Runcie and Heywood (Child support)

[2021] AATA 998

Runcie and Heywood (Child support) [2021] AATA 998 (9 February 2021)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2020/SC019708

APPLICANT:  Mrs Runcie

OTHER PARTIES:  Child Support Registrar

Mr Heywood

TRIBUNAL:Member C Breheny

DECISION DATE:  09 February 2021

DECISION:

The decision under review is affirmed.

CATCHWORDS

CHILD SUPPORT – departure determination – costs of education - manner expected by both parents - cost of maintaining the children are significantly affected – a ground for departure established - financial resources of the liable parent – not just and equitable to depart – decision not to depart - 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. Mrs Runcie and Mr Heywood are the separated parents of [Child 1], born June 2009 and [Child 2], born June 2011. A child support case has been registered with Services Australia – Child Support (Child Support) since 13 August 2013 and has been registered for collection from 27 February 2015. Mr Heywood is assessed as liable to pay child support to Mrs Runcie on the basis that she has 77% care of the children.

2. Most recently Mr Heywood’s child support liability was set by a departure determination made by this Tribunal (differently constituted) on 7 February 2018, following review of a change of assessment application lodged by Mrs Runcie on 21 June 2016. Mrs Runcie requested an increase in child support payments from 1 July 2015 onwards. The Tribunal determined that Mr Heywood’s adjusted taxable income was set at $150,878 for the period 21 June 2016 to 31 December 2019. This resulted in an annual child support liability of $18,808.

3. From 1 January 2020 Mr Heywood’s child support liability reduced to ‘nil’ on the basis of a 2018/19 derived income of $19,996 for Mr Heywood and Mrs Runcie’s 2018/19 taxable income of $9,815.

4. On 12 December 2019 Mrs Runcie contacted Child Support to lodge a further change of assessment application seeking an increase in Mr Heywood’s child support liability from 1 January 2020 onwards, because Mr Heywood should contribute to private school fees for the children and the administrative assessment did not adequately reflect Mr Heywood’s income, financial resources and earning capacity.

5. On 10 March 2020 decision maker (DM) Bray decided that although a ground for departure had been made out in respect of the private school fees, it was not just and equitable to change the administrative assessment. On 4 April 2020 Mrs Runcie lodged an objection to DM Bray’s decision and on 22 July 2020 a Child Support objections officer disallowed Mrs Runcie’s objection.

6. On 21 August 2020 Mrs Runcie applied to the Social Services and Child Support Division of the Administrative Appeals Tribunal for an independent review of the objection decision. A hearing into Mrs Runcie’s application for review was held on 9 February 2020. Both Mrs Runcie and Mr Heywood attended the hearing by conference telephone and gave evidence on affirmation. A representative of the Child Support Registrar (the Registrar) did not attend the hearing. 

7. I had before me the Statement and Documents provided by Child Support pursuant to subsection 37(1) and section 38AA of the Administrative Appeals Tribunal Act 1975 received on 4 September 2020 and 19 January 2021 respectively and numbered 1–341. I also considered additional documents provided by Mrs Runcie (marked A1–A95) and Mr Heywood (marked B1–B65) as a result of written directions issued on 3 November 2020.

LEGISLATIVE FRAMEWORK AND ISSUES

1. The legislation relevant to this review is contained in the child support law, in particular the Child Support (Assessment) Act 1989 (the Act) and the Child Support (Registration and Collection) Act 1988.

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 takes into account factors such as the number of children, the level of care provided and the income of each parent. Either the liable parent or the carer entitled to child support may apply to the Registrar for a determination to depart from the child support administrative assessment under Part 6A of the Act (section 98B). Section 98C provides that the Registrar may make a determination to depart from the formula assessment and establishes a three step process. The Registrar, and the Tribunal standing in place of the Registrar, must be satisfied that a ground for departure exists and that it is just and equitable and otherwise proper to make a departure determination.

3. The grounds for departure from an administrative assessment of child support are those set out in subsection 117(2) of the Act. If satisfied that a ground or grounds exist, 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.

