Pesaresi and Sauber (Child support)

[2021] AATA 3613

Pesaresi and Sauber (Child support) [2021] AATA 3613 (16 June 2021)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2021/MC021311

APPLICANT:  Ms Pesaresi

OTHER PARTIES:  Child Support Registrar

Mr Sauber

TRIBUNAL:Member K Dordevic

DECISION DATE:  16 June 2021

DECISION:

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

• The mother’s application for collection is accepted; and

• That the father’s unpaid child support liability during the maximum arrears period must be collected by Child Support.

CATCHWORDS

CHILD SUPPORT - opt-in arrears - whether party was payee of a registrable maintenance liability – whether there were unpaid amounts – whether there were exceptional circumstances - application for collection of unpaid amounts should be accepted - 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. Ms Pesaresi and Mr Sauber are the parents of three children. Services Australia− Child Support registered an administrative assessment on 4 June 2019. The father was liable to pay the mother child support in respect of the children. The mother elected to collect her child support entitlement privately from the father. 

2. On 2 October 2020 the mother contacted Child Support and discussed the advice she had received that she was now the paying parent (a “role-reversal”, as a consequence of updating the parents’ incomes). She requested that the child support be collected privately but was advised that this was a decision that was only open to the parent receiving child support (now being the father).

3. On 9 December 2020 Child Support accepted the mother’s application for collection for a nine-month period in the amount of $1,636.38 for the period 2 February to 1 October 2020.

4. On 4 December 2020 the father lodged an objection to the decision. On 31 March 2021 an objections officer allowed the objection, deciding that the mother was overpaid $896.26 in child support.

5. On 26 April 2021 the mother requested a review of the decision by application to the Social Services and Child Support Division of the Administrative Appeals Tribunal (the tribunal). The matter was heard on 16 June 2021 with the parties appearing by conference telephone. The Child Support Registrar did not elect to appear. The tribunal had before it evidence provided by Child Support (folios 1−134).

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 needs to be determined is whether the mother’s application for collection of child support for the maximum arrears period should be granted.

CONSIDERATION

1. Subsection 24A(2) of the Act states that a payee may elect, when registering the child support assessment, not to have the liability collected by Child Support. However, if the payee later elects to have the liability collected, the payee may also seek to have Child Support collect unpaid arrears. Subsection 28A(4) of the Act states that if the period does not exceed three months the Registrar must grant the payee’s application. The unpaid amounts are treated as if they were payable during the period and are collectable by Child Support. The payee may also apply for any unpaid amounts payable in relation to the “maximum arrears period” (a period of up to nine months) to be collected by Child Support.

2. In this matter a child support case was registered with Child Support on 4 June 2019 (Case ID 637300564); under the initial assessment the father was liable to pay child support to the mother. Therefore, in relation to that liability the mother was the “payee” and the father was the “payer”. The tribunal finds that on 29 May 2020 the mother contacted Child Support and discussed the possibility of collection of her child support, including the option of collection of unpaid child support arrears. She stated that she hoped to recoup unpaid child support in the parents’ property settlement and would opt-in for collection upon finalisation of the property settlement.

10.  On 1 August 2020, upon receiving new information about the parents’ 2020 financial year incomes, Child Support made changes to the child support assessment for the children and as a result there was a “role reversal” whereby the mother was, from 1 August 2020, required to pay child support to the father. As a result, Child Support entered into the system a second maintenance liability (Case ID 637301439); in relation to that liability the mother was the payer and the father the payee. On 2 October 2020 Child Support began collection of the mother’s child support liability. On the same day the mother contacted Child Support and requested that her unpaid child support arrears for the previous three months be collected on her behalf.

11.  In the tribunal’s view, this advice was incorrect. Subsection 24A(1) of the Act states that when the Registrar makes a child support assessment under which a registrable maintenance liability arises, it must register the liability under the Act.. A “registrable maintenance liability” includes, pursuant to subsection 17(2), a liability that arises under a child support assessment. The term “payee” is defined in section 4 of the Act as meaning, in relation to a registrable maintenance liability, the person who is entitled to receive payments under the liability.

12.  As outlined above, there are in fact two maintenance liabilities that arise under the child support assessment in the present case. In relation to the first liability the mother is the person who is entitled to receive payments, and therefore she is the payee (though the father’s ongoing rate of liability is nil from 1 August 2020).

13.  The tribunal therefore finds that the mother is the payee of a registrable maintenance liability and that she applied for registration of that liability on 2 August 2020. The tribunal finds that under subsection 25(2) the Registrar must therefore register the liability.

