Ruffer and Ruffer (Child support) - [2019] AATA 5110

Ruffer and Ruffer (Child support) [2019] AATA 5110 (22 October 2019)

DIVISION:Social Services & Child Support Division
REVIEW NUMBER:  2019/PC015971
APPLICANT:  Ms Ruffer
OTHER PARTIES:  Child Support Registrar
Mr Ruffer

TRIBUNAL:Senior Member R Ellis
DECISION DATE: 22 October 2019
DECISION:

The Tribunal sets aside the decision under review and, in substitution, decides that:

for the period from 4 April 2018 to 16 October 2018 the adjusted taxable income for Mr Ruffer is varied to $70,000;

for the period from 17 October 2018 to 14 July 2019 the adjusted taxable income for Mr Ruffer is varied to $159,680; and

for the period from 15 July 2019 until a terminating event occurs for the child [Child 1] the adjusted taxable income for Mr Ruffer is varied to $0.

CATCHWORDS

CHILD SUPPORT – departure determination – income, property and financial resources 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 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

This review is about whether or not there should be a departure from the administrative assessment of child support.
Ms Ruffer and Mr Ruffer are the parents of [Child 1] (born November 2001) and [Child 2] (born February 2000). There has been a child support assessment in place since 10 September 2015 and Mr Ruffer is the liable parent under the assessment. This matter relates to [Child 1] only as [Child 2] is no longer a child of the assessment.
The following child support assessments are under consideration:
·       for the period from 10 March 2018 to 3 April 2018 Mr Ruffer was assessed to pay child support at an annual rate of $25,123 based on a default income for Mr Ruffer of $232,854.28 and a 2016–17 adjusted taxable income of $48,139 for Ms Ruffer;
·       for the period from 4 April 2018 to 24 July 2018 Mr Ruffer was assessed to pay child support at an annual rate of $427 based on a 2017–18 estimated adjusted taxable income of $0 for Mr Ruffer and a 2016–17 adjusted taxable income of $48,139 for Ms Ruffer; and
·       for the period from 25 July 2018 to 9 June 2019 Mr Ruffer was assessed to pay child support at an annual rate of $427 based on a 2018–19 estimated adjusted taxable income of $0 for Mr Ruffer and a 2016–17 adjusted taxable income of $48,139 for Ms Ruffer.
On 29 June 2018 Ms Ruffer applied to the Department of Human Services, Child Support (the Child Support Agency) for a change to the assessment and on 3 October 2018 the Child Support Agency made the decision to change the assessment so that for the period 29 June 2018 until a terminating event occurs with regard to the child [Child 1] the annual rate of child support payable by Mr Ruffer is set at $24,759 (the original decision).
This was done on the basis of the income, property and financial resources of Mr Ruffer (the ground commonly referred to as Reason 8A).
On 2 November 2018 Mr Ruffer objected to this decision and on 25 January 2019 the Child Support Agency allowed the objection in part and made the decision to change the assessment (the objection decision) so that:
· for the period from 29 June 2018 to 20 January 2019 the annual rate of child support payable by Mr Ruffer is set at $24,759; and
· for the period 21 January 2019 until [Child 1] is no longer a child of the assessment the adjusted taxable income for Mr Ruffer is set at $107,900 per annum.
On 21 February 2019 Ms Ruffer applied for a review of the objection decision by the Administrative Appeals Tribunal (the Tribunal).
A telephone directions hearing was held on 22 August 2019. Both Ms Ruffer and Mr Ruffer attended by conference telephone. Prior to the telephone directions hearing the Child Support Agency provided the Tribunal and the parties with a bundle of documents in accordance with section 37 of the Administrative Appeals Tribunal Act 1975 (382 pages).
Ms Ruffer and Mr Ruffer were directed to provide further information to the Tribunal and both complied.
A hearing was held on 3 October 2019. Both Ms Ruffer and Mr Ruffer gave evidence on affirmation by conference telephone. The Tribunal received documents folioed A1 to A11 from Ms Ruffer and B1 to B13 from Mr Ruffer. These were distributed to the parties prior to the hearing. Additional documents were also received from the Child Support Agency (pages 383–441).
At the telephone directions hearing and at the commencement of the hearing the Tribunal clarified with Ms Ruffer and Mr Ruffer the reasons for their concerns. Ms Ruffer said she disagreed with the objection decision because the level of child support was based on income figures for Mr Ruffer that were estimated instead of on verifiable information. Ms Ruffer said she would like the Tribunal to consider basing child support on Mr Ruffer’s long-term earning patterns. Mr Ruffer said he wanted a fair assessment of child support based only on the income he earned when he was actually employed.

