Ridgeway and Ridgeway (Child support)

[2018] AATA 2415

Ridgeway and Ridgeway (Child support) [2018] AATA 2415 (15 May 2018)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2017/PC013184

APPLICANT:  Mr Ridgeway

OTHER PARTIES:  Child Support Registrar

Mrs Ridgeway

TRIBUNAL:Member W Budiselik

DECISION DATE:  15 May 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 Ridgeway (the father) and Mrs Ridgeway (the mother) are the separated parents of two children (a girl born in 2010 and a boy born in 2012) (the children).  A child support non- collect case was registered with the Department of Human Services – Child Support (the Department) in respect of the children on 3 October 2016. The Department’s records show it commenced collecting child support on behalf of the mother from 6 July 2017, and that the children reside with the mother for 226 nights per annum and with the father for 139 nights per annum. The matter before the tribunal is about the amount of child support the father is required to pay the mother.

2. Following registration the mother’s 2015/2016 adjusted taxable income of $38,983 was used as an element within the child support formula to determine the father’s child support liability for the child support period commencing from 3 October 2016. The child support assessment issued is referred to as the administrative assessment of child support.

3. On 17 October 2016, the father lodged an application to depart from the administrative assessment of child support. On 5 July 2017 (following an initial determination by the Department on 16 December 2016 and a subsequent objection by the father) an objections officer from the Department determined that for the period 3 October 2016 to 31 October 2017 the mother’s adjusted taxable income was to be varied to $79,200. The child support assessment issued following this variation replaced the previous administrative assessment of child support.

4. After the Department’s objections officer made his decision on 5 July 2017, the Department sent the father a notice advising him if he thought the decision was wrong he could seek a review by the Administrative Appeals Tribunal (the tribunal). He was advised he must act to seek a review within 28 days from the date he received the decision. The father has not sought a review of the decision of 5 July 2017.

5. On 13 October 2017, the father lodged a fresh departure application citing his reason for seeking the departure as the mother’s income, property, financial resources and earning capacity. In his application the father wrote “whilst the original COA (decision 16/12/2016) and the following successful objection (05/07/2017) are not being questioned or objected to; they will be referenced in this application along with new evidence”. While the father stated he was not seeking to object to the decision of 5 July 2017, he also wrote: “I ask for a proper and conclusive revision from the outset of this case being 3 October 2016”.

6. On 7 November 2017, an officer from the Department considered the father’s departure application and refused it. The application was not exchanged with the mother because it was refused prior to her involvement. That the application was not exchanged with the mother is permitted by subsection 85(2) of the Child Support (Registration and Collection) Act 1988.

7. On 13 November 2017, the father lodged an objection to the Department’s decision. On 20 December 2017, a Departmental objections officer affirmed the officer’s decision and disallowed the father’s objection.

8. On 22 December 2017, the father lodged an application for review of the Department’s decision with the Administrative Appeals Tribunal (the tribunal). On 26 March 2018, the tribunal conducted a telephone directions hearing with the parents. In part the purpose of the telephone directions hearing was to clarify the scope of the father’s review request. In this case the father stated he believed the mother’s known 2015/2016 adjusted taxable income ($90,017) should be utilised in the child support assessments from 3 October 2016; and that $15,000 provided to the mother by her mother for legal fees should be regarded as a financial resource available to the children. 

9. On 15 May 2018, the tribunal conducted a hearing into the father’s application. Prior to the hearing the Department provided the parents and the tribunal with a bundle of documents (folios 1-650). In addition, the father provided the tribunal with submissions (folios A1-A 23) and the mother provided a statement of her financial circumstances (folios B1-B10). These documents provided by the parents have been provided to the Department.

10. On 10 May 2018, the mother provided a further written submission. The tribunal did not accept this submission into evidence because there was inadequate time to exchange it with the father. The mother was advised she would be provided with ample time at hearing to canvas issues she had addressed in the submission, if they were relevant.

ISSUES

1. The statutory provisions relevant to this review are contained in the Child Support (Assessment) Act 1989 (the Act).

2. The three issues to be determined by the tribunal are:

   a)    Whether a ground is established to depart from the administrative assessment of child support; and

   b)    If so, whether it is just and equitable to make a particular departure determination; and

   c)    If so, whether it is otherwise proper to make a particular departure determination.

CONSIDERATION

1. The rate of child support payable by a liable parent is usually based on an administrative assessment calculated using the relevant formula under Part 5 of the Act. This involves the application of a statutory formula which takes into account factors such as the adjusted taxable income of each parent, the number of children and the level of care provided. A parent’s adjusted taxable income for a given year is calculated according to a formula that includes a parent’s previous year’s taxable income (see section 43 of the Act).

