Rea and Child Support Registrar (Child support)

[2020] AATA 5116

Rea and Child Support Registrar (Child support) [2020] AATA 5116 (11 September 2020)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2020/BC019584

APPLICANT:  Mr Rea

OTHER PARTY:  Child Support Registrar

TRIBUNAL:Member P Jensen

DECISION DATE:  11 September 2020

DECISION:

The decision to refuse Mr Rea’s application for an extension of time in which to object to a decision made on 16 January 2020 to replace [Ms A]’s 2017-18 provisional income of $39,612 with her 2017-18 adjusted taxable income of $39,612 in the administrative assessment of child support payable from 1 July 2019 to 30 September 2019 is affirmed.

CATCHWORDS

CHILD SUPPORT – refusal to grant an extension of time to object – particulars of the administrative assessment in relation to the adjusted taxable income – no satisfactory explanation for the delay – no merit – decision under review affirmed

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

1. Mr Rea is required to pay child support to [Ms A] in respect of their child, [Child 1]. The child support is payable to what is commonly called the Child Support Agency, or CSA.

2. 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 for the last relevant year of income. The term “last relevant year of income” is defined in section 5 of the Act to mean the last year of income (i.e. the financial year) that ended before the start of the child support period in question. For example, if a child support period started on 1 July 2018, the last relevant year of income was 2017-18. The term “child support period” is defined in section 7A of the Act.

3. In certain circumstances, if a parent’s adjusted taxable income for the last relevant year of income has not been assessed, the administrative assessment can be based on a provisional income, subject to a possible amendment once the parent’s adjusted taxable income becomes known.

4. On 29 May 2018 the CSA wrote to Mr Rea and informed him that a child support period was ending on 30 June 2018. The next child support period was for the period from 1 July 2018 to 30 September 2019. The CSA informed Mr Rea that the administrative assessment during that period would be based on [Ms A]’s 2017-18 provisional income of $45,176.

5. On 26 March 2019 the CSA wrote to Mr Rea and informed him that the administrative assessment from 1 July 2018 to 25 March 2019 had been based on [Ms A]’s 2017-18 provisional income of $45,176, and the administrative assessment from 26 March 2019 to 30 September 2019 would be based on her 2017-18 provisional income of $39,912. The CSA calculated that figure from records of her earnings and income support payments during 2017-18. Mr Rea objected to the decision to use a 2017-18 provisional income of $39,912. An objections officer disallowed his objection. It appears that Mr Rea did not seek further review of that decision.

6. On 23 May 2019, [Ms A] provided a 2017-18 income tax declaration of $39,612. The CSA decided to accept that declaration pursuant to subsection 58(2) of the Act. That decision resulted in the administrative assessment from 23 May 2019 to 30 September 2019 being based on a 2017-18 provisional income of $39,612.

7. On the same day, [Ms A] provided an estimate of income of $0 for the period from 23 May 2019 to 30 June 2019. The CSA accepted that estimate of income and the administrative assessment during that period was based on that estimate of income. The administrative assessment from 1 July 2019 to 30 September 2019 continued to be based on [Ms A]’s 2017-18 provisional income of $39,612.

8. On 16 January 2020 the CSA was notified that [Ms A]’s 2017-18 adjusted taxable income, as assessed by the Australian Taxation Office, was $39,612. According to the CSA’s records, it wrote to Mr Rea on 16 January 2020 and notified him that:

   ·    from 23 May 2019 to 30 June 2019, the administrative assessment was based on [Ms A]’s reconciled estimate of income of $174,507;

   ·    from 1 July 2019 to 30 September 2019, the administrative assessment was based on [Ms A]’s 2017-18 adjusted taxable income of $39,612;

   ·    from 1 October 2019 to 11 November 2019, the administrative assessment was based on [Ms A]’s 2018-19 provisional income of $50,076;

   ·    from 12 November 2019 to 12 January 2020, the administrative assessment was based on [Ms A]’s 2018-19 provisional income of $49,291; and

   ·    from 13 January 2020 to 31 December 2020, the administrative assessment was based on [Ms A]’s 2018-19 adjusted taxable income of $48,986.

9. On 2 June 2020, Mr Rea objected to the CSA’s decisions to base the administrative assessment from 1 July 2019 to 30 September 2019 on [Ms A]’s 2017-18 adjusted taxable income of $39,612, and to base the administrative assessment from 13 January 2020 to 31 December 2020 on [Ms A]’s 2018-19 adjusted taxable income of $48,986. He also applied for extensions of time in which to lodge those objections. The CSA decided to refuse his extension of time applications. He applied to the Tribunal for review of those decisions. I heard the matters on 11 September 2020. Mr Rea gave sworn evidence by conference.

10. At the hearing, Mr Rea confirmed that he was not disputing the CSA’s decision to base the administrative assessment from 23 May 2019 to 30 June 2019 on [Ms A]’s reconciled estimate of income of $174,507.

