Rushmore and Rushmore (Child support)

[2019] AATA 5025

Rushmore and Rushmore (Child support) [2019] AATA 5025 (15 October 2019)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2019/BC016487

APPLICANT:  Ms Rushmore

OTHER PARTIES:  Child Support Registrar

Mr Rushmore

TRIBUNAL:Member J Thomson

Member K Buxton

DECISION DATE:  15 October 2019

DECISION:

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

• for the period 1 July 2018 to 30 June 2019, Mr Rushmore’s adjusted taxable income is varied to $123,654, and Ms Rushmore’s adjusted taxable income is varied to $62,105; and

• for the period 1 July 2019 to 30 June 2020, Mr Rushmore’s adjusted taxable income is varied to $109,200, and Ms Rushmore’s adjusted taxable income is set at $79,491.

CATCHWORDS

CHILD SUPPORT – departure determination – income, property and financial resources of both parents – a ground for departure established based on the incomes of both parents – 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

1. Ms Rushmore and Mr Rushmore are the parents of [Child 1], born 2007, [Child 2], born 2010, and [Child 3], born 2011 (the children). Until 5 December 2018, the recorded care percentages for the children were 74% to Ms Rushmore and 26% to Mr Rushmore. On 5 December 2018, there was a change in care with Mr Rushmore having 100% care of [Child 1] from that date, and Ms Rushmore recorded as having 0% care.

2. The administrative assessment of child support prior to 19 October 2018 required Mr Rushmore to pay an annual rate of child support of $nil to Ms Rushmore for the period 1 January 2019 to 30 November 2019, based on his 2017/18 declared income of $41,000, and Ms Rushmore’s 2017/18 adjusted taxable income of $54,557, based on three children in the 0 to 12 age category.

3. On 19 October 2018, Ms Rushmore applied to the Department of Human Services – Child Support (the Department) for a change of assessment on the grounds that Mr Rushmore’s income used in the administrative assessment at $41,000 was not an accurate reflection of his actual income, property and financial resources available to him for child support purposes, and that he had an unexercised earning capacity not reflected in the administrative assessment of child support.

4. Mr Rushmore cross applied on the grounds that Ms Rushmore’s income used in the administrative assessment at $54,557 was not reflective of her actual income, property and financial resources available to her for child support purposes, that she had an unexercised earning capacity not reflected in the administrative assessment, and that the costs of educating or training the child, [Child 1] in the manner intended by both parents significantly affected the cost of maintaining [Child 1].

5. On 31 January 2019, a Department decision maker, [Ms A], found Mr Rushmore’s income was not accurately reflected in the administrative assessment, making it unfair and a ground for departure established. [Ms A] also found the costs of educating [Child 1] in the manner intended by his parents significantly affected the cost of maintaining him, and a further ground for departing from the administrative formula was established. [Ms A] changed the assessment to provide that:

   ·From 1 January 2019 to 13 January 2019, Mr Rushmore’s adjusted taxable income is set at $132,638; and

   ·From 14 January 2019 to 31 December 2019, the annual rate of child support payable by Mr Rushmore to Ms Rushmore is set at $nil.

6. [Ms A’s] decision reflects that although the costs of maintaining [Child 1] were considered to have been significantly affected by the cost of educating him at [School 1]in [Town 1], determined at $4,555 for the 2019 academic year, after considering the rate of child support of $4,150 which would be payable by Mr Rushmore on an adjusted taxable income determined for him for the period 14 January 2019 to 30 November 2019 at $85,000, and Ms Rushmore’s income at $54,577, [Ms A] was satisfied Mr Rushmore’s income and financial resources were sufficient for him to meet this rate of child support without incurring hardship, but needed to consider whether it was fair to reflect a contribution to [Child 1’s] school fees by Ms Rushmore. After considering the respective parents’ incomes and financial positions, [Ms A] decided the just and equitable and otherwise proper outcome would be to set-off Mr Rushmore’s annual rate of child support of $4,555 payable to Ms Rushmore against any contribution by her to [Child 1’s] school fees, effectively relieving Ms Rushmore of the obligation to contribute anything to [Child 1’s] [School 1] fees, the responsibility for the payment of which remained with Mr Rushmore, but relieving him of the obligation of paying any child support to Ms Rushmore for the period of the 2019 academic year,14 January 2019 to 31 December 2019.