4. In the legislation, each ground for departure is prefaced by the words, “in the special circumstances of the case”. Therefore, when considering whether one (or more) ground exists, the Tribunal must be satisfied that there are “special circumstances” in the case. The phrase “special circumstances of the case” is not defined in the Act. The Full Family Court, in the case of Gyselman and Gyselman,[1] stated that:

   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 administrative formula result in the ordinary run of cases.

   [1] [1992] FLC 92–279.

5. Subsection 98C(3) of the Act provides that subsections 117(4) to (9) of the Act apply and the Tribunal must consider these when deciding whether it would be just and equitable or otherwise proper to make the departure decision.

CONSIDERATION

A ground for departure

1. In this case, Mrs Runcie asked for a departure from the administrative assessment on the basis that the assessment does not correctly reflect the parties’ respective income, property, financial resources and earning capacity (also known as “Reason 8A and Reason 8B”) and that Mr Heywood had capacity to contribute to private school fees (also known as “Reason 3”).

Private school fees

1. Subparagraph 117(2)(b)(ii) of the Act provides that a ground for departure exists, where in the special circumstances of the case, the costs of maintaining the child are significantly affected because the child is being cared for, educated or trained in the manner that was expected by his or her parents.

2. [Child 1] and [Child 2] attend [School 1]. Mrs Runcie provided evidence that school fees and SEDSO Levy amounted to $2,703 in 2020 (folio 226). These fees are for three children, as Mrs Runcie’s stepson also attended [School 1] in 2020. There are additional costs for excursions and other school programs, which total $1,184 for [Child 1] and [Child 2]. Mrs Runcie stated that she also purchased one iPad for the children in late 2019 for $586. The second iPad was purchased by the children’s grandmother.

3. Based on this evidence I find that in 2020 education related expenses for [Child 1] and [Child 2] amounted to $3,572.[2]

   [2] $1,802 (fees for two children) + $1,184 (extra costs) + $586 (iPad)

4. Evidence provided by Mrs Runcie for the 2021 school year (folio A95) indicates that school fees and SEDSO Levy for the family are $1,712 plus $1,076, a total of $2,788. Extra costs amount to $377 per student, plus an additional $541 for [Child 1]’s “Year 6” expenses. The school fees and levy are for two children only in 2021, as Mrs Runcie’s stepson now attends high school.

5. I therefore find that in 2021 education related expenses for [Child 1] and [Child 2] amounted to $4,083.[3]

   [3] $2,703 (fees for two children) + $754 (extra costs for two children) + $541 (Year 6 costs for [Child 1])

6. Mrs Runcie submitted that both parents always intended for the children to be educated in a private school environment. She noted that Mr Heywood signed the enrolment form for [Child 1], when she started at a Catholic primary school in 2015.

7. Mrs Runcie moved to the [Suburb 1] of New South Wales in 2016 and, as a result, the children were enrolled in a new school. Mr Heywood did not sign the new enrolment forms.

8. Mr Heywood stated that he initially agreed that [Child 1] should attend a private school. He did not agree however that the children should attend a private school once Mrs Runcie moved to the [Suburb 1], as the area has very good public schools and he could no longer afford to pay for private school fees.

9. I note Mr Heywood wrote in his response to Mrs Runcie’s objection (folios 231/232):

   Reason 3; this is not fair and equitable, as I informed [Mrs Runcie] prior to enrolling the children at [School 2] that I was unable to afford school fees….

   Circumstances have changed and I cannot afford to pay for them to attend.

10. In view of the evidence before me I am satisfied and I find that Mrs Runcie and Mr Heywood intended for the children to be educated privately. [Child 1] was enrolled in a private school in 2015 and there appears to be no reason why [Child 2] should not also have been enrolled in a private school in due course, i.e. there seems to be no reason why the children should have attended separate schools.

11. A ground for departure cannot exist, however, unless I am further satisfied that “in the special circumstances of the case, the cost of maintaining the child is significantly affected” because of the child’s education. The term “special circumstances” requires that there is something special or out of the ordinary apparent in Mrs Runcie’s case. 