14.  Subsection 28A(3) of the Act states that the payee may apply to the Registrar for any unpaid amounts payable under the liability in relation to a specified period to be treated as arrears amounts. Subsection 28A(4) states that if the period does not exceed three months the Registrar must grant the payee’s application. Thus, pursuant to subsection 28A(4) of the Act, the mother is entitled to seek unpaid arrears for the three months prior to her application, being 2 July to 2 October 2020. Of course, the father’s rate of liability was nil from 1 August 2020, so the practical effect of this decision is that the father is only liable to pay child support for the period 2 to 31 July 2020.

15.  The maximum period of arrears is a period of nine months. The Registrar (and the tribunal in its place) must only grant arrears for a period greater than three months if satisfied that there are “exceptional circumstances” (paragraph 28A(5)(c) of the Act). The mother’s lawyer provided written submissions on this point. It is submitted that as a result of family violence, the mother was not able to seek collection of child support in a timely manner, as she was in fear of her own and the children’s safety. It is alleged that there were indirect threats and pressure from the father, and a reluctance not to provoke the father by seeking collection of the child support liability. The mother instructed that the intervention order proceedings meant that she did not have capacity to seek child support as she was overwhelmed by the incidents of violence. It was also stressed that the parents were involved in negotiations over child support, parenting and property matters, which commenced in September 2019. It was submitted that application for collection of child support would have compromised those negotiations. The tribunal notes that there is in place a Family Violence Intervention Order initiated by Victoria Police dated 18 July 2019. There are also criminal charges pending following alleged breaches of the intervention order. The tribunal understands that the father vigorously denies the allegations and the matter is set down for trial in July 2021.

16.  At hearing the father disputed that the mother seeking child support would have compromised the parenting and property matters afoot in the Federal Circuit Court. He also did not believe that the mother held any fear about having contact with him, stating that she attended basketball games that their son participated in when he was present. He also stated that they spoke frequently about matters concerning the children. He did not contest that the final orders regarding the parenting and property matters were signed by the parties on 14 September 2020 and these were sealed by the court in October 2020. The father also did not contest that there was no agreement between he and the mother that the $748.73 in payments he made towards the children’s costs during the period July 2019 to 21 August 2020 was in lieu of child support (as he had previously claimed). The tribunal is satisfied that the amounts payable by the father under the child support liability were not actually paid during the period 2 February to 2 October 2020.

17.  The Child Support Guide provides some assistance in determining whether exceptional circumstances exist. It states at Chapter 5.1.4:

Exceptional circumstances

Whether circumstances are exceptional will depend on the facts in each particular case. The circumstances must be unusual in some way. They may be circumstances beyond the control of the payee that prevented them from applying for collection within a reasonable period. The Registrar will consider the effect of the particular circumstances on the payee and the extent to which they contributed to the payee's delay in applying for collection.

The following are examples of circumstances that the Registrar may consider exceptional. This is not an exhaustive list and each case must be considered on its merits.

·The payer threatened or pressured the payee not to apply for collection by Services Australia (see also 6.10).

·The payee was ill or had an accident that stopped them from applying for collection.

·The payee suffered a personal trauma such as a death in the family or a natural disaster that caused damage to the payee's property.

·The payee had communication difficulties because of, or including, isolation, illiteracy or poor English language skills.

·The payer created a false expectation of payment (e.g. they promised to pay a lump sum from the proceeds of the sale of property or a compensation settlement).

·The parents were involved in negotiations over child support and/or other matters and applying for collection may have compromised those negotiations.

In some cases payees may apply for collection after the Registrar amends a child support assessment retrospectively so that there are significant arrears arising (e.g. it may replace a default income or reconcile an estimate of income). These arrears arise through the ordinary operation of the Act and are not an exceptional circumstance even if the payee was unaware of any change in the payer's circumstances.

18.  The tribunal is satisfied that exceptional circumstances exist. Victoria Police sought and were granted an intervention order protecting the mother and the children. They have also determined that this order was breached and pressed criminal charges. Clearly, such circumstances were beyond the control of the mother. Whilst the tribunal acknowledges that the father has not had the opportunity to defend himself against the charges, there is sufficient evidence to support the mother’s submission that she was fearful there would be negative repercussions should she seek to enforce the liability. Furthermore, the tribunal also placed weight on the contemporaneous 29 May 2020 record, where it is documented that the mother stated that she was hoping to secure the unpaid child support in the parents’ property settlement. The tribunal accepts that the parents were involved in negotiations over child support matters and applying for collection may have compromised these negotiations.

19.  The tribunal concludes that there are exceptional circumstances that prevented the mother from applying for collection within a reasonable period. Therefore, the mother’s application for collection of the maximum arrears period must be granted.

DECISION

The tribunal sets aside the decisions under review and, in substitution, decides that:

• The mother’s application for collection is accepted; and

• That the father’s unpaid child support liability during the maximum arrears period must be collected by Child Support.