Qualey and Qualey (Child support)

[2020] AATA 2135

Qualey and Qualey (Child support) [2020] AATA 2135 (14 April 2020)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2019/BC017639

APPLICANT:  Ms Qualey

OTHER PARTIES:  Child Support Registrar

MrQualey

TRIBUNAL:Member S Letch

DECISION DATE:  14 April 2020

DECISION:

The decisions under review are set aside and the matter is sent back to the Child Support Registrar for reconsideration in accordance with the direction that the child support assessment be reconsidered on the basis that the requirements of section 58A of the Child Support (Assessment) Act 1989 and Regulation 11 of the Child Support (Assessment) Regulations 2018 to give retrospective effect to Mr Qualey’s 2009/10, 2011/12, 2012/13 and 2014/15 adjusted taxable incomes are not satisfied.

This means Ms Qualey’s application is successful.

CATCHWORDS

CHILD SUPPORT – particulars of the administrative assessment – whether the adjusted taxable incomes for past periods for the liable parent should be changed – conditions for changing the incomes to lower amounts are not met - decisions under review set aside and the matters sent back for reconsideration with directions

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

1. Mr Qualey has been assessed by the Child Support Agency (CSA) as liable to pay child support to Ms Qualey.

2. It is convenient to set out part of the letter setting out the original decisions of 28 June 2019:

   We are writing to you about the adjusted taxable income used in your child support assessment. You have asked us to consider your circumstances and apply your Financial Year 2009/2010, 2011/2012, 2012/2013 and 2014/2015 adjusted taxable income to your child support assessment from an earlier date.
   After careful consideration, we have decided not to change the date the new adjusted taxable income was used in your assessment. This is because we can only change the start date of a new adjusted taxable income if:
   the income information wasn’t provided when the assessment was made because of prescribed circumstances, and the income information was then provided within a reasonable timeframe.
   The best way to ensure the income used in your child support is correct is to lodge your tax return on time every year or provide your income details to us as soon as possible.

   This means your adjusted taxable income is still the same and the amount of child support has not changed as a result of this decision.

3. By default, the CSA had applied two thirds of the male average weekly earnings in the absence of any information about Mr Qualey’s adjusted taxable income.

4. In a file note by the CSA dated 28 June 2019, the following is recorded:

   Based on the information I have outlined below I am not satisfied that Mr Qualey meets specialcircumstances for us to consider Section 11 to update his 2009/10, 2011/12 and 2014/15 incomes ‐

   • Mr Qualey has maintained his mutual obligation requirements consistently since 2014 which indicates an ability to manage his financial affairs.
   • Mr Qualey claims he wasn’t aware that he had a CS case until he received a letter in 2018 however
   records show that he lodged an ITD in 2014. Whilst Mr Qualey claims that was not him that called in 2014 I don’t accept that as we would have conducted PORO.
   • Even if Mr Qualey had not been aware of his CS case until 2018 one of the requirements of Section 11 is that a person updates their income details as soon as they cease to be impacted by special
   circumstances. This meaning he could have updated his income details in 2018.
   • Mr Qualey has the opportunity to use an interpreter service so I don’t accept that English being his
   second language as a reasonable excuse.

   Whilst this decison is at the APS5 delegation I recommend we do not accept this application as he does not satisfy special circumstances. Mr Qualey has objection rights to this decision.

5. Following Mr Qualey’s objection, on 12 September 2019, an objections officer decided the following (Tribunal’s emphasis, and otherwise unedited):

   …

   In relation to Mr Qualey’s 2009/2010 adjusted taxable income:

   On 20 June 2010 we issued a letter to the parties advising of Mr Qualey’s provisional income of $39,236.00 being used for the period from 1 August 2010 to 31 October 2011.
   On 4 July 2010 we received information from Centrelink confirming Mr Qualey’s income for the 2009/2010 financial year was $11,889.00.
   Based on the evidence at hand on review we have made the decision to replace Mr Qualey’s 2009/2010 provisional income of $39,236.00 as per the information received from Centrelink on
   4 July 2010.
   On objection we have applied Mr Qualey’s 2009/2010 adjusted taxable income of $11,889.00 for the period from 1 August 2010 to 31 October 201.

   In relation to Mr Qualey’s 2011/2012 adjusted taxable income:

   On 7 July 2012 we received information from Centrelink confirming Mr Qualey`s income for the
   2011/2012 financial year was $8,866.00 as follows:
   For the period from 1 July 2011 to 19 September 2011: $2,209.00
   For the period from 30 November 2011 to 26 May 2012: $6,657.00.

