Putt and Frabi (Child support)

Putt and Frabi (Child support) [2018] AATA 4521 (16 October 2018)

DIVISION:Social Services & Child Support Division
REVIEW NUMBER:  2018/SC014680
APPLICANT:  Mr Putt
OTHER PARTIES:  Ms Frabi
Child Support Registrar

TRIBUNAL:Member P Jensen
DECISION DATE: 16 October 2018
DECISION:

The Tribunal sets aside the decision under review and, in substitution, decides to vary Mr Putt’s adjusted taxable income to $90,000 per annum from 18 January 2018 to 31 December 2020.

CATCHWORDS

CHILD SUPPORT – departure determination – income, property, financial resources and earning capacity of the liable parent – a ground for departure is established – decision to depart – 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

Mr Putt and Ms Frabi are the parents of [Child 1] who was born in 2007. A child support case was registered in 2007. At all relevant times the Department of Human Services – Child Support (“the CSA”) has recorded Ms Frabi as providing 100% care to [Child 1].
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. From 29 December 2017, the administrative assessment was based on Mr Putt’s estimate of income of $0 and Ms Frabi’s 2016-17 adjusted taxable income of $92,922, and Mr Putt was required to pay $420 per annum in child support.
The Act also provides for a departure from the administrative assessment in certain circumstances. Ms Frabi lodged a departure application on 18 January 2018. A senior case officer granted the application and varied Mr Putt’s adjusted taxable income to $65,660 per annum from 1 February 2018 to 31 January 2021. Mr Putt objected to that decision. An objections officer disallowed his objection. Mr Putt sought further review by this Tribunal. I conducted a directions hearing on 13 September 2018 and I spoke to both parents by conference phone. I conducted a full hearing on 16 October 2018. I spoke briefly to Mr Putt by conference phone. He stated he was unable to participate in the full hearing. The full hearing continued in his absence. I spoke to Ms Frabi by conference phone.
Paragraph 98C(1)(b) of the Act relevantly provides that a departure decision may be made in respect of a departure application if:
(i)... one, or more than one, of the grounds for departure referred to in [subsection 117(2)] exists; and
(ii)... it would be:
(A)just and equitable as regards the child, the liable parent, and the carer entitled to child support; and
(B)otherwise proper;
to make a particular determination under this Part …

