Roper and Finnis (Child support)

[2021] AATA 5190

Roper and Finnis (Child support) [2021] AATA 5190 (7 December 2021)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2021/SC021832

APPLICANT:  Mr Roper

OTHER PARTIES:  Child Support Registrar

Ms Finnis

TRIBUNAL:Member K Dordevic

DECISION DATE:  7 December 2021

DECISION:

The tribunal sets aside the decision under review and, in substitution, decides that from 7 January 2021 to 1 December 2024 Mr Roper’s adjusted taxable income is varied to $80,000.

CATCHWORDS

CHILD SUPPORT – departure determination – income, property and financial resources of the liable parent – earning capacity of the liable parent – a ground for departure established – decision to depart - decision under review set aside and substituted

Names used in all published decisions are pseudonyms. Any references appearing in square brackets indicate that information has been omitted 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. The Child Support (Assessment) Act 1989 (the Act) provides for an administrative assessment of the child support payable. It uses a formula which contains variables such as the parents’ adjusted taxable incomes and their percentages of care of the children. The Act also provides for a departure from the administrative assessment in certain circumstances.

2. This matter concerns the child support payable by Mr Roper (the father) to Ms Finnis (the mother). This case was registered with the Department of Human Services (now Services Australia) – Child Support on 1 August 2007 and has been collectable since 2 March 2020. There are two children subject to the administrative assessment, who were recorded as being in the mother’s 100% care.

3. The mother lodged a departure application on 7 January 2021. On 12 March 2021 a senior case officer decided to vary the father’s adjusted taxable income to $76,269 for the period 7 January to 30 November 2021.  

4. On 13 April 2021 the father lodged an objection to that decision. On 10 June 2021 an objections officer partly allowed the objection, varying the father’s adjusted taxable income to $142,858 for the period 7 January 2021 to 31 October 2022.  

5. On 25 June 2021 the father sought further review with the Social Services and Child Support Division of the Administrative Appeals Tribunal (the tribunal). Directions were issued on 21 September 2021, requiring compliance by 13 October 2021.

6. On 23 August 2021 the father lodged a request to be represented at the substantive hearing by [Representative A], [agency name]. His request was refused on 21 September 2021, as [Representative A] is not a practising lawyer or accountant. The father’s request that he be represented by his current partner, [Partner A], was refused on 29 September 2021. It is noted that the mother objected to [Representative A] and [Partner A] representing the father at hearing. On 23 October 2021 the father contacted the tribunal in writing and advised that he was under the care of a psychiatrist and required support at hearing from [Representative A]. His request was refused on 26 October 2021 on the same basis that it was refused previously. The father was advised that he was at liberty to seek permission for his treating psychiatrist, or other accredited mental health professional, to attend the hearing to support him. The father’s request to be legally represented was lodged with the tribunal on 1 November 2021. Permission was granted for the father to be represented by [Representative B from named firm], on the same day.

7. The hearing was scheduled and convened on 3 November 2021. The mother reported that she was unwell and the tribunal formed the view that it would not be appropriate to proceed, given her description of symptoms. With the agreement of all parties the matter was rescheduled to 10 November 2021.

8. The hearing took place on 10 November 2021. The mother, father and [Representative B] appeared by MS Teams audio. The Child Support Registrar was not represented at the hearing. The tribunal also considered the documentation provided by Child Support (folios 1 to 483), the father (folios A1 to A179) and the mother (folios B1 to B18).

9. The tribunal deferred the matter and on 10 November 2021 issued directions, pursuant to subsection 95H(1) of the Child Support (Registration and Collection) Act 1988 to the [Manager A], [Business 1]. The response from [Business 1] was received on 15 November 2021 (folios D1 to D2). A copy was provided to the parties and they were permitted to provide written submissions in response to the information by close of business on 23 November 2021. The father provided a written response and supporting documentation on 23 November 2021 (folios A93 to A111). A copy was provided to the mother, with permission to provide written submissions in response to the information by close of business on 6 December 2021. The mother provided her response on 6 December 2021 (folios B19 to B20), a copy of which was provided to the father and his legal representative.

