Rosa and Rosa (Child support)

[2020] AATA 2140

Rosa and Rosa (Child support) [2020] AATA 2140 (28 April 2020)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2019/SC017709

APPLICANT:  Mr Rosa

OTHER PARTIES:  Child Support Registrar

Ms Rosa

TRIBUNAL:Member S Letch

DECISION DATE:  28 April 2020

DECISION:

The decision under review is affirmed.

CATCHWORDS

CHILD SUPPORT – particulars of the administrative assessment – whether a fixed annual rate of child support should not apply – unjust and inequitable considerations – the application for fixed annual rate not to  apply should be refused - decision under review affirmed

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

1. Mr Rosa has been assessed by the Child Support Agency (CSA) as liable to pay child support to Ms Rosa.

2. This application concerns an objection decision dated 21 October 2019 which allowed Ms Rosa’s objection to an original decision dated 5 August 2019 which had accepted an application by Mr Rosa for the fixed annual rate of child support (around $1,400 per annum) to not apply for the period 1 September 2019 to 30 November 2020.[1]

   [1] The fixed annual rate is a set rate of child support payable per child; it is payable by low income parents who did not receive an income support payment from Centrelink in the last relevant year of income.  It is intended to address the situation where parents minimise their taxable income in a way that does not fairly represent their true income, or real capacity to pay child support, and reduces or avoids the contribution they should make towards meeting the costs of their children.

3. Mr Rosa and Ms Rosa participated in the Tribunal’s hearing by conference telephone.

4. In short, Mr Rosa says that he has not had a job since he left his business in 2015. His only income was a “couple of years ago” when he sold his “freehold commercial site” and received the sum of $240,000. He said he “can account for where all that is gone”. Mr Rosa supplied additional documents evidencing the transaction and his bank statements. His disbursements included legal fees; some $48,000 to credit card debt. His father assisted to establish the business and was paid $90,000. He put $5,000 in advance of his mortgage as his parents went overseas for some seven months. The rest of the monies went to daily expenses; he said the monies were exhausted “a few months ago”. He said the CSA has told him many times to “go on benefits” – he has only done that once in his life. He said his financial position is “very complex with assets in his name”. He survives now with assistance from his family and friends. He said he is “getting into debt so to speak”. He pointed to a $5,000 tax bill he has not been able to pay, evidenced in his additional materials. He said things were “getting beyond a joke” and that he “was looking at going on benefits” but only if Ms Rosa came to an arrangement to “share my son”. He is about $1,000 in arrears of his child support account; he last made a payment around eight months ago. The Tribunal asked whether Mr Rosa’s family would assist him meet his child support liability – he indicated it would be fairer if he had care of his son for half the time (presently, he has 14% care in accordance with court orders) so that he could support him directly. He said he was given legal advice to stop paying child support until the matter of his application to not have the fixed rate applied was resolved.

5. Ms Rosa’s position is that she agrees with the objection decision. She said she “wants what is fair”; Mr Rosa has said in court documents that his financial position is secure and that he is able to support his son and provide support payments. Mr Rosa said that his representations in legal proceedings about his capacity to provide support were made some years ago; Ms Rosa observed that the representations were made in 2018 and 2019 affidavits. Ms Rosa said she is not interested in Mr Rosa’s financial arrangements; she said in her experience with Mr Rosa that he can be “dishonest”; however, she has “no proof”. She said she just “wants her life to move on” and wants what is fair.

6. The Child Support Guide, at 2.5.3, accurately reflects the relevant child support law:

Application for section 65A (the fixed annual rate) not to be used

…

The parent making the application must provide evidence about their financial circumstances to the Registrar to show that their current income is no more than the relevant parenting payment (single) maximum basic amount (2.4.2) (section 65B(2)(a)). The relevant parenting payment (single) maximum basic amount is the value of the amount in the calendar year that the child support period begins. An income tax assessment for the last relevant year of income will not be sufficient evidence of the parent’s income. The parent must also show that it would be unjust and inequitable to expect them to pay the assessed amount (section 65B(2)(b)).

Decision on application

The Registrar must first be satisfied that the parent’s current income is no more than the relevant parenting payment (single) maximum basic amount (2.4.2), before granting the application. A parent’s current income is generally their income for the 12 month period from the date of the application.

If the parent’s current income is more than the relevant amount the application must be refused (section 65B(4)).

If the parent’s current income is no more than the relevant amount, the Registrar must then be satisfied that it would be unjust and inequitable to expect the parent to pay the fixed annual rate (section 65B(4)).

In making this decision, the Registrar will consider whether the parent’s income accurately reflects their real capacity to pay child support, including whether the parent receives goods, services or benefits which mean that their current income is not an accurate representation of their financial position. The Registrar may decide that it would not be unjust and inequitable to require the parent to pay the fixed annual rate despite their income being low.