A ground for departure

Subparagraphs 117(2)(c)(ia) and (ib) of the Act, commonly referred to as Reason 8, provide as grounds for departure:
that, in the special circumstances of the case, application in relation to the child of the provisions of this Act relating to administrative assessment of child support would result in an unjust and inequitable determination of the level of financial support to be provided by the liable parent for the child:
…
(ia)because of the income, property and financial resources of either parent; or
(ib)because of the earning capacity of either parent; ...
The Tribunal can only find that a parent’s earning capacity is greater than their actual income if the requirements of subsection 117(7B) are satisfied. That subsection states:
In having regard to the earning capacity of a parent of the child, the court may determine that the parent's earning capacity is greater than is reflected in his or her income for the purposes of this Act only if the court is satisfied that:
(a)one or more of the following applies:
(i)the parent does not work despite ample opportunity to do so;
(ii)the parent has reduced the number of hours per week of his or her employment or other work below the normal number of hours per week that constitutes full-time work for the occupation or industry in which the parent is employed or otherwise engaged;
(iii)the parent has changed his or her occupation, industry or working pattern; and
(b)the parent's decision not to work, to reduce the number of hours, or to change his or her occupation, industry or working pattern, is not justified on the basis of:
(i)the parent's caring responsibilities; or
(ii) the parent's state of health; and
(c) the parent has not demonstrated that it was not a major purpose of that decision to affect the administrative assessment of child support in relation to the child.
The senior case officer’s decision was based on a finding that Mr Putt could, and should, be assessed on his earning capacity. It is convenient to set out the relevant chronology in full, and then return to consider whether the elements of subsection 117(7B) are satisfied in respect of Mr Putt.
Mr Putt’s 2015-16 adjusted taxable income was $82,752. He was employed as [Occupation 1]. He ceased employment with [Company 1] on 4 December 2015 and commenced employment with [Company 2] on 25 November 2015. That evidence, i.e. the absence of any period of unemployment, suggests that he was successful in obtaining new employment with [Company 2] while employed by [Company 1].
During 2015-16, Mr Putt was required to pay $1,290 per annum in child support for two months, and $3,897 per annum in child support for the remaining ten months.
Mr Putt’s 2016-17 adjusted taxable income was $91,837. He earned wages of $91,450 as an employee of [Company 2]. He stated at the directions hearing that he had been employed by [Company 2] on a full-time basis. He also worked as a sole trader providing, according to his individual tax return, a “[specified] service”, which generated revenue of $17,660, incurred expenses of $10,000, and made a profit of $7,660. That evidence suggests that he was undertaking more than a full-time workload during at least part of 2016-17.
During 2016-17, Mr Putt was required to pay $3,897 per annum in child support for one month, and $3,102 per annum in child support for the remaining eleven months.
From 1 July 2017 to 30 September 2017, Mr Putt was required to pay $3,102 per annum in child support, based on an adjusted taxable income of $49,600.
From 1 October 2017, Mr Putt was required to pay $7,965 per annum in child support, based on his 2016-17 adjusted taxable income of $91,837. The senior case officer subsequently stated:
Mr Putt’s initial 2015-16 income tax return was updated on three subsequent occasions. ...
In the current case, due to both an error by [Mr Putt] in lodging an income tax return (that for 2015-16) plus his income increasing in comparison to the prior year’s taxable income, there has been a very small period in time in recent years when Mr Putt has provided child support on the basis of his actual capacity. In other periods, Mr Putt’s child support obligations have been based on incomes significantly lower than his actual income at the time. ...
On 19 October 2017, Mr Putt contacted the CSA and queried the increase in his rate of child support payable.
On 21 November 2017, Mr Putt and his wife, Mrs Putt, registered [Company 3]. Mr Putt and Mrs Putt are [Company 3]’s two directors and shareholders.
On 5 December 2017, Mr Putt contacted the CSA and it noted:
[Mr Putt] rang to discuss options as his job is finishing up end of Dec
On 9 December 2017 the CSA contacted Mr Putt about the payment of his child support arrears. It noted:
Contacted Mr Putt to gain payment
Mr Putt advised that his wife was unemployed and he has now been given notice form [from?] his employer finishing in 2 weeks
advised of acceptable range we require for payment of debt
...
Payment arrangement within or above acceptable range made = N
It is worth noting at this point that Mr Putt subsequently acknowledged that [Company 2] did not terminate his employment; he resigned. Also, the CSA subsequently obtained some of Mr Putt’s bank account statements. The statements for a [Bank] joint loan account in the names of Mr Putt and Mrs Putt include the following transactions:
29 Nov 2017    Credit [Wage]  1,549.50
...
30 Nov 2017    Credit ASAP Mrs Putt Expenses  424.64
...
04 Dec 2017    Credit ASAP Mrs Putt Expenses  44.79
04 Dec 2017    ASAP RECRUITMENT PAY FOR 4/12/2017  1,121.50
...
11 Dec 2017    Payroll ASAP RECRUITMENT PAY FOR 11/12/2017          1,134.50
...
18 Dec 2017    Payroll ASAP RECRUITMENT PAY FOR 18/12/2017          1,139.00