ISSUES

The statutory provisions relevant to this review are contained in the Child Support (Assessment) Act 1989 (the Act).
The rate of child support payable by the liable parent is usually based on an administrative assessment under Part 5 of the Act.
Under Part 6A of the Act, the liable parent or the carer of the child or children may apply to the Child Support Registrar for a determination to depart from the administrative assessment (section 98B).
Section 98C provides that the Registrar may make a determination to depart from the administrative assessment and establishes a three step process such that the issues for determination by this Tribunal are:
·       whether or not a ground is established to depart from the administrative assessment of child support; and if so,
·       whether or not it is just and equitable to make a particular departure determination; and if so,
·       whether or not it is otherwise proper to make a particular departure determination.
The grounds for departure from an administrative assessment of child support are set out in subsection 117(2) of the Act.
Each ground is prefaced by the words “in the special circumstances of the case”. The meaning of this expression is not defined in the Act, but the Family Court in Gyselman and Gyselman [1991] FamCA 93 has held that:
as a generality 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 formula in the ordinary run of cases.
In Philippe and Philippe (1978) FLC 90-433 the Court held that “special circumstances” are “facts peculiar to the particular case which set it apart from other cases”.
If the Tribunal is satisfied that a ground exists and that it would be just and equitable and otherwise proper to make a particular determination, the Tribunal may make one of the determinations prescribed in section 98S of the Act.
The range of determinations which can be made includes variations to the annual rate of child support payable; or to the adjusted taxable incomes of the parents and/or carer; or to other components of the statutory formula used to calculate child support.

CONSIDERATION

Issue 1 – Is there a ground for departure?