10. The tribunal reached its decision on 7 December 2021.

ISSUES

1. The statutory provisions relevant to this review are outlined in section 98C of the Act, which states that a decision to depart from the administrative assessment may be made if the following three requirements are met:

   (i)that one, or more than one, of the grounds for departure referred to in subsection 117(2) exists; and

   (ii)that it would be:

   (A)just and equitable as regards the child, the liable parent, and the carer entitled to child support; and

   (B)otherwise proper;

   to make a particular determination under this Part …

2. Therefore, the issues which arise in this case are:

   ·     Does a ground exist for departure from the administrative assessment of child support? And if so,

   ·     Would it be just and equitable and otherwise proper to make a particular determination?

CONSIDERATION

A ground for departure

1. Subparagraph 117(2)(c)(ia) of the Act provides a ground for departure if the administrative assessment would result in an unjust and inequitable determination of the level of financial support to be provided by the liable parent because of either parent’s income, property or financial resources.

2. At the time the mother lodged the departure application under review the father was liable to pay $2,934 in child support per annum during the period 1 September 2020 to 30 November 2021, based on the parents’ 2020 adjusted taxable incomes of $0 (the father) and $24,875 (the mother).

3. The mother’s submissions are summarised as follows. When they separated in September 2019 the father’s gross business income was between $70,000 and $80,000 per annum; they would then split this income to minimise the father’s income tax liability. She completed all the administrative tasks for the father’s sole trading enterprise, including all bookkeeping and liaison with their accountant. It was the accountant who advised her that the father’s gross income was between $70,000 and $80,000 per annum. She understands that in the 2019 financial year the father wrote off the entirety of his asset pool, which led to a net loss of about $50,000. She submits that had he not done so, his taxable income would have remained at $70,000 to $80,000 per annum. She also submitted that the father’s income and financial resources were reflected in his significant discretionary spending, including a [Pet A] costing $11,000.

4. The father’s testimony and submissions made on his behalf at hearing can be summarised as follows.  The objections officer was in error in varying his income to $142,858 per annum, as it failed to take into account the expenses associated with his business. He confirmed that he had lodged a business credit card application on 29 April 2021 and declared that his gross income was $142,848 (at folio 302). However, he understood this to mean gross business/sole trading income and not his actual income. Therefore, business expenses, such as fuel, motor vehicle loans, insurances and the like were not taken into account but are reflected in his taxable income. He stressed that he was never asked by the finance provider what would be left over each week to meet his expenses. He just guessed they would ask for “proof of turnover” to substantiate his claims.  His actual income is about $30,000 per annum.

5. The father submitted that he worked in [business line] as a sole trader ([Business 2]) for many years. Following his father’s death, his mother wished to buy both he and his sister a business so they would always have an income. His mother was running [Business 2] and she handed the business over to him. At that time the major work undertaken was [specified] work [in a specified region]. He then started doing [business line] with [limited equipment]. About six years ago [Business 2] began contracting exclusively with [Business 1] , a [regional business], mainly [in specified work].

6. His company, [Business 3], was incorporated on 1 December 2020 and began trading in February 2021; he engaged a new accountant who recommended that he operate under a company structure. He is currently working between his sole trading enterprise and [Business 3]. He will continue to do so until such time that he can refinance [Business 2’s] debt and transfer it to [Business 3]. The transfer from sole trader to [Business 3] has been hindered as there was a downturn in income for both [Business 3] and [Business 2] in early 2021, whereby he was offered less and less work from [Business 1]. He does not know the particulars, it was likely a range of things, but he can only explain it by changes to the market because of the COVID-19 pandemic. He stressed that the catastrophic local fires in the summer of 2019 and 2020 also saw him not be able to work for four months. In June 2021 it changed again, where he was no longer offered any work from [Business 1]. At hearing he could not offer any other explanation as to why this was the case: “I don’t know. I’m just [an occupation 1]…I only do what I’m told”.  He denies the mother’s allegation that he assaulted [Mr A], [Business 1’s] [Manager A]. The father explained that despite his attempts, he has been unable to secure any work since June 2021. He was willing to provide evidence to support his contention that he has been actively seeking employment since this time. Therefore he has had no income since this date. He is now solely supported by his partner.

