributed of $60,521 and drawings of $291,109; and
·     notes to the financial statements for the year ended 30 June 2018 show beneficiaries funds in relation to the [Business 2] with an opening balance of minus $202,560, capital contributed of $17,552 and drawings of $280,984.
Ms Parisi explained that [business] income was generated through [Method 1] and [sales]. She said the accepted industry benchmark was that 25 per cent of income was derived from [Method 1] and 75 per cent through retail sales. Ms Parisi said both her [businesses] had a small retail floor space and were somewhat of an anomaly with [Method 1] accounting for around 65 per cent of income at the [Business 1] and for around 70 per cent of income at the [Business 2].
The Tribunal reviewed the [business] expenses with Ms Parisi. She explained that the expenses for the [Business 1] were higher than would ordinarily be expected because in the early stages of setting up the [Business 2] many of its expenses were run through the [Business 1]. This was done to assist with cash flow while the [Business 2] was in its infancy. She said a higher proportion of the wage costs of $383,317 were for the [Business 2] because it was a larger operation and had more staff. This figure also included her wage and a wage for her partner who was employed through the [businesses] as the business operations manager.
Ms Parisi told the Tribunal that all expenses were for business purposes aside from a portion of motor vehicle and telephone costs. Ms Parisi said interest charges related to the cost of financing the [businesses] through bank loans to pay for the initial fit out, stock purchase and to cover general cash flow. Rent expenses were for the two [business] premises. She said the majority of the depreciation expense was for [business] specific plant and [equipment] while only a small percentage was for motor vehicles. Subscriptions related to those which were mandatory for [businesses]. She said entertainment expenses related primarily to community engagement and relationship building with, for example,[professionals].
Ms Parisi said that motor vehicle expenses related to two motor vehicles. She said one was hers and one was used by her partner. Ms Parisi estimated her personal use of the motor vehicle, based on logbooks, at around 30 per cent. She said her partner used his vehicle more for business use with only around 20 per cent for personal use. Ms Parisi also said that the business paid for mobile phone plans for both her and her partner at $79 per month each. The majority of this cost was for business use and she pointed out they paid their own home Internet separately.
Mr Wouter disputed that Ms Parisi’s partner was a genuine employee of the business as he ran his own [Business 3], which he believed was a full-time occupation. Ms Parisi responded by saying her partner [was] well-qualified for the position.
The Tribunal considered Ms Parisi to be open and transparent in discussing the various expenses for the two [businesses]. Having carefully examined the accounts for the trust the Tribunal is satisfied the expenses are largely for business purposes and provide no significant personal benefit to Ms Parisi. While the business does meet a portion of her motor vehicle and mobile phone costs, the Tribunal does not consider this to be significant.
Ms Parisi also provided the Tribunal with a Statement of Financial Circumstances received on 22 October 2018. She said it differed from the version provided to the Tribunal just prior to the hearing as her weekly expenses had changed with her partner now making a large contribution to these expenses. Ms Parisi states the following:
·     her total average weekly income is $2,541 which consists of a salary and owner drawings;
·     her average weekly expenses total approximately $3,393, however, Ms Parisi said this included expenses for her partner who was now making a contribution and she had reduced her own expenses to approximately $1,000 per week. By reducing her expenses and removing the expenses for her partner, the Tribunal arrived at a figure of approximately $1,586 in weekly expenses which includes $586 for the children;
·     total value of property owned is approximately $2,186,400 including the two [businesses] valued at $1,600,000, $494,500 for her half share in the family home and $85,400 for her motor vehicle;
·     she has total liabilities of approximately $2,122,373 including a home mortgage of $491,069 for her 50 per cent share, a business loan with [BANK 1] of $968,002, a loan for her divorce settlement of $508,000 and a motor vehicle loan of $100,267;
·     her superannuation, [is] valued at $83,830.
Ms Parisi told the Tribunal her loans had recently been refinanced and were now with [BANK 1]. She said the drawings taken from the business we used to assist in paying down these loans including the loan of $508,000 to fund property settlement with Mr Wouter. Ms Parisi said she did not agree the drawings were income as it was not cash she had lying around. She said it went straight to the bank to pay for her loans.
The Tribunal notes in evidence from the Child Support Agency, [Bank 2] bank statements for an everyday account in the names of Ms Parisi and her partner. The name on the account is ‘daily expenses’ and it shows regular deposits from both [businesses] to Ms Parisi. Total deposits for the period 21 May 2018 to 13 August 2018 amount to $21,669. The Tribunal calculated this to be $93,049 net when annualised over the 85-day period, which equates to a pre-tax amount of approximately $132,043. This is almost equivalent to the total amount Ms Parisi listed in her Statement of Financial Circumstances for her salary and drawings.
The Tribunal finds that in 2017–18 Ms Parisi had a taxable income of $45,844. The Tribunal is not satisfied, however, that Ms Parisi’s true income and financial resources are accurately reflected by her taxable income alone. Ms Parisi is taking regular drawings from the business and these are used to pay for personal expenses.
There are certain advantages in being self-employed which are not generally available to salary and wage earners. Such advantages may include being able to write off personal expenses against the business, reducing personal tax liability as a result of the way the business is structured and being able to claim business expenses which offer a parent some personal gain. In such cases, assessing child support on the basis of taxable income only can result in an unjust and inequitable level of child support.
While this may be quite legitimate for tax purposes, the Family Court has found that such practices may not properly reflect the true financial resources or capacity of a person to contribute to the financial support of their children and may therefore be ignored. For example, in Voss & Child Support Registrar (SSAT Appeal) [2009] FMCAfam 1296, the Court commented on the common situation of a self-employed person's taxable income not corresponding with his or her income or financial resources for child support purposes:
There is a body of cases where simple reference to a person's tax return does not provide an appropriate quantification of their capacity to provide financial support. Most commonly this occurs in cases involving the self-employed, where it is well accepted that legal structures and arrangements may generate taxable income that doesn't properly reflect the realistic capacity of the person to provide financial support for their children.
Ms Parisi acknowledges that she is taking regular drawings from the [businesses]. The Tribunal notes from the financial statements of the trust that Ms Parisi is also making capital contributions. It is not possible to determine with any real accuracy the exact amount of such drawings, however, the Tribunal is mindful that it is not required to undertake a forensic audit or major investigation of the financial circumstances of the parents. Rather, the Tribunal must be satisfied on the balance of probabilities as to each party’s income, property and financial resources (section 2A of the Administrative Appeals Tribunal Act 1975 and Tanner & Dalton and Anor (SSAT Appeal) [2012] FMCAfam 732).
The Tribunal considers the benefits available to Ms Parisi through her business as financial resources that should be regarded as income for the purposes of child support.
For the purposes of assessing child support, the Tribunal finds Ms Parisi currently has access to income and financial resources equivalent to an adjusted taxable income of approximately $187,480 per annum. The Tribunal has arrived at this figure by taking her salary and drawings of $132,028 as listed in her Statement of Financial Circumstances (which, as previously noted, is close to the gross annualised salary amount as calculated from her bank statements) and added the 2017–18 net income for the trust of $55,451. Ms Parisi is the [Occupation 1] proprietor and 100 per cent owner of the two [businesses] and the Tribunal considers the profit from the trust to be a financial resource available to her.