A ground for departure exists where, in the special circumstances of the case, application of the administrative assessment of child support would result in an unjust and inequitable determination of child support to be provided by the liable parent in respect of the child because of the income, property and financial resources of either parent (subparagraph 117(2)(c)(ia) of the Act).
Ms Ruffer told the Tribunal in her view it was unfair for Mr Ruffer to be assessed on an income of $0. She said his lifestyle was not impacted by his lack of employment.
Ms Ruffer told the Tribunal that since starting employment as an [Occupation 1] in the [named] industry 12 years ago Mr Ruffer had never earned less than $166,000 per annum. She said it was quite normal for Mr Ruffer to be in and out of work multiple times. Ms Ruffer said she also worked intermittently. Ms Ruffer said in her role she had paid employment during [period 1] but was not paid during [period 2]. Ms Ruffer said for her to claim, like Mr Ruffer, that she was earning nothing while she was not working would be incorrect and a misrepresentation of her true positon. She said the Tribunal should look at the amount Mr Ruffer earned across his career and not just his short-term income.
Mr Ruffer told the Tribunal he was an [Occupation 1] and had started working on large [projects] on a fly-in fly-out (FIFO) basis around 2011. Mr Ruffer said he was currently unemployed and although he was actively looking for work there were few opportunities available. He said many of these projects had reached completion and there was no longer the same sort of highly paid roles available. Mr Ruffer said the industry had changed dramatically in the past two years and he was struggling to find work.
Mr Ruffer acknowledged he had been earning a very good salary [but] said that type of work no longer existed. He said Ms Ruffer needed to understand the reality of the current work environment. Mr Ruffer said he had no firm prospects of employment but that was not from lack of trying.
Mr Ruffer told the Tribunal that most recently he had been employed by [Employer 1]. He said he started work at [Employer 1] on 17 October 2018 but was made redundant less than a year later on 9 July 2019. Mr Ruffer said his salary at the time was approximately $3,550 per week. He said he had not worked at all since then.
Mr Ruffer said prior to working at [Employer 1] he was employed by [Employer 2] working FIFO on the [Specified] Project on a four week on and one week off roster. Mr Ruffer explained that when the project was coming to an end he was told he was going to be laid off and so he quit. He confirmed his last day at [Employer 2] was 23 March 2018. He said he was exhausted after working a 60–70 hours a week for two-and-a-half years and needed a break. Mr Ruffer said when he finished at [Employer 2] he received a payout which included unpaid holiday pay, sick leave and a termination payment totalling $29,074.
Mr Ruffer told the Tribunal that after leaving [Employer 2] and before starting at [Employer 1] he had survived only on his savings. He said this was money he had earned and paid tax on. He said during the seven months between these two roles he had no income.
In response to directions Mr Ruffer provided the Tribunal with a PAYG payment summary for the period from 17 October 2018 to 30 June 2019 and his final payslip from [Employer 1]. Mr Ruffer also provided the Tribunal with a PAYG payment summary for the period from 1 July 2017 to 23 March 2018. Mr Ruffer explained that he had not completed a tax return for some time including for those financial years.
The PAYG payment summary for the period 17 October 2018 to 30 June 2019 shows total gross payments earned while Mr Ruffer was employed at [Employer 1] of $114,544. The payslip from [Employer 1] is for the period 8 July 2019 to 14 July 2019 and shows a gross salary of $4,245.44. Year-to-date income from 1 July 2019 to 14 July 2019 totals $11,013.32 (gross). The payslip also confirms Mr Ruffer was terminated on 9 July 2019. The PAYG payment summary for the period from 1 July 2017 to 23 March 2018 shows total gross payments earned while Mr Ruffer was employed at [Employer 2] of $249,187.
The Tribunal also notes in evidence from the Child Support Agency a PAYG payment summary for the employment termination payment Mr Ruffer received from [Employer 2]. It shows a gross payment made on 1 April 2018 of $29,074.
Ms Ruffer told the Tribunal it was difficult to believe Mr Ruffer had received a termination payment from [Employer 2] but not from [Employer 1]. Ms Ruffer said there was a PAYG payment summary from [Employer 2] for his ordinary salary and a separate summary for his termination payment. She said Mr Ruffer could simply have failed to provide the summary for a termination payment received from [Employer 1]. Ms Ruffer said she wanted to see solid evidence rather than taking Mr Ruffer at his word. She said Mr Ruffer had previously told the Child Support Agency his bank balance on 24 July 2018 was $3,000 yet it was later determined he had $13,000 in his bank account on this date. She added that Mr Ruffer was unable to account for a cash deposit to his bank account of $7,000 while he was between jobs and was also able to transfer $40,000 to his home loan account when he was not working. Ms Ruffer pointed out Mr Ruffer had also refused to submit any evidence relating to an inheritance from his father’s estate. She said this was a pattern of misleading behaviour.
Mr Ruffer responded by saying he had not received a termination payment from [Employer 1]. He said the days of receiving such payments were gone. He said his final pay was recorded in the payslip he had provided which included his salary and a lump sum for leave owed.
Mr Ruffer agreed that he had substantial savings when he finished at [Employer 2]. Mr Ruffer said after leaving [Employer 2] he went on a seven week holiday to visit his family and travel around [Country 1] and took $15,000 with him to help fund his travels. He said when he returned he deposited the balance of this cash, which was the $7,000, into his bank account. He said this was not clandestine income as Ms Ruffer was making out. Mr Ruffer said he had not received “a cent” from his father’s estate as it had yet to be finalised. He said he was uncertain when this would be resolved as it was being contested. Mr Ruffer explained the $40,000 he deposited onto his mortgage was additional funds he had borrowed for the purchase of the unit he was now living in. He said it was intended for the purchase of a new car but he had instead financed the car through [Named Company].