7. In response to the mother’s submissions that his income has historically been between $70,000 to $80,000 per annum, he did not “believe” that it was that high. He also wished to clarify the income splitting claim, stating that this was not entirely correct as the mother was paid an income each week. He cannot make any comment on fluctuations in his income tax return generally and the recent reduction in his income as he does not complete any of the bookwork. His current partner and accountant have responsibility for the financial aspects of the business and company. His partner also works on a full-time basis for a local [agency] and has done so for the last 19 years.

8. The father’s 2020 income tax return indicates that [Business 2] gross income was $319,405. Declared expenses totalled $374,331, including a depreciation expense of $131,750. A net loss of $54,281 was declared. There is some discrepancy between the income tax return and [Business 2’s] profit and loss statement in evidence (at folio 87), which indicates that 2020 gross income was $339,405 and expenses were $371,332 (including wages of $23,144), with a net loss of $31,927.92.

9. The tribunal questioned the father regarding deposits and spending evident in his personal and company accounts. It was difficult to elicit clear responses to questions from the father and he directed the tribunal to put some of its questions directly to his accountant. In response to questioning regarding the loan application in evidence where he declared income of $142,848 in a credit application the father initially stated that he did not complete the form. He then amended his statement, explaining that the declaration was made on the basis of him examining his gross business income for the last period, determining the lowest and highest weekly income, resulting in him considering that income of $4,000 a week was a “fair” reflection of his average income. In response to the evidence provided by the mother that he and his partner recently purchased a [Pet A] for $11,000, the father stated that the [Pet A] cost only $4,000 as it has genetic issues and was purchased by his partner from her financial settlement; whilst he objects to the method employed by the mother to gain evidence of the cost of the [Pet A], he was not able to adequately explain the discrepancy between his and the breeder’s declaration of the cost.   

10. The tribunal was initially of the view that the father was dissembling and disingenuous in his responses to questions about his income and expenses; this impression was put to him at hearing. In reply, his representative submitted that he is “unsophisticated” and dependent on others to manage the financial aspects of his [business]. Whilst the tribunal accepts that this may partly explain some of the father’s responses, it nevertheless formed the view that he did not make a full and frank disclosure of the financial benefits he received from the company and his sole trading enterprise.

11. What is apparent after examination of the bank statements in evidence is that there is a blending of accounting between [Business 2], [Business 3] and the father’s personal accounts that makes it difficult to determine the expenses of each enterprise, as opposed to the father’s own personal expenses, and what income and financial resources he receives from the businesses. There are also deposits into the father’s accounts that are apparently from the father’s partner to meet his personal expenses, including his legal costs. The father states that these deposits are loans, to be repaid if and when he can do so. As to his capacity to meet the discretionary expenses evident in the accounts, the father conceded that the transfers from [Business 3] to his personal credit card may be more accurately described as director fees. He also submits that he meet some of the discretionary spending evidenced on his credit card statement with financial assistance from others. By way of example, an [accommodation] expense for a weekend away for his partner’s birthday was met in part by cash from friends. The tribunal put to the father that there was no evidence in his bank statements that he met personal expenditure such as rent, groceries and utilities. The father stated that he began to live with his partner in November 2019 and reiterated that he is not required to meet any rental costs and he is now fully supported by her as he has been unable to secure any paid work.

12. The tribunal was left with the impression that the father derives personal benefits from the his company and sole trading enterprise, but was unable to determine the quantum of these benefits with any certainty. It is also clear that his personal expenses are limited, given his testimony that his partner currently supports him.

13. The tribunal is satisfied that the father’s 2020 taxable income does not fully reflect his income and financial resources during the same period. The Child Support Guide at Chapter 2.6.14 (Version 4.59) recognises that depreciation may be an entry in a business account that is not necessarily an expense that is actually incurred by the business; a claim for depreciation may mean that a parent has financial resources available to them that is not reflected in their taxable income. In such cases the Registrar (or this tribunal, standing in its place) must determine whether the parent is receiving a benefit through claiming depreciation that results in a parent having greater financial resources that their taxable income would indicate.

