Sadr and Bartoli (Child support)

[2020] AATA 2043

Sadr and Bartoli (Child support) [2020] AATA 2043 (7 May 2020)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2020/MC018646

APPLICANT:  Mr Sadr

OTHER PARTIES:  Child Support Registrar

Ms Bartoli

TRIBUNAL:Member J Longo

DECISION DATE:  7 May 2020

DECISION:

The tribunal sets aside the decision under review and, in substitution, decides that Mr Sadr’s child support income amount is taken to be $36,946 (annualised) for the period 15 July 2019 to 30 June 2020.

CATCHWORDS

CHILD SUPPORT – particulars of the administrative assessment – estimate of income – whether the estimate should have been refused – estimate of income accepted – 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 omitted from this decision and replaced with generic information so as not to identify involved individuals as required by subsections 16(2AB)-16(2AC) of the Child Support (Registration and Collection) Act 1988.

REASONS FOR DECISION

BACKGROUND

1. Mr Sadr and Ms Bartoli are the parents of [Child 1], [Child 2] and [Child 3]. Mr Sadr is the parent liable to pay child support.

2. On 15 July 2019, Mr Sadr made an election to lodge an estimate of his income for the period 15 July 2019 to 30 June 2020 of $37,130.78 annualised income. On 15 July 2019, the Department of Human Services – Child Support (the Department) accepted Mr Sadr’s estimate of income of $36,946 (annualised) for the period 15 July 2019 to 30 June 2020. 

3. On 23 September 2019, Ms Bartoli objected to the estimate of income. An extension of time for the objection was granted on 17 October 2019. On 13 March 2020, the Department allowed the objection to Mr Sadr’s estimate of income and refused to accept his estimate of income on 15 July 2019.

4. On 16 March 2020, Mr Sadr lodged an application with the Administrative Appeals Tribunal (the tribunal) for a review of the decision. The hearing took place on 7 May 2020. Mr Sadr and Ms Bartoli spoke to the tribunal via conference telephone and gave sworn evidence. In making its decision, the tribunal took into consideration documents (numbered 1 to 174) provided by the Department and provided to Mr Sadr and Ms Bartoli.

CONSIDERATION

1. The law that applies in this case is the Child Support (Assessment) Act 1989 (the Assessment Act) and the Child Support (Registration and Collection) Act 1988 (the Registration Act). The rate of child support payable by a liable parent is usually based on an administrative assessment under Part 5 of the Assessment 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 child support income amount of each parent.

2. Subdivision C of Division 7 of Part 5 of the Assessment Act enables a person to elect that an estimate of their adjusted taxable income is used either before the income year commences or during the income year to replace the adjusted taxable income amount calculated using the last year’s taxable income and supplementary amount under the formula assessment (section 60).

3. The method of estimation is set out in subsection 60(4) of the Assessment Act and appears to have been followed in this case by the Department. Subsection 60(1) provides that a person may make an election to use an estimate if the amount is not more than 85% of the total of the person’s adjusted taxable income and supplementary amount for the last relevant year of income for the child support period.

4. It is uncontroversial that in this case Mr Sadr elected to provide an estimate income amount of $37,130.78 from 15 July 2019. This estimate of income was accepted by the Department and used to determine the amount of child support payable by Mr Sadr for the period from 15 July 2019 to 30 June 2020. The estimate provided was based on a year to date income amount of $1,500 for the period 1 July 2019 to 14 July 2019 and an estimate of $35,630.78 for the remaining period from 15 July 2019 to 30 June 2020.

5. The Department, after initially accepted the estimate, subsequently refused to accept the estimate on 13 March 2020 after Ms Bartoli objected to the original decision. Mr Sadr has submitted that the decision is invalid because it was not made within the time period required under section 87 of the Registration Act. Section 87 of the Registration Act sets out the mandatory requirements for the Registrar (and their delegate) to consider when an objection is lodged with the Department, and includes:

   ·     Consideration of any grounds supporting or opposing the objection;

   ·     Allow (in whole or in part) or disallow the objection within 60 days after the objection is lodged.

