Porter and Moultrie (Child support)

Porter and Moultrie (Child support) [2021] AATA 2291 (19 May 2021)

DIVISION:Social Services & Child Support Division
REVIEW NUMBER:  2021/BC020678 & 2021/BC020686
APPLICANT:  Mr Porter
OTHER PARTIES:  Child Support Registrar
Ms Moultrie

TRIBUNAL:Member J Thomson
DECISION DATE: 19 May 2021
DECISION:

2021/BC020678

The Tribunal sets aside the decision under review and, in substitution, decides that Mr Porter lodged an estimate of income on 19 October 2020 on the basis that his income for the period 19 October 2020 to 30 June 2021 would be $5,052. That election is accepted.

2021/BC020686

The Tribunal sets aside the decision under review and, in substitution, decides that the Fixed Annual Rate (FAR) should not be applied in the assessment for the period 19 October 2020 to 30 June 2021.

CATCHWORDS

CHILD SUPPORT – particulars of the administrative assessment – estimate of income - whether the estimate should have been refused - estimate of income 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 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

Mr Porter and Ms Moultrie are the parents of [Child 1], born 2006. [Child 1] is recorded as being in the 100% care of Ms Moultrie.
Mr Porter seeks review of two objection decisions made by the Child Support Agency (the Agency) on 25 January 2021. His application number 2021/BC020678 (matter 678) relates to the objection decision made on 25 January 2021 allowing Ms Moultrie’s objection to an Agency decision dated 19 October 2020 to accept Mr Porter’s amended estimate of income of $nil for the period 19 October 2020 to 30 June 2021. His application number 2021/BC020686 (matter 686) relates to the objection decision made on 25 January 2021 allowing Ms Moultrie’s objection to an Agency decision dated 23 October 2020 to accept Mr Porter’s request for the fixed annual rate (FAR) of child support not to be applied in the child support assessment for the period 19 October 2020 to 30 June 2021.
The objection decision of 25 January 2021 relating to matter 678 decided that Mr Porter’s $nil estimate of income for the period 19 October 2020 to 23 November 2020 should be refused on the basis that the objections officer found Mr Porter had received additional taxable income payments from his previous employer after he made his $nil income election estimate on 19 October 2020, and that, accordingly, his estimate at that time was inaccurate and that Mr Porter’s previous income election annualised estimate of $70,392 for the 2020/21 financial year should be applied in the assessment for the period 19 October 2020 to 23 November 2020.
The objection decision of 25 January 2021 relating to matter 686 decided that Mr Porter’s request for the FAR of child support should be applied in the child support assessment for the period 24 November 2020 to 30 June 2021 and not for the period 19 October 2020 to 30 June 2021 on the basis that the objections officer found that it was only when Mr Porter commenced receiving income tested Centrelink benefits from 24 November 2020 that his income was genuinely sufficiently low for him to qualify to have the reduced minimum annual rate (MAR) of child support applied in the child support assessment for the period 24 November 2020 to 30 June 2021.
The Tribunal heard both matters (678 and 686) on 1 April 2021. Mr Porter attended the hearing via conference telephone and gave affirmed evidence. Ms Moultrie elected not to participate in the hearing. The Tribunal had before it documents provided by the Agency (Exhibit 1), documents provided by Mr Porter (Exhibit A), and documents provided by Ms Moultrie (Exhibit B).
At the conclusion of the hearing, the Tribunal directed Mr Porter to provide a copy of his PAYG income tax summary for the period 1 July 2020 to 15 October 2020. Mr Porter was unable to obtain a copy of this document, but has provided a copy of his final payslip from his previous employer for the period 12 October 2020 to 18 October 2020 reflecting his year-to-date income, date of receipt of his income for that period, and the breakdown of the components of the income reflected in the payslip; he also provided a copy of his most recent Centrelink payment summary for the period 16 March 2021 to 27 April 2021. The Tribunal is satisfied Mr Porter has complied with its post hearing direction.
Ms Moultrie has been provided with copies of these documents for her consideration and comment, but no response has been received.

ISSUES

The issues which arise in this case are:
· Whether the Registrar was correct in accepting Mr Porter’s $nil income election for the period 19 October 2020 to 30 June 2021 provided to the Agency on 19 October 2020 as an accurate estimate of his income as at the date he made his election; and
· Whether the Registrar was correct in accepting Mr Porter’s request on 19 October 2020 for a reduction in the rate of child support from the fixed annual rate to the minimum annual rate with effect from 19 October 2020.