11. He confirmed that he was disputing the CSA’s decision to base the administrative assessment from 1 July 2019 to 30 September 2019 on [Ms A]’s 2017‑18 adjusted taxable income of $39,612. He submitted that it should be based on her 2018-19 adjusted taxable income of $48,986.

12. He confirmed that he was not disputing the CSA’s decision to base the administrative assessment from 1 October 2019 to 11 November 2019 on [Ms A]’s 2018-19 provisional income of $50,076.

13. He confirmed that the current proceedings did not concern the CSA’s decision to base the administrative assessment from 12 November 2019 to 12 January 2020 on [Ms A]’s 2018-19 provisional income of $49,291. He explained that he had previously sought review of that decision and this Tribunal, differently constituted, had affirmed the CSA’s decision: review number 2020/BC018911.

14. He stated that he was not disputing the CSA’s decision to base the administrative assessment from 13 January 2020 to 31 December 2020 on [Ms A]’s 2018-19 adjusted taxable income of $48,986. With his consent, I dismissed his application for review of the CSA’s decision to refuse his extension of time application in respect of the objections officer’s decision disallowing his objection to that original decision: review number 2020/BC019615.

15. Returning to the matter at hand, to object within time, Mr Rea needed to object within 28 days of being notified of the decision that was made on 16 January 2020: section 81 of the Child Support (Registration and Collection) Act 1988. Regulation 19 of the Child Support (Assessment) Regulations 2018 provides that if a notice is sent to a person by prepaid post then, unless the contrary is proved, service will be taken to have been effected at the time when the notice would, in the ordinary course of the post, have arrived at the place to which it was addressed. Mr Rea stated he did not receive the notice dated 16 January 2020. In the absence of any further evidence on point, I find that Mr Rea was served with the noticed dated 16 January 2020 in the ordinary course of the post.

16. Mr Rea applied for an extension of time in which to object pursuant to section 82 of the Child Support (Registration and Collection) Act 1988. The principles when considering whether to grant an extension of time application were summarised in Hunter Valley Developments Pty Ltd v Cohen (1984) 3 FCR 344.

17. The CSA’s decision to replace [Ms A]’s 2017-18 provisional income of $39,612 with her 2017-18 adjusted taxable income of $39,612 was made in reliance upon section 58A of the Act. That section relevantly states:

    Subsequently ascertaining components of a parent's adjusted taxable income

    (1)The Registrar must immediately amend an administrative assessment of child support payable by or to a parent in relation to a child support period if: 

    (a)the assessment was made on the basis of a determination under section 58; and

    (b)either:

    (i)the Registrar subsequently ascertains the amount of the parent's adjusted taxable income for the last relevant year of income; or

    (ii)the Registrar makes a later determination under section 58; and

(c)either: 

(i)if subparagraph (b)(i) applies--the amount that was subsequently ascertained is different from the amount that was determined under section 58; or 

(ii)if subparagraph (b)(ii) applies--the later amount that the Registrar determines is different from the earlier amount determined under section 58.

1. On 23 May 2019 an assessment in respect of the period from 1 July 2019 to 30 September 2019 was made on the basis of a determination that was made under section 58: see paragraph 6 above. Paragraph 58A(1)(a) is satisfied.

2. The child support period in question is the child support period from 1 July 2018 to 30 September 2019, so the last relevant year of income was 2017-18. On 16 January 2020 the CSA ascertained [Ms A]’s 2017-18 adjusted taxable income. Subparagraph 58A(1)(b)(i), and therefore paragraph 58A(1)(b), is satisfied.

3. [Ms A]’s 2017-18 adjusted taxable income was the same as the 2017-18 provisional income that was determined on 23 May 2019 under section 58 of the Act. Paragraph 58A(c) is not satisfied.

4. Legally, it follows that the CSA’s decision on 16 January 2020 to amend the administrative assessment from 1 July 2019 to 30 September 2019 by replacing [Ms A]’s 2017-18 provisional income of $39,612 with her 2017-18 adjusted taxable income of $39,612 was incorrect. The correct decision would have been to not replace the provisional income. Mr Rea submitted that the provisional income should have been replaced with [Ms A]’s 2018-19 adjusted taxable income. However, that submission overlooks the fact that the period from 1 July 2019 to 30 September 2019 formed part of the child support period from 1 July 2018 to 30 September 2019, and the last relevant year of income for that child support period was 2017-18.

5. Practically, Mr Rea’s rate of child support payable is the same regardless of whether the administrative assessment from 1 July 2019 to 30 September 2019 is based on [Ms A]’s 2017-18 provisional income of $39,612 or her 2017-18 adjusted taxable income of $39,612, so there would be no utility in granting [Ms A]’s extension of time application. The decision to refuse his extension of time application was the preferable decision in the circumstances.

DECISION

The decision to refuse Mr Rea’s application for an extension of time in which to object to a decision made on 16 January 2020 to replace [Ms A]’s 2017-18 provisional income of $39,612 with her 2017-18 adjusted taxable income of $39,612 in the administrative assessment of child support payable from 1 July 2019 to 30 September 2019 is affirmed.