12. As noted above the fees and associated education costs were $3,572 (or about $68 per week) in 2020 and $4,083 (or about $78 per week) in 2021.

13. Mrs Runcie indicated on her Statement of Financial Circumstances (folio A3) that she earns about $200 per week and is largely reliant on financial support from her husband and child support from Mr Heywood. As at 1 January 2020, Mr Heywood’s child support liability is assessed as ‘nil’ (folio 72).

14. In view of this evidence I am satisfied that the costs of educating the children for the 2020 and 2021 academic years are of such magnitude as to significantly affect the costs of maintaining them, and that special circumstances exist as those fees are not taken into account in the administrative assessment. I therefore find that the cost of the children’s education at [School 1] provides a ground to depart from the administrative assessment.

15. Mr Heywood is concerned that he cannot afford to pay the private school fees and in this regard I note the case of Wright[4] in which Riethmuller FM (as he was then) considered how this Tribunal ought to deal with the payment of private school fees where the children were enrolled in private schools but the father subsequently suggested he could no longer meet those fees. It relevantly states:

    Secondly, with respect to school fees, the Tribunal accepted that the children had been enrolled in private schools for many years.…

    The real issue in the case was whether or not given the current financial circumstances of the Father, he could continue to meet those school fees….

    At present the school fees are clearly an expense of the Wife as the Husband has advised the school he will no longer accept liability.  Therefore the fees should be taken up as an expense of caring for the children, in determining the costs of maintaining the children. Once it has determined the costs of the children the Tribunal should then turn to consider the capacity of the Appellant to contribute to those costs along with the capacity of the Respondent to contribute to those costs….

    [4] Wright & Wright & Anor(SSAT Appeal) [2009] FMCAfam 979

16. In accordance with this approach, I will turn to the capacity of each parent to contribute to these costs later in these Reasons.

17. Subparagraph 98C(1)(b)(i) of the Act is satisfied if “one, or more than one” of the grounds for departure are established. Having found one ground for departure established, I deem it not necessary to determine whether any of the other grounds relied upon by the parties has been met. The issues raised by the parties in respect of the other grounds will be considered when determining whether it would be just and equitable to make a departure determination.

Just and equitable 

1. Subparagraph 98C(1)(b)(i) of the Act is satisfied if “one, or more than one” of the grounds for departure are established. Having found a ground for departure is established in relation to the private school fees, I must now determine whether it would be just and equitable to make a departure determination. To do so I must have regard to a number of factors set out in subsection 117(4) of the Act, such as the needs of the children, the parents’ commitments and any hardship that would be caused by departing or not departing from the formula.

Mr Heywood

Income and financial resources

1. Mr Heywood has been studying for a Bachelor [degree] since 2016. He completed the degree in 2019. He enrolled in a two year Master [degree] in the 2020 academic year (folio 242) and expects to complete the degree at the end of 2021.

2. He provided a list of jobs that he had applied for in late 2019/early 2020 (folios 162, 163 and 247), but noted that he was not a qualified [Occupation 1] as yet. He needed to either complete two years of supervised practice or a Master [degree] (folio 163).

3. In July 2020 Mr Heywood was able to secure employment with [Company 1] as a provisional [Occupation 1]. Payslips provided by Mr Heywood indicate that he works part-time, 30.4 hours per fortnight and his gross earnings are $1,230.77 per fortnight or $32,000 per annum (folios B50–B60).

4. Mr Heywood submitted bank statements for [Bank 1] account number xxxx0329 from late November 2019 to mid-February 2020, when that account was closed (folios B61–B65). He opened an account with the [Bank 2] in early February 2020 (folio B23–B39).

5. The statements indicate that prior to 12 May 2020 only small cash deposits were made into Mr Heywood’s account, a total of $1,400. From 12 May 2020 Mr Heywood received jobseeker payments of $1,311.10 per fortnight. Jobseeker payments ceased in June 2020, as Mr Heywood had been granted parenting payment from 11 June 2020 (folio 237).