If an application is granted, the Registrar will specify the day on which the fixed annual rate ceases to apply to the parent (section 65B(5)). In most cases, the Registrar will specify that the determination will apply from the first day in the child support period on which the fixed annual rate was payable. However, if making a determination that the fixed annual rate will not apply from the beginning of the child support period would create an overpayment for the payee, generally the Registrar will specify that the determination will apply from a date after the start of the child support period, for example, the date the application was made. In making this decision, the Registrar will consider the reasons for any delay in making the application.

If the fixed annual rate applies to only part of the child support period (e.g. where the parent lodged an estimate of income after the beginning of the child support period), the determination not to apply a fixed annual rate will not apply to the earlier part of the child support period.

When the Registrar refuses to grant the application, the unsuccessful applicant must be notified in writing (section 66C). That person can then object (4.1.2) to the particulars of the assessment.

If an application is refused because the parent’s current income is greater than the relevant amount, and the parent believes that their assessment is unfair for other reasons, they may wish to consider making a change of assessment application (2.6.1).

Meaning of income

In considering an application under 65B for the fixed annual rate not to be used, the Registrar must use the definition of income in section 66A(4) to determine if the parent’s current income is no more than the relevant parenting payment (single) maximum basic amount (2.4.2). In that section, “‘income”‘ is not restricted to taxable income. A taxation assessment is not sufficient evidence of the income of the parent for the purposes of this section (section 65B(3)). In section 66A(4) income is defined as:

·any money received, earned or derived for personal use or benefit, or

·any periodic payment by way of gift or allowance.

The only exclusions to this definition are prescribed in the regulations (CSA Regulations section 13). They are:

·amenity allowances or gratuities (incidental payments for personal items or other minor expenses, but not payments for work, study or participation in approved programs) paid to prisoners;

·disability support pensions, pensions paid to veterans who are totally and permanently incapacitated and Special Rate Disability Pension for veterans, where at least 85% of the pension is paid to another person for the provision of ongoing care to the pension recipient; and

·a National Disability Insurance Scheme (NDIS) amount (as defined in the National Disability Insurance Scheme Act 2013).

In considering a parent’s financial circumstances “‘money”‘:

·includes coins and bank notes, cheques and deposits into bank accounts (but not goods, services, or some other benefit, even if the payment is capable of being valued in money terms)

·is ‘earned’ when it is received in return for labour or service, in compensation or as profit

·is taken to be “‘derived”‘ in accordance with ordinary business and commercial principles. It includes capital payments, trust distributions and royalties

·is taken to be “‘received”‘ when it comes into a person’s possession. This covers most money which comes into a person’s hands including capital payments, e.g. a tax refund, Lotto wins, lump sum compensation, profit from the sale of an asset, deposits into a joint bank account

·must be received for the person’s own use or benefit. Income received by a person in another capacity is not included.

1. Mr Rosa’s evidence is that he is presently being supported by family and friends. There was some suggestion he was accruing a debt to family and friends; however, there is no evidence to support that is so. There is no evidence that he has direct access to any cash reserves. To the extent he is being provided support, broadly speaking, the Tribunal is satisfied that Mr Rosa is receiving a benefit by way of periodic gift or allowance. However, there is limited evidence about the extent of that support, and whether that support could be ascribed a value exceeding the annual level of parenting payment (some $20,000 per annum).

2. Regardless, the Tribunal would need to be satisfied it would be unjust and inequitable to expect Mr Rosa to pay the fixed annual amount: paragraph 65B(2)(b) of the Child Support (Assessment) Act 1989. The policy guidelines provide no great assistance in defining what circumstances might be so regarded.

3. Mr Rosa’s own evidence during the hearing – consistent with representations he has previously made, albeit when it appears he was in a better financial position having not exhausted the proceeds from the sale of a business asset – was that he was seeking up to 50% of his son’s care and that he had the financial capacity to support him. It appeared to the Tribunal that he was suggesting his support was conditional upon him having a higher level of care for his son, and not that he did not have the financial resources to do so. He also advised that he stopped paying child support some eight months earlier on the advice of his lawyer, and not on the basis that he did not have access to financial resources to maintain his child support commitments.

4. The Tribunal is not satisfied that Mr Rosa does not have access to resources to meet his child support liability. Ultimately, the child support scheme is directed towards the needs of the child, which takes priority over all else. The Tribunal also observes that upon receipt of the large sum as a result of the sale of a business asset, it does not appear Mr Rosa made any provision to meet what is a relatively small level of child support going forward, instead giving priority to other disbursements. With the interests of the child in mind, the Tribunal is not satisfied that it would be unjust and equitable for Mr Rosa to be expected to support his son by meeting the liability to pay the fixed annual rate (a modest sum of some $1,400 odd dollars per annum). As a result, there is no proper basis to apply section 65B in Mr Rosa’s favour.

1. As the Tribunal has reached the same conclusion as the objections officer, the decision under review will be affirmed.

DECISION

The decision under review is affirmed.