7. On 28 February 2019, Ms Rushmore objected to [Ms A’s] decision, and on 29 April 2019, a Department objections officer set aside [Ms A’s] decision and, in substitution, decided that for the period 1 January 2019 to 12 January 2019, Mr Rushmore’s adjusted taxable income should be set at $135,000 to reflect his income at that time, that for the period 1 January to 31 December 2019, the annual rate of child support payable by him to Ms Rushmore should be set at $nil, and for the period 1 January 2019 to 31 December 2019, Ms Rushmore should be required to pay an annual rate of child support of $2,000.

8. On 7 May 2019, Ms Rushmore applied to the Tribunal for review of the objections officer’s decision.

9. The Tribunal heard the matter on 15 October 2019. Both parents attended the hearing via conference telephone and gave affirmed evidence. The Tribunal had before it documentation provided by the parties which was admitted into evidence, the Department’s documents marked Exhibit 1, Ms Rushmore’s documents marked Exhibit A, and Mr Rushmore’s documents marked Exhibit B.

CONSIDERATION

1. In reaching its decision, the Tribunal has considered the affirmed evidence of both parents and the documentation contained in Exhibits 1, A and B.

The legislative framework

1. The rate of child support payable by a liable parent is usually based on an administrative assessment under Part 5 of the Child Support (Assessment) Act 1989 (the Act). A formula is used which takes into account variables including each parent’s adjusted taxable income for the last relevant year of income, the number of children and the level of care provided by each parent. The legislative intent is that the administrative formula will apply in the ordinary run of cases.

2. Part 6A of the Act allows for a departure from an administrative assessment (a process commonly known as a “change of assessment”). Under subsection 98C(1), a change of assessment can be made only if:

   ·a ground (or more than one ground) for departure exists; and

   ·departure from the administrative assessment would be:

   i) just and equitable as regards the children and each parent; and

   ii) otherwise proper.

3. Subsection 98C(2) of the Act provides that the grounds for departure are the same as those set out in subsection 117(2).

4. 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 range of determinations prescribed in section 98S of the Act, which include varying the rate of child support payable, the adjusted taxable income or the cost percentage for a child.

Income, financial circumstances and earning capacity

1. Subparagraphs 117(2)(c)(ia) and (ib) of the Act provide as a ground for departure:

   (c) that, in the special circumstances of the case, application in relation to the child of the provisions of this Act relating to administrative assessment of child support would result in an unjust and inequitable determination of the level of financial support to be provided by the liable parent for the child:

   (ia) because of the income, property and financial resources of either parent; or

   (ib) because of the earning capacity of either parent…

2. Subparagraph 117(2)(b)(ii) of the Act provides as a further ground for departure:

   (b) that, in the special circumstances of the case, the costs of maintaining the child are significantly affected:

   …

   (ii) because the child is being cared for, educated or trained in the manner that was expected by his or her parents;…

3. The words “in the special circumstances of the case” are not defined in the legislation. While it is not possible to define with precision the meaning of that term, 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 Tribunal will not interfere with the administrative formula result unless there is a special reason to do so. In Gyselman and Gyselman (1992) FLC 92–279, it was held that “special circumstances” were “facts peculiar to the particular case which set it apart from other cases”. The Tribunal’s approach to the interpretation and application of the particular grounds of subsection 117(2) must be guided by that qualification. The Tribunal will consider whether the application of the administrative assessment would result in an unjust and inequitable determination of child support payable, having regard to the evidence relevant to the parents’ financial positions.

Ms Rushmore’s evidence

1. The issues raised by Ms Rushmore at the hearing were:

   (a)  Mr Rushmore’s unexercised earning capacity resulting from his decision to reduce his normal rostered hours of work as [an occupation 1] at the [specified worksite] in the employ of [Employer 1], located some 20 minutes drive from [Town 1];

   (b)  the objections officer’s decision to require her to contribute the amount of $2,000 over the period 1 January 2019 to 31 December 2019 towards [Child 1’s] education costs at [School 1] [in Town 1]; and

   (c)  Mr Rushmore’s failure to disclose income derived by him from his extracurricular [specified various] business activities. She asserted he received cash payments for his services which was not reflected in his income tax returns, but she acknowledged that she had no direct evidence to support her allegations in this respect.