That evidence suggests that Mr Putt’s wife was employed on 9 December 2017. It also suggests that Mr Putt falsely stated that his wife was unemployed in an attempt to justify either making a reduced payment towards his child support arrears, or not making a payment towards his child support arrears.
On 29 December 2017, Mr Putt contacted the CSA and provided an estimate of income of $0 for the balance of 2017-18. He stated that his year-to-date earnings were $42,632.
On 2 January 2018, Mr Putt contacted the CSA and it noted that “[he] advised that he will be going to [Centrelink] to go on benefits due to financial constraints.” On 11 April 2018 the senior case officer noted: “Information available with the [Department of Human Services] shows he has not applied for income support payments from Centrelink.”
On 7 February 2018 the CSA contacted Ms Frabi who said that Mr Putt owned his own business. The CSA then contacted Mr Putt who said he was not currently working, and that he would complete a form in response to Ms Frabi’s departure application. On the same day in wrote on that form, in part:
I am currently unemployed. ... I am currently studying @ university. P/T. I recently opened a Pty Ltd company (Nov 2017) with my wife which we plan to use once I am finished studying. I am hoping to do some part-time work whilst studying depending on course load. ...
On 4 March 2018 he reiterated that statement.
On 20 March 2018 the CSA contacted Mr Putt and noted (with minor typographical errors in the original):
Mr Putt explained that he left [Company 2] in dec 17. He explained this firm moved location to the centre of Sydney involving 3 hrs travel per day plus tolls. He also explained that he is [qualified] (as [Occupation 1]) and the firm he was working for had started to outsource to overseas countries, the work he did. Mr Putt explained that the co wanted him to leave. He explained that it was due to pressure from the emp-loyer that he resigned in dec (rather than wait until the start of the 2018 academic year.
Mr Putt also explained that due to his low quals, the opportunity for him to work for a decent wage is difficult as younger more qualified prople are willing to do the job for lower pay.
Mr Putt also confirmed he has started his maters in [subject] [Masters in [a subject]] to allow him to obtain the [qual]. He explained that due to his [surgery in 1993], he has a p/t study load so he expects to complete his studies in 5 years.
I enquired about Mr Putt’s sole trader work he performed last year and Mr Putt advises he is no longer doing this. I enquirewd aboutt he business and Mr Putt confirmed that he and his spouse have started a co which is performing [certain] work using his spouse’s quals and skills. Mr Putt denied that he was performing any work in the business although he stated he was hopeful of securing some work in the future.
The CSA obtained [Company 3]’s bank account statements for the period from 29 March 2018 to 26 June 2018. It is unfortunate that the CSA did not obtain earlier statements. However, the statements that were obtained show regular transactions from 29 March 2018 and suggest that [Company 3] was conducting business prior to 29 March 2018. The evidence suggests that when Mr Putt stated on 4 March 2018 that that he was currently studying and he and his wife planned to use [Company 3] once he had finished studying, [Company 3] was already conducting business.
[Company 3]’s bank account statements from 29 March 2018 include the following entries:
29 Mar 2018    Direct Credit ... [Name deleted] [Redacted] Inv 121              +660.00
...
3 Apr 2018      Direct Credit... [Company name deleted]  +346.50
...
6 Apr 2018      Direct Credit ... [Company 1].  $242.00
...
9 Apr 2018      Direct Credit ... [Company 2] ... INV 000 116  +181.50
9 Apr 2018      Direct Credit ... [Company 2]... INV 000 111  +231.00
9 Apr 2018      Direct Credit... [Company name deleted]  $148.50
On 12 May 2018, written submissions were prepared by “Mrs Putt in conjunction and with Mr Putt” which included the following:
[[Company 3]] currently carries out [specified] services and will eventually carry out [Occupation 1] services once Mr Putt has finished studying and registered. His partner is qualified to carry out the current services.
...
Mr Putt is studying and therefore is unable to carry out work.
...
It is correct that the company has a low income due to the fact that the company was only started at the end of 2017. Mr Putt is not a qualified [Occupation 2] currently.
The CSA issued a notice to [Company 3] to provide certain information. On 6 July 2018, Mrs Putt contacted the CSA and it noted:
She said that the business is up and running since 21/11/17 but neither party has drawn a wage on this business yet. She states that event when they get paid, they are not drawing a wage on the income as they are still buying stuff from the business etc. ... She stated that [Mr Putt] is a joint director of the company, he is studying and has [a medical condition] so he hasn’t actually worked at all. She has been doing the work. ...
On 27 July 2018, Mr Putt stated in his current application for review by the Tribunal:
I am currently studying to complete my university to become a registered [Occupation 2]. I was pushed out of my job as [Occupation 1] with a company as they have been able to use younger and less skilled people to do the job I was doing. Originally my partner and myself opened a PTY LTD company where we would work for ourselves (I would work part time whilst studying). Due to changes with the governing body I am unable to carry out most of the work I wanted to until I am fully qualified without being sued. I haven’t worked since the beginning of 2018. My partner is currently working in the business and also has another job and is supporting our family whilst I study. ...