CONSIDERATION

In reaching its decision, the Tribunal has considered the affirmed evidence given by Mr Porter at the hearing and the documents contained in Exhibits 1, A and B.
The statutory provisions relevant to the review of Mr Porter’s application in matter number 678 are contained in the Child Support (Assessment) Act 1989 (the Act). Section 60 states:
A parent may, before a year of income starts or during a year of income, elected that the parent’s adjusted taxable income for the year of income is to be the amount that applies under subsection (2) or (3)…
A year of income is defined as a taxation year. Relevantly, subsections 60(3) and 60(4) provide that, if the election is made after the year of income has started, the person has to estimate their adjusted taxable income from the date of the election until the end of the year of income. That amount is then annualised and used by the Agency in the administrative assessment. The person is also required to estimate their adjusted taxable income for the period from the start of the year of income until the date before the election was lodged.
Therefore, to make such an election, a person has to advise the Agency of what their income is likely to be from the date they make the election until the end of the financial year and also advise the Agency of their income from the start of the financial year to the date they make the election.
Subsection 60(5) of the Act states that the start date for the election must be the day on which the parent makes the election or a later date which is the start date of a child support period. That is, the election cannot take effect from a date earlier than the date on which the election was made.
Subsection 63AA(2) of the Act provides that the Agency may refuse to accept an estimate of income if satisfied that the estimated income until the end of the year of income is likely to be less than the person’s actual income, or if the estimated income for the period from the start of the year of income until the election was made is likely to be more than the person’s actual income for that period.

