Quinn and Marshall (Child support)

Quinn and Marshall (Child support) [2018] AATA 3801 (7 August 2018)

DIVISION:Social Services & Child Support Division
REVIEW NUMBER:  2017/MC012922
APPLICANT:  Ms Quinn
OTHER PARTIES:  Child Support Registrar
Mr Marshall

TRIBUNAL:Member T Hamilton-Noy
DECISION DATE: 7 August 2018
DECISION:

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

For the period 24 April 2017 until there is a terminating event for [Child 1], the amount of child support payable by Mr Marshall is varied to $13,000 per annum;
For the period 1 October 2018 to 30 September 2019, child support is increased by $4,695 to reflect [Child 2]’s orthodontic costs.

CATCHWORDS
Child support - Departure determination - Income, property and financial resources of both parents - Business income - Special needs of the child - Ground for departure established - 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

Ms Quinn and Mr Marshall are the separated parents of [Child 1], [Child 2] and [Child 3].
A case has been registered with the Department of Human Services – Child Support (the Department) since December 2009 and child support has been collectable by the Department since 15 January 2010. Mr Marshall is the payer of child support in this matter and Ms Quinn the payee.
On 18 March 2017 the Department issued the following relevant administrative assessments of child support to the parties:
·      For the period 1 November 2016 to 12 January 2017 Mr Marshall was to pay $3,771 per annum, based on his 2015/2016 adjusted taxable income of $44,593 and Ms Quinn’s income estimate of $0.
·      For the period 13 January 2017 to 30 June 2017 Mr Marshall was to pay $4,119 per annum, based on his 2015/2016 adjusted taxable income of $44,593 and Ms Quinn’s income estimate of $0.
·      For the period 1 July 2017 to 30 November 2017 Mr Marshall was to pay $1,986 per annum, based on his 2015/2016 adjusted taxable income of $44,593 and Ms Quinn’s 2015/2016 adjusted taxable income of $45,565.
On 24 April 2017 Ms Quinn applied for a departure determination on the basis that the administrative assessment of child support was unfair because of Mr Marshall’s income, property and financial resources (called “Reason 8A” by the Department). Mr Marshall cross-applied on the basis of Ms Quinn’s income, property and financial resources and on the basis of her earning capacity (called “Reason 8B” by the Department). This cross-application was later withdrawn by the second party.
On 24 July 2017 a senior case officer of the Department found a ground established to depart from the administrative assessment of child support. The senior case officer made a departure determination that:
· For the period 24 April 2017 to 12 January 2022, Mr Marshall’s adjusted taxable income is varied to $65,000 per annum;
· For the period 1 July 2018 to 30 June 2019 and each financial year thereafter, Mr Marshall’s adjusted taxable income is increased by the consumer price index (CPI) national weighted average results for the preceding March quarter.
On 15 August 2017 Ms Quinn objected to this decision and on 22 August 2017 Mr Marshall objected to this decision.
On 7 November 2017 an objections officer of the Department disallowed the objections.
On 17 November 2017 Ms Quinn made application to the Administrative Appeals Tribunal for an independent review of the Department’s decision. A directions hearing was conducted with the parties on 16 March 2018 and the hearing itself was conducted on 26 April 2018, on which date the parties both attended the hearing in person and gave evidence on affirmation. The Tribunal had before it at the hearing documents provided by the Department numbered 1 to 359, documents provided by the applicant numbered A1 to A39 and documents provided by the second party numbered B1 to B82. Copies of the documents had been provided to the parties prior to the hearing and they confirmed receipt of the documents with the Tribunal.
Following the hearing the Tribunal deferred its decision to obtain further information from the parties. Documents provided by Ms Quinn were numbered A40 to A123 and documents provided by Mr Marshall were numbered B83 to B116 and were exchanged with time for comment. Further documents (A124 and B117 to B118) were sent for information only as they did not contain new information relevant to the legal issues before the Tribunal. The Tribunal proceeded to make a decision on all of the evidence before it on 7 August 2018.