The Tribunal also considered the income, property and financial resources of Mr Wouter.
Mr Wouter told the Tribunal he recently commenced working at the [Employer 1] but was on a similar salary to his previous position at [Employer 2]. He said his finances as a salary earner were fairly straightforward whereas he felt Ms Parisi creatively disguised her finances.
In response to directions issued by the Tribunal, Mr Wouter provided a copy of his 2017–18 individual tax return, which shows gross payments from his employment at [Employer 2] of $62,470. After allowing for various work-related deductions, including car expenses and union fees, his taxable income for 2017–18 was $52,039. The Tribunal accepts that, while high, the deductions allowed for Mr Wouter in his tax return are all genuine work expenses.
Mr Wouter also provided the Tribunal with a Statement of Financial Resources received on 18 October 2018. It shows total average weekly income, including his salary and family assistance, of $1,226. His average weekly expenses total $1,344 including $672 a week for the children and $336 a week for another adult. Total personal expenditure is $581.31 including $384.61 in income tax. Total value of property owned is approximately $403,550 including his half share in the family home of $350,000, household contents of $50,000 and a motor vehicle valued at $2,500. Total liabilities are approximately $193,441 including $162,246 for his half share of the mortgage on the family home and debts on two credit cards of approximately $6,095. Mr Wouter has superannuation of $70,500.
Ms Parisi pointed out that the Statement of Financial Resources provided by Mr Wouter did not include an investment property he purchased with his then partner. She also believed the figure for the home mortgage was over inflated and should only be around $48,000.
Mr Wouter responded by saying this was not correct and Ms Parisi was not aware of the details of his financial affairs. Mr Wouter also explained that he purchased the investment property, an apartment, for $265,000 in November 2018 which was after he completed his Statement of Financial Circumstances. He said the loan was approximately $275,000 which included stamp duty and it was currently rented at $275 per week. Mr Wouter said his share of the rental income from the property went towards payment of the loan and the investment currently ran at a net rental loss of approximately $7,000 per annum.
The Tribunal is satisfied that $52,039 represents the income of Mr Wouter for child support purposes. The Tribunal will address the investment property held by Mr Wouter when considering the timing of its decision.
Mr Wouter applied for a departure from the administrative assessment on 8 May 2018. The administrative assessment in place at the time was based on an adjusted taxable income for Ms Parisi of $44,721 and an adjusted taxable income for Mr Wouter of $48,913.
When Ms Parisi’s and Mr Wouter’s respective incomes as determined by the Tribunal are applied in the child support formula, Ms Parisi’s annual rate of child support increases to approximately $16,280. The Tribunal notes that when Mr Wouter made his application, care of the children was 58 per cent to Mr Wouter and 42 per cent to Ms Parisi. Care changed from 12 August 2018 and incorporating these new percentages of care results in an annual rate of child support of payable by Ms Parisi of approximately $13,480.
The Tribunal finds this to be significantly more than her liability under the administrative assessment. The Tribunal therefore determines that special circumstances exist and application of the administrative assessment of child support would result in an unjust and inequitable determination of child support.
On this basis, the Tribunal finds there is a ground for departure from the administrative assessment.