6. Salary payments from [Company 1] commenced on 31 July 2020 and parenting payments ceased on 13 August 2020 (folios B28/29). Mr Heywood also received two lump sum family tax benefit payments ($4,074.73 and $4,282.57) on 6 October 2020 (folios B33/34) and two child care subsidy (CCS) payments on 1 September 2020 and 21 October 2020 (folios B30 and B36).

7. I have calculated that Mr Heywood’s financial resources for 2020 (January to December 2020) amounted to $34,674.05 based on the deposits into his bank account.

Earning capacity

1. Mrs Runcie submitted that Mr Heywood had far greater earning capacity than he currently exercised. She indicated on her change of assessment application form that Mr Heywood was capable of working full time and could earn $150,000 or more per annum (folio 100).

2. Mr Heywood stated that Mrs Runcie was aware that he wanted a career change from his previous work in [Industry 1]. He subsequently enrolled in a Bachelor [degree] and is currently studying for the Master [degree], which he will complete at the end of 2021 (folio 235).

3. The relevant legislative provisions for consideration of a parent’s earning capacity are provided for in subparagraph 117(2)(c)(ib) and also in subsection 117(7B) of the Act. Essentially the provision restricts the circumstances in which a person’s earning capacity can be used as a basis to depart from a formula assessment.

4. There are three essential matters to be considered in determining whether the administrative assessment should be departed from on the grounds of earning capacity. In simple terms they can be explained as follows:

   ·the parent did not work despite ample opportunity to do so, reduce their hours of work or change their occupation, industry or working pattern; and

   ·the parent’s decision not to work despite ample opportunity to do so or to reduce their hours of work or change their occupation, industry or working pattern was not justified because of caring responsibilities or their state of health; and

   ·the parent has not demonstrated that it was not a major purpose of their decision not to work despite ample opportunity to do so or to reduce their hours of work or change their occupation, industry or working pattern to affect the administrative assessment of child support.

   All three of the above criteria must be met before a change of assessment can be made to take into account whether the parent has a greater earning capacity.

5. In this case, the evidence contained in the previous Tribunal decision of 7 February 2018, indicates that Mr Heywood’s 2013/14 taxable income was $154,342 and the 2014/15 taxable income was $150,878 (folio 56). The 2015/16 taxable income was $83,700 and in 2016/17 Mr Heywood’s taxable income reduced to $17,475, made up of parental leave pay and parenting payment (folio 52). Mr Heywood has not lodged a tax return since 2016/17.

6. Mr Heywood stated that he has not worked in [Industry 1] for some years now. He initially commenced his studies in 2015 and was also working for his wife’s business on [a] project. He stopped work in June 2016 and became full-time carer for his son, [Child 3] (born June 2016). He told Child Support in March 2020 that he was definitely not working for his wife’s business, as her work now did not require a second person (folio 189).

7. Mrs Runcie submitted that Mr Heywood continued to work in his wife’s business and continued to earn a salary, probably at least until March 2020. He only opened a new bank account (with [Bank 2]) in February 2020, after he became aware of her change of assessment application, possibly to hide his income.

8. I note that copies of Mr Heywood’s previous bank statements from early October 2019 to the beginning of February 2020 (folios 110–113) do not show any wages/salaries being deposited into his account, however there are a number of a small cash deposits.

9. In this case, I do accept that Mr Heywood reduced his working hours to below full time and changed his industry (from [Industry 1] to a [Occupation 1] student) in 2016. Based on the evidence, I therefore find that paragraph 117(7B)(a) of the Act is satisfied.

10. I have no evidence before me that Mr Heywood’s decision to change his work was based on medical grounds. I note Mr Heywood stated that he was the main care provider for his young son and he also had increased care of [Child 1] and [Child 2] and thus his decision about his work arrangements was justified by his caring responsibilities (folio 234).

11. In contrast, Mrs Runcie submitted that Mr Heywood stated in March 2016 that “his employer was flexible in terms of the hours of his job” and as long as outcomes are delivered in a timely manner the employer “does not mind which hours I work”. He therefore could have continued to work despite his caring responsibilities.