ISSUES

The statutory provisions relevant to this review are contained in the Child Support (Assessment) Act 1989 (the Assessment Act) and the Child Support (Registration and Collection) Act 1988.
The rate of child support payable by a liable parent is usually based on an administrative assessment under Part 5 of the Assessment Act. The liable parent or carer may apply to the Child Support Registrar for a determination to depart from the child support administrative assessment under Part 6A of the Assessment Act. Section 98C of the Assessment Act provides that the Registrar may make a determination to depart from the formula assessment and establishes a three-step process. The Registrar, and the Tribunal standing in the place of the Registrar, must be satisfied that:
(i)There is a ground to depart from the administrative assessment of child support;
(ii)It is just and equitable to depart; and
(iii)It is otherwise proper to depart.
The grounds for departure from an administrative assessment of child support are those set out in subsection 117(2) of the Assessment Act. Each ground is prefaced by the term “in the special circumstances of the case”. The term “special circumstances” is not defined in the Assessment Act. In Gyselman and Gyselman (1992) FLC 92-279, the Full Family Court indicated that for there to be special circumstances, the facts of the case must establish something which is special or out of the ordinary.
If satisfied that a ground or grounds exist and that it would be just and equitable and otherwise proper to make a particular determination, the Tribunal may make one of the determinations prescribed in section 98S of the Assessment Act.

CONSIDERATION

Issue 1 – Is there a ground established to depart from the administrative assessment of child support?

The primary issue in dispute between the parties was the income, property and financial resources of each of the parties. The Tribunal therefore considered this ground first.
Subparagraph 117(2)(c)(ia) of the Assessment Act provides that a ground for departure exists where, in the special circumstances of the case, application of the provisions of the Assessment Act relating to the 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 because of the income, property and financial resources of either parent. The Tribunal considered each of the parent’s levels of income, property and financial resources under this ground.

Mr Marshall

The Tribunal accepted Mr Marshall’s evidence that he has been self-employed under the trade name [deleted] for the past 18 months. Prior to that, Mr Marshall stated that he was employed by [Company 1] as [an occupation] for 12 months. He stated that he had left because he was “promised lots of things” that never eventuated. He stated to the Tribunal that he has no more work from [Company 1].
Mr Marshall described to the Tribunal that over the past 18 months all of his work had been billed through his ABN, that he had worked 40 to 50 hours per week, largely Monday to Friday and that his work is with existing companies as he has no time to seek new clients.
The Tribunal noted that the administrative assessment of child support used Mr Marshall’s 2015/2016 adjusted taxable income of $44,593. Mr Marshall’s personal income tax return for the 2015/2016 financial year declared gross income from employment of $57,985 and his primary occupation was described as a sales manager. Allowances/director’s fees of $10,120 and interest of $160 was also declared, with total gross income for the financial year of $68,265. Following expenses, taxable income of $44,593 was declared.
Mr Marshall also provided to the Tribunal his personal 2016/2017 income tax return (customer copy) which declared business income of $103,550, interest of $107 and dividends of $232. Business expenses of $28,583 were declared, and carry forward business losses of $1,155 from a previous year. The Tribunal considered that the carry forward business losses were notional rather than actual. The Tribunal noted the significant increase in total business income in comparison to the previous financial year.
The Tribunal noted that the income tax return indicated net income from the business for the financial year was $74,967, in addition to interest and dividends totalling $339. Mr Marshall’s income for the financial year, as indicated by the income tax return, was $75,306.
Ms Quinn submitted that the calculation of Mr Marshall’s income by the Department was inconsistent with his lifestyle and living expenses. The Tribunal noted that the Statement of Financial Circumstances prepared by Mr Marshall estimated weekly household expenses of $1,464, which equates to $76,128 per annum. These amounts did not include car repayments or gambling activities, the latter of which Mr Marshall estimated cost him $100 per week. Mr Marshall’s written submissions stated that he owns a caravan site which costs $2,800 per annum and racehorses which cost $1,500 per annum. These costs were also on top of Mr Marshall’s stated weekly household expenses. The Tribunal accepted that Mr Marshall has travelled overseas recently, however, noted the comments in the Department documents that his sister assisted him with these costs (and the estimated holiday costs of $100 per week in the household expenses total $5,200 per annum).
Taking into account the further costs of car repayments ($950 per month or $11,400 per annum), gambling activities ($100 per week or $5,200 per annum), the caravan site ($2,800 per annum) and racehorses ($1,500 per annum), Mr Marshall’s annual expenses total $97,028 per annum. Mr Marshall would need to earn within the vicinity of $140,000 gross per annum to meet these expenses.
The Tribunal noted that it is likely that Mr Marshall’s business is meeting part of these expenses. This is, however, a financial resource available to Mr Marshall from his situation of self-employment. Mr Marshall’s Statement of Financial Circumstances listed credit card charges of $5,000 and the car loan of $25,000, but did not otherwise indicate that Mr Marshall is carrying a level of debt from an inability to meet his regular living expenses.
Mr Marshall’s evidence about his income going forward was that is currently earning $1,100 per week and is working on three jobs. This would appear to be a decrease in income, however, the Tribunal did not have clear documentary evidence of a downturn in work for Mr Marshall in recent months.
The Tribunal was satisfied from the evidence before it that the 2015/2016 adjusted taxable income of $44,593 used for Mr Marshall was not reflective of his actual level of income, property and financial resources available to him during the periods covered by the administrative assessments, from November 2016 to November 2017. The Tribunal noted its findings, above, that Mr Marshall’s income for the 2016/2017 financial year, as indicated by the income tax return, was $75,306; and that his level of expenses are commensurate with a gross income of $140,000 per annum, the level of which cannot be explained by the documents provided to the Tribunal or the oral evidence of Mr Marshall at the hearing.