The Tribunal notes in evidence from the Child Support Agency bank statements from [Named] Bank in the name of Mr Ruffer for the period 15 January 2018 to 14 October 2018. There is also a spreadsheet listing all transactions for the same account during the period from 4 October 2018 to 1 January 2019. While the Tribunal acknowledges the spreadsheet could be altered manually, by cross-referencing the two documents it appears the transactions in the bank statements from 4 October 2018 to 14 October 2018 align with the transactions in the bank statements for the same period. The Tribunal is satisfied the spreadsheet is an accurate reflection of the account transactions for the 90 day period.
The opening balance of the account as at 15 January 2018 was $53,712.91. The statements show weekly direct credits from [Employer 2] with a final payment of $19,161.58 on 6 April 2018. The Tribunal accepts this would be the net amount of the final gross payment of $29,074 Mr Ruffer received from [Employer 2]. The balance of the account on 6 April 2018 immediately prior to this final payment from [Employer 2] was $69,158.95.
The statements show a cash withdrawal of $15,000 made on 12 March 2018 and a cash deposit of $7,000 made on 1 August 2018. There is also a transfer of $40,000 made to Mr Ruffer’s mortgage account on 1 August 2018. The statements and the spreadsheet show no other significant credits after Mr Ruffer received his final payment from [Employer 2] until a direct credit from [Employer 1] of $2,101.19 on 25 October 2018. The statements and the spreadsheet show multiple discretionary purchases including day-to-day costs being met from the account as well as regular recurring payments to the mortgage account and to [Named Company]. They also show transfers to what appear to be additional accounts held by Mr Ruffer. The balance of the account on 17 October 2018 immediately before Mr Ruffer commenced employment with [Employer 1] was approximately $520.00.
The Tribunal also notes the Child Support Agency conducted a search utilising AUSTRAC, the Australian Transaction Reports and Analysis Centre, which is a financial intelligence unit within the Australian Government. The search showed no funds coming into the country for Mr Ruffer.
Ms Ruffer pointed to the transfer of funds from one account to another unknown account held by Mr Ruffer as a further example of Mr Ruffer not being transparent about his financial resources. She said even when he had money in his account Mr Ruffer refused to pay child support. Ms Ruffer also said Mr Ruffer had not provided his tax returns to the Tribunal and so the picture of his income was incomplete. Mr Ruffer responded by saying he had not completed his tax returns for many years but he had provided his PAYG payment summaries to the Tribunal. He said irrespective of any funds he may have transferred from one account to another his only income was deposited into the [Named] account and the statements had been provided in evidence to the Child Support Agency.
The Tribunal also examine the Statement of Financial Circumstances received from Mr Ruffer on 1 April 2019. Mr Ruffer states his total average weekly income at the time was $3,550. He told the Tribunal this was his salary while he was still employed at [Employer 1]. Mr Ruffer also lists his total average weekly expenditure at $1,080 which includes mortgage payments of $260 per week, food of $150 per week and total vehicle expenses of $175 per week. He declares assets of $308,000 including his home valued at $250,000, a [motor] vehicle valued at $38,000, household contents of $10,000 and cash at bank of $10,000. He has total liabilities of $160,000 including his home mortgage of $140,000 and a car loan with [Named Company] of $20,000. Mr Ruffer lists his inheritance at $118,000 but states this is yet to be received. His total personal weekly expenditure is $1,587 including income tax of $1,260 per week and child support of $307 per week. Mr Ruffer states he has $250,000 in superannuation.
Mr Ruffer told the Tribunal he currently had approximately $1,500 in his bank account and was now struggling financially. He said [his bank] had recently allowed him to reloan $11,000 based on the equity in his home until he could find work.
Ms Ruffer believes Mr Ruffer has financial resources available to him that are not reflected in the child support assessment. She has pointed out that Mr Ruffer has not completed a tax return for a considerable time and feels he understates his income. Ms Ruffer has also argued that Mr Ruffer has more than likely not reported a termination payment he received from his last employer as he has always received such payments in the past. She also believes he has received a large inheritance from his father’s estate in [Country 2].
The change of assessment process is evidence based. The Tribunal is not required to undertake a forensic audit or major investigation of the financial circumstances of the parents. Rather, the Tribunal must be satisfied on the balance of probabilities as to each party’s income, property and financial resources (section 2A of the Administrative Appeals Tribunal Act 1975 and Tanner & Dalton (SSAT Appeal) [2012] FMCAfam 732).
Mr Ruffer has not submitted details of his father’s estate, however, he has said he will receive an inheritance of $118,000 at some stage in the future when the matter has settled. There is no evidence suggesting Mr Ruffer has received any funds from overseas at this point in time and the Tribunal is satisfied Mr Ruffer has yet to realise any financial benefit from the estate. The Tribunal will not consider this matter further.
The Tribunal is satisfied Mr Ruffer worked at [Employer 2] until his employment ended on 23 March 2018. From 1 July 2017 to 23 March 2018 he earned $249,187 (gross). He also received a final payment on 1 April 2018 of $29,074 (gross) which included holiday pay owed, sick leave owed and a termination payment. This means Mr Ruffer received total income in 2017-18 of $278,261. As this income was derived during a period of approximately nine months the Tribunal is of the view it would be reasonable to annualise the income earned. It would not be fair to annualise the total income as this includes the final payment received on 1 April 2018. The standard income of $242,187[1], when annualised, shows that for the period from 1 July 2017 to 23 March 2018 Mr Ruffer was earning income at the rate of $332,324. Adding the lump sum payout he received on 1 April 2018 of $29,074 brings his total income to $361,398 for the period from 1 July 2017 to 1 April 2018.
[1] The Tribunal notes, according to information from the Child Support Agency, the last tax return filed by Mr Ruffer was in 2014-15 which included deductions of $7,000 (rounded). The Tribunal finds it reasonable to allow the same level of deductions for Mr Ruffer in 2017-18 which would reduce his income to $242,187.