2. Ms Rushmore acknowledged that their eldest child, [Child 1], had left her care on 5 December 2018 to reside with Mr Rushmore while both parents were residing in [Town 1] but submitted there was no justification for Mr Rushmore taking time off work or reducing his normal rostered working hours at the [specified worksite] in order to care for [Child 1] because there were adequate after-hours care facilities available to Mr Rushmore in [Town 1], his partner, [Ms A], whom she said was residing with Mr Rushmore at his [Town 1] residence, was available to provide care for [Child 1], or alternatively, Ms Rushmore was available to provide care while Mr Rushmore was at work. She asserted that his motivation in reducing his hours of work was to reduce his income and, correspondingly, his child support liability.

3. Ms Rushmore also gave evidence that, whilst she and Mr Rushmore had mutually agreed that all three children would be privately educated at primary school level at [School 1] in [Town 1], she said it was agreed that the children’s secondary school education would be at public expense at the local state high school.

4. She acknowledged that the parents had mutually agreed that the children should attend [School 1] in [Town 1] for their primary education as they were satisfied that the school offered a higher standard of education than the local state schools, but she asserted that no decision was taken as to the children’s secondary education because [School 1] did not offer secondary education at the time she and Mr Rushmore decided to enrol the children at that school. At the end of the 2018 academic year she had removed all three children from [School 1] in anticipation of her move from [Town 1] to [Town 2] to take up residence with her new partner, and enrolled [Child 1] at the local [Town 2] State High School and [Child 2] and [Child 3] at the local state primary school.

5. During the course of discussions between the Tribunal and Mr Rushmore regarding [Child 1’s] secondary school education, Mr Rushmore acknowledged that he had unilaterally taken the decision to enrol [Child 1] at [School 1] in [Town 1] following [Child 1] coming to live with him from 5 December 2018, and that he was prepared to accept responsibility for the total costs of [Child 1’s] education at that school. The Tribunal therefore finds that Mr Rushmore has accepted full responsibility for the costs of [Child 1’s] private education at [School 1] in [Town 1], and does not require Ms Rushmore to contribute to those costs.

6. Ms Rushmore gave evidence that she notified Mr Rushmore in late December 2018 of her intention to relocate to [Town 2] to reside there with her current partner, and moved to [Town 2] on 18 January 2019.

Mr Rushmore’s evidence

1. Mr Rushmore failed to provide a Statement of Financial Circumstances (SOFC), despite being required to do so by the Tribunal. At the commencement of the hearing, the Tribunal addressed his failure to provide this document, despite the Tribunal informing him during the directions hearing and in writing of his ongoing obligation to provide full and frank financial disclosure, and of the potential adverse inference to be drawn if he did not comply.

2. Mr Rushmore’s evidence at hearing was that he was employed as [an occupation 1] in the employ of [Employer 1]. His payslip for the period 12 January 2019 to 18 January 2019 provided by the Department as part of Exhibit 1 records his position as [occupation 1], and reflects his gross weekly income for that period at $1,461.60 and his gross year-to-date earnings $74,893.65. He provided copies of his 2017/18 and 2018/19 PAYG summaries reflecting a gross income from his employment with [Employer 1] for those years of $137,025, and $123,654 respectively. He also provided a copy of his [Employer 1] payslip for the period 7 September 2019 to 13 September 2019 reflecting his year-to-date income of $13,447.43, and extracts of his 2017/18 and 2018/19 income tax returns reflecting his income and expenses relating to his other sources of income described as [specified business activities]. The Tribunal will comment further on these personal business activities later in these reasons.