Ms Quinn

Ms Quinn stated to the Tribunal that she was made redundant from her role with [Company 2] in May 2016 and started her own business in late 2016 under an ABN which was registered in mid-2016 under the name of [Business 1]. She was unable to afford the rent for her business premises and left in mid-2017, and has worked on a mobile basis since then. From June to December 2017 she was making a couple of hundred dollars per week in the mobile business. The Tribunal noted that, at the time of completion of the Statement of Financial Circumstances on 3 December 2017, Ms Quinn described herself as [an occupation], working on a casual basis for the past six months under the name of [Business 1], and earning on average for November 2017 an amount of $1,616, or an average weekly amount of $404.
Ms Quinn stated to the Tribunal that she took casual work [for] two months over Christmas, working 10 hours per week, earning gross $250 per week. Between June 2017 and February 2018 she has undertaken casual work for [another workplace], but described this as very up and down. From February 2018 to August 2018 she has been working for [a workplace] as [an occupation] on a six month contract, but she expects it to continue to the end of the year. She is still undertaking some [work] on a Saturday morning. Following the hearing Ms Quinn noted in written submissions that her contract has been extended to the end of the 2018 calendar year.
As to the structure of her self-employment business, Ms Quinn stated that she does her own bookkeeping and uses a credit card device and takes payments into her nominated account. Expenses for the business relate to purchases of materials but she has not purchased anything for some three to four months. Last month she undertook [a certain amount of work]. The Tribunal found the applicant to give her evidence in a credible manner in respect of her business arrangements and accepted this evidence.
The Tribunal was provided a copy of Ms Quinn’s 2015/2016 income tax return, in which she declared income of $41,713 plus allowances/director’s fees of $2,875, which she stated after the hearing was a car allowance from [Company 2]. Dividends of $101 (franked) and $43 (franking credit) were also declared. Following deductions for work-related expenses and donations, Ms Quinn’s taxable income was $40,284.
At the time of the Tribunal hearing, Ms Quinn had provided to the Tribunal a Notice of Assessment for 2016/2017, declaring her 2016/2017 taxable income of $4,250. Ms Quinn stated that she had been made redundant in May and started her own business, with a lot of deductions given it was the first year of the business.
Following the hearing Ms Quinn provided her 2016/2017 income tax return. Her occupation was described in the tax return as [an occupation], with income from two employers of $3,529 and $1,294, plus dividends of $97. Following modest work-related deductions, Ms Quinn’s taxable income was $4,250. For the business itself in the 2016/2017 financial year, gross income of $20,764 was declared, and total expenses of $31,997 were declared. Deferred non-commercial business losses from a previous financial year of $2,074 were also declared, with the business declaring a net loss of $13,307 for the financial year.
In terms of the expenses claimed, the Tribunal noted that the largest expenses for the business were declared to be motor vehicle ($4,582), rental ($10,599) and products and supplies ($13,734). Mr Marshall questioned, in particular, the cost of products and supplies. However, given the nature of Ms Quinn’s self-employment and in the absence of any clear evidence suggesting that the level of costs claimed are inappropriate for tax purposes, the Tribunal accepted the costs claimed in the income tax return. The Tribunal accepted that Ms Quinn’s level of income and financial resources in the 2016/2017 financial year was significantly reduced due to her redundancy in May 2016 and the time and cost taken to set up her own business.