12. I note that Mr Heywood has been a full-time student since 2016. He completed his Bachelor [degree] in 2019 and commenced full-time study for his Master [degree] in 2020. These studies also require a significant time commitment and as such I do not find that Mr Heywood’s decision to cease work and instead to study full-time is justified by his caring responsibilities and this means paragraph 117(7B)(b) of the Act is also satisfied in this case.

13. As noted, the third criterion in relation to a person’s earning capacity represents a rebuttable presumption. The onus of proving a major purpose for the decision about their work is on the person who made the choice and “If the Tribunal is not satisfied one way or the other, the person with the onus fails.”[5]

    [5] Carlson & Acuff & Anor (SSAT Appeal) [2010] FMCAfam 677, at [68]

1. Mr Heywood contended that the main reason for changing his work arrangements was that he was miserable in his old career and couldn’t bear to work in [Industry 1] for the rest of his life (folio 235). He wanted a career change. Mr Heywood stated that he that he was trying to find employment after he completed his undergraduate studies, but the COVID-19 pandemic made this extremely difficult.

2. I note that the previous Tribunal (decision of 7 February 2018) found that Mr Heywood had additional earning capacity, but considering his circumstances from January 2020 onwards, I will accept that Mr Heywood made genuine attempts to seek employment in his chosen field and actually managed to secure part-time work as a probationary [Occupation 1] in July 2020. He was also successfully accepted into the Master’s degree program at [University 1].

3. Based on the evidence before me I therefore find that Mr Heywood demonstrated to my satisfaction that it was not a major purpose of his decision to leave employment to avoid his responsibility to pay child support, but rather he wanted to change his career and is actively pursuing employment in his new career. This means paragraph 117(7B)(c) of the Act does not apply in respect of Mr Heywood’s circumstances.

4. As all three criteria provided for in subsection 117(7B) of the Act are not met, I will not consider Mr Heywood’s earning capacity further in relation to this review.

Current financial circumstances

1. Mr Heywood provided a Statement of Financial Circumstances (folios B1-B9). He noted a weekly income of $496 for himself and an income of $750 for his partner (total family income of $1,246 per week). He listed total weekly expenses of $2,375 and stated that he and his wife could meet all of their financial commitments.

2. When asked how this was possible, given an apparent weekly shortfall of $1,129, Mr Heywood initially suggested that they were “living off his wife’s redundancy payments”. He provided a letter from [Company 2] indicating that Mrs Heywood’s employment contract was terminated on 28 July 2020 (folio B12). The letter does not indicate the amount of Mrs Heywood’s redundancy payout, so I am unable to verify this information.

3. Mr Heywood then stated that he probably overestimated his “education expenses” ($263 per week or $13,676 per year). He said that the amount indicated on the budget form included his study fees. He does not, as yet, repay those fees. They will be accumulating in his HELP debt. His other education expenses would amount to no more than $20 per week.

4. Mr Heywood also said that his wife recently commenced a new job (in January 2021), which enabled her to pay for all expenses not covered by his wages.

5. I note that Mr Heywood’s bank statements show that he recently (on 26 October 2020) commenced paying the rent for the family home (folio B36). It is difficult to see how this might be sustainable in the long-term however, as rent payments are $1,190 per fortnight, but Mr Heywood’s net wages only amount to $1,108 per fortnight (folio B59).

6. It is more likely that, for the most part, Mr Heywood relies on financial support from his wife and uses his wages for incidental expenses, as needed. Bank statement show withdrawals for groceries, petrol, chemist, gym fees and other smaller expenses.

Mrs Runcie

Income and financial resources

1. Mrs Runcie works part time as a [Occupation 2] for her father’s business. She has been working for her father for the past five years. Her 2018/19 taxable income was $9,815 (folio A12) and her 2019/20 taxable income was $5,698 (folio A16).