From 2 April 2018 until Mr Ruffer commenced work at [Employer 1] on 17 October 2018 the Tribunal is satisfied Mr Ruffer was not earning an income. He did, however, have considerable savings and the Tribunal has previously noted the balance of his bank account on 6 April 2018 (immediately prior to his final payment from [Employer 2]) was $69,158.95. During the period of approximately six months when he was not working Mr Ruffer was able to take an overseas holiday. He continued to meet his mortgage payments and other financial commitments. There is no evidence to suggest his spending habits changed during this time as Mr Ruffer clearly had the resources available to maintain his lifestyle despite not receiving any income. The Tribunal notes that on 3 September 2018 Mr Ruffer detailed annual personal expenses totalling $68,100 in his response to the application for a change of assessment made by Ms Ruffer.
A major objective of the child support legislation is to ensure the level of financial support provided by each parent is determined according to their capacity to provide that support based on their overall income, property and financial resources. The duty of a parent to maintain their child has priority over all other commitments apart from their necessary commitments of self-support or to support another child or person.
Mr Ruffer had savings of approximately $70,000 around the time his employment with [Employer 2] ended. This had diminished to approximately $520.00 immediately before he commenced work again nearly seven months later. The Tribunal is satisfied that Mr Ruffer had access to income, property and financial resources equivalent to that of a person earning approximately $70,000 from 2 April 2018 to 16 October 2018.
Mr Ruffer told the Tribunal he should pay child support while he was unemployed although the level of child support should reflect the fact he was not earning an income. The Tribunal will consider this further when establishing a just and equitable determination.
Mr Ruffer commenced work with [Employer 1] on 17 October 2018 and earned $114,544 (gross) until 30 June 2019. From 1 July 2019 to 14 July 2019 his year-to-date income was $11,013.32. There is no evidence suggesting Mr Ruffer received a termination payment from [Employer 1] when his employment with the company ended. The Tribunal is satisfied that for the period from 17 October 2018 to 14 July 2019 Mr Ruffer earned a total of $125,557.
As this income was derived during a period of approximately nine months the Tribunal is of the view it would be reasonable to annualise the income Mr Ruffer earned. Allowing for reasonable deductions[2] the income amount of $118,557, when annualised, shows that for the period from 17 October 2018 to 14 July 2019 Mr Ruffer was earning income at a rate of $159,680. The Tribunal is satisfied that during this period Mr Ruffer had access to income, property and financial resources equivalent to that of a person earning $159,680.
[2] Ibid.
Mr Ruffer has not worked again since his employment ended at [Employer 1]. He has told the Tribunal he has no immediate prospects of work and has little savings. Mr Ruffer has also said he is now drawing down on the equity in his home to meet his mortgage and motor vehicle payments as well as his living expenses. The Tribunal will consider his current income, property and financial resources for child support purposes when establishing a just and equitable determination.
The Tribunal must also make a determination in relation to the income, property and financial resources of Ms Ruffer.
Ms Ruffer told the Tribunal she worked in a permanent part-time role at [Employer 3] in [Suburb 1]. She said she had been at [her empolyer] since 2012 and was paid for 40 weeks each year. Ms Ruffer said her salary was approximately $57,000 per annum and she received additional rental income of $290 per week from a granny flat on her property.
Ms Ruffer is yet to complete her 2017-18 or 2018-19 tax returns, however, the Tribunal notes in evidence from the Child Support Agency a copy of her 2016-17 tax return. It shows total gross payments from employment of $56,235. Gross rent received was $12,880 and after deductions there was a net rental property loss of $12,457. Ms Ruffer had a taxable income in 2016-17 of $35,682 after allowing for deductions. Her adjusted taxable income in 2016-17, as recorded by the Child Support Agency, was $48,139.
Ms Ruffer told the Tribunal her income from employment had not changed significantly. In response to directions Ms Ruffer provided the Tribunal with a payslip from [Employer 3] for the month ending 31 August 2019. The payslip shows a gross pay of $4,744.71 during this period and an annual salary of $56,936. After allowing for deductions and a similar net rental property loss the Tribunal is satisfied Ms Ruffer’s current income is not significantly different to her income in 2016-17.
Ms Ruffer is currently being assessed on an income of $50,730. The income in place for Ms Ruffer when she submitted her application for a change of assessment was based on her 2016–17 adjusted taxable income of $48,139. The Tribunal is satisfied that Ms Ruffer’s income is fairly represented in the administrative assessment of child support.
The Statement of Financial Circumstances for Ms Ruffer received on 12 March 2019 shows total average weekly income of $1,677 which includes her salary of $1,186, the rental income she receives of $290 and government benefits of $108. Ms Ruffer acknowledged that due to a mathematical error the figure of $1,677 did not include the child support she currently received of approximately $176 per week. Ms Ruffer also receives financial hardship payments from state government agencies of $97 per week. Her total weekly household expenditure is approximately $1,843 including $620 per week in mortgage payments, $190 per week for food and $116 per week in total motor vehicle expenses. Ms Ruffer values her total assets at approximately $1,158,000 including her home at $1,125,000, two motor vehicles with a total value of $28,000, household contents of $5,000 and a small amount of cash at bank. Her liabilities total $679,058 which include a mortgage on the family home of $478,158 and a second loan which she said was from her parents of $200,000. Her total weekly personal expenditure is $490 including income tax of $233, superannuation of $112, minimum credit card payments of $88 and health insurance premiums of $57. She has superannuation of approximately $71,108.
The administrative assessment in place at the time Ms Ruffer made her application for a change to the assessment on 29 June 2018 was based on an adjusted taxable income of $48,139 for Ms Ruffer and an estimated adjusted taxable income of $0 for Mr Ruffer. The income, property and financial resources available to Mr Ruffer, as determined by the Tribunal, are much greater than those used in the assessment. Even when he was not working – which was the case when Ms Ruffer made her application for a change to the assessment – the Tribunal has determined that Mr Ruffer had access to income, property and financial resources equivalent to a person earning $70,000. Using this amount for Mr Ruffer and the income for Ms Ruffer as used in the administrative assessment at the time the application was made and applying these in the child support formula, the annual rate of child support payable by Mr Ruffer would be approximately $10,300.
The Tribunal finds this to be significantly more than his liability under the administrative assessment and determines there are special circumstances and application of the administrative assessment of child support would result in an unjust and inequitable determination of child support to be provided by Mr Ruffer in respect of the child.
On this basis the Tribunal finds there is a ground for departure from the administrative assessment.