10.Mr Sadr submitted that as the decision was not made in accordance with the requirements of section 87 of the Registration Act, that is the decision was not made within 60 days after the objection was lodged, any decision subsequently made is an invalid decision and therefore the objection decision should be null and void. The tribunal notes that a decision which gave effect to such a conclusion would lead to the conclusion that the tribunal does not have the jurisdiction to review the decision, as no there would be no decision under section 87 for the tribunal to consider.

11.The tribunal accepts that paragraph 87(1)(b) of the Registration Act does provide a mandatory time limit for the Registrar to allow or disallow an objection. However, section 87 of the Registration Act does not specify what is the consequence of not complying with the mandatory requirement to allow or disallow the objection within 60 days after the objection is lodged. The considerations in this matter are similar to the issues considered in Garnaut v Child Support Registrar [2004] FCA 1100 (Garnaut). In Garnaut, the Federal Court considered subsection 98ZC(1) of the Assessment Act (as it then was) and the mandatory requirement that an objection be considered within 60 days after the objection being lodged. In Garnaut, Justice Spender decided as follows: ‘depriving the Registrar of jurisdiction to make a valid decision on a Pt 6B objection would not give effect to harmonious goals of the Assessment Act and, in particular, the original decision that the objector wants changed would remain in force, as indicated above (Paragraph 61)’.

12.Furthermore, as stated in Bond v Queensland Department of Justice and Attorney-General (Workers’ Compensation Regulator) [2015] QSC 252, the purpose of such time limits is to promote prompt resolution of matters. The Registrar’s inability to make a decision within the 60-day time limit in this matter did not invalidate the objection decision that had been made, but rather, it gave rise to a right to seek an order to have the objection decision made. Therefore, the tribunal considers that the objection decision, notwithstanding that it was made outside the 60-day time limit imposed by section 87 of the Registration Act, was a valid decision and is reviewable by the tribunal.

13.The Department made its objection decision based on the payroll information provided by Mr Sadr’s employer [Company name]. In this information the Department noted that Mr Sadr continued to receive income until 31 October 2019. Ms Bartoli’s objection stated that Mr Sadr had previously lodged estimates which were inaccurate and that Mr Sadr had more income than what was provided in the estimate to the Department.

14.Mr Sadr stated that the payment in October 2019 should not have been taken into account as it is clear in the payroll information that this payment was in error and was repaid. Mr Sadr also stated that the responses by his employer confirm that he resigned on 30 September 2019. Mr Sadr stated that the figure he had provided in his estimate was based on his income less allowable deductions and the payroll information shows that his estimate was correct.

15.The tribunal notes that the power to refuse an estimate is discretionary. There are no statutory criteria set out to consider whether to refuse or accept an estimate, other than it being considered that the estimate is likely to be lower than the parent’s actual adjusted taxable income for the remaining period. The tribunal had reference to the policy guide in force at the relevant time and notes that there are no other policy considerations set out for the purpose of deciding whether to accept or refuse an estimate. The estimate was less than the amount of Mr Sadr’s income for the last relevant year of income. While the Department has considered Mr Sadr’s employer income information, to refuse the estimate, the tribunal is not satisfied that the information shows that Mr Sadr’s actual adjusted taxable income is likely to be higher for the remaining period.

16.The tribunal considered that in all the circumstances of the case, the election should be accepted. In reaching this conclusion, the tribunal noted that the Assessment Act provides that estimates are reconciled in the future and that the departure process set out in Part 6A of the Assessment Act is available where a person considers that the administrative assessment provisions should not be applied due to the special circumstances of the case.

DECISION

The tribunal sets aside the decision under review and, in substitution, decides that Mr Sadr’s child support income amount is taken to be $36,946 (annualised) for the period 15 July 2019 to 30 June 2020.