Reid and Gates (Child support)

[2018] AATA 2410

Reid and Gates (Child support) [2018] AATA 2410 (8 June 2018)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2017/MC013007

APPLICANT:  Mr Reid

OTHER PARTIES:  Child Support Registrar

Ms Gates

TRIBUNAL:Member P Glass

DECISION DATE:  08 June 2018

DECISION:

The decision under review is affirmed.

CATCHWORDS
Child support - Departure determination - Whether there is new information since the last departure decision - A ground for departure not established - Refusal to make a determination - 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

BACKGROUND

1. Mr Reid and Ms Gates are the parents of [Child 1].  Ms Gates is the parent liable to pay child support.

2. On 26 June 2017, Mr Reid applied to the Department of Human Services – Child Support (the Department) for a departure from the administrative assessment of child support on the grounds that the assessment does not correctly reflect the parents’ income, property and/or financial resources (Reason 8A) and the assessment does not correctly reflect the parents’ earning capacity (Reason 8B).

3. On 31 August 2017, a decision maker at the Department found that a ground for departure was established but refused to depart from the administrative assessment of child support as it would not be just and equitable to do so.

4. On 8 September 2017, Mr Reid objected to the Department’s decision.  On 2 November 2017, an objections officer disallowed Mr Reid’s objection.

5. On 29 November 2017, Mr Reid applied to the Administrative Appeals Tribunal (the Tribunal) for an independent review of the objections officer’s decision.  That application was heard on 7 June 2018.  Mr Reid appeared before the Tribunal and gave evidence on affirmation.  Neither Ms Gates nor the Department participated in the hearing.

6. The Tribunal received into evidence the following documents:

   · Documents produced by the Department pursuant to subsection 37(1) of the Administrative Appeals Tribunal Act 1975, marked 1 to 435 (Exhibit 1);

   ·      Documents produced by Mr Reid prior to the hearing and subsequently marked A1 to A448 (Exhibit 2);

   ·      Documents produced by Ms Gates and subsequently marked B1 to B45 (Exhibit 3);

   ·      Further documents produced by Mr Reid at and subsequent to the heading, subsequently marked A449 to A468 (Exhibit 4); and

   ·      A decision of the Tribunal involving the same parties dated 21 October 2016 (Exhibit 5).

7. The issue arising for determination in this case is whether a ground for departure from the administrative assessment of child support is established.

CONSIDERATION

Subsequent departure applications

1. In December 2015, Mr Reid applied to the Department for a departure from the administrative assessment of child support.[1]  That application was ultimately determined by this Tribunal (differently constituted) on 21 October 2016.  From 8 December 2015 until the end of the child support assessment, Ms Gates’ adjusted taxable income was varied to $60,890 and Mr Reid’s was varied to $30,973.[2]  Once registered by the Child Support Registrar, the administrative assessment is amended in accordance with that determination for the purpose of the Child Support (Assessment) Act 1989 (the Act).[3]  It was open to Mr Reid to appeal the Tribunal’s decision of 21 October 2016.[4]  He did not do so.

   [1] Exhibit 5, paragraph 3.

   [2] Exhibit 5, page 1.

   [3] Child Support (Assessment) Act 1989 paragraph 75(4)(f) and subsection75(6).

   [4] Administrative Appeals Tribunal Act 1975 section 44AAA.

2. Part 6A of the Act provides for the departure from administrative assessments of child support. Contained in that Part, subsection 98J(1) of the Act is in the following terms:

   A person who has made an application for a determination under this Part in respect of an administrative assessment of child support is not, for that reason, precluded from subsequently making another application in respect of that assessment if, because of circumstances existing at the time when the subsequent application is made, there are grounds for departing from the administrative assessment.

3. Accordingly, Mr Reid is not precluded from lodging a further application for departure from the administrative assessment of child support.

4. The terms of section 98J require the Tribunal to consider the circumstances existing at the time of Mr Reid’s subsequent application on 26 June 2017.

   The Assessment Act (s 98J) is not so broad as to enable parties to engage in child support assessment departure disputes whenever they feel inclined, irrespective of surrounding circumstances. Multiple departure applications are possible, but subsequent departure applications are only permitted when the circumstances at the time the subsequent application is made warrant it.[5]

   [5] Ibid.

5. Significantly, Mr Reid cannot ‘now, in violation of a regulated path of appeal, simply re-contest the controversy determined between the parties’[6] by the Tribunal on 21 October 2016.

   [6] Ignacio & Ignacio [2016] FamCA 50 at [106].

Ground for departure

1. The first relevant ground for departure applies if, in the special circumstances of the case, the administrative assessment would result in an unjust and inequitable determination of the level of financial support to be provided by Ms Gates for the child because of the parents’ income, property and financial resources (subparagraph 117(2)(c)(ia) of the Act).  The second relevant ground applies if, in the special circumstances of the case, the administrative assessment would result in an unjust and inequitable determination of the level of financial support to be provided by Ms Gates for the child because of the earning capacity of either parent (subparagraph 117(2)(c)(ib) of the Act).[7]

   [7] Exhibit 1, page 160.

2. The first contention raised by Mr Reid is that the current situation is manifestly unfair because of Ms Gates’ income.  It is recalled that her adjusted taxable income had been varied to $60,890 by the Tribunal on 21 October 2016.  Mr Reid relies on correspondence from the Department on 2 March 2018 setting out her income for the financial year ending 30 June 2017 of $92,056.[8]  He accepted that he did not know anything about that figure at the time of lodging his application on 26 June 2017.

   [8] Exhibit 2, page A427.