On 13 September 2018 I conducted a directions hearing. Mr Putt said that at the end of 2017, Mrs Putt was employed by a [firm]. He said she was then offered, and accepted, more remunerative full-time employment by another [firm]. He said that more recently, she commenced other full-time employment with another employer. According to my notes, Mr Putt then stated:
She also works for [Company 3]. [All] sorts of work. She doesn’t have any [Occupation 2]-type qualifications. She doesn’t have any professional qualification. [But] it’s like being a mechanic or a plaster, you don’t need qualifications to do the work.
The directions hearing was audio-recorded, which is the Tribunal’s standard practice.
On 13 October 2018, Mr Putt and his wife prepared joint written submissions. They stated that Mr Putt “is currently unable to work full time due to medical issues” because of a number of matters including ““employment insecurity because of crackdown by [Occupation 2 official body] on regulation which required registered [Occupation 2s] to carry out works that previously have been carried out by [Occupation 1s].” They also stated:
Mr Putt and his wife [started] [[Company 3]] to work in the business together. Mr Putt was to work part time whilst finishing university.
I accept Mr Putt’s belated acknowledgement that when he resigned from [Company 2], he intended to undertake remunerative work via [Company 3] whilst studying part-time. His earlier statements that he (and his wife) “plan to use [[Company 3]] once I am finished studying” were false.
Returning the elements of subsection 117(7B) of the Act, Mr Putt initially intimated that [Company 2] terminated his employment, but he later acknowledged that he resigned. He changed his working pattern. Paragraph 117(7B) is satisfied.
Mr Putt did not suggest that he resigned because of any caring responsibilities. His and his wife’s most recent joint explanation as to why he resigned is contained in written submissions that they prepared on 13 October 2018:
Mr Putt’s resignation from [Company 2] although technically voluntary, was because he could not cope with the stress of significantly increased travel time and workplace bullying and was not intended by him in any way, as a means of reducing his assessment to pay child support.
Mr Putt was employed by [Company 2] for approximately two years. According to Mr Putt’s and his wife’s submissions, he was employed by [Company 1] for approximately two and a half years prior to his employment with [Company 2]. There is no medical evidence to suggest that Mr Putt’s health deteriorated in the lead-up to his resignation from [Company 2]. His decision to resign was not justified on the basis of his state of health. Paragraph 117(7B)(b) is satisfied.
To paraphrase paragraph 117(7B)(c), the issue then arises as to whether Mr Putt’s decision to resign was for a major purpose of affecting his rate of child support payable. Prior to resigning from [Company 2], he was in full-time employment as [Occupation 1] for approximately four and a half years, initially with [Company 1] and later with [Company 2]. On 1 October 2017 his rate of child support payable increased significantly when the administrative assessment started using his 2016-17 adjusted taxable income of $91,837. He contacted the CSA about the increase, then he and his wife registered [Company 3]. He falsely stated to the CSA that [Company 2] had given him notice, when in fact he had decided to resign. When asked about his capacity to pay his child support arrears, he falsely stated that his wife was unemployed. After he resigned, he told the CSA that he did not expect to earn any income for the rest of the financial year, and that he would be going to Centrelink to apply for an income support payment. According to the CSA’s investigations, he did not apply for income support payments. He informed the CSA on 7 February 2018, and again on 4 March 2018, that he and his wife planned to use [Company 3] once he had finished studying. He planned to be studying for five years. The evidence suggests that when he made those statements, [Company 3] was probably already conducting a business. The CSA noted Mrs Putt as stating on 6 July 2018 that “the business is up and running since 21/11/17”. Mr Putt subsequently acknowledged that he and his wife had planned to operate a business via [Company 3] while he was studying.
If a person is employed by an unrelated third-party, their administratively assessed rate of child support payable usually fairly reflects their actual income and financial resources, and that is what occurred in this case from 1 October 2017. Mr Putt’s relatively prompt decision to register [Company 3] with his wife, resign from [Company 2], and lie to the CSA about various matters that I have referred to above, suggest that he resigned for a major purpose of affecting the rate of child support payable.
It is important to note that the legislation refers to “a major purpose”; not “the major purpose”. It appears that when Mr Putt resigned, he believed he would be able to earn an income providing [services] (which is different to accurately declaring the income that he earned from providing [services]). On 27 July 2018 he stated that it had transpired that he was unable to provide those services due to “changes with the governing body”, which suggests that the relevant laws or regulations had been changed, whereas on 13 October 2018 he stated that there had been a crackdown by [Occupation 2 governing body], which suggests that any such services that he had provided in the past may have been provided in contravention of the relevant laws and regulations. In any event, a major purpose of Mr Putt’s resignation may have been to become effectively self-employed, albeit via a corporate structure. However, a person can resign from their employment for more than one major purpose.

