Rachford and Yilmaz (Child support)

The Administrative Appeals Tribunal (AAT) considered a child support matter involving Mr Rachford, the liable parent, and Ms Yilmaz, the primary carer, concerning their child. Ms Yilmaz had applied for a change of assessment, arguing that Mr Rachford's income, property, and financial resources made the existing assessment unfair under Reason 8A of the Child Support (Assessment) Act 1989. The dispute centred on how a significant capital gain realised by Mr Rachford from a property sale should be treated in the child support assessment.

The tribunal was required to determine whether a ground for departure from the administrative assessment existed, and if so, whether it would be just and equitable to depart from the assessment, considering the interests of the child and both parents. Specifically, the tribunal had to assess if Mr Rachford's income, property, and financial resources, particularly the capital gain, rendered the standard assessment unjust and inequitable. The tribunal also considered the financial circumstances of Ms Yilmaz, including her income and accumulated savings.

The tribunal found that a ground for departure existed under subparagraph 117(2)(c)(ia) of the Act. It reasoned that while Mr Rachford's taxable income in the 2018/19 financial year was significantly increased by a one-off capital gain, his ongoing financial resources, derived from the sale proceeds of a property, were substantial. The tribunal acknowledged Mr Rachford's argument that the capital gain was a one-off event and that his regular income was lower, but concluded that his overall financial position warranted consideration beyond his standard adjusted taxable income. The tribunal determined that it was just and equitable to depart from the administrative assessment.

The tribunal set aside the decision under review and substituted a new determination. For the period from 1 September 2019 to a terminating event, Mr Rachford's adjusted taxable income was varied to $100,000. This figure was reached by considering his employment income, rental losses, and an allowance of approximately $20,000 to reflect the additional financial resources available to him from the property sale. This revised assessment resulted in an annual child support liability of approximately $16,700, an increase from the initial administrative assessment.