3. Taking the parties’ taxable incomes at face value reveals that Mr Reid’s taxable income for the financial year ending 30 June 2017 was $97,878.[9]  That amount is substantially more than the $30,973 to which his adjusted taxable income was varied by the Tribunal on 21 October 2016.  He asserts that much of his taxable income for the financial year ending 30 June 2017 was paper money.  I find it is necessary to consider more than just the face value of the parties’ taxable incomes to determine whether a ground for departure is established.

   [9] Exhibit 4, page A462.

4. Ms Gates’ employment payment summary for the financial year ending 30 June 2017 reveals gross payments of $23,911, reportable fringe benefits amount of $22,666 and reportable employer superannuation contributions of $12,600.[10] Each of those amounts is included in her adjusted taxable income for the purpose of the Act.[11]  Their total is slightly less than her adjusted taxable income as varied by the Tribunal on 21 October 2016. The administrative assessment of child support is not unfair because of Ms Gates’ employment income.

   [10] Exhibit 4, page B26.

   [11] Child Support (Assessment) Act 1989 subsection 43(1).

5. Ms Gates asserts that her higher taxable income in the financial year ending 30 June 2017 was due solely to interest received on her property settlement payment prior to purchasing her new home.[12]  Mr Reid had previously submitted to the Tribunal that it was likely Ms Gates would receive annual interest of between $25,000 and $50,000 on her funds received by way of property settlement.[13]

   [12] Exhibit 3, page B38.

   [13] Exhibit 1, page 62.

6. Mr Reid gave evidence that Ms Gates received her property settlement from him in two payments totalling approximately $1,000,000 in May and June 2016.  It must first be observed that those funds had been exchanged prior to the Tribunal’s decision of 21 October 2016 and were presumably earning interest at that time.  Secondly, settlement was effected on a property purchased by Ms Gates on 16 June 2017.[14] Mr Reid gave evidence he understands the property was purchased for $902,000 without finance.[15] Mr Reid conceded that by the time he made his application on 26 June 2017, Ms Gates would no longer have income by way of interest on her property settlement payment available to her. In those circumstances, I find that the income available to Ms Gates at the time of Mr Reid’s application did not result in an unjust or inequitable determination of the level of financial support to be provided by Ms Gates.

   [14] Exhibit 2, page A20.

   [15] Exhibit 2, page A18.

7. Mr Reid referred also to a reduction in his income in early 2017 as a result of changes to rules affecting his age pension payment.  The Tribunal previously assessed his income other than his age pension as $21,997.[16]  A reduction in Mr Reid’s income from $30,973 to $21,997 would alter the rate of child support by just over $1 per week.  The level of financial support to be provided by Ms Gates is not unjust or inequitable as a result of any reduction in Mr Reid’s age pension.  Further, Mr Reid is now in receipt of age pension totalling $861.45 per fortnight,[17] or approximately $22,398 per annum.

   [16] Exhibit 5, paragraph 26.

   [17] Exhibit 2, page A26.

8. The second contention raised by Mr Reid is that Ms Gates has control of and hence is deemed to own substantial assets of her parents, including superannuation interests.  He was unable to point to any change in Ms Gates’ position in that respect following the Tribunal’s decision on 21 October 2016.  The only recent change in Ms Gates’ position with respect to any trusts or companies in evidence is her appointment as director of a trustee company on 10 October 2016.[18]  Mr Reid seeks nevertheless to agitate the contention because his awareness changed after 21 October 2016.  Any change in his awareness is insufficient foundation for a finding that circumstances at the time of his subsequent application establish a ground for departure. To find otherwise would permit Mr Reid to re-contest a prior controversy.

   [18] Exhibit 1, page 88.

9. Mr Reid also raised for consideration the apparent shortfall between the funds received by Ms Gates and those applied to the purchase of her property and its renovation.  He pointed to the letter from Ms Gates’ father on 12 July 2016 describing the $129,000 owed to him in April 2016, which he expected to be repaid following settlement of legal matters.[19]  Mr Reid submitted that had Ms Gates repaid that total amount from the $1,000,000 received by her, she would have had insufficient funds to purchase a property for $902,000 and pay stamp duty, which he has calculated to have been $49,190.[20]  He estimates she may have spent at least an additional $100,000 on renovation costs.

   [19] Exhibit 3, page B13.

   [20] Exhibit 2, page A19.

10. It may be that Ms Gates has had access to further funds from her family to assist with the purchase and renovation of her property.  However, Mr Reid has also had access to resources from which he is proposing to meet his lifestyle.  He gave evidence of having drawn $160,000 from his superannuation this financial year, of which he proposes to spend $150,000 purchasing a car and caravan for a trip in 2019.  He continues to have superannuation interests of $237,759, [21]and equity in his home of approximately $1,150,000.[22]  I do not accept that any property or resources available to Ms Gates when compared with those available to Mr Reid leads to an unjust or inequitable determination of the level of financial support to be provided by Ms Gates.

    [21] Exhibit 2, page A176.

    [22] Exhibit 2, page A4.

11. Mr Reid did not make any submissions on the question of Ms Gates’ earning capacity distinct from his arguments with respect to her control of her mother’s assets.  He did not point to any change in her working arrangements, a necessary element to establishing the second relevant ground.[23]  The administrative assessment of child support does not lead to an unjust and inequitable determination of the level of financial support to be provided by Ms Gates because of the parents’ earning capacities.

    [23] Child Support (Assessment) Act 1989 subsection 117(7B).

12. No ground for departure from the administrative assessment of child support is established. Mr Reid’s general appeals to the unfairness of the situation do not lead to a different conclusion.

DECISION

The decision under review is affirmed.