2. Child Support records further indicate that Mrs Runcie’s taxable income in 2017/18 was $5,380, in 2016/17 it was $11,940 and in 2015/16 it was $23,160 (folio 279). I note these taxable incomes were below the statutory self-support amount and thus did not affect the child support assessment.

3. Mr Heywood submitted that Mrs Runcie had access to a company car, which she used for private purposes and she also had access to a business credit card. These additional benefits would increase her taxable income.

4. Mrs Runcie agreed that she had access to the business credit card and she used it to pay for petrol for the company car and to purchase printer ink. As a [Occupation 2] she was frequently copying [documents] and this used a lot of ink.

5. Mrs Runcie provided her personal credit card statements for the period January 2020 to November 2020 (folios A31–A71). The card appears to be regularly used for various expenses, including petrol and groceries (e.g. folio A57). There seems no reason why Mrs Runcie would use the business credit card for private purchases and I accept Mrs Runcie’s evidence that she uses the business credit card for business purposes only.

6. Mrs Runcie acknowledged that she had access to the company car and she would use the car to drop off or pick up the children from school or Mr Heywood’s home, if she was working in the area. She also agreed that in June 2020 she had to use the company car for a longer trip as her own car had broken down, but that was a one-off occurrence. At most, the private use of the company car would amount to no more than 10% of the total kilometres travelled.

7. I note substantial private use of a company vehicle by an employee may attract fringe benefit tax, but there is no fringe benefit tax component identified in Mrs Runcie’s tax returns. I also do not have any evidence as to the make and model of the company car or the number of kilometres that may be travelled for private purposes.

8. The information provided by the Australian Taxation Office indicates the taxable value of a car fringe benefit can be calculated by the “statutory formula method”, which applies regardless of kilometres travelled. The formula provides that the taxable fringe benefit is 20% of the car’s base value,[6] i.e. the taxable fringe benefit for private use of a car valued at $30,000 is $6,000. I note that, even if I were to add this amount to Mrs Runcie’s taxable income, her income would not exceed the statutory self-support amount (being $25,575 per annum in 2020) and would not affect the child support assessment.

   [6] ato.gov.au, Fringe benefit tax – a guide for employers

9. Based on the evidence before me, I have concluded that Mrs Runcie does not have any other source of income and I am therefore satisfied that Mrs Runcie’s income and financial resources are adequately represented by her annual income tax returns.

Earning capacity

1. Mr Heywood contended that Mrs Runcie has greater earning capacity. She is a qualified [Occupation 3] and she could work full time. Both children are at school and she could work at least 30 hours per week now. She could earn a base salary of (at least) $73,000 per year, as a qualified [Occupation 3] (folio 165).

2. Mrs Runcie stated that she ceased full-time employment after [Child 1] was born in 2009 and she ceased working as a [Occupation 3] after [Child 2]’s birth in 2011. Thus she has not worked in the [Occupation 3] field for over nine years now. Mrs Runcie also said that her father was getting older and he is not working full time in his business anymore, thus there is not a lot of work available for her to do in her father’s business.

3. I note that Mrs Runcie has been working part time since the birth of her last child (in 2011) and she ceased working as a [Occupation 3] at that time. This change in her working pattern occurred prior to the child support case being registered for collection in 2015 and indeed prior to any child support assessment being made.[7]

   [7] The child support case was registered on 13 August 2013

4. There has been no change in her circumstances since the child support case commenced and I thus cannot find that Mrs Runcie reduced her working hours or changed her occupation, industry or working pattern to affect the child support assessment. As such I do not consider that Mrs Runcie has greater earning capacity than she currently exercises.

Current financial circumstances

1. Mrs Runcie noted in her Statement of Financial Circumstances (folio A2–A9) that her income is about $200 per week. It was more ($750 per week) when she received
   jobkeeper payments. Her bank statements show that jobkeeper payments commenced in April 2020 (folio A23) and ceased in September 2020 (folio A28). Mrs Runcie also received family tax benefit payments until October 2020. These payments have now stopped as the family income is too high.