As to her expected income for the 2017/2018 financial year, Ms Quinn stated that she has earned $31,500 from all jobs. She is currently earning $1,500 gross per fortnight, which the Tribunal noted would equate to gross income of $78,000 for the 2018/2019 financial year, assuming that the [contract] continues past its current expiry date of August 2018. She provided a further Statement of Financial Circumstances to the Tribunal after the hearing, dated 9 May 2018, stating her income from training was $1,500 per week gross, plus she was earning an estimated $100 per week from her [business]. The Tribunal noted that this was equivalent to $83,200 per annum gross.
As to any other property or financial resources, the Tribunal accepted that Ms Quinn owns shares valued at approximately $1,000.
Mr Marshall submitted to the Tribunal that Ms Quinn owns an investment property. Ms Quinn stated she does not. Ms Quinn’s Statement of Financial Circumstances indicated she owns 50% interest in one property with an estimated value of $160,000 (her updated Statement of Financial Circumstances indicated her 50% value was $225,000). Mr Marshall provided the results of a title search for Ms Quinn stating that she and her current partner are joint proprietors for one property. This was consistent with Ms Quinn’s evidence at the hearing, although the Tribunal noted that Ms Quinn’s previous estimate of the value of the property provided to the Department was significantly higher, indicating that the property was valued at $500,000.
Following the hearing the Tribunal sought clarification from Ms Quinn about her real estate holdings. She provided to the Tribunal a rates instalment notice for [an address] and submitted that the mortgage for the property is $320,000 of which her share is $160,000. The most recent valuation of the property indicated a value of $500,000. Ms Quinn submitted that there are no other properties in her name or joint names. The Tribunal found on the evidence before it that Ms Quinn and her current partner own one property which is Ms Quinn’s primary place of residence. Ownership of this property does not provide a financial resource to her (such as, for example, a rental property would provide) that increases the financial resources available to her to support the children from.
The Tribunal noted Ms Quinn’s submissions to the Department in which she indicated she and her partner had purchased a block of land (folio 161). The Tribunal was not persuaded from the evidence before it at the time of the decision that Ms Quinn owns additional real estate from which she is able to support herself.
The Tribunal noted that both parents made extensive submissions about discrepancies in evidence provided by the other party and submissions about inferences to be drawn from these. The Tribunal considered that its role is to determine not the minutiae of a parent’s expenditure, but each parent’s overall financial position so as to best determine how each parent can best contribute to the ongoing needs of the three children. With this in mind, the Tribunal found as follows:
During the period of the administrative assessment, July 2017 to November 2017, Mr Marshall was assessed on his 2015/2016 adjusted taxable income of $44,593. From late 2016 to early 2017, Mr Marshall has been self-employed and, on his evidence, has been earning around $65,000 per annum after business expenses. His level of expenses, however, suggests he would need to earn $140,000 per annum to meet his expenses.
During the period July 2017 to November 2017, Ms Quinn was assessed on her 2015/2016 adjusted taxable income of $45,565. While her income leading up to July 2017 had been significantly less, her 2017/2018 anticipated total income is within the vicinity of $83,200 per annum. The Tribunal accepted that Ms Quinn’s variations in earnings have been due to factors beyond her control such as employment ending and difficulty picking up a higher level of work while self-employed.

The Tribunal noted that both parties’ levels of income, property and financial resources are significantly different to the amounts used in the administrative assessments of child support. The Tribunal found that the discrepancy establishes special circumstances in this case and that application of the provisions of the Assessment Act relating to the administrative assessment of child support result in an unjust and inequitable determination of the level of financial support to be provided by Mr Marshall for the children because of each of the parties’ levels of income, property and financial resources. The ground for departure is established in this case.

