Salah and Morden (Child support) - [2025] ARTA 254

Salah and Morden (Child support) [2025] ARTA 254 (14 February 2025)

Applicant/s: Mr Salah

Respondent: Child Support Registrar

Other Parties: Ms Morden
Tribunal Number: 2024/SC027756
Tribunal: Senior Member J Longo
Place:Melbourne
Date:14 February 2025
Decision:The Tribunal sets aside the decision under review and remits the matter for reconsideration in accordance with the order that:
·For the period 1 January 2023 to 31 December 2025, Mr Salah’s adjusted taxable income is varied to $100,000 per annum.
·For the period 1 January 2024 to 31 December 2025, the annual rate of child support payable by Mr Salah is increased by $1,865 per annum for [Child 2]’s orthodontic costs.
·For the period 1 July 2024 to 31 December 2025, the annual rate of child support payable by Mr Salah is increased by $1,200 per annum for [the children’s] counselling costs.
·For the period 1 January 2023 to 31 August 2023, Ms Morden’s adjusted taxable income is varied to $110,407 per annum.

CATCHWORDS
CHILD SUPPORT – departure from the administrative assessment – adjusted taxable income – income, property or financial resources – father’s earning capacity and use of corporate structures – previous contract work through partner’s corporate entity and current part-time work because of caring responsibilities – loan agreement between father and partner – property settlement – mother’s expenses – costs of maintaining children – orthodontic treatment and counselling – education at private school or special entry public school – decision under review set aside and sent back with directions

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 pursuant to subsection 16(2AB) of the Child Support (Registration and Collection) Act 1988.

Statement of Reasons

BACKGROUND

Mr Salah and Ms Morden are the separated parents of [Child 1] (born 2008) and [Child 2] (born 2012). According to Services Australia – Child Support (Child Support), the child support assessment was registered on 21 January 2016 and Child Support has been responsible for the collection of child support since registration. The children are recorded as being in the primary care of Ms Morden and regular care of Mr Salah.
The most recent administrative assessment, prior to the current application for this departure determination, was as follows:
· For the period 1 November 2022 to 31 August 2023 Mr Salah was assessed to pay $5,496 per annum, based on a 2021-22 adjusted taxable income of $70,627 for Mr Salah and a 2021-22 adjusted taxable income of $75,532 for Ms Morden.
· For the period 1 September 2023 to 30 November 2024 Mr Salah was assessed to pay $3,802 per annum, based on a 2022-23 adjusted taxable income of $74,033 for Mr Salah and a 2022-23 adjusted taxable income of $110,407 for Ms Morden.
On 31 January 2023, Ms Morden applied to Child Support for a departure from the administrative assessment on the basis that, in the special circumstances of the case, it was unfair because of the income, property or financial resources of one or both parents (Reasons 8A) and on the basis of the special needs of [Child 1] (Reason 2).
On 5 September 2023, Child Support decided to depart from the administrative assessment and made a departure determination as follows:
· For the period 30 January 2023 to 31 October 2024, Mr Salah’s income to be set at $135,000.
· For the period 30 January 2023 to 31 August 2023, Ms Morden's income to be set at $110,407.
Mr Salah objected to the decision on 15 November 2023. An objections officer of Child Support allowed the objection on 19 March 2024 and made a departure determination as follows:
·     For the period 30 January 2023 to 28 February 2023, Mr Salah’s adjusted taxable income is set at $181,500.
·     For the period 1 March 2023 to 31 May 2025, Mr Salah’s adjusted taxable income is set at $115,240.
·     For the period 30 January 2023 until 31 August 2023, Ms Morden’s adjusted taxable income is set at $110,407.
On 8 April 2024, Mr Salah lodged an application to the Administrative Appeals Tribunal (the AAT) for review of the objections officer’s decision. Directions for this matter were made on 14 August 2024.
From 14 October 2024, the AAT became the Administrative Review Tribunal (the Tribunal). Under the transitional provisions in the Administrative Review Tribunal (Consequential and Transitional Provisions No. 1) Act 2024 (the Transitional Act), applications for review to the AAT that were not finalised before 14 October 2024 are taken to be an application for review to the Tribunal. This also applies to decisions not finalised before 14 October 2024 being taken to be decisions of the Tribunal. The Transitional Act gives the Tribunal the authority to continue and finalise any aspect of the review not already completed by the AAT. This decision and statement of Reasons is made by the Tribunal.
A hearing of the application occurred on 1 October 2024. In reviewing the decision, the Tribunal considered the documents and information (provided to the parties prior to the hearing)[1] and the oral evidence under affirmation of both Mr Salah and Ms Morden. Further directions were issued following the hearing for Mr Salah and Ms Morden to provide additional information, which has also been considered by the Tribunal.[2]

CONSIDERATION

[1] Section 23 and section 25 statement and documents provided by Child Support numbered 1 to 803; Mr Salah’s documents numbered A1 to A201 and Ms Morden’