Issue 2 – is it just or equitable to make a particular determination?

As the Tribunal finds there is a ground to depart from the administrative assessment of child support, the next step is to consider whether it is just and equitable as regards the child, the liable parent, and the carer entitled to child support to make a particular determination in accordance with sub-subparagraph 98C(1)(b)(ii)(A) of the Act. This in turn requires the Tribunal to consider the matters discussed below,[1] which are as set out in subsection 117(4) of the Act:
[1] The Tribunal is required to give “overt consideration” to relevant factors listed in subsection 117(4) of the Act: Tyagi & Meares [2008] FMCAfam 886.
(4)In determining whether it would be just and equitable as regards the child, the carer entitled to child support and the liable parent to make a particular order under this Division, the court must have regard to:
(a)    the nature of the duty of a parent to maintain a child (as stated in section 3); and
(b)    the proper needs of the child; and
(c)    the income, earning capacity, property and financial resources of the child; and
(d)    the income, property and financial resources of each parent who is a party to the proceeding; and
(da) the earning capacity of each parent who is a party to the proceeding; and
(e)    the commitments of each parent who is a party to the proceeding that are necessary to enable the parent to support:
(i)himself or herself; or
(ii)any other child or another person that the person has a duty to maintain; and
(f)     the direct and indirect costs incurred by the carer entitled to child support in providing care for the child; and
(g)    any hardship that would be caused:
(i)to:
(A)the child; or
(B)the carer entitled to child support;
by the making of, or the refusal to make, the order; and
(ii)to:
(A)the liable parent; or
(B)any other child or another person that the liable parent has a duty to support;
by the making of, or the refusal to make, the order; and
(iii)to any resident child of the parent (see subsection (10)) by the making of, or the refusal to make, the order.