Viewing the evidence as a whole, I find that Mr Putt has not demonstrated that it was not a major purpose of his decision to resign to affect the administrative assess of child support payable. Paragraph 117(7B)(c) is satisfied and I can have regard to Mr Putt’s earning capacity.
It is convenient at this point to return to Mr Putt’s statement on the day of the full hearing that he was unable to participate in the hearing. Mr Putt was born in [year]. He was granted the disability support pension in December 1991. He underwent an operation in [1993]. His pension was suspended in May 1994 following his return to paid employment, and his pension was cancelled in June 1995 on the basis that he had remained in paid employment. He has reapplied for the pension once, in 2005, and his claim was rejected because the functional impairment of his medical conditions did not satisfy the relevant legislative test. On 13 September 2018, I conducted a directions hearing by conference phone. When I phoned Mr Putt, Mrs Putt was present. Mr Putt had not applied to be represented by Mrs Putt: see section 32 of the Administrative Appeals Tribunal Act 1975 (“the AAT Act”). I explained to Mr Putt that the proceedings were private proceedings and I asked Mr Putt to ask Mrs Putt to leave the room. Mr Putt and Mrs Putt were quite forceful in their protestations, and Mr Putt initially refused to participate in any proceedings if Mrs Putt was not present, but once Mrs Putt had left the room, Mr Putt appeared to have no difficulty participating in the directions hearing. At one point he stated that he sometimes forgets things, and shortly thereafter he said he had forgotten something, and then he remembered it. There is obviously a fundamental difference between a person not being able to participate in a hearing, and a person not being able to remember a particular fact.
Despite the registry’s attempts to have Mr Putt organise a private email address and not involve Mrs Putt in the proceedings, Mr Putt and Mrs Putt continued to communicate with the registry via a joint email account and Mrs Putt continued to attempt to represent Mr Putt.
On 26 September 2018, Mr Putt applied to be represented by Mrs Putt. Ms Frabi opposed the application. On 2 October 2018, I decided to refuse the application.
On the same day that I refused Mr Putt’s application to be represented by Mrs Putt, the Tribunal registry received an email from Mr and Mrs Putt’s joint email account. Mr Putt asked if the matter could be heard on the papers. Hearing the matter on the papers would have been a faster way of finalising the matter, if Ms Frabi had also consented to the matter being heard on the matter, but I decided that the interests of justice favoured leaving the matter listed for a full hearing, for the following reasons. Varying a parent’s adjusted taxable income on the basis of their earning capacity, rather than their actual income, is a particularly serious matter. It often causes financial hardship to the paying parent. Mr Putt was uniquely placed to give evidence about his reasons for resigning from [Company 2]. Mr Putt applied to have the matter heard on the papers very shortly after I decided to refuse his application to be represented by Mrs Putt; it was possible that, with the passage of time, Mr Putt would change his mind and participate in the full hearing.
On 11 October 2018 the registry received an email from Mr and Mrs Putt in which they asked to have the matter adjourned because “We have [sought] legal aid for this matter” and “Mr Putt being unfit medically to represent himself”. They attached a handwritten letter from [Dr A], general practitioner, dated 10 October 2018, in which he stated, in part:
Mr Putt’s memory has been reduced since his [surgery] [in 1993]. He repeats himself, gets mixed up. He attempted further studies [but] his memory was not up to [???]. He has had panic attacks and at present is quite depressed. At present he is neither working nor studying but does part time work.
I refused Mr Putt’s application to have the matter adjourned.
On 15 October 2018 the registry received an email from Mr and Mrs Putt which enclosed a medical certificate from [Dr B] which stated:
Mr Putt has a medical condition (Depression and Anxiety), is panicking through a stressful situation and have advised him to avoid anything which can stress him and make his Mental Health situation worse. I suggest he does not represent Himself in court [sic] and appoint a legal representative to speak for him from 15/10/18 to 22/10/18.
I refused Mr Putt’s application to have the matter adjourned.