Issue 2 – Is it just and equitable to make a departure determination?

As the Tribunal is satisfied that there is a ground to depart from the administrative assessment of child support, the next step is to consider whether it is just and equitable as regards the children, the liable parent and the carer entitled to child support to make a particular determination in accordance with sub-subparagraph 98C(1)(b)(ii)(A) of the Assessment Act. In addition to the income, property and financial resources of each of the parents, discussed in detail above, the Tribunal took the following matters into consideration:

The nature of the duty of a parent to maintain a child and the income, earning capacity, property and financial resources of the children

The Tribunal found on the evidence before it that [Child 1], [Child 2] and [Child 3] do not have access to any other income, property or financial resources from which to support themselves and that they are reliant on Ms Quinn and Mr Marshall to meet all of their needs.

The proper needs of the children

The Tribunal heard from Ms Quinn that [Child 2] suffers from an overbite and attended an orthodontist in 2017 who advised she will be required to have braces and requires surgery to expose her adult teeth and remove her baby teeth. Ms Quinn submitted that the orthodontic work is not for cosmetic purposes and that, in the absence of the intervention, [Child 2] will require her jaw to be broken when she is older to realign her teeth.
The Tribunal had before it at the time of the hearing a letter prepared by [a named person] of [a named clinic] dated 6 April 2018, stating as follows in relation to [Child 2]:
[Child 2] presented with a Class II crowding malocclusion in the late mixed dentition with deep anterior overbite.
Crowding is present anteriorly in both arches.
Multiple permanent teeth stay unerupted due to the retained primary teeth.
OPG shows a dentigerous cyst on #46 causing its delayed eruption.
My recommendation has been to consider undertaking fixed appliance orthodontic treatment to correct [Child 2]’s occlusion with extraction of all the primary teeth and surgically exposure of #46. I have referred [Child 2] to a maxillofacial surgeon for the surgery required.
Fee for orthodontic treatment:
Total: $6900
Monthly payment (20 months) $345
Following the hearing Ms Quinn provided to the Tribunal a letter prepared by [an] oral and maxillofacial surgeon, of [a named clinic] dated 23 April 2018. The letter provided a quote for three separate fees for surgery for [Child 2]: surgeons fees including consultation fee of $150, surgical removal of teeth at $90 per tooth (four indicated) and exposure of one tooth at $580; private hospital fees unspecified (handwritten note states $900 approx); and anaesthetic fees unspecified, partly funded by Medicare and part may be funded by private health insurance (handwritten note states $600 approx).
Mr Marshall’s response to this evidence at the hearing was that “if she needs braces, she needs braces”. Following the hearing Mr Marshall made written submissions in relation to the claimed orthodontic costs, stating that he is willing to pay 38% share after Centrelink, Medicare and health insurance rebates are taken into consideration, but would prefer this to be by direct payment plan to the dentist rather than through the Department.
The Tribunal also heard from Ms Quinn at the hearing that the children require glasses at an estimated cost of $300 per annum.
The Tribunal accepted that the children are currently educated in the government school system and that both parents are contributing financially to extracurricular activities of the children.
The Tribunal considered that the costs of [Child 2]’s braces do add an additional cost for Ms Quinn over and above the usual living expenses incurred for the children. It was unclear to the Tribunal from the evidence presented at the hearing what insurance and Medicare rebates were available to Ms Quinn for the orthodontic expenses. Following the hearing, Ms Quinn provided further written submissions to the Tribunal, stating that there is no health insurance for [Child 2]’s orthodontic costs and the only rebate available is for the anaesthetist which is approximately $100. The surgery was, at the time of writing, scheduled for October 2018 pending a further visit to the orthodontist. The costs for braces still stood at the time of writing.
This information was sent to Mr Marshall with time for comment and no response was received from the second party. The Tribunal considered that the best evidence before it was that [Child 2] requires orthodontic treatment, not purely for cosmetic reasons, and that the anticipated cost of this treatment is $6,900. The Tribunal accepted Ms Quinn’s written evidence that no rebates or health insurance reduce this amount payable. The Tribunal accepted that further costs for surgery total an estimated $2,490 for surgeon fees, removal of teeth, exposure of one tooth, private hospital fees and anaesthetic fees minus an estimated $100 rebate. Total costs for surgical and orthodontic costs for [Child 2] are $9,390.

