Rudner and Rudner (Child support)

[2022] AATA 3508

Rudner and Rudner (Child support) [2022] AATA 3508 (4 July 2022)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2022/MC023675

APPLICANT:  Mr Rudner

OTHER PARTIES:  Child Support Registrar

Ms Rudner

TRIBUNAL:Member H Moreland

DECISION DATE:  04 July 2022

DECISION:

The decision under review is affirmed.

CATCHWORDS

CHILD SUPPORT – particulars of the administrative assessment – estimate of income - whether the estimate should have been refused - 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. This application for review is about whether an income estimate provided by Mr Rudner of $0 (annualised) for the period from 4 January 2022 to 30 June 2022 should have been accepted by Child Support.

2. Mr Rudner and Ms Rudner are the parents of [Child 1] (born [in] December 2004) and [Child 2] (born [in] May 2002, so child support is no longer payable in relation to her care). A child support case between Mr Rudner and Ms Rudner has been registered with Child Support since 9 September 2018.[1]

   [1] Child Support papers, p 4.

3. On 4 January 2022, Child Support accepted an income estimate of $0 (annualised) from 4 January 2022 for Mr Rudner. On 25 January 2022, Ms Rudner objected to the decision. On 6 April 2022, an objections officer decided to allow Ms Rudner’s objection. On 12 April 2022, Mr Rudner lodged an application for a review of the objections officer’s decision with the Social Services and Child Support Division of the Administrative Appeals Tribunal (the Tribunal).

4. The Tribunal conducted a hearing on 4 July 2022. Mr Rudner and Ms Rudner participated in the hearing via telephone conference and gave evidence on affirmation. Prior to the hearing, Child Support provided to the Tribunal, Ms Rudner and Mr Rudner a bundle of documents taken from its files (166 pages). Ms Rudner provided additional documentary evidence to the Tribunal which was copied to Mr Rudner (numbered B1–B4). Relevant aspects of the evidence and material before the Tribunal will be referred to in the Tribunal’s consideration of the issue to be decided.

ISSUE

1. The issue which arises in this case is whether it was correct that Mr Rudner’s income estimate from 4 January 2022 was accepted.

CONSIDERATION

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

2. The rate of child support payable by a liable parent is usually based on an administrative assessment under Part 5 of the Act. This requires the application of a statutory formula which uses the adjusted taxable income for the year ending immediately before the start of the child support period (the last relevant year of income).

3. Subsection 60(1) of the Act provides that a parent can elect that their current income is their adjusted taxable income, rather than their adjusted taxable income from the last relevant year of income.

4. Under subsection 62A(1) of the Act, the parent must then make a new income election. According to subsection 63AA(3), the Registrar has discretion to refuse to accept the new income election made by the parent, if the Registrar is satisfied that the new income election is less than what the Registrar considers the parent’s adjusted taxable income for the remainder of the year will be.

5. In this case, Mr Rudner’s income had been estimated as $203,795, based on his 2020/21 adjusted taxable income. Mr Rudner told the Tribunal that on 4 January 2022, he contacted Child Support to inform it that for the foreseeable future he had no work and expected his income would be $0 which, as noted above, Child Support accepted.

6. Mr Rudner told the Tribunal that he subsequently managed to secure work from 14 February 2022 and contacted Child Support on 11 March 2022 to inform them of this and that his new salary would be $131,000.

7. Mr Rudner told the Tribunal that the 6 April 2022 objections officer decision then “overrode” the income estimate he had provided on 11 March 2022, so his recorded income with Child Support reverted to the previous $203,795, which, as noted above, was based on his 2020/21 adjusted taxable income.

8. Mr Rudner told the Tribunal that this was problematic because his 2020/21 income was higher than it would usually have been because he received a redundancy payment of $70,000 in that year; and that as a result of the 11 March 2022 income estimate being “overridden” he has paid too much Child Support and there is no way it can be corrected.

9. The Tribunal asked Ms Rudner what submissions she wanted to make and amongst them, she directed the Tribunal’s attention to the list of payments made by Mr Rudner’s employer to him in the Child Support papers, which show that he regularly received income for the period from 23 December 2021 to 10 February 2022.[2] Mr Rudner told the Tribunal that these were payments for income already earned.

   [2] Child Support papers, p 5.

10. The Tribunal is satisfied that at the time the income election of $0 (annualised) was made on 4 January 2022, for the period from 4 January 2022 to 30 June 2022, it was likely that Mr Rudner’s income would exceed the amount elected. This means the Tribunal refuses to accept Mr Rudner’s income estimate of $0 (annualised) from 4 January 2022.

11. With regard to Mr Rudner’s concerns about the effect of the 6 April 2022 decision on his income estimate, the Tribunal acknowledges that Mr Rudner was likely attempting to keep Child Support updated when he contacted them on 4 January 2022.

12. The effect of the objections officer’s decision is unfortunate but is what is provided for in the Act. This is because under section 63AA, if an estimate is made under section 60 and later refused under section 63AA of the Act, it is taken to have never been made.

13. This means that as a result of refusing the income estimate of $0 (annualised) under section 63AA of the Act, it is deemed to have not been made, so the estimate reverts to the adjusted taxable income from the last relevant year of income (in this case, $203,975 for the 2020/21 financial year). As it is deemed to have not been made, the income estimate of $0 cannot be revoked under section 62 and replaced with a subsequent estimate (the later estimate of $131,000). This is because the subsequent estimate cannot be reconciled with the first estimate, as it is calculated using a different method and does not comprise a year-to-date component.

14. So, the effect of a first estimate of income by a parent in a financial year being rejected on appeal is that all later estimates are removed.

15. The Tribunal notes that other matters were raised by Mr Rudner and Mrs Rudner which are not subject to this review and which may be more appropriately considered through a Change of Assessment review. Further, the Tribunal notes that it is open to Mr Rudner to have his income reviewed as part of a Change of Assessment review but that this is also not before this Tribunal.

DECISION

The decision under review is affirmed.