My reasons for refusing Mr Putt’s applications to have the matter adjourned can be summarised as follows. As a starting point, it is important to note that I am not bound by the opinion of medical experts, although I would not depart from an expert’s opinion unless there was good reason to do so. The point can be best explained by way of a simple hypothetical example. If an issue in a case was whether the applicant could walk, and the applicant walked into a hearing room and handed me a report in which a doctor stated that the applicant could not walk, it would be open to me to conclude that the applicant could walk, based on what I had just observed. In the current case, Mr Putt was initially quite forceful in insisting that Mrs Putt had to accompany him during the directions hearing, but once she had left the room, he appeared to have no difficulty participating in the hearing.
During the directions hearing, Mr Putt did not repeat himself, and he did not appear to get mixed up. However, even if that had occurred, the hearing could have continued. Tribunals routinely receive evidence from witnesses who are, at times, nervous, forgetful, confused, and so on. Further, to the extent that [Dr A]’s statement suggests that Mr Putt suffers from a permanent condition, nothing is to be gained by adjourning the proceedings.
Mr Putt did not explain why he provided a subsequent medical certificate from [Dr B], rather than a second medical certificate from [Dr A]. I note that the doctors practice at different medical clinics. In any event, [Dr B]’s statement identifies a possible misconception about the current proceedings. Even if Mr Putt had been represented, his representative would not have been allowed to “speak for him”. I would have asked Mr Putt the same questions, regardless of whether he was represented, and he would have been required to answer them, without any assistance from his representative. Compared to Court proceedings, representatives in departure application proceedings before the Tribunal tend to have very little involvement in the proceedings: see, for example, section 26 of the Child Support Review Directions.
There is no clear evidence that if the matter were adjourned, Mr Putt would be better placed to participate in the full hearing on a subsequent date. To the extent that the medical evidence suggests that Mr Putt’s anxiety and depression were the result of the imminent hearing, his anxiety and depression may be largely unavoidable, and may flow from a concern that he will be questioned about the evidence that I have set out above.
Finally, Ms Frabi lodged her departure application in January 2018. Two decision-makers have already concluded that Mr Putt can, and should, be assessed on his earning capacity, and they have both provided detailed reasons for their decisions. Mr Putt has had ample time to gather evidence, organise potential representation, and generally prepare himself for the hearing. I am required to conduct proceedings with as much expedition as the requirements of the AAT Act and of every other relevant enactment and a proper consideration of the matters before the Tribunal permit: paragraph 33(1)(b) of the AAT Act.
As noted earlier, the requirements of subsection 117(7B) of the Act are satisfied in respect of Mr Putt’s resignation from [Company 2] and I can have regard to his earning capacity. The senior case officer concluded that Mr Putt’s earning capacity was $65,660, which was the average of his adjusted taxable incomes over five years: 2012-13 to 2016-17. I am not persuaded that that is the preferable way of calculating Mr Putt’s earning capacity. He was employed by [Company 1] on a full-time basis for two and a half years, and then he moved to [Company 2] and worked on a full-time basis for two years, and then he decided to resign. His 2016-17 adjusted taxable income was $91,837. He was in full-time employment with [Company 2] throughout that financial year, and he also operated a profitable business as a sole trader. He received wages of $91,450 from [Company 2], and one might expect him to incur modest tax-deductible expenses in respect of those earnings. I find that Mr Putt’s earning capacity is fairly reflected to child support purposes in an adjusted taxable income of $90,000 per annum, which is significantly greater than the actual income that he states he receives. When Ms Frabi lodged her departure application, the administrative assessment was based, in part, on Mr Putt’s estimate of income of $0. The evidence suggests that when Mr Putt lodges his 2017-18 tax return, his stated income in respect of the estimate period will be close to $0. Those circumstances as a whole constitute special circumstances that would result in an unjust and inequitable determination of child support payable. Reason 8 is established.