14. In this case the tribunal accepts that the policy is consistent with the objects of the Act and that there is no inconsistency between the legislative provisions and the policy. The tribunal concludes that it has not been demonstrated that the depreciation expense has been set aside for replacing equipment and so finds that it provides the father with an additional financial resource. Adding back the claimed depreciation expense indicates that [Business 2’s] profit was $76,269. The profit and loss statement indicates that the father also earned wages of $23,144 in the same period. Applying the same reasoning to the 2020 profit and loss statement would indicate that the father’s 2020 income and financial resources are in the vicinity of $99,413 ($76,269 + $23,144). 

15. The tribunal had regard to the Australia Taxation Office’s 2019 small business benchmarks. The father’s industry of [specified business line] indicates that the expenses are generally between 68% to 83%, with an average of 75%. Applying this average to the 2020 accounts would indicate that the [Business 2] profit was $79,851 (based on the income tax return) and $84,851 (based on the profit and loss statement). As the small business benchmarks are generally consistent with the income tax return the tribunal finds that the income tax return more accurately represents [Business 2] 2020 profit.

16. The tribunal concludes that the father’s 2020 income and financial resources are in the vicinity of $99,413. Application of this to the current administrative assessment would require the father to contribute about $18,900 per annum towards the costs of the children. At the time the mother lodged her application he was liable to contribute just over $2,954 per annum towards the children’s costs. As the father’s income and financial resources are not properly reflected in the child support assessment, there are special circumstances such that the application of the administrative assessment would result in an unjust and inequitable determination of child support payable. The tribunal therefore concludes that the ground provided for in subparagraph 117(2)(c)(ia) of the Act is established.

Just and equitable

1. The requirement to consider whether a departure would be just and equitable directs attention to what is fair to the parents and their children. Regard must be had to a variety of factors such as the needs of the child, the parents’ commitments and any hardship that would be caused by departing or not departing from the formula assessment.

2. The mother provided a Statement of Financial Circumstances dated 10 July 2021. She is employed on a part-time basis and reports gross income of $868 per week, supplemented by parenting pension of $130 per week. She declares a 50% interest in the former matrimonial home of $190,000 and her half share of the mortgage is $93,349. She meets the mortgage cost in full and remains living with the children in the former matrimonial home. She declares nil savings, and assets including a motor vehicle valued at $9,000, household contents of $5,000 and superannuation valued at $60,000. She also estimates a 50% interest in a 2015 [vehicle], valued at $7,000. Apart from her mortgage, her only other liability is credit card debt of $6,000. Her weekly personal expenditure is $131 in income tax, $1.80 in ambulance cover and superannuation of $86.50. She declares household expenses of $1,040, of which $245 relate to her care of the children, but makes no allowance for the costs associated with accommodating, transporting and other costs relating to the children. The tribunal calculates that about $819 of the household costs relate to her care of the children. The mother’s 2021 adjusted taxable income is $38,985.

3. The parents are in agreement that the children are in good health and they attend public schools. Neither parent reports that the children have costs that are out of the ordinary.

1. In his Statement of Financial Circumstances dated 25 July 2021 the father declared that he is [an occupation 1] and director, with a net income of $500 per week ($26,000 per annum) from [Business 3]. His partner earns $1,473 per week. He declared nominal savings and the business bank balance was $1,931. His assets comprise his half share of the former matrimonial home valued at $190,000, a motor vehicle valued at $70,000 and superannuation of $14,000. His liabilities include a mortgage of $78,233, a [business] loan of $132,000, a car loan of $26,000, personal credit card debts of $17,600, business credit card debts of $35,000 and personal loans totalling $64,648. His weekly personal expenditure is $495, including private health insurance of $16, car payments of $323, credit card repayments of $100 and child support payments of $56. He declared household expenses of $1,363, of which he states his costs are $377, including telephone payments of $50. The father’s 2021 taxable income is $18,253.