The nature of the duty of a parent to maintain a child (as stated in section 3 of the Act)

Section 3 of the Act states that it is the primary duty of a parent to maintain the child and this has priority over nearly all other commitments.
In this case, the Tribunal is not aware that either parent has a responsibility to any other child or person.

The proper needs of the child

In relation to the proper needs of the child, regard must be had to the manner in which the child is being, and in which the parents expected the child to be, cared for, educated or trained, and any special needs of the child (subsection 117(6) of the Act).
The Tribunal was not made aware that the parents expected [Child 1] and [Child 2] to be cared for, educated or trained in a particular way or that the children had any special needs.
In their respective Statements of Financial Circumstances, both parents apportioned a number of household expenses, such as food, clothing, activities and education, to the children. Of the approximately $1,586 in weekly expenses listed by Ms Parisi, $586 is for the children. This includes education expenses of approximately $163 per week. Mr Wouter listed total weekly expenses of $1,344 of which $672 is for the children. This includes education expenses of approximately $127 per week.
The Tribunal finds it reasonable to calculate the costs of their needs by reference to the Costs of the Children Table (provided for in section 155 of the Act) in the circumstances of this case.

The income, earning capacity, property and financial resources of the child

The Tribunal is satisfied the children have no income, earning capacity, property and financial resources which are to be taken into account for the purpose of child support.

The income property, financial resources and earning capacity of each parent

The Tribunal has already considered in detail the income, property and financial resources of both parents.
Mr Wouter told the Tribunal he had recently finalised his 2018–19 tax return. The Tribunal will take account of this when considering the timing of its decision.
Ms Parisi raised matters in relation to the ability of Mr Wouter to earn a higher salary than he is paid in his current employment. She said, for example, in his role as a manager at [a workplace] from 2014 to 2017 he was paid $120,000 per annum.
The law in this regard is not designed to prevent a parent from changing careers or industry while maintaining full-time employment. This, in itself, is unlikely to lead to a finding in relation to earning capacity. The Tribunal is satisfied that the earning capacity criteria (set out in subsection 117(7B) of the Act) are not met in this case.

Other relevant matters

Ms Parisi raised with the Tribunal the funds she had paid to Mr Wouter as part of property settlement. She said the court order signed by the parents included a clause that neither would claim spousal maintenance or child support from the other and that the cash payment of $508,000 plus equity in the home paid to Mr Wouter was intended for child support.
Ms Parisi said it was her view funds paid to Mr Wouter as part of property settlement were actually in lieu of child support and she felt it would be double dipping if she was now required to make ongoing child support payments to Mr Wouter as well.
The Tribunal notes in evidence from the Child Support Agency a court order issued by the Family Court of Western Australia dated 21 June 2017. Attached to this is a Minute of Consent Orders relating to property matters signed by both parents and dated 18 May 2017. Under the heading ‘Recitals’ the consent orders state:
D.The parties agree and acknowledge that the Orders set out herein are intended to finally determine the financial relationship between them within the meaning and intent of Section 81 of the Family Law Act 1975 and that accordingly neither party shall make a claim against the other with respect to the following:
a.Spousal Maintenance; and / or
b.Child Support.
Ms Parisi said by signing this agreement she believed after finalising property settlement she would no longer be liable for further child support payments. Ms Parisi said she would not have agreed to the terms of the property settlement and borrowed funds if she had known there was an ongoing commitment to pay child support.
Mr Wouter told the Tribunal that property settlement related to other matters and was not relevant to child support. He said Ms Parisi had insisted on adding this clause to the consent orders even though both parents understood it would not be legally binding.
Section 66E of the Family Law Act 1975 sets out that a court must not “make, revive or vary” a child maintenance order if an application could properly be made at the time under the Act.
In such matters the Tribunal is also mindful of the ‘Child Support Guide’ which, in relation to circumstances where a court order is made where there is no child support assessment, relevantly states at 4.3.5:
Where the Registrar becomes aware that an order that contravenes section 66E has been registered, the order will not be deregistered. The Registrar will advise both parents that the liability will continue to be payable under the order, unless either parent applies for an administrative assessment or unless one of the parents challenges the order in court and the order is set aside.
Although not bound by the ‘Child Support Guide’, the Tribunal is able to take into account relevant government policy, which is not inconsistent with the provisions or objects of the legislation.
The Court Order issued by the Family Court was dated 21 June 2017 and the application for a child support assessment was accepted on 6 July 2017. The Tribunal is satisfied that, in the circumstances of this case, the provision relating to child support in the Minute of Consent Orders signed by the parents has no effect and is not enforceable.