3. Until 5 December 2018, when his son [Child 1] came to live with him, Mr Rushmore was working shift work at [Employer 1’s] [work] site on average twelve and a half hours a day, commencing at 6 am and finishing at 7 pm, three and a half days per week, including the nightshift, and undertaking overtime work when offered. His current partner, [Ms A], was also employed on an on-call casual basis at the same [work] site. Mr Rushmore gave evidence that he and [Ms A] commenced living together in his [Town 1] home from 29 January 2019. However, in an email dated 7 January 2019, forming part of the Department’s papers, Exhibit 1, [Ms A] records that she was at Mr Rushmore’s home on Wednesday 5 December 2018 at 4:55 pm when [Child 1] “turned up to the house unannounced on his pushbike”, and came to stay with Mr Rushmore on a permanent basis.

4. In response to Ms Rushmore’s assertion that it was not necessary for Mr Rushmore to alter his normal working hours in order to care for [Child 1], because [Ms A] was residing with him and available to provide care while Mr Rushmore was at work, Mr Rushmore pointed out that his and [Ms A’s] shifts at the [work] site often coincided, and she was employed on a casual/on-call basis which precluded any reliable prospect for being able to provide care while Mr Rushmore was completing his usual twelve and a half hour work shift. In any event, the Tribunal considers that it is not [Ms A’s] responsibility to provide care for [Child 1]. Mr Rushmore also said that, although there may have been afterhours school care facilities available to him in [Town 1], because he left home at 5:20 am to commence work at the [work] site, some 20 minutes driving time from his home, and did not return home until approximately 7:15 pm, conventional afterhours school care was not a practical option.

5. In response to questioning by the Tribunal, Mr Rushmore acknowledged that, prior to [Child 1] coming to live with him and his subsequent change in work pattern to accommodate his care arrangements for [Child 1], his income earning capacity was $135,000 per annum.

6. After [Child 1] came to stay with him on 5 December 2018, Mr Rushmore said he approached his employer, [Employer 1] to request a change in his twelve and a half hour day/night shift work roster pattern to an eight hour daytime shift only to allow him to be at home when [Child 1] returned from school. While these arrangements were being put in place, his took leave without pay from 5 December 2018 throughout the December/January school holidays until 23 January 2019, when his new daytime shift roster commenced, and [Child 1] returned to school at [School 1] , where Mr Rushmore had re-enrolled him on his own initiative for the 2019 academic year, and paid the school fees.

7. He said in evidence that he did offer to accept overtime work from [Employer 1] when it was available, but because of his limited skills, he was only able to secure a couple of hours work with minimal impact on his overall income. Ms Rushmore challenged this evidence, pointing out that his job description on his payslip records him as [an occupation 1 variant].

8. In the course of discussions with the Tribunal regarding his reduced income following his change from the twelve and a half hour day/night shift roster to the eight hour day shift roster as a consequence of [Child 1] returning to live with him, Mr Rushmore conceded his income from 5 December 2018 to 30 June 2019 would have been approximately $90,480.

9. Mr Rushmore gave evidence that [Ms A] moved into his [Town 1] home in February 2019. She ceased work at the [worksite] in or about March/April 2019 due to her pregnancy, and has been residing with him and [Child 1] at his home in [Town 1] with their new baby following the birth of the child on [date]. He acknowledged that [Ms A] is at home when [Child 1] returns from school.

10. Subsection 117(7B) of the Act provides, relevantly, that, when having regard to the earning capacity of a parent of a child, the Tribunal may determine that the parent’s earning capacity is greater than is reflected in his or her income for the purposes of the Act only if the Tribunal is satisfied that:

    (a)   one or more of the following applies:

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

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

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

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

    (i)the parent’s caring responsibilities; or…

11. The Tribunal finds that Mr Rushmore’s decision to change his normal working hours following his son, [Child 1], coming to live with him on 5 December 2018 was justified on the basis of his caring responsibilities for [Child 1]. Therefore the Tribunal will not considered any unexercised earning capacity as a result of Mr Rushmore’s changed working arrangements.

12. Mr Rushmore gave evidence that during his two rostered days off work, he devoted his time to his other personal income-earning activities. He said he conducted these business activities under the trading name of [business name], operating as a sole trader. He said he deployed his [specified vehicles and equipment] in the conduct of these businesses. Based on the evidence he gave, his [specified] business would appear to be the predominant income-generating business, involving extensive amounts of travel to [supply] to clients in the [Town 1] region and as far as [another region].