Evidence before the Tribunal

The Agency’s file records in Exhibit 1 contain a letter sent to Mr Porter on 5 May 2020 notifying him that the period during which the Agency had been applying his income estimate for the current child support period was due to expire on 30 June 2020.
It appears from the Agency’s file that, in response to its letter of 5 May 2020, Mr Porter contacted the Agency on 24 July to discuss his electing to provide an income estimate for the 2020/21 financial year. However, he did not have sufficient financial information available to him at that time to be able to do so. The Agency’s file note for that date records Mr Porter being given until 27 July 2020 to provide the necessary financial information to enable him to complete his intended income estimate election.
The Agency’s file records Mr Porter contacting an Agency case officer named Andrew on 27 July 2020 and completing his income estimate. The Agency’s file note of that date records the case officer, Andrew, accepting Mr Porter’s income estimate pursuant to the provisions of section 60 of the Act referred to above.
The Agency then sent letters dated 27 July 2020 to each of the parents confirming its acceptance of Mr Porter’s income election for the 2020/21 financial year, recording his year-to-date (YTD) income, 1 July 2020 to 23 July 2020 in the amount of $4,435.70, and his estimated income for the remainder of the 2020/21 financial year, 24 July 2020 to 30 June 2021 at $65,957.13, annualised to $70,392.
No objection was made to the Agency’s decision to accept Mr Porter’s income estimate set out above.
Mr Porter gave evidence regarding the background to his circumstances leading up to his decision to make an election to provide an income estimate for the 2020/21 financial year. He said he had sustained serious neck, back and other injuries in a work-related accident on [a day in] August 2019, when he was working as [an occupation 1] for [Employer 1], a company with whom he had been employed from 3 February 2016 until mid-October 2020, when his employment was terminated. He was unable to work for a period of approximately 18 months, and although he continued to be employed by that company after recovering from his injuries, his work capacity was significantly reduced as a consequence of the injuries he suffered, and his employment was terminated on 15 October 2020 because of his disabilities.
Mr Porter said he notified the Agency on 19 October 2020 of this change in his employment and his income circumstance. The Agency’s file records Mr Porter’s notification on 19 October 2020 at pages 40 and 41 of Exhibit 1, in which Mr Porter informed the Agency’s [case officer], , that he was no longer in receipt of income, and intended applying to Centrelink for income support benefits. Mr Porter gave evidence that he informed the Agency case officer that he expected to receive further termination payments from his former employer, [Employer 1], but as he had not received details of these payments, he was unable to provide those financial details. He gave evidence that the Agency case officer allowed him until 26 October 2020 to provide a copy of his former employer’s Separation Certificate, detailing his termination entitlements, to enable him to complete his amended income election.
It appears from the case officer’s brief notes at page 40 of Exhibit 1 that she discussed Mr Porter’s $nil income estimate from 19 October 2020, consistent with the termination of his employment on 15 October 2020, and his intention to apply for Centrelink benefits, and that she assisted Mr Porter with his income estimate for the 2020/21 financial year in forecasting his likely adjusted taxable income (ATI) in the amount of $21,213.
Pages 42 and 43 of Exhibit 1 record the Agency’s further discussions with Mr Porter on 19 October 2020 regarding the Agency’s decision to apply the FAR of child support, having regard to the low level of his anticipated income, consequent upon his employment termination on 15 October 2020, and his 0% child care level. The Agency file notes also record its agreement to allow Mr Porter until 26 October 2020 to provide a copy of his former employer’s Separation Certificate.
The Agency sent letters to the parents dated 19 October 2020 notifying them of its decision to accept Mr Porter’s amended income election on 19 October 2020 for the 2020/21 financial year, attaching a summary of the income estimate, reflecting Mr Porter’s total income estimate in the 2020/21 financial year, including his YTD income estimate of $4,435.70 for the period 1 July 2020 to 23 July 2020, his income estimate for the initial remaining period 24 July 2020 to 18 October 2020 of $16,777.95, and his $nil income estimate for the balance of the remaining period 19 October 2020 to 30 June 2021.
The Agency’s letters of 19 October 2020 also reflected its application of the child support FAR of $1,467 per annum and a corresponding weekly child-support payment of $28.12.
The Agency’s file at pages 58 to 60 of Exhibit 1 records its receipt on 22 October 2020 of Mr Porter’s final [Employer 1] payslip for the period 12 October 2020 to 18 October 2020 reflecting Mr Porter’s annual leave entitlement payment of $2,183.77, received, according to the payslip, on 22 October 2020, and his Employment Separation Certificate dated 22 October 2020 reflecting both his annual leave entitlement of $2,183.77 and his payment in lieu of notice of $2,868, paid to him, according to the Certificate, on 22 October 2020.
The Agency’s file note dated 23 October 2020 at page 62 of Exhibit 1 records the Agency’s decision not to apply the child support FAR from 19 October 2020, consistent with which, it sent letters dated 23 October 2020 to each of the parents, notifying them that it had accepted Mr Porter’s request to reduce the child support rate, consistent with his income estimate of $nil from 19 October 2020 to 30 June 2021. The Agency’s letters also reflected its application of the child support MAR of $443 per annum ($8.49 per week) in substitution for the previously applied child support FAR of $1,467.
The Tribunal is satisfied, on the evidence set out above, that the $nil income estimate Mr Porter provided to the Agency on 19 October 2020 following his employment termination on 15 October 2020 for the period 19 October 2020 to 30 June 2021 was an accurate income estimate as at that date, and that the Registrar was entitled to accept that estimate.
However, the YTD income estimates applied for both the initial income election period 1 July 2020 to 23 July 2020, and the period 24 July 2020 to 18 October 2020 do not accord with the income information provided by Mr Porter to the Agency on 22 October 2020. The Tribunal will address this issue later in these Reasons.
The Tribunal accepts Mr Porter’s evidence that at the time he provided his $nil income estimate on 19 October 2020, he informed the Agency’s case officer, Donna, that he anticipated receiving further payments from his former employer, but at that point in time, he had not received those payments and was not aware of the amount or amounts thereof, and that it was not until 22 October 2020, when he received his final payslips and the annual leave payment of $2,183.77 and payment in lieu of notice payment of $2,868, reflected in his payslips, that he became aware of having received that additional income.
The Tribunal notes that, compliant with the Agency’s request on 19 October 2020, on 22 October 2020 he provided the Agency with copies of his Employment Separation Certificate disclosing the additional amounts of income referred to above, and his final payslips reflecting both the $2,868 payment in lieu of notice and the $2,183.77 annual leave payment.
On 27 October 2020, Ms Moultrie contacted the Agency to register her objection to the Agency’s decision of 23 October 2020 to accept Mr Porter’s application to reduce his child support liability from the child support FAR to the MAR, alleging that Mr Porter had a current Australian Business Number (ABN), suggesting Mr Porter was conducting a business operation and had an additional source of income.
In his evidence to the objections officer in the course of the objection process, reflected at pages 91 and 93 of the Agency’s file notes of 27 November 2020, Exhibit 1, and at the Tribunal’s hearing, Mr Porter refuted Ms Moultrie’s allegation, acknowledging that whilst he held a current ABN, established approximately 10 years ago when he was operating his own business, his sole source of income since 3 February 2016 until 15 October 2020 had been from his employment as [an occupation 1] for [Employer 1], consistent with his evidence referred to earlier in these Reasons, and that he has not used his ABN since at least 3 February 2016.
Ms Moultrie did not attend the hearing and Mr Porter’s evidence regarding her allegations was unchallenged. The Tribunal accepts his evidence that his only source of income from 3 February 2016 to 15 October 2020 was from his employment as [an occupation 1] with [Employer 1].
The Agency’s file notes of 26 November 2020 also record Mr Porter notifying the Agency that he commenced receiving jobseeker payments, following his successful application to Centrelink, from 12 November 2020.
Mr Porter gave evidence that the jobseeker payments he is receiving from Centrelink are a form of Total and Permanent Disability pension, based on the injuries he sustained in the work-related accident [in] August 2019, from which he never fully recovered, and is subject to the qualification that he is no longer required to continue to seek employment.
Page 93 of the Agency’s Exhibit 1 file records reflects the Agency’s decision on 26 November 2020 to accept a further amended income estimate from Mr Porter, presumably based on his notification to the Agency that he was receiving jobseeker payments from Centrelink from 12 November 2020. Consistent with its acceptance of that notification, the Agency sent letters dated 26 November 2020 to each of the parents, notifying them that consequent upon receipt of new information, the Agency had recalculated the child support assessment for the period 24 November 2020 to 30 June 2021, using Mr Porter’s jobseeker income of $13,609.28, annualised to $22,682.
The summary detailing Mr Porter’s updated estimated income enclosed with the Agency’s letters of 26 November 2020 records Mr Porter’s total income (including his YTD income) in the 2020/21 financial year was estimated to be $34,822.93, comprising his initial YTD income for the period 1 July 2020 to 23 July 2020 of $4,435.70, his income estimate for the period 24 July 2020 to 18 October 2020 of $16,777.95, annualised to $70,392, his $nil income estimate for the period 19 October 2020 to 23 November 2020, and his income estimate for the period 24 November 2020 to 30 June 2021 of $13,609.28, annualised to $22,682.
In response to questioning by the Tribunal regarding his YTD income estimate of $4,435.70 provided to the Agency on 27 July 2020, Mr Porter was unable to explain the precise method used to determine that amount. It appears from the Agency’s file records at page 15 of Exhibit 1 that a weekly gross income of $400.00 may have been adopted by the Agency officer, Joseph, with whom Mr Porter was dealing on that date, and extrapolated over a period of 23 days, to arrive at an amount of approximately $4,435.70 for the period 1 July 2020 to 23 July 2020.
In any event, by reference to the two payslips provided by Mr Porter at page 58 of Exhibit 1, and page A11 of Exhibit A, Mr Porter’s gross YTD income from wages is reflected as $3,201.01, for the period 1 July 2020 to 22 October 2020 plus his additional payments in lieu of notice of $2,868 and his annual leave entitlement of $2,183.77 for the same period, a total of $5,051.77, rounded up to $5,052.
Adopting the YTD (1 July 2020 to 22 October 2020) gross wages amount reflected in the payslips of $3,201, Mr Porter’s YTD income at the time he lodged his amended income election estimate on 19 October 2020 was $3,201.01, not $4,435.
It follows that the YTD income amount reflected in the earlier income election estimate is incorrect, and, calculated on the gross wages YTD amount of $3,201 reflected in the payslips over the 108-day period 1 July 2020 to 15 October 2020, reflects a daily wages rate of $29.63, extrapolated over the initial YTD period 1 July 2020 to 23 July 2020, which results in a YTD income amount of approximately $681.49.
It also follows that his YTD income for the period 1 July 2020 to 22 October 2020, based on the payslips and the Employment Separation Certificate he received on 22 October 2020 and provided to the Agency on that date, was $3,201.01 reflected in his payslips and the additional income in the form of the payment in lieu of notice of $2,868 and the annual leave payment of $2,183.77, a total of $8,253.