Issue 2 – Is it just or equitable to make a particular determination?

As the Tribunal finds there is a ground to depart from the administrative assessment of child support, the next step is to consider whether or not it is just and equitable as regards the children, the liable parent, and the carer entitled to child support to make a particular determination in accordance with sub-subparagraph 98C(1)(b)(ii)(A) of the Act. This in turn requires the Tribunal to consider the matters discussed below[3], which are as set out in subsection 117(4) of the Act:
[3] The Tribunal is required to give “overt consideration” to relevant factors listed in subsection 117(4) of the Act: Tyagi & Meares (SSAT Appeal) [2008] FMCAfam 886.
(4) In determining whether it would be just and equitable as regards the child, the carer entitled to child support and the liable parent to make a particular order under this Division, the court must have regard to:
(a)the nature of the duty of a parent to maintain a child (as stated in section 3); and
(b)the proper needs of the child; and
(c)the income, earning capacity, property and financial resources of the child; and
(d)the income, property and financial resources of each parent who is a party to the proceeding; and
(da) the earning capacity of each parent who is a party to the proceeding; and
(e)the commitments of each parent who is a party to the proceeding that are necessary to enable the parent to support:
(i)himself or herself; or
(ii)any other child or another person that the person has a duty to maintain; and
(f)the direct and indirect costs incurred by the carer entitled to child support in providing care for the child; and
(g)any hardship that would be caused:
(i)to:
(A)the child; or
(B)the carer entitled to child support;
by the making of, or the refusal to make, the order; and
(ii)to:
(A)the liable parent; or
(B)any other child or another person that the liable parent has a duty to support;
by the making of, or the refusal to make, the order; and
(iii)to any resident child of the parent (see subsection (10)) by the making of, or the refusal to make, the order.

The nature of the duty of a parent to maintain a child (as stated in section 3 of the Act)

Section 3 of the Act states that it is the primary duty of a parent to maintain the child and this has priority over nearly all other commitments.
In this case the Tribunal is not aware that either parent has a responsibility to any other child or person.