1. The limited extracts provided by Mr Rushmore from his business activities income tax return for the 2017/18 financial year recorded gross income $37,000 from his [specified business] activities, offset against expenses totalling $116,598 which included a depreciation item of $72,493, including his [Vehicle 1], for which he claimed 90% business use, and fuel and oil expenses of $13,767. He also claimed $3,167 registration fees and $10,417 in plant and equipment and truck repairs, resulting in a business loss of $79,303.

2. He gave evidence that he [produces a product] on a 5 acre section of his [size] acre property on which he resides in [Town 1]. The income tax business worksheet extract he provided for [this] business for the 2017/18 financial year recorded gross sales of $10,850 against expenses totalling $11,314, including deferred prior losses of $9,996, resulting in an overall loss of $464.

3. The business worksheet extract he provided for his [specified various] business activities for the 2018/19 financial year reflected gross income of $70,060 against expenses totalling $135,001, including, notably, motor vehicle depreciation of $62,213 on his [Vehicle 1], fuel and oil expenses of $17,640, registration, building repairs, plant and equipment and truck repairs totalling $33,071, with a resulting loss of $64,941.

4. In response to questioning by the Tribunal, Mr Rushmore acknowledged that the motor vehicle depreciation items in his business tax returns were non-expense items, and cumulative, and abnormally high. The Tribunal considers the depreciation items reflected in the income tax extracts for both the 2017/18 and 2018/19 financial years grossly inflated and should be added back to the gross sales income of the businesses. Mr Rushmore also conceded that he uses his [Vehicle 1] to drive to and from his work at the [work] site and for other personal use, and that some adjustment to the gross income was warranted to reflect more than the 10% personal use allocated in the business tax return. Mr Rushmore also conceded that the cost of maintaining these businesses had severely impacted on his financial circumstances, that he has already sold [another vehicle], and was considering liquidating the businesses entirely.

5. The Tribunal finds that none of Mr Rushmore’s businesses referred to above returned profits for the past two financial years, and that the only benefit in maintaining the businesses was to reduce his taxable income from his employment with [Employer 1] as [an occupation 1], and correspondingly, reducing his adjusted taxable income for child support purposes. The Tribunal will therefore not take his income and losses from his businesses into account in determining his income and financial resources available to him for child support purposes, and focus instead on his income from his employment as [an occupation 1] with [Employer 1].

6. Mr Rushmore’s evidence in that respect was that up until [Child 1] came to live with him on 5 December 2018, he was working twelve and a half hours per day, three and a half days per week day/night shift at an hourly rate of $35.70 plus attendance allowance of $100 per shift. He successfully applied to [Employer 1] for a transfer to the day shift to allow him to care for [Child 1] during the December 2018/January 2019 school holidays, and took some leave without pay between 5 January and 17 January 2019 until 23 January 2019 when his application for transfer to the day shift was approved, and he commenced working the day shift of eight hours, three and a half days per week at $34.54 per hour plus attendance allowance of $150 per shift, effective from that date. His payslip for the pay date 16 January 2019 reflects his weekly income for the period 5 January 2019 to 11 January 2019 at $1,261 with no attendance allowance; for the pay date 23 January 2019, covering the period 12 January 2019 to 18 January 2019 his payslip reflected his weekly income at $1,461 including attendance allowances, and his year to date gross income is recorded as $74,893.

7. Mr Rushmore provided copies of his [Employer 1] PAYG summaries for the 2017/18 and 2018/19 financial years, reflecting gross income of $137,025 and $123,654 respectively. He also provided a copy of his [Employer 1] payslip for the period 7 September 2019 to 13 September 2019 reflecting his year to date income at $13,447, however, his gross weekly payment and his attendance allowance rate were redacted, although a slightly increased hourly pay rate of $35.74 was reflected.

