Rolland and Rolland (Child support)

[2024] AATA 4114

Rolland and Rolland (Child support) [2024] AATA 4114 (25 September 2024)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2024/BC027997

APPLICANT:  Ms Rolland

OTHER PARTIES:  Child Support Registrar

Mr Rolland

TRIBUNAL:Senior Member S Trotter

DECISION DATE:  25 September 2024

DECISION:

The Tribunal sets aside the decision under review and, in substitution, decides for the 2022/23 financial year the adjusted taxable income determined for Mr Rolland pursuant to section 58 of the Child Support (Assessment) Act 1989 is $129,435.30.

CATCHWORDS

CHILD SUPPORT – departure determination – father’s provisional and actual income – income protection payments, compensation settlement and bank interest – decision under review set aside and substituted

REASONS FOR DECISION

BACKGROUND

1. As relevant to this application, Ms Rolland and Mr Rolland are the parents of two children (born 2009 and 2013) in relation to whom there has been a child support case registered with Services Australia – Child Support (Child Support) since 2 January 2020.

2. This review application concerns a single decision of Child Support about Mr Rolland’s income as utilised in the child support case.

3. Immediately prior to 4 December 2023, Mr Rolland was assessed to pay child support of $32,635[1] per annum based upon income of $153,736 (an indexed default 2022/2023 taxable income of $131,663 plus $22,073 pursuant to a previous change of assessment decision) and a 2022/2023 adjusted taxable income of $161,991 for Ms Rolland.

   [1] $20,978 calculated pursuant to the administrative assessment of child support based upon Mr Rolland’s adjusted taxable income of $153,376 and Ms Rolland’s adjusted taxable income of $161,991 as set by change of assessment decision of Child Support dated 5 July 2023 PLUS $2,367 and $9,290 added to the administratively assessed child support in respect of special needs and school fees with Mr Rolland’s child support liability therefore totalling $20,978 + $2,367 + $9,290 = $32,635.

4. On 4 December 2023, based upon oral evidence from Mr Rolland that he had not received any income (by way of income protection payments since April 2023), and given Mr Rolland had not yet lodged his 2022/2023 tax return, Child Support decided to apply a provisional income of $60,000 for Mr Rolland for the 2022/2023 financial year based on the information provided. $22,073 was added to that provisional income pursuant to a previous change of assessment decision, and $82,073 was therefore utilised as Mr Rolland’s income, and $161,991 again utilised for Ms Rolland resulting in a child support liability of $23,587[2] payable by Mr Rolland.

   [2] $11,930 calculated pursuant to the administrative assessment of child support based upon $83,073 income for Mr Rolland and Ms Rolland’s adjusted taxable income of $161,991 as set by change of assessment decision of Child Support dated 5 July 2023 PLUS $2,367 and $9,290 added to the administratively assessed child support in respect of special needs and school fees with Mr Rolland’s child support liability therefore totalling $11,930 + $2,367 + $9,290 = $23,587.

5. On 28 December 2023, Ms Rolland objected to that decision and, on 4 May 2024, Child Support disallowed the objection.

6. On 27 May 2024, Ms Rolland lodged an application with the Tribunal seeking an independent review of Child Support’s decision on the following basis:

   … ex is on income protection payments of $140k p.a. but he has advised he is now on $60 without providing any evidence and CSA have accepted it. She has shown them all the paperwork, as she set up the income protection policy in the first place but they wanted to hear from [the company]. As they have not heard from them they just closed the case with no changes.

1. Ms Rolland participated in a hearing before me by telephone on 12 August 2024 and gave sworn evidence. Although notified of the application and of the date and time of the hearing, Mr Rolland did not participate in the hearing.

2. The Child Support Registrar did not seek leave to participate in the hearing and did not attend.

3. I adjourned the application after the hearing to obtain further documents from Child Support and to request Child Support to obtain further relevant documents from relevant third parties, including from banks at which Mr Rolland holds accounts and from Mr Rolland’s income insurance provider. Copies of the additional documents obtained were provided to Ms Rolland and Mr Rolland on 13 September 2024, with opportunity given to provide any response or comment to those documents to the Tribunal by close of business on 20 September 2024, following which it was indicated the Tribunal would proceed to make its decision based upon the evidence and submissions before it.

4. Ms Rolland provided further written submissions which have been taken into account and which are copied to the parties with this decision. No response was received from Mr Rolland and I proceeded to make my decision on 25 September 2024.

5. In considering the application, I took into account the oral evidence of Ms Rolland and the documentary material provided by Child Support (marked Exhibit 1, pages 1 to 172) in accordance with subsection 37(1) of the Administrative Appeals Tribunal Act 1975, which included the further documents requested and obtained from Child Support after the hearing, documents from Ms Rolland (marked Exhibit A, pages 1 to 39) and documents obtained by Child Support from third parties (marked Exhibit C, pages 1 to 344).