Just and equitable

The requirement to consider whether a departure would be just and equitable directs attention to what is fair to the parents and their children. Regard must be had to a variety of factors such as the needs of the children, the parents’ commitments and any hardship that would be caused by departing or not departing from the formula.
Mr Putt completed a Statement of Financial Circumstances on 27 September 2018. He stated that he is self-employed via [Company 3]. He said he earns $100 per week. He said his wife earns $2,000 per week. I will not repeat other details of Mr Putt’s Statement of Financial Circumstances because I do not consider him to be a reliable witness.
Ms Frabi is [an Occupation 3]. She completed a Statement of Financial Circumstances on 8 August 2018. She lives in rented accommodation. She has modest savings. She has considerable personal debt. Her average weekly household expenses are unremarkable. Her 2016-17 adjusted taxable income was $91,837. Her income and financial resources are fairly reflected for child support purposes in her adjusted taxable income as assessed by the ATO from time to time.
Mr Putt raised other matters during his dealings with the CSA which clearly have no merit. They were addressed by the objections officer under the headings “Reason 9” and “Reason 10”. I respectfully adopt the objections officer’s reasoning in respect of those matters.
Subsection 117(7B) of the Act is intended to enable decision-makers to make decisions in appropriate cases that effectively thwart a parent’s attempts to evade their child support responsibilities. The current case is such a case.
Ms Frabi lodged her departure application on 18 January 2018. It is clear that Mr Putt was under-assessed for child support purposes prior to that date. However, varying his adjusted taxable income from 18 January 2018 to $90,000 per annum would increase his child support arrears and would probably cause him significant financial hardship. On balance, I consider it appropriate to make a departure decision with effect from 18 January 2018, and not from an earlier date. It is appropriate to vary Mr Putt’s adjusted taxable income for approximately three years, to 31 December 2020. For the reasons stated above, if that decision causes Mr Putt financial hardship, that hardship does not make the decision unjust or inequitable.
The proposed decision will increase Mr Putt’s child support arrears by approximately $2,900 and it will require him to pay a current rate of child support of $7,700 per annum.

Otherwise proper

The requirement to consider whether a departure would be otherwise proper directs attention to what is fair to the community. It is necessary to consider the effect of any departure from the administrative assessment on entitlements to income-tested pensions, allowances and benefits. Parents rather than the community have the primary duty to maintain a child. Ms Frabi stated that she does not receive family tax benefit.

DECISION

The Tribunal sets aside the decision under review and, in substitution, decides to vary Mr Putt’s adjusted taxable income to $90,000 per annum from 18 January 2018 to 31 December 2020.

[2018] AATA 4521

16 October 2018

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Family Law

Administrative Law

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Jurisdiction

Judicial Review

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