8. Using his year to date income for the period 1 July 2018 to 18 January 2019 reflected in his payslip for the period 12 January 2019 to 18 January 2019 at $74,893, and subtracting that income from his 2018/19 PAYG summary, results in a gross income for the period 23 January 2019 to 30 June 2019 of $48,761, which would be his income based on the reduced day shift contract terms and conditions to which he transferred, effective from 23 January 2019. The Tribunal considers it reasonable to assume Mr Rushmore’s employment terms and conditions will remain approximately the same for the 2019/20 financial year, and allowing for the slightly increased hourly rate of pay reflected in the redacted payslip he provided for the 7 September 2019 to 13 September 2019 period referred to above, annualising the gross income figure of $48,761 results in a gross annual income for the 2019/20 financial year of $109,188, rounded up to $109,200 for contingencies such as extra overtime, attendance allowance and fluctuations in the hourly pay rates.

9. The Tribunal has found Mr Rushmore’s income for the 2018/19 financial year was $123,654, and his income for the period 1 July 2019 to 30 June 2020 will be approximately $109,200.

Ms Rushmore’s evidence

1. The evidence provided by Ms Rushmore in her affirmed SOFC dated 18 May 2019, the copy of her  2018/19 income tax return and corresponding assessment notice for that financial year reflect her occupation as [an occupation 2] employed by [Employer 2] on a gross income of $62,465. In addition, she receives an annual government parent payment of $832, and rental from her former residence in [Town 1] of $250 per week. Her 2018/19 income tax return reports rental income for the period her [Town 1] property was rented in that year as $5,750, against expenses of $13,328, and a net loss of $7,587, resulting in a taxable income of $55,511. The Tribunal will add back the losses on her rental property, but allow the other deductions she claimed for compulsory work uniform expenses and donations totalling $360, resulting in a net taxable income of $62,105 for the 2018/19 financial year.

Is there a ground to depart?

1. Applying the child support calculator to the incomes of Mr Rushmore and Ms Rushmore for the 2019 year of $109,200 and $62,105 produces a result requiring Mr Rushmore to pay Ms Rushmore an annual rate of child support of $4,614.

2. The administrative assessment in place at the time of Ms Rushmore’s application for change of assessment on 19 October 2018 required Mr Rushmore to pay an annual rate of child support for the period 1 January 2019 to 30 November 2019 of $nil, based on his declared 2017/18 income of $41,000, and Ms Rushmore’s 2017/18 adjusted taxable income of $54,557 for three children in the 0 to 12 age category.

3. The Tribunal finds that incomes of Mr Rushmore and Ms Rushmore for the financial year 2018/19 at $109,200 and $62,105, respectively, are not accurately reflected in the administrative assessment, producing a rate of child support which is unfair, unjust and inequitable, making the case special and a ground for departure from the administrative assessment established.

Just and equitable

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

Ms Rushmore

1. As noted above, Ms Rushmore provided a SOFC setting out her income, occupation, assets and liabilities. She affirmed the contents of this statement at hearing to be true and correct. She confirmed that she returned to full time employment from 15 July 2019, and provided copies of her payslips reflecting her year to date gross income of $11,107 as at 21 August 2019, annualised to $79,491 which will be captured in her income tax return for the 2019/20 financial year together with any rental she receives on her [Town 1] property for that financial year. Her assets comprise the [Town 1] property valued at $280,000, bank savings totalling $1,200, [shares] valued at $2,490, a [motor vehicle] valued at $9,000, a [specified] bike valued at $800, household contents to a value of $8,000 and [another vehicle] valued at $14,000, resulting in total assets of $315,490. She reports superannuation to a value of $76,185, and total liabilities of $268,665 comprising the mortgage debt on the [Town 1] property of $233,720, loans from [her] bank and her family of $10,745 and $10,000 respectively, and credit card debts totalling $24,200. Ms Rushmore’s average weekly personal expenditure totalling $828 comprised income tax instalments of $165, mortgage payments of $290 in reduction of the [home loan] on her [Town 1] property, child support payable to Mr Rushmore of $38 and credit card repayments of $225.