2. Mrs Runcie noted that her husband earns $1,650 per week (about $85,800 per annum). Thus the family income is about $1,850 to $2,400 per week, plus family tax benefit payments (prior to October 2020).

3. Mrs Runcie indicated weekly expenses of about $1,892 (folios A8/A9) for the family. This reduced to $1,802 per week as they recently refinanced their mortgage,[8] saving them about $90 per week.

   [8] Now $1,650 per month fixed rate plus $215 per month variable rate = $1,865 per month or about $430 per week

4. Mrs Runcie agreed that she relies on her husband for financial support and he pays for most of the household expenses. Mrs Runcie submitted that the family can just meet all financial commitments, but Mr Heywood ought to be making some payments to support his children.

The children

1. [Child 1] is now eleven years old and [Child 2] is nine years old. Both children attend [School 1]. As noted previously, education expenses amounted to $3,572 in 2020 and $4,053 in 2021. Mrs Runcie indicated education expenses amount to about $85 per week ($4,420 per year) for both children.

2. Apart from the private school fees, there appear to be no other out of the ordinary expenses for the children. There is no evidence that they have any income, property or financial resources relevant to my determination.

Otherwise proper

1. The requirement to consider whether it is “otherwise proper” to depart from the administrative assessment 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 or benefits (subsection 117(5) of the Act).

2. It is a prime objective of the child support legislation that parents should be obliged to support their own children to the extent of their real capacity, and that that obligation should not be unnecessarily abrogated to the public welfare system when the parents themselves have the capacity to maintain their children.

3. Mrs Runcie has been in receipt of Centrelink payments, which are affected by maintenance payments such as child support. Any increase to child support payable would result in an appropriate decrease in these payments. Such a result would be otherwise proper.

Conclusion

1. Section 98S of the Act describes the determinations that the Registrar, and the Tribunal standing in the shoes of the Registrar, may make if it decides to depart from the administrative assessment. It is open to the Tribunal to set a rate of child support payable or set some of the variables used in the administrative assessment formula (for example, vary one or both parents’ adjusted taxable income).

2. Based on the evidence provided by Mrs Runcie her necessary costs for the children were increased by their private school fees ($3,572 in 2020 and $4,053 in 2021). She submitted that Mr Heywood should contribute to those fees. She also noted that Mr Heywood had additional earning capacity and should pay child support.

3. Mr Heywood argued that he could not afford to pay for the school fees and he also told Child Support on 6 March 2020 that he would struggle to pay child support of $1,500 per annum, as he had no income (folio 189).

4. Mrs Runcie lodged her departure application on 12 December 2019, seeking an increase in child support payments from 1 January 2020. For the period commencing 1 January 2020, the rate of child support payable was based on a derived income of $19,996 for Mr Heywood and Mrs Runcie’s 2018/19 adjusted taxable income of $9,815. This resulted in a child support liability of ‘nil’.

5. I have found that Mr Heywood’s financial resources amounted to $34,672.05 in 2020, based on deposits into his bank account. I note however that most of this income was accrued from 12 May 2020 onwards, when Mr Heywood first received jobseeker payments.

6. Between 1 January 2020 and 30 June 2020 deposits into Mr Heywood’s bank account only totalled $5,502.15 (being mainly Centrelink payments, job seeker and parenting payment). Mr Heywood was only able to obtain employment from July 2020, that is in the current 20/21 financial year.

7. Thus at the time of Mrs Runcie’s application, Mr Heywood had no income and was solely reliant on his partner for financial support. I have further concluded that Mr Heywood has no additional earning capacity in the period under review.

8. It appears that, in this case, both parents rely heavily on their respective partners for  financial support and neither has the financial capacity to meet all of their children’s expenses, including the private school fees.

9. I appreciate Mrs Runcie’s submission that Mr Heywood should contribute to support his children, but I am not persuaded that Mr Heywood had sufficient financial resources or earning capacity to change the assessment from 1 January 2020 onwards. It is therefore not just and equitable to make a departure determination.

10. I have reached the same conclusion as the objections officer and affirm the decision under review.

DECISION

The decision under review is affirmed.