The proper needs of the child

In relation to the proper needs of the child, regard must be had to the manner in which the child is being, and in which the parents expected the child to be, cared for, educated or trained, and any special needs of the child (subsection 117(6) of the Act).
The Tribunal was not made aware that the parents expected [Child 1] to be cared for, educated or trained in a particular way or that she had any special needs. Ms Ruffer did not establish the costs for supporting [Child 1]. The Tribunal is satisfied it is therefore appropriate to calculate the costs of her needs by reference to the Costs of the Children Table (provided for in section 155 of the Act).

The income, earning capacity, property and financial resources of the child

The Tribunal is satisfied that [Child 1] has no income, earning capacity, property and financial resources which should be taken into account for the purpose of child support.

The income property, financial resources and earning capacity of each parent

The Tribunal has already considered in detail the income, property and financial resources of both parents.
Ms Ruffer is primarily concerned that Mr Ruffer is not being transparent about the income he has earned. She also told the Tribunal Mr Ruffer had not paid child support even when it was proven he had substantial savings. Mr Ruffer is primarily concerned that his child support is based on his income only during his time in employment.
While Mr Ruffer is not currently working he has told the Tribunal he was made redundant by his employer and this is supported by the evidence he provided which shows he was terminated on 9 July 2019. The Tribunal is satisfied that the earning capacity criteria (set out in subsection 117(7B) of the Act) are not met in relation to either parent.