2. Ms Rushmore resides with her partner and the children, [Child 2] and [Child 3], in subsidised rented premises in [Town 2] where her partner is employed as [an occupation] and entitled to receive subsidised rental accommodation. She lists total average weekly household expenses totalling $1,645, including rental payments on the family home in [Town 2]; her share of those expenses is $946 and her partner’s share, $699, the individual items of which were unremarkable. Both children are recorded as in Ms Rushmore’s 76% care, and attend the [Town 2] State School. None of the children have any identified special needs.

Mr Rushmore

1. Mr Rushmore did not provide a SOFC, in spite of being directed to do so by the Tribunal. However, during the course of the hearing, he provided details of some of his business-related assets, including [specified vehicles and equipment] as listed above. His application for change of assessment/special circumstances included in the Department’s documentation dated 15 December 2018 lists additional assets including his family home valued at $440,000, a [vehicle] valued at $14,000 and a motorbike valued at $1,500. He gave evidence of modest [bank] savings of $1,500. He said he is experiencing financial stress, and is in the process of disposing of his business-related assets to reduce his debt level.

2. He gave evidence of a mortgage debt on his [Town 1] property, but provided no details as to the amount of that debt. He reported debt to [a credit company] of $21,000 on [one vehicle], $50,000 debt to [another creditor] on his [Vehicle 1] and credit card debt totalling $29,000.

3. He resides with his current partner, [Ms A], their newly born child, and [Child 1], in respect of whom he is recorded as having 100% care, in his home in [Town 1]. As he did not provide a SOFC, no details of his average weekly household expenses were available to the Tribunal. Mr Rushmore acknowledged at hearing that he is prepared to accept full responsibility for payment of [Child 1’s] private education expenses at [School 1] in [Town 1].

Conclusions

1. As noted above, Mr Rushmore is currently employed as [an occupation 1] with [Employer 1], working the day shift on an income of approximately $123,654 for the 2018/19 financial year. He gave evidence of the possibility that his contract with his current employer will end sometime in 2020, but no substantive evidence in support of that assertion was provided. The Tribunal has found that his income for the 2019/20 will be approximately $109,200.

2. Ms Rushmore’s income as [an occupation 2] in the employ of [Employer 2] for the 2018/19 financial year was $62,465. Since returning to full-time employment with [Employer 2], her income has increased, and her annual base salary for the 2019/20 financial year, as reflected in her payslips provided to the Tribunal is $73,336.

3. The Tribunal considers it would be just and equitable for child support to be assessed using the findings of the Tribunal as to the incomes and financial resources available to the parents to meet their own expenses and those of the children, and consistent with that view, proposes setting aside the decision under review, and in substitution, varying Mr Rushmore’s adjusted taxable income to $123,654 for the period 1 July 2018 to 30 June 2019, and for the period 1 July 2019 to 30 June 2020, varying his adjusted taxable income to $109,200. The Tribunal will also vary Ms Rushmore’s adjusted taxable income for the period 1 July 2018 to 30 June 2019 to $62,105, and for the period 1 July 2019 to 30 June 2020 her income will be set at $79,491.

4. The Tribunal is satisfied that Mr Rushmore has the income, property and financial resources to enable him to pay child support based on the income determined by the Tribunal as set out above, and to meet the private education expenses for the child, [Child 1], without unnecessary hardship being incurred by either parent or the children.

Otherwise proper

1. The requirement to consider whether a departure would be otherwise proper directs attention to what is fair to the community. It is necessary to consider the effect of any departure from the administrative assessment on entitlements to income-tested pensions, allowances and benefits. Parents rather than the community have the primary duty to maintain a child. Varying the incomes for Mr Rushmore and Ms Rushmore on which child support is calculated from that used in the administrative assessment, based on their income and financial resources which are not reflected in the administrative assessment, would result in an appropriate apportionment of financial responsibility between the parents and the community. Such a result would be otherwise proper.

DECISION

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

• for the period 1 July 2018 to 30 June 2019, Mr Rushmore’s adjusted taxable income is varied to $123,654, and Ms Rushmore’s adjusted taxable income is varied to $62,105; and

• for the period 1 July 2019 to 30 June 2020, Mr Rushmore’s adjusted taxable income is varied to $109,200, and Ms Rushmore’s adjusted taxable income is set at $79,491.