ISSUES

1. The statutory provisions relevant to this review are contained in the Child Support (Assessment) Act1989 (the Assessment Act) and the Child Support (Assessment) Regulations 2018 .

2. The main issue in this review is what income figure should be used for Mr Rolland, pending lodgement of his 2022/2023 tax return, to calculate the child support liability.

CONSIDERATION

1. The rate of child support payable by a parent is usually based on an administrative assessment under Part 5 of the Assessment Act. The administrative assessment takes into account factors such as the number and age of the children, the level of care of the children provided by each parent and the adjusted taxable income of each parent.

2. Adjusted taxable income is defined in section 43 of the Assessment Act as including the taxable income for the last relevant financial year plus other amounts such as reportable fringe benefits and net investment loss. Section 56 of the Assessment Act provides that a parent’s ‘taxable income’ is as assessed under an Income Tax Assessment Act for the last relevant year of income in relation to the child support period.

3. Section 5 of the Assessment Act defines the last relevant year of income in relation to a child support period as the last year of income that ended before the start of the child support period.

4. Section 58 of the Assessment Act allows the Registrar (Child Support) to determine a parent’s adjusted taxable income if they have not lodged their income tax return for the last relevant year of income in a number of ways including by:

   (a)  using available information to work out a reasonable approximation of the person’s adjusted taxable income (subsection 58(2));

   (b)  by multiplying the person’s adjusted taxable income for the previous year of income by the ATI indexation factor (subsection 58(3));

   (c)   using the greater of the amount worked out by multiplying the parent’s adjusted taxable income for the most recent year of income assessed by the Australian Taxation Office by the ‘ATI indexation factor’ and the amount that is equal to two-thirds of the annualised male total average weekly earnings (MTAWE) for the relevant June quarter in relation to the child support period (subsection 58(4));

   (d)  using an amount that is at least two-thirds of the annualised MTAWE figure (subsection 58(5)).

5. Section 58A of the Assessment Act requires a provisional income determined under section 58 to be amended immediately if Child Support ascertains the person’s adjusted taxable income for the last relevant year of income or a later determination is made under section 58.

6. Child Support, on 4 December 2023, pursuant to subsection 58(2) of the Assessment Act apparently worked out a reasonable approximation of Mr Rolland’s income based upon oral information provided by Mr Rolland on that date. Exhibit 1, pages 31 to 33, records a telephone contact by Mr Rolland with Child Support when Mr Rolland advised, amongst other things, that his total salary and wages for the 2022/2023 year had been $60,000 with a data breach meaning that his income insurer had not paid him further income insurance payments since April 2023. Following Ms Rolland lodging an objection to the 4 December 2023 decision, Child Support issued a notice to Mr Rolland’s income insurer on 24 February 2024 seeking copies of various relevant documents, including a copy of the policy and details of payments made under the policy. Child Support’s records show that the income insurer contacted Child Support on 12 March 2024 and said that they would email the response to the notice. As at 4 May 2024, no response was yet forthcoming from the income insurer and Child Support proceeded to disallow the objection and the 4 December 2023 decision to apply a provisional income of $60,000 for Mr Rolland for 2022/2023 based upon the oral information provided by him remained in force.

7. In reviewing the decision of Child Support, I issued a direction to Child Support to exercise its powers to obtain bank account statements and details from the banks at which it was known Mr Rolland held accounts (the ANZ Banking Group and the Commonwealth Bank of Australia) and to Mr Rolland’s income insurance provider. The documents subsequently obtained from the banks and the income insurance provider[3] show the following:

   [3] I note that the letter of 27 August 2024 from the income insurance provider, although referring to Mr Rolland and his personal details on a number of occasions, appears to incorrectly note another name on two occasions. I am nonetheless satisfied that the information provided relates to Mr Rolland.

   (a)  Mr Rolland is currently receiving payments of $10,440.15 per month (up until 14 December 2045) with the monthly benefit increasing every three months by a quarter of the indexation factor subject to Mr Rolland meeting ongoing policy terms and conditions (which I note includes providing ongoing treating doctor’s statements, copies of which the insurer has provided).

   Mr Rolland was paid the following income insurance payments in the 2022/2023 financial year:

Date paid	Amount
14 July 2022	$  28,244.13
10 October 2022	$  28,491.27
14 February 2023	$  28,740.57
10 April 2023	$    9,664.02
10 April 2023	$    9,664.02
10 April 2023	$    9,664.02
Total	$114,468.03

(b)  Mr Rolland was paid the following income insurance payments in the 2023/2024 financial year:

Date paid or payable

Amount

28 November 2023

$  29,557.41

28 November 2023

$  30,133.77

30 May 2024

(paid to Child Support )

$    3,584.16

30 May 2024

(paid to Child Support)

$    3,584.16

30 May 2024

(paid to Child Support)