The earning capacity of the parties

As to the earning capacity of each of the parents, the Tribunal noted that subsection 117(7B) of the Assessment Act requires the Tribunal to consider the following matters in determining that a parent’s earning capacity is greater than is reflected in his or her income used in the administrative assessment:
·    Whether the parent:
oIs not working despite ample opportunity to do so (subparagraph 117(7B)(a)(i)); and/or
oHas reduced their weekly hours of work to below full-time work (subparagraph 117(7B)(a)(ii)); and/or
oHas changed their occupation, industry or working pattern (subparagraph 117(7B)(a)(iii)); and
·    If the parent’s decision about his/her work arrangements is not justified by either his/her caring responsibilities (subparagraph 117(7B)(b)(i)) or his/her state of health (subparagraph 117(7B)(b)(ii)); and
·    If the parent has not demonstrated that it was not a major purpose of their decision not to work despite ample opportunity to do so or to stop working, reduce their hours of work or change their occupation, industry or working pattern to affect the administrative assessment of child support (paragraph 117(7B)(c)).
The Tribunal accepted that Ms Quinn has had several changes to her working pattern in the last couple of years: from an employee to self-employment arrangement in May 2016; working on a mobile basis from mid-2017; undertaking casual work over Christmas 2017; and in a contract position as [an occupation] from February 2018. The Tribunal accepted Ms Quinn’s stated reasons for these changes to her work arrangements and noted that she is the payee of child support in this matter. The Tribunal found that these changes were not done to affect the administrative assessment of child support and found that it is not open to the Tribunal to make an earning capacity determination in relation to Ms Quinn’s circumstances.
The Tribunal accepted that Mr Marshall has been self-employed for the past 18 months after leaving a contract position. However, the Tribunal was not satisfied that Mr Marshall has reduced his hours of work, is not working, or has changed his occupation, industry or working pattern. The Tribunal found that it is not open to the Tribunal to make an earning capacity determination in relation to Mr Marshall’s circumstances.

The necessary commitments of Ms Quinn

The Tribunal accepted that Ms Quinn resides with her current partner and children. The Tribunal noted that Ms Quinn’s Statement of Financial Circumstances, completed on 3 December 2017, listed minimal household expenses for herself and the children of $389 per week. Ms Quinn stated that this was because she didn’t have any income at the time.
Ms Quinn submitted a further Statement of Financial Circumstances to the Tribunal after the hearing, dated 9 May 2018, reflecting household expenses for her partner, herself and the three children of $1,520 per week. Children’s expenses identified amounted to $685 per week, however of this amount, $200 per week related to entertainment/hobbies and holidays which the Tribunal did not consider are essential expenses. The Statement did not identify a proportion of rent and utility expenses for the children. Ms Quinn’s share of these amounted to $510 per week and the Tribunal considered it appropriate to reflect half of these costs as the children’s costs, given Ms Quinn is providing shelter for the children. Taking into account these additional costs of $205 per week, the costs of providing care to the children incurred by Ms Quinn are $690 per week.

The necessary commitments of Mr Marshall

The Tribunal accepted Mr Marshall’s evidence that he is living in a rental property and the children stay with him on a regular basis. Mr Marshall’s Statement of Financial Circumstances, completed on 5 December 2017, stated that his household expenses for himself and the children are $1,464 per week. The costs identified specifically for the children amount to $260 per week, although do not identify a proportion of the rent and utility expenses that Mr Marshall incurs in providing shelter for the children. Taking into account half of these expenses, the cost of providing care to the children incurred by Mr Marshall are $500 per week.

The direct and indirect costs incurred by Ms Quinn in providing care for the children

The Tribunal found that Ms Quinn’s employment arrangements have changed over the past two years. This appears to have been due to work availability rather than for caring reasons. The Tribunal found on the evidence before it that Ms Quinn is not foregoing income in order to provide care to the children.