   On 24 December 2012 we issued a letter to the parties advising of Mr Qualey’s 2010/2011 provisional income of $44,758.00 being used for the period from 1 February 2013 to 30 April 2014. We note a subsequent decision outside of this objection process replaced Mr Qualey’s 2011/2012 adjusted taxable income of $44,758.00 for the period from 8 April 2014 to 30 April 2014 with a taxable income of $8,376.00.

   A search of the Department of Immigration and Citizenship records revealed the following relevant travel dates for Mr Qualey:
   Departure date: [May] 2012
   Arrival date: [November] 2012.

   Based on the evidence at hand on review we have made the decision to replace Mr Qualey’s 2011/2012 provisional income of $44,758.00 as per the information received from Centrelink on
   7 July 2012.

   On objection we have applied Mr Qualey’s 2011/2012 adjusted taxable income of $8,866.00 for the period from 1 February 2013 to 7 April 20.

   In relation to Mr Qualey’s 2012/2013 adjusted taxable income:

   On 8 April 2014 we made a decision to apply Mr Qualey’s provisional income of $7,803.00 for the period from 1 May 2014 to 31 July 2015.

   The 2012/2013 provisional income of $7,803.00 for Mr Qualey has been applied from 1 May 2014 as per notification received on 8 April 2014 therefore Section 11 consideration is not applicable.

   We note a search of Centrelink’s records confirmed Mr Qualey`s income in the 2012/2013 financial year was $7,803.00.

   In relation to Mr Qualey’s 2014/2015 adjusted taxable income:

   On 20 June 2015 we issued a letter to the parties advising of Mr Qualey’s 2014/2015 provisional income of $47,219.00 being used for the period from 1 August 2015 to 31 October 2016.

   On 3 July 2015 we received information from Centrelink confirming Mr Qualey’s income for the 2014/2015 financial year was as follows:
   For the period from 2 November 2014 to 30 June 2015: 8,636.00.

   A search of the Department of Immigration and Citizenship records revealed the following relevant travel dates for Mr Qualey:
   Departure date: [April] 2014
   Arrival date: [October] 2014.

   In June 2019 Mr Qualey contacted us to update his 2014/2015 income. Mr Qualey lodged an income tax declaration of $0.00 in relation to any other form of income. Mr Qualey advised he had only received Centrelink income during this period. Mr Qualey advised during the 2014/2015 financial year, he had travelled overseas to look after his father. We did not replace Mr Qualey`s existing provisional income of $47,219.00.

   On objection Mr Qualey stated he travelled to [Country 1] from April to November 2014 as his father was unwell and subsequently passed away. Mr Qualey advised he did not have any income while he was in [Country 1], stated he was supported by his father. Mr Qualey discussed previous issues with communication with the agency.

   Based on the evidence at hand we find that Mr Qualey provided income information as soon as was practicable and within a reasonable period of time after the special or exceptional circumstances ceased to affect him.

   Based on the evidence at hand on review we have made the decision to replace Mr Qualey’s 2014/2015 provisional income of $47,219.00 as per the information received from Centrelink on
   7 July 2012 and Mr Qualey’s income declaration and information provided in June 2019.

   On objection have applied Mr Qualey’s 2014/2015 adjusted taxable income of $8,636.00 for the period from 1 August 2015 to 31 October 2016.

6. Ms Qualey participated in the Tribunal’s hearing by conference telephone. Mr Qualey did not answer the Tribunal’s telephone calls at, and around, the time of the hearing, and the matter proceeded in his absence. Following the hearing, as Ms Qualey had not yet received a copy of the CSA materials, the Tribunal allowed Ms Qualey 14 days to provide any further written submissions following receipt of those materials; the Tribunal did not receive further contact from Ms Qualey and assumed she did not seek to make any further submissions.

7. In short, Ms Qualey told the Tribunal that Mr Qualey was fully aware that a child support assessment was in place. It was only when Mr Qualey was due to receive a “compensation payout” and learned he would be required to pay a large sum of child support arrears owing that he had contact with the CSA and sought to have the assessment retrospectively reduced. The CSA told her that if she decided to discharge the arrears owing, there would be adverse family tax benefit consequences. Ms Qualey said Mr Qualey has other children and is “very aware of what he has to do with child support”.

8. Ms Qualey told the Tribunal that Mr Qualey is “very smart” and that his English and capacity to read and understand English was “fine”; he first arrived in Australia in around 2006 to the best she can recall. She could not speak [Country 1 language] so Mr Qualey had been required to quickly learn English so they could communicate. When he first arrived, he could already speak English but it was “not the best”, but rapidly improved.