$    1,098.10

30 May 2024

$    6,656.30

30 May 2024

$    6,656.30

30 May 2024

$    9,142.36

30 May 2024

$  10,440.15

30 May 2024

$  10,440.15

30 May 2024

$  10,440.15

Total

$121,733.01

1. By way of observation, I note that this information is consistent with Mr Rolland telling Child Support in December 2023 that he had not received any income insurance payments since April 2023. Although the income insurer records payments having been made to Mr Rolland on 28 November 2023, it is possible that there was a lag in those payments and as at 4 December 2023, when he spoke to Child Support those payments may have not yet come through. However, I note that by 14 February 2024 when Mr Rolland next spoke to Child Support and said he would provide a letter from the income insurance provider (which was notably not done), it would be expected that Mr Rolland would by then have been well aware of the 28 November 2023 payments to him from his income insurer, contrary to his continuing assertion that he was no longer receiving income insurance payments. As Mr Rolland did not elect to participate in the hearing, despite invitation, I was unable to discuss these matters with him.

2. The bank account statements obtained, for known bank accounts of Mr Rolland (noting that there may be additional bank accounts held by Mr Rolland which are unknown), include interest credited to Mr Rolland as follows:

Date	Interest credited to Mr Rolland
1 September 2022	$   280.03
1 October 2022	$   308.94
1 November 2022	$   324.63
1 December 2022	$   951.60
1 January 2023	$1,238.73
1 February 2023	$1,250.15
1 March 2023	$   722.55
1 April 2023	$   692.85
1 May 2023	$   703.77
1 June 2023	$   729.02
Total	$7,202.27

1. Bank statements have not been provided for the relevant account for July and August 2022, but it appears that Mr Rolland would have also received interest credited to him of at least $250 in each of July and August 2022, therefore totalling interest of at least $7,702.27 in the 2022/2023 financial year.

2. As also noted by Ms Rolland in her submissions of 17 September 2024, the bank statements provided also show the following significant credits to Mr Rolland’s accounts in the 2022/2023 financial year:

Date paid or payable	Amount
2 September 2022	$    5,714.62
5 October 2022	$  70,000.00
3 November 2022	$  40,000.00
4 November 2022	$  75,000.00
10 November 2022	$  45,000.00
20 December 2022	$    4,182.10
23 February 2023	$  35,000.00
Total	$274,896.72

1. The descriptors for some of the above amounts suggest that the credits may be related to settlement monies paid to Mr Rolland consequent to settlement of a compensation case. Notably, the statements also show significant amounts deposited into Mr Rolland’s account in the following financial year including $59,691 on 11 December 2023, $5,664.71 on 27 February 2024, $6,135.37 on 13 March 2024 and $11,777.58 on 14 May 2024. Those deposits are not of the nature that are included in a person’s adjusted taxable income, but rather might be the types of financial resource that may, depending upon the circumstances, be taken into account in a change of assessment application. I note that a number of previous change of assessment applications and resulting decisions have been made in relation to this child support case previously. It is not the role of the Tribunal to provide advice in relation to what action might be taken by a parent in this regard. It is a matter for Ms Rolland and/or Mr Rolland whether they seek a further change of assessment based upon what appears to be additional financial resources not otherwise taken into account.

2. In reviewing Child Support’s decision, I am limited to considering Mr Rolland’s adjusted taxable income absent his 2022/2023 tax return by utilising one of the previously canvassed methods permitted by section 58.

3. The information now available from Mr Rolland’s bank account statements, and the information provided by his income insurer, shows that Mr Rolland received income from insurance payments and interest of at least $129,435.30 ($121,733.01 + $7,702.27) in the 2022/2023 financial year. I do not have information in relation to Mr Rolland’s tax position or any tax liability nor any information in relation to likely tax deductions. However, I consider the total amount of the payments and interest detailed to be a reasonable approximation of Mr Rolland’s adjusted taxable information for 2022/2023.

4. Pursuant to subsection 58(2) of the Assessment Act, I consider the information now available suggests a reasonable approximation of Mr Rolland’s adjusted taxable income for 2022/2023 to be $129,435.30.

5. I will therefore set aside Child Support’s decision, and, in substitution, decide pursuant to section 58(2) of the Assessment Act that based on information now available, $129,435.30 is Mr Rolland’s adjusted taxable income for the 2022/2023 financial year. I note that, additionally, pursuant to the previous change of assessment application, $22,073 is to be added to Mr Rolland’s adjusted taxable income from 1 October 2022 until the child support case has ended.

OTHER MATTERS

1. I note that in addition to matters relating to issues arising on this review, Ms Rolland has raised concerns in her written submissions in relation to Mr Rolland not paying child support and a submission that Child Support should be garnisheeing Mr Rolland’s earnings. These are not matters within the Tribunal’s jurisdiction nor relevant to the issues before the Tribunal.

DECISION

The Tribunal sets aside the decision under review and, in substitution, decides for the 2022/23 financial year the adjusted taxable income determined for Mr Rolland pursuant to section 58 of the Child Support (Assessment) Act 1989 is $129,435.30.