2. The tribunal next considered whether the father should be assessed with regards to his earning capacity. In order for a person to be assessed in accordance with their earning capacity rather than their actual income, the three tests set out in subsection 117(7B) of the Act must be satisfied:

   In having regard to the earning capacity of a parent of the child, the court may determine that the parent's earning capacity is greater than is reflected in his or her income for the purposes of this Act only if the court is satisfied that:

   (a)   one or more of the following applies:

   (i)the parent does not work despite ample opportunity to do so;

   (ii)the parent has reduced the number of hours per week of his or her employment or other work below the normal number of hours per week that constitutes full‑time work for the occupation or industry in which the parent is employed or otherwise engaged;

   (iii)the parent has changed his or her occupation, industry or working pattern; and

   (b)   the parent's decision not to work, to reduce the number of hours, or to change his or her occupation, industry or working pattern, is not justified on the basis of:

   (i)the parent's caring responsibilities; or

   (ii)the parent's state of health; and

   (c)   the parent has not demonstrated that it was not a major purpose of that decision to affect the administrative assessment of child support in relation to the child.

3. The father has worked as a sole trader for many years and in February 2021 began operating from a company structure. Contradictory evidence was provided regarding the father’s recent work arrangements. As outlined above, his Statement of Financial Circumstances indicates that he continues to earn income from [Business 3]. This is supported by the bank statements in evidence indicate that during the 2022 financial year [Business 3] is in receipt of government support and [business] income. At hearing the father stated that he has not worked since June 2021. This is consistent with submissions made after hearing, where the father stated he has applied for five roles since July 2020: [an occupation 1] role on 18 July 2020 and a traffic control on 12 September 2021, as well as three apprenticeship roles on 6 September 2020 and 13 August 2021. The father also asserts that he has approached other businesses informally and considered starting a [specified] business. He reported in his submissions received post-hearing that [Business 3] will soon fold.

4. The tribunal is satisfied that in February 2021 the father changed his working pattern and, according to his testimony, since June 2021 he has not worked, despite ample opportunity to do so. Paragraph 117(7B)(a) of the Act is satisfied.

5. There is no evidence before the tribunal to suggest that the father’s caring responsibilities justify his decision to change his working pattern and to not work. In his request for legal representation the father referred to being diagnosed with attention deficit disorder an is under the care of a psychiatrist, however there is no suggestion that the father’s health justifies his decision not to work. In the absence of any medical evidence to the contrary, the tribunal is not persuaded that his health justifies his decision to change his working pattern and to not work. Thus, paragraph 117(7B)(b) of the Act is satisfied.

6. As outlined above, the matter was deferred in order to determine the basis on which the [Business 2] and [Business 3] no longer contracted with [Business 1], as the mother had alleged at hearing that the father “resigned” from [Business 1]. The tribunal understands that she means that it was the father’s decision to longer accept work offered by [Business 1] to [Business 2] and [Business 3]. She asserts that a week after the father resigned, he went to the workplace to hand in his keys and had an altercation with [Mr A] and physically assaulted him. At hearing the father denied this, stating that he did not resign and he never assaulted [Mr A]. Instead, he states there was a “disagreement after they gave me no work”.

7. The tribunal issued an order to [Mr A], [Manager A], [Business 1]. In reply, the tribunal received the following responses (the tribunal’s questions being in italics):

   ·The period in which Mr Roper, [Business 2] or [Business 3] contracted with [Business 1].

   mr Roper (sic) /[Business 2] started contracting to [Business 1] (sic) January 2015 with the last job being 15th April 2021

   ·The circumstances surrounding why, in or around April 2021, Mr Roper, [Business 2] or [Business 3] no longer contracted with [Business 1].

   Mr Roper called me on [a day in] April 2021 where we had a conversation where it would be his decision to resign from contracting to [Business 1] (sic) when he return (sic) back to the main depot of [named town].

·Whether Mr. Roper, [Business 2] or [Business 3] resigned or gave notice to [Business 1] that he/they would no longer [accept work] for [Business 1] OR whether there as a downturn in work which resulted in Mr Roper, [Business 2] or [Business 3] no longer being offered [orders] (and attaching relevant documents or correspondence).

There was a downturn in the workload compared to other years, there had been a few different conversations where it had been said to Mr Roper/[Business 2] (sic) that if he could find other work then to take up the opportunity, however while he was committed to [Business 1], [Business 1] continued to provide work until it was his choice to resign.

1. Some days after the tribunal issued the order, the mother alleged, in writing, that [Mr A] was receiving texts and telephone calls with “implied threat” regarding the provision of information to this tribunal. The mother alleged that it was the father who was orchestrating the harassment and that [Mr A] was concerned for his own safety and that of his family.