Hardship

Paragraph 117(4)(g) of the Act requires the Tribunal to consider any hardship that would be caused to the children or to Ms Quinn by the making of, or the refusal to make, a departure determination; and also to consider any hardship that would be caused to Mr Marshall or any other child or other person that Mr Marshall has a duty to support, by the making of, or the refusal to make, a departure determination.
The Tribunal has noted above that Ms Quinn’s income in 2017 was insufficient to meet her household costs, and that her current level of income, while improved, is also insufficient to meet all expenses. In addition, Ms Quinn has upcoming costs for orthodontic treatment for [Child 2] that Mr Marshall has agreed should be covered by both parents. The Tribunal does not have jurisdiction to require Mr Marshall to pay amounts directly to the orthodontist in question and considered it appropriate to consider these costs within the current decision.
The Tribunal considered that there would be some hardship caused to Ms Quinn and to the children if the Tribunal were to refuse to depart from the administrative assessment of child support.
The Tribunal noted the level of flexibility in Mr Marshall’s financial arrangements, as evidenced by his regular gambling activity and ability to take on a $25,000 car loan. The Tribunal did not consider that there would be significant hardship to Mr Marshall if the Tribunal made a departure determination on reasonable terms.

What is the proposed departure determination in this case?

The Tribunal noted that Ms Quinn’s application for a departure determination was made on 24 April 2017 and the Tribunal considered it appropriate to commence any departure from this date. Going forward, the Tribunal noted the applicant’s submissions about providing a level of certainty to the parties. The Tribunal noted that [Child 1] turns 18 in 2022 and considered it appropriate to set child support for this period. This provides a level of certainty about the respective rights and obligations of the parties for a period of time, but allows for a reconsideration of the children’s needs and the parties’ circumstances at that time.
The Tribunal noted that Mr Marshall was assessed on an adjusted taxable income of $44,593 which is significantly less than his current level of expenses equating to an income of $140,000 per annum. The Tribunal noted the lack of clarity in the evidence about Mr Marshall’s exact level of income from employment and decided that, for this reason, it is preferable to set an amount of child support in this case rather than set an income level for Mr Marshall.
The Tribunal considered the most appropriate approach in this case is to vary the amount of child support payable to $13,000 per annum, which is intended to reflect a contribution by Mr Marshall of $250 per week towards the costs Ms Quinn is incurring in providing care for the children. This amount is intended to reflect each party’s costs for the children at present and their differing levels of income, which indicate that Mr Marshall has the capacity to contribute to Ms Quinn’s costs for the children without being placed in significant financial hardship.
In addition the Tribunal considered it appropriate to increase child support to reflect upcoming costs of [Child 2]’s orthodontic treatment which the Tribunal has found above totals $9,390. The Tribunal considered that Mr Marshall should contribute to half of these costs, or $4,695 over a 12-month period commencing in October 2018 when treatment is anticipated to commence.
The Tribunal did not consider it appropriate for Mr Marshall to contribute to the costs of glasses for the children, an estimated $300 per annum, over and above the amounts he will be required to pay as a result of this decision.
The Tribunal therefore proposed to make a departure determination on the following terms:
·For the period 24 April 2017 until there is a terminating event for [Child 1], the amount of child support payable by Mr Marshall is varied to $13,000 per annum;
·For the period 1 October 2018 to 30 September 2019, child support is increased by $4,695 to reflect [Child 2]’s orthodontic costs.

Issue 3 – Is it otherwise proper to make a departure determination?

The third step is to consider whether it would be otherwise proper to make a particular departure determination in accordance with sub-subparagraph 98C(1)(b)(ii)(B) of the Assessment Act. The Tribunal accepted from Ms Quinn’s most recent Statement of Financial Circumstances that she is not currently in receipt of family tax benefit. Any departure determination made by the Tribunal is unlikely to have any impact on the public purse and the Tribunal therefore concluded that it is otherwise proper to make the proposed departure determination.

DECISION

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

For the period 24 April 2017 until there is a terminating event for [Child 1], the amount of child support payable by Mr Marshall is varied to $13,000 per annum;
For the period 1 October 2018 to 30 September 2019, child support is increased by $4,695 to reflect [Child 2]’s orthodontic costs.

[2018] AATA 3801

7 August 2018

Key Legal Topics

Areas of Law

Family Law

Administrative Law

Legal Concepts

Judicial Review

Remedies