9. In short, Ms Qualey said Mr Qualey was fully aware the child support liability was accruing and if he had any issue with the assessment, he ought to have taken steps to change the assessment. As a result of the objection decision, instead of Mr Qualey being in arrears, Ms Qualey has been assessed as owing Mr Qualey some $5,000.

The relevant law

1. Section 58A of the Child Support (Assessment) Act 1989 sets out the circumstances in which a person’s adjusted taxable income is subsequently determined to be a different amount. So far as is relevant here (that is, where the later amount is less than the amount applied to the assessment), a retrospective determination can only be made in circumstances prescribed by the Child Support (Assessment) Regulations 2018 – if so, the Registrar must immediately amend the administrative assessment for the child support period on the basis that the parent’s adjusted taxable income for that year of income is, and has always been, the amount that was subsequently ascertained or later determined (as the case requires).

2. Regulation 11 of the Regulations provides the following:

   (1) For the purposes of section 58A of the Act, the following circumstances are prescribed in relation to a parent who was unable to provide information about the parent’s adjusted taxable income to the Registrar at the time the relevant administrative assessment was made:

   (a) one or more of the following applied in relation to the parent at that time:

   (i) the parent did not know that an application for the assessment had been made and accepted;

   (ii) the parent had a serious illness or injury;

   (iii) the parent was under detention or imprisonment;

   (iv) the parent resided in a remote location which made it difficult to contact the Registrar;

   (v) a natural disaster prevented the parent from being able to contact the Registrar;

   (vi) there was some other exceptional circumstance that prevented the parent from providing the information;

   (b) the Registrar confirms that the parent was unable to provide the information at that time because of a circumstance mentioned in paragraph (a);

   (c) the parent later provides the information to the Registrar as soon as is practicable in the circumstances.

   (2) For the purposes of section 58A of the Act, the following circumstances are prescribed in relation to a parent who resided overseas during the last relevant year of income for the child support period for which the Registrar made the relevant administrative assessment:

   (a) the parent was not required to lodge a tax return under the Tax Act;

   (b) the parent provides the information about the parent’s adjusted taxable income to the Registrar within a reasonable time in the circumstances.

3. The Tribunal did not have the benefit of hearing from Mr Qualey. However, the Tribunal assessed Ms Qualey as a credible and consistent witness.

4. The Tribunal observes a file note by the CSA dated 8 April 2014 recording contact with Mr Qualey:

   Called Pp Mr Qualey to discuss CS. Advised PP case is with ICS due to overdue arrears of $5788.04 and we are now requesting payment in full.
   PP advised he cannot pay the debt in full and queried where this has come from and advised he is on C’link and cannot pay debt in full.
   I obtained ITD’s from PP for 11/12 and 12/13 and queried why PP has not contacted us to update his income and PP advised he did not know he had to.
   I expl’d arrears have accumulated as he has been assessed on prov income since Feb 2013 and discussed option of COA.

   PP advised he had to go to an appointment and requested I call him back this afternoon to discuss further and transfer to COA. Debt macro to be completed in next call.

5. Mr Qualey advised the CSA he did not participate in that call, and that it must have been another person.

6. The Tribunal does not accept that is at all likely. The Tribunal is satisfied that Mr Qualey had been made fully aware of the accumulating child support debt and the requirement for him to update his income to the CSA for assessment purposes. It is likely he had received written correspondence from the CSA advising him of the basis for the assessment. There is no evidence Mr Qualey took any further steps following the call of April 2014. The Tribunal accepted Ms Qualey’s evidence that Mr Qualey was fully aware of the child support assessment.

7. The Tribunal is not satisfied any of the factors identified in Regulation 11 are satisfied in this case. There are no exceptional circumstances. There is no medical evidence which would suggest Mr Qualey was incapable of managing his taxation or child support affairs; furthermore, it appears Mr Qualey’s level of English was not a material barrier to his capacity to engage with the CSA. Mr Qualey effectively “sat on his hands”; he is not entitled to the benefit of the assessment being retrospectively adjusted.

8. There being no proper basis to give retrospective effect to Mr Qualey’s adjusted taxable incomes to the assessment in respect of any of the years in question, the Tribunal will set aside the objection decisions under review.

DECISION

The decisions under review are set aside and the matter is sent back to the Child Support Registrar for reconsideration in accordance with the direction that the child support assessment be reconsidered on the basis that the requirements of section 58A of the Child Support (Assessment) Act 1989 and Regulation 11 of the Child Support (Assessment) Regulations 2018 to give retrospective effect to Mr Qualey’s 2009/10, 2011/12, 2012/13 and 2014/15 adjusted taxable incomes are not satisfied.

This means Ms Qualey’s application is successful.