2. The father provided written submissions and supporting documentation in reply to the response received from [Mr A], summarised as follows. He is subject to ongoing harassment and that the downturn in work offered by [Business 1] directly correlates with the threats made by his partner’s ex-husband (the ex-husband); they are both now protected by an apprehended violence order. The ex-husband is currently imprisoned after breaching the order and is subject to an intensive corrections order. The ex-husband is a [social media contact] of [Mr A]. The ex-husband has bragged that he is using his influence to ensure that the father will not receive work from [Business 1], by way of a text message sent to the father’s partner’s father [in] October 2020 states (at folio A106):

   …if I don’t hear from [name[ [their child], I told [Mr A] at [Business 1], I’m pretty sure if they get a bad rap over [Mr Roper] [the father] the piece of [expletive] will no longer be required, I am so sick of missing out on my son…

3. The father also relies on a [social media] message sent by the ex-husband wishing his son a happy birthday that was [endorsed] by the owner of [Business 1], [named], and his son (or grandson), [named] (at folio A103). [The grandson] and the mother’s employer also [endorsed this message] by the ex-husband dated [in] April 2021 (at A101), where the ex-husband made derogatory comments about the father and his partner.

4. In August the ex-husband also apparently sent a text message to a friend of the father’s partner stating:

   …funny as guck watching [Business 1] starve him, he call it caronaviris (sic),

   that’s an illness, not a description of your personality, he’s quite cause he’s a [expletive] that no one can stand to be near, lol, do you reckon [threat details deleted]? [Expletive] funny, he might be better of taking [another employer’s] offer, they are after a [specified position]

5. The father forwarded a copy of this text to [Mr A] (at A107) [in] October 2020. What response (if any) the father received was not provided. However, text messages dated [in] January 2021 between [Mr A] and the father have also been provided, (at folio A107):

   [Dated in] Jan 1:47 PM

   [the father]

   Hey buddy, just touching base to see what you think might be going on next week, im (sic) keen and ready to go Sunday…just so I can put a bit of a plan together for the rest of my week. Thanks

   [[Mr A]]

   Hi there currently just day to day at the moment the work has dropped off a bit out of here, seems to be a bit slow moving in Sydney and Melbourne but currently don’t have much locked in

   [Later in] Jan 3:04 PM

   How did you end up organizing yourself for Sunday, just chasing [the remainder of the message is not provided]

6. Email correspondence (at folio A108) between [Mr A] and the father was also provided. In response to the father’s email which states that he was required to be at home on [a given] night as he had an appointment on [a day in] April 2021, [Mr A] replied:

   This will be no worries, heads up tho it is looking a little quite as the [specified] plan is hit & miss & [a named job] finishs today

7. In the submissions attached it is submitted that this email is evidence that [Mr A] informed the father that “no further work was available due to a downtown” (at folio A93). After carefully considering the correspondence, the tribunal is not persuaded that the email states that there is no further work available, rather that there is a reduction in available work. It was then submitted that:

   After receiving no further contract work from [Business 1], our client obtained work with [Business 4] as a sub-sub-contractor for [Business 5]. His position with [Business 1] was thereafter terminated. Days after his contract with [Business 1] was terminated, Mr Roper attended at [Business 1] to return documentation, keys, etc. He was then verbally attacked by [Mr A] and the two men got into an altercation related solely to the separation of [the father’s partner] and [the ex-husband] and the relationship with [the father] and [his partner]. The position with [Business 5] was terminated as a result of a breakdown between [Business 5] and [Business 4].

   …

   It is clear that [the father’s] ongoing relationship with [Business 1] has been damaged through deliberate actions of [the ex-husband] and [Mr A] in an effort to ‘punish’ [the father] for his relationship with [his partner], and not through any fault of [the father] and [his partner].