Any hardship that would be caused

The Tribunal has found that Ms Parisi currently has access to income for the purposes of child support of $187,480 per annum.
Ms Parisi lists total estimated household expenditure of approximately $82,472 per annum and total personal expenditure of approximately $59,617. Ms Parisi told the Tribunal she lived a comfortable lifestyle but felt any additional costs would cause some hardship.
The Tribunal is satisfied that Mr Wouter has an income of $52,039. Mr Wouter lists total household expenditure of approximately $69,880 per annum, however, this includes expenditure of $17,472 per annum for another adult who is also working. He also lists total personal expenditure of approximately $30,228 per annum, which includes approximately $20,000 per annum in income tax. Mr Wouter told the Tribunal he was struggling financially and just making do.
After considering all the circumstances of this case, the Tribunal proposes to make the following determination:
· for the period 8 May 2018 until 31 December 2020 the adjusted taxable income for Ms Parisi is varied to $187,480 per annum; and
· for the period 8 May 2018 until 30 September 2019 the adjusted taxable income for Mr Wouter is varied to $52,039.
The Tribunal is limited to making a determination in respect of a day in a period that is not more than 18 months prior to the date the change of assessment application was made (paragraph 98S(3B)(a) of the Act). The Tribunal must determine whether it is just and equitable to backdate the determination (prior to the change of assessment application date).
As the child support assessment commenced on 6 July 2017 this is the earliest date open to the Tribunal from which to make a determination. On balance, the Tribunal is of the broad view that retrospectively changing entitlements should be avoided without compelling reasons.
In this case, the Tribunal finds it just and equitable to commence the departure determination from 8 May 2018 and not from an earlier date.
In making its decision, the Tribunal decided there was a balance needed between providing both parents some certainty and not extending child support too far into the future given that Ms Parisi is self-employed and her income is reliant on the success of her [businesses]. The Tribunal has only set the income for Mr Wouter to 30 September 2019. Given Mr Wouter told the Tribunal at hearing he has completed his income tax return for 2018–19, this should allow him enough time to file the return which will include income from his new employment and his investment property. After 30 September 2019, the formula assessment will apply in terms of Mr Wouter’s income.
The Tribunal is satisfied that the proposed determination will not cause hardship to Ms Parisi, Mr Wouter or the children and is just and equitable.

Issue 3 – is it otherwise proper to make a particular determination?

The third step is to consider whether it would be otherwise proper to make a particular departure determination in accordance with sub-subparagraph 98C(1)(b)(ii)(B) of the Act. Subsection 117(5) sets out the matters that must be considered when deciding whether it would be “otherwise proper” to make a departure determination. It focuses on the balance of support carried between the parents on one hand and the taxpayer on the other. It is appropriate for children to be primarily supported by their parents rather than by government assistance. The Tribunal must consider whether the level of a benefit, in particular family tax benefit, received by the party caring for the children may be affected by the level of child support.
Mr Wouter currently receives government benefits in the form of family tax benefit. The effect of the Tribunal decision may decrease the cost to the community as any family tax benefit payable to Mr Wouter is likely to decrease to reflect the increased child support payments from Ms Parisi compared to the formula assessed rate of child support.
The Tribunal is therefore satisfied the change of assessment is otherwise proper in the terms of the Act.

DECISION

The Tribunal sets aside the decision under review and, in substitution, decides that:

for the period from 8 May 2018 until 31 December 2020 the adjusted taxable income for Ms Parisi is varied to $187,480 per annum; and

for the period from 8 May 2018 until 30 September 2019 the adjusted taxable income for Mr Wouter is varied to $52,039.