2. Part 6A of the Act allows for a departure from an administrative assessment. The liable parent or a carer entitled to child support may apply to the Child Support Registrar (the Registrar) for a determination to depart from the child support administrative assessment under Part 6A of the Act.

3. Section 98C of the Act provides that the Registrar (and the tribunal in the Registrar’s place) may make a determination to depart from the administrative assessment if satisfied that a ground exists and that it would be just and equitable and otherwise proper to make a particular determination.

4. Section 98F of the Act provides that if the Registrar (and the tribunal in the Registrar’s place) is satisfied there are no grounds for departing from the administrative assessment the Registrar may refuse to make a determination without taking any further action.

5. The grounds for departure from the administrative assessment are set out in subsection 117(2) of the Act. Each ground for departure is prefaced by the words, “in the special circumstances of the case”. Therefore, when considering whether one or more grounds exist, the tribunal must be satisfied that there are “special circumstances” in the case. The phrase “special circumstances of the case” is not defined in the Act. The Full Family Court, in the case of Gyselman and Gyselman (1992) FLC 92-279, held that:

   It is intended to emphasise that the facts of the case must establish something which is special or out of the ordinary. That is, the intention of the Legislature is that the court will not interfere with the administrative formula result in the ordinary run of cases.

6. In this matter before the tribunal the departure application lodged by the father on 13 October 2017 identified the grounds for the departure as the mother’s income, property, financial resources and earning capacity. At hearing the father said he no longer wished to pursue the mother’s earning capacity as a ground for departure.

Issue a: Is a ground established to depart from the administrative assessment?

Is the administrative assessment unfair because of either parent’s income, property and financial resources?

19.Subparagraph 117(2)(c)(ia) of the Act provides a ground for departure exists where, in the special circumstances of the case, application of the provisions of the 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 payer for the child because of the income, property and financial resources of either parent.

1. The applicant wants the tribunal to make a determination about the mother’s adjusted taxable income and then that the determination be used to calculate his child support liability from the beginning of the child support case (3 October 2016). However, on 5 July 2017, the Department determined that the mother’s adjusted taxable income for the period 3 October 2016 to 31 October 2017 was to be varied to $79,200. The Department’s decision for this period led to an administrative assessment based on the formula which utilised the mother’s Department determined income.

2. Section 98J of the Act provides that a person who has made an application for a departure determination is not precluded from making a subsequent application if there are grounds for making an application.  That is, if there are grounds, it is open to the tribunal to change the administrative assessment put in place on 5 July 2017 for the period 3 October 2016 to 31 October 2017.

3. At the telephone directions hearing the father advised the tribunal he was not seeking to have the child support assessment for the period from 1 November 2017 changed, because that assessment was based on using the mother’s known 2016/2017 taxable income ($90,017). What he said he was seeking to do was to have the child support assessment for the period from 3 October 2016 to 31 October 2017 amended. He cited two reasons:

1. The first reason was because the mother’s actual 2016/2017 taxable income was now known ($90,017) and because it was higher than that set by the Department ($79,200). He argued the mother’s known Australian Taxation Office (the ATO) determined taxable income should be used as an element within the child support formula from 3 October 2016.

2. The second reason was because he had come to know the mother’s mother had paid the mother’s legal fees ($15,000). He argued these funds should be regarded as resources available to the mother for child support.

1. The tribunal pointed out to the father that when he lodged his departure application on 13 October 2017 he specifically stated he did not wish to object to the decision of 5 July 2017, which had set the mother’s income at $79,200 for the period 3 October 2016 to 31 October 2017. The father said he believed that his departure application would mean that the decision which set his wife’s adjusted taxable income at $79,200 for the period cited above would be reviewed.

2. In Ignacio and Ignacio [2016] FamCA 50 (10 February 2016) (Ignacio) Judge Austin considered a case which had similarities to the father’s review request. At the time of Ignacio the Social Security Appeals Tribunal (SSAT) dealt with applications for reviews of the Department’s decisions. While noting changes (with the creation of the tribunal), the tribunal believes the sentiments expressed in the Ignacio judgement remain relevant:

   104. Although the husband’s application was posited as an application for departure from administrative assessment of child support it was, in reality, both that and an appeal against the SSAT decision. That is because the SSAT decision regulated the child support assessments up to and including 31 March 2015 and the husband wanted to discharge the child support arrears calculated in accordance with those assessments over the preceding 12 months, from March 2014. His application was, at least in part, a direct challenge to the correctness of the SSAT decision. Only the remaining part of the first limb of the husband’s application, which related to the period after 31 March 2015, could be properly regarded as a departure application. Since the first limb of husband’s child support application implicitly involved two different components, each should be addressed separately.

   105. As for the part of the application properly characterised as an appeal against the SSAT decision, the husband did not appeal in a timely way....

