Philby and Philby (Child support)

[2023] AATA 835

Philby and Philby (Child support) [2023] AATA 835 (23 February 2023)

DIVISION:Social Services & Child Support Division

REVIEW NUMBERs:  2022/MC024845

2022/HC024854

APPLICANT:  Mr Philby

OTHER PARTIES:  Child Support Registrar

Mrs Philby

TRIBUNAL:Member J Bakas

DECISION DATE:  23 February 2023

DECISION:

The tribunal sets aside the decision under review and, in substitution, decides that the decision under review to apply the lump sum redundancy payment as an income estimate of $201,000.29 ($452,870 annualised) to the assessment for the period 20 January 2022 to 30 June 2022 is set aside and the decision is substituted with a new decision that no estimate of income was lodged.

The decision under review to accept the income estimate of $65,178 made on 29 April 2022 is affirmed.

CATCHWORDS

CHILD SUPPORT – particulars of the administrative assessment – estimate of income – no estimate of income lodged - decision under review set aside and substituted

CHILD SUPPORT – particulars of the administrative assessment – estimate of income - whether the estimate should have been accepted - decision under review affirmed

Names used in all published decisions are pseudonyms. Any references appearing in square brackets indicate that information has been omitted 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 and Ms Philby are the parents of two children born 2004 and 2006. Only the child born in 2006 is involved in this objection, who is recorded as being in the 100% care of Ms Philby.

2. The two applications for review before the tribunal both relate to estimates of income for Mr Philby.

3. From 4 January 2022 Mr Philby’s child support liability was assessed on the basis of his income estimate of $91,980.

4. On 2 February 2022, Mr Philby contacted the Child Support Agency (the Agency) to notify them of a $0 estimate and that he was living off of a redundancy payment at which time the estimate appears to have been accepted.

5. About 10 minutes later, Mr Philby again contacted the Agency and stated that he received a lump sum redundancy payment of $201,000.29 and this amount was coded as an estimate until the end of the financial year.

6. On 2 February 2022, the Agency made a decision to apply estimated income for Mr Philby of $201,532 to the assessment for the period 5 January 2022 to 30 June 2022.

7. On 29 April 2022 Mr Philby contacted the Agency to advise that he had obtained employment and he made an estimate of income of $65,178.

8. On 29 April 2022 the Agency made a decision to apply estimated income of $65,178 to the assessment for the period 29 April 2022 to 30 June 2022.

9. Mr Philby objected to these decisions because the redundancy payment had not been correctly reflected on the case.

10. On 10 October 2022 the objections officer decided to allow the objections, after agreeing to an extension of time to object. The outcome of allowing the objection to the first matter was to apply the lump sum estimated income of $201,000.29 ($452,870 annualised) to the assessment for the period 20 January 2022 to 30 June 2022.  

11. And the outcome of allowing the objection to the second matter resulted in an annualised estimated income of $456,013 for the period 19 April 2022 to 30 June 2022. 

12. Mr Philby applied to the tribunal for further review as he was still of the view that the redundancy payment was not correctly applied.

13. The tribunal heard the matter on 8 February 2022. Both parents attended the hearing via MS Teams audio and gave affirmed evidence. The tribunal had before it documentation provided by the Agency (hearing papers). Both parents had a copy of these documents with them at the hearing.

ISSUES

1. The issues which arise in this case are:

   14.1.  Whether, on 2 February 2022, Mr Philby made an amended estimate of income and, if so, the amount of that estimate and whether that estimate should have been accepted.

   14.2.  Whether it was correct to accept the updated estimate of $65,178 made on 29 April 2022.

CONSIDERATION

1. In reaching its decision, the tribunal has considered the affirmed evidence given by the parents at the hearing and the documentation provided by the Agency.

2. The statutory provisions relevant to this review are contained in the Child Support (Assessment) Act 1989 (the Act). Subsection 60(2) of Part 5 of the Act sets out the income component amounts that make up an estimate of income.

3. Section 60 of the Act clearly sets out that an income estimate for a part of a year of income must consist of an income estimate covering the period from the start day for the election and ending at the end of the last day of the year of income. Sections 62 and 62A provide that a parent may revoke an earlier estimate and elect a new estimate of his or her adjusted taxable income.

4. An income estimate for a part of a year of income may be rejected if it is less than what the Child Support Registrar (or the Tribunal on review) considers is likely to be the actual amount of the parent’s adjusted taxable income: subsection 63AA(3) of the Act.

5. Mr Philby’s evidence at hearing, reflected in the relevant Agency hearing papers was that on 2 February 2022 he contacted the Agency to notify that he was no longer working and he had an estimated income of $0. He also informed the Agency that he received a lump sum redundancy payment of $201,000.29. The Agency diary note of that date at pages 97 and 98 of the hearing papers does not record him identifying whether the payment was a redundancy payment or whether it was taxable or non-taxable.

6. Mr Philby’s evidence at the hearing included that a large portion of the redundancy payment was tax free and should not have been included by the Agency as an estimate. He simply called on 2 February 2022 to inform the Agency that he had no income but that he had received a redundancy payment. The officer he spoke to did not ask him about any breakdown regarding his lump sum payment and he was not aware at that time as to any non-taxable components.

7. He assumed the child support payable amount was calculated correctly. When he called back on 29 April 2022 it was to inform the Agency of his new employment and associated salary.

8. Mr Philby also confirmed that he was not disputing the acceptance of his estimate made on 29 April 2022 but rather the annualised income as a result of the actions of the Agency regarding his redundancy payment.

9. I note that there is no evidence before the tribunal to suggest that the Agency officers with whom Mr Philby spoke on 2 February 2022 sought better particulars as to the source or the nature of the $201,000.29 lump-sum redundancy payment and they appear to have assumed it was some form of taxable income, and treated it as such in the Agency’s determination of his amended income estimates. The papers do not include any information to indicate that the first call noting an estimate of $0 was progressed given the second call some 10 minutes later.

10. I also note that Mr Philby’s taxable income for the 2021/2022 financial year was $126,375.

11. Ms Philby’s evidence at the hearing was limited. She indicated that she had nothing she wished to add.

12. Having considered all the evidence before me, I find that when Mr Philby contacted the Agency on 2 February 2022, it was merely to inform the Agency of his redundancy payment. I find that he did not make an estimate under section 62A.

13. In relation to the second estimate dated 29 April 2022, I find that this estimate was properly made.

14. Accordingly, I set aside the first decision and affirm the second one.

DECISION

The tribunal sets aside the decision under review and, in substitution, decides that the decision under review to apply the lump sum redundancy payment as an income estimate of $201,000.29 ($452,870 annualised) to the assessment for the period 20 January 2022 to 30 June 2022 is set aside and the decision is substituted with a new decision that no estimate of income was lodged.

The decision under review to accept the income estimate of $65,178 made on 29 April 2022 is affirmed.