8. The tribunal is not persuaded, on the evidence before it, that the father’s employer and/or [Manager A] orchestrated a reduction in the work available to him at the direction or behest of his partner’s ex-husband. Certainly, the father never submitted that this was the case in his discussions with the Agency or in his application to this tribunal. He made no such reference in his oral testimony to this tribunal. In his written objection to the senior case officer’s decision, he stated that his 2020 income was impacted by the bushfires and COVID-19, which he reiterated at hearing. The suggestion of a conspiracy was only raised after the tribunal deferred the matter seeking further evidence regarding the change in his work arrangements from [Business 1]. Furthermore, the supporting documentation provided by the father does not support such a finding. Whilst it is clear that the father and the father’s partner are subject to ongoing violence from the ex-husband, the tribunal is not persuaded that the ex-husband has influenced the work available to the father from [Business 1]. Certainly, the text messages between [Mr A] and the father indicate no animosity between the two and are cordial in nature.

9. As already stated, the tribunal is not persuaded that the father was advised that no further work was available to him in or around April 2021 and prefers [Mr A’s] evidence that the father elected to no longer [work] for [Business 1]. The tribunal reached this conclusion with greater confidence, given that this event coincided with the father’s objection application. Furthermore, the tribunal has already found that the business and company financials are opaque and the father has not made a full and frank disclosure of his financial circumstances and in particular the financial benefits that he receives. The tribunal is of the view that, on balance, there is sufficient evidence to demonstrate that a major purpose of the father’s decision to change his working arrangements and then to cease work was to affect the administrative assessment. Paragraph 117(7B)(c) of the Act is satisfied.

10. The father provided a part profit and loss statement for [Business 2] for the period 1 July to 31 December 2020. It indicates that there was gross income of $110,000. Annualising this income and applying the small business benchmarks to this would suggest that the businesses’ profit would be in the vicinity of $55,000. As already noted, it is difficult to reach any precise conclusion regarding the father’s income and financial resources. The tribunal has determined that his 2020 income and financial resources were $99,413. There is an apparent reduction in the work available to the father during the period 1 July 2020 to April 2021.

11. The tribunal has concluded that it is appropriate that the father’s child support liability be varied to an adjusted taxable income of $80,000, which is in line with [Business 2] 2020 profit and the small business benchmarks and the discretionary spending evident in the father’s bank statements. In the tribunal’s view this variation reflects the most reasonable conclusion to be drawn on the available evidence regarding the father’s income and financial resources. To find otherwise would result in a disproportionate amount of the children’s costs being borne by the mother.

12. It is appropriate to amend the administrative assessment on this basis from the date the mother sought to amend the administrative assessment, being 7 January 2021, notwithstanding the fact that the assessment was based on the fixed annual rate from 1 September 2020, some four months prior to the mother’s application. Application of an adjusted taxable income of $80,000 to the administrative assessment will result in the father being liable to pay $14,000 in child support per annum. The tribunal’s decision will place the father in arrears of about $13,000, when compared to the fixed annual rate of child support he was liable to pay prior to the mother’s application. As at 8 July 2021 the father was in arrears of $9,339. This decision will see these arrears decrease by about $7,000. The tribunal is satisfied that amending his adjusted taxable income on this basis will not place him in a position of undue hardship given his income, financial resources and earning capacity. Furthermore, these funds are necessary for the mother to adequately provide for the children.

13. The tribunal is of the view that the father’s income, financial resources and earning capacity will not be accurately reflected by his taxable income into the foreseeable future. It is therefore appropriate that his adjusted taxable income be varied to $80,000 until 1 December 2024, when the older child will no longer be subject to the administrative assessment. This determination will provide certainty to the parties and minimise the need for repeat proceedings.

14. The tribunal is satisfied that the administrative assessment is unfair given the father’s income, financial resources and earning capacity. This results in an unjust and inequitable level of child support given the circumstances of each parent. For all these reasons it is just and equitable to depart from the administrative assessment.

Otherwise proper

1. The requirement to consider whether a departure would be otherwise proper directs attention to what is fair to the community. It is necessary to consider the effect of any departure from the administrative assessment on entitlements to income-tested pensions, allowances and benefits. Parents, rather than the community, have the primary duty to maintain a child. The mother is in receipt of income-tested benefits. Departing from the administrative assessment will result in a more appropriate apportionment of financial responsibility between the parents and the community.

2. The determination is otherwise proper.

DECISION

The tribunal sets aside the decision under review and, in substitution, decides that from 7 January 2021 to 1 December 2024 Mr Roper’s adjusted taxable income is varied to $80,000.