Any hardship that would be caused

The Tribunal has found that for the period from 1 July 2017 to 1 April 2018 Mr Ruffer had access to income, property and financial resources equivalent to a person with an income of $361,398. The Tribunal notes from 10 December 2016 to 10 February 2018 Mr Ruffer was being assessed on an income of $229,019, the same income from 11 February 2018 to 9 March 2018 and then from 10 March 2018 to 3 April 2018 he was being assessed on an income of $232,854. The Tribunal is satisfied that Mr Ruffer was not being significantly under-assessed during this period as his income was already above the maximum amount in the Costs of the Children Table. The Tribunal is also satisfied that using his higher income for this period would not render the assessment unfair.
The Tribunal has also found that from 2 April 2018 to 16 October 2018 Mr Ruffer had access to income, property and financial resources equivalent to that of a person earning approximately $70,000. During this period the annual rate of child support payable by Mr Ruffer would be approximately $10,300. From 17 October 2018 to 14 July 2019 Mr Ruffer had access to income, property and financial resources equivalent to that of a person earning approximately $159,680. Using this amount and the income for Ms Ruffer as used in the administrative assessment, the annual rate of child support payable by Mr Ruffer would be approximately $21,875. Mr Ruffer has not worked since 14 July 2019. If the Tribunal was to use an income of $0 for Mr Ruffer and the income for Ms Ruffer as used in the administrative assessment, the annual rate of child support would be approximately $427.
Mr Ruffer lists his total estimated household expenditure at $56,160 per year. His total personal expenditure is $82,524 per year which includes $65,520 a year in income tax (based on an annual salary of approximately $184,600) and child support of $15,964 a year.
Mr Ruffer told the Tribunal he did not believe it was equitable for him to pay child support based on an income he was no longer earning. He accepted he should pay child support even when he was not working but the level of child support should be based on his limited income. He said he now had little savings and was facing difficult times financially.
Ms Ruffer said she felt Mr Ruffer was exaggerating his current financial situation and was now drawing down on additional payments made to his mortgage account while he was working. She said Mr Ruffer did not ever seem to be short of money. She said his circumstances were directly related to the way he had chosen to work with periods of high paid employment followed by times when he was unemployed.
Ms Ruffer lists her total average income at approximately $87,200 per year which includes her salary, rental income and family tax benefit payments but not the child support of $9,152 a year which she states she currently receives. Her total average weekly expenses equal $95,836 per year but the Tribunal notes this includes an expense for holidays of $10,400 per year. Her total personal expenditure is approximately $25,515 per year.
Ms Ruffer told the Tribunal her total expenses were higher than her total income because the amount she received in child support was unpredictable. She said each year she had to “wing it” and would accrue a large credit card debt which would be repaid from her tax refund.
The Tribunal notes that in her application for a change of assessment Ms Ruffer requested the annual rate of child support be increased to $24,759 from 4 April 2018. This is the date from which the estimate of income of $0 made by Mr Ruffer was applied to the assessment.
It could be argued that given the lump sum payment Mr Ruffer received on 1 April 2018 it would be unfair to base the assessment on an estimate of income of $0 from 4 April 2018. The Tribunal has also found that from 2 April 2018 Mr Ruffer had access to income, property and financial resources equivalent to that of a person earning approximately $70,000. The Tribunal notes in evidence that Ms Ruffer was first notified of the estimate of income of $0 submitted by Mr Ruffer in correspondence from the Child Support Agency dated 31 May 2018. Ms Ruffer made her application for a change of assessment on 29 June 2018.
The Tribunal is of the broad view that retrospectively changing entitlements should ordinarily be avoided without compelling reasons. In this case Ms Ruffer made her application for a change of assessment only a few weeks after becoming aware the estimate of income submitted by Mr Ruffer had been accepted by the Child Support Agency. The Tribunal considers Ms Ruffer acted in a timely manner and, as Mr Ruffer was being under-assessed, the Tribunal finds it just and equitable to commence the departure determination from 4 April 2018 rather than the date of application.
After considering all the circumstances of this case the Tribunal proposes to make the following determination:
·     for the period from 4 April 2018 to 16 October 2018 the adjusted taxable income for Mr Ruffer is varied to $70,000;
·     for the period from 17 October 2018 to 14 July 2019 the adjusted taxable income for Mr Ruffer is varied to $159,680; and
·     for the period from 15 July 2019 until a terminating event occurs for the child [Child 1] the adjusted taxable income for Mr Ruffer is varied to $0.
The Tribunal has calculated the annual rate of child support from 29 June 2018 to 16 October 2018 would be approximately $10,300. This rate would also apply from 4 April 2018 under the proposed determination. The Tribunal acknowledges that for the 28 weeks from 4 June 2018 Mr Ruffer will be required to meet a child support liability that does not reflect his actual income. The Tribunal has based its decision on his capacity to meet other expenses not related to child support as a result of the financial resources available to him at the time. The Tribunal is satisfied this is a fair outcome and will not cause hardship to Mr Ruffer or Ms Ruffer.
From 17 October 2018 to 14 July 2019 the Tribunal has calculated the rate of child support would be $21,875. This is reflective of the income Mr Ruffer was earning at that time and after taking account of his expenses as set out in his Statement of Financial Circumstances the Tribunal is satisfied this will not cause hardship to Mr Ruffer. The Tribunal is also satisfied this determination will not cause hardship to Ms Ruffer.
From 15 July 2019 until [Child 1] is no longer an eligible child of the assessment the Tribunal has calculated the rate of child support would be $427. The Tribunal accepts that Ms Ruffer’s expenses exceed her income and this determination is likely to cause Ms Ruffer some hardship. Given Mr Ruffer has not worked for several months and has stated he now has little savings the Tribunal is of the view he currently has limited capacity to support [Child 1]. The Tribunal considers the determination from 15 July 2019 is appropriately aligned with the income, property and financial resources available to Mr Ruffer. On balance, considering the circumstances of both parents, the Tribunal is satisfied this determination is just and equitable.
The Tribunal decided to end the determination at the point when a terminating event occurs in relation to [Child 1] as at the date of the hearing Mr Ruffer was not working and had no immediate prospects of employment. The Tribunal notes it is likely [Child 1] will no longer be an eligible child of the assessment once she turns 18 years of age on 8 November 2019.

Issue 3 – Is it otherwise proper to make a particular determination?

The third step is to consider whether it would be otherwise proper to make a particular departure determination in accordance with sub-subparagraph 98C(1)(b)(ii)(B) of the Act. Subsection 117(5) sets out the matters that must be considered when deciding whether it would be “otherwise proper” to make a departure determination. It focuses on the balance of support carried between the parents on one hand and the taxpayer on the other. It is appropriate for children to be primarily supported by their parents rather than by government assistance. The Tribunal must consider whether the level of a benefit, in particular family tax benefit, received by the party caring for the children may be affected by the level of child support.
The Tribunal finds that Ms Ruffer receives family assistance in respect of the children. The Tribunal is satisfied that its determination will result in an appropriate apportionment of financial responsibility between the parents and the community and would be otherwise proper.

DECISION

The Tribunal sets aside the decision under review and, in substitution, decides that:

for the period from 4 April 2018 to 16 October 2018 the adjusted taxable income for Mr Ruffer is varied to $70,000;

for the period from 17 October 2018 to 14 July 2019 the adjusted taxable income for Mr Ruffer is varied to $159,680; and

for the period from 15 July 2019 until a terminating event occurs for the child [Child 1] the adjusted taxable income for Mr Ruffer is varied to $0.