   107. The husband could not now, in violation of a regulated path of appeal, simply re-contest the controversy determined between the parties by the SSAT. 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. In this case, in so far as the husband’s application related to the period up to 31 March 2015, it hinged on facts that existed at the time of the SSAT decision in April 2014 – not on changed circumstances that existed when he made the departure application in his Further Amended Response filed in October 2014 or when he actually pressed the application at trial in December 2015 (emphasis added). He cannot now seek to disturb the SSAT decision by an application that masquerades as a departure application, when it really is not so. Even if he could now press the application in its guise as a fresh departure application, it should not succeed in those circumstances because it would not be just and equitable or otherwise proper for it to do so, thereby leaving the mandatory conjunctive requirements of the Assessment Act (s 117) unsatisfied. Success of the application as a departure application would be tantamount to an abuse of the regular appeal process.

3. The father argued the Department had not sufficiently interrogated the mother’s financial statements when it made its decision on 5 July 2017 which set the mother’s adjusted taxable income at $79,200 for the period 3 October 2016 to 31 October 2017. In the tribunal’s opinion in respect of this argument the father was asking the tribunal to review the Department’s earlier decision. He was not asking it to consider new information or new circumstances, which were not available to the Department at the time.

4. The tribunal is satisfied the Department determined the mother’s adjusted taxable income of $79,200 for the period 3 October 2016 to 31 October 2017 in a transparent way. That there is a difference between the mother’s 2016/2017 adjusted taxable income and the Department determined adjusted taxable income is not, in the tribunal’s opinion, unusual.

5. The mother advised the tribunal that money was lent to her by her mother to pay legal fees and the debt will be repaid following property settlement. The mother also pointed out that the father’s brother had lent him $20,000 to assist the father meet legal fees.

6. The tribunal does not find merit in the argument the father put about considering $15,000 provided to the mother by her mother to assist with legal fees as resources available to the mother for child support purposes. The father has wrongly assumed the money had been gifted to the mother, rather than lent to her for a specific purpose.

7. The father said if his current departure application was unsuccessful he would lodge an extension of time application with respect to ‘officer West’s decision’ because he believed officer West had underestimated the mother’s income. The tribunal pointed out to the father that officer West’s decision to which he was referring was the decision made on 16 December 2016, and which he had subsequently objected. That is, officer West’s decision had already been reconsidered and recast by way of the decision of 5 July 2017.

8. Noting the father retains his right to seek an extension of time to seek a review of the Department’s 5 July 2017 decision the tribunal concluded there was not a changed circumstance at the time the application of 13 October 2017 was made, which led it to find a ground to change the administrative assessment of child support as it had been determined on 5 July 2017 until 31 October 2017.

9. With respect to the period from 1 November 2017, at the telephone directions hearing the father said he did not wish to ‘attack’ that child support assessment in place from 1 November 2017 (which relied on the mother’s income as determined by the ATO ($90,017)).

10. However, at hearing the father said he had recently informed himself more about the powers of the Department and the tribunal and he wished to have all the financial statements supplied by the mother re-examined. That is, the material provided by the mother for the matter which was decided on 5 July 2017.

11. The tribunal put it to the father that the onus was on him to point the tribunal to areas where he had concerns about the mother’s financial statements. The father’s assertions were general. He repeated he believed the mother did not provide information to the Department. The mother disputed the father’s allegation.

12. The tribunal asked the father to be specific. The father pointed to the mother’s submitted Statement of Financial Circumstances and he said he believed the mother had misled the tribunal by stating she did not receive Government benefits. The father said the mother received parenting payment and family tax benefit.

13. The mother gave evidence that she does not receive either payment as she has estimated her 2017/2018 income to be in excess of the threshold for either payment.

14. The father asserted the mother had been dishonest from the outset of the case in that she had allowed the Department to assess his child support liability on an income which she knew was erroneous.

15. The tribunal pointed out to the father that a child support assessment relies on the previous year’s ATO determined adjusted taxable income and then each year the previous year’s income is used to determine a parent’s liability.

16. The mother said she had advised the Department from the outset of the case that she expected her 2016/2017 taxable income to be more than her 2015/2016 taxable income. She said the Department advised her it would use her previous year’s adjusted taxable income to determine the father’s child support liability, and that it was open to him to seek a departure determination if he believed the administrative assessment was unfair.

17. In the special circumstances of this case the tribunal was unable to conclude the mother’s income, property and financial resources resulted in an unfair administrative assessment of child support and therefore did not constitute a ground to depart from the administrative assessment of child support in place from 1 November 2017. No other ground for departure was argued by either parent.

18. In these circumstances it is not necessary for the tribunal to consider the father’s application further.  

DECISION

The decision under review is affirmed.