The Tribunal finds that, based on the information Mr Porter provided to the Agency on 22 October 2020, the YTD income estimate of $4,435 provided to the Agency on 19 October 2020 was an accurate estimate of his 1 July 2020 to 18 October 2020 YTD income as at that date. The Tribunal is also satisfied Mr Porter’s $nil income estimate for the period 19 October 2020 to 30 June 2021 was an accurate reflection of his likely income for that period as at 19 October 2020, and that his amended estimate of his income received on 22 October 2020, reflecting the payments of $2,868 in lieu of notice, and $2,183.77 annual leave entitlement, totalling approximately $5,052, provided to the Agency on 22 October 2020, was an accurate estimate of his YTD income from 19 October 2020 to 22 October 2020.
His $nil income estimate for the period 22 October to 23 November 2020 was also an accurate estimate of his income for that period up until he notified the Agency on 26 November 2020 that he had commenced receiving Centrelink jobseeker payments estimated at $13,609.28 for the period 24 November 2020 to 30 June 2021, annualised to $22,682.
The Tribunal is also satisfied that Mr Porter’s total income for the 2020/21 financial year estimate period totalling $21,862.29, comprising his YTD incomes of $3,201.01 and $5,052, and his Centrelink/jobseeker payments of $13,609.28 was not likely to exceed the parenting payment (single) maximum basic amount, and that it would be unjust and inequitable for him to be assessed on the child support FAR.
The Tribunal therefore intends setting aside the decisions under review, and in substitution, decides that, with respect to matter 678, the Registrar was entitled to accept Mr Porter’s $nil income estimate on 19 October 2020 for the period 19 October 2020 to 30 June 2021, and with respect to matter 686, the Registrar was entitled to accept Mr Porter’s request that the child support FAR not apply in the assessment from 19 October 2020.

DECISION

2021/BC020678

2021/BC020686

[2021] AATA 2291

19 May 2021

Key Legal Topics

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Administrative Law

Family Law

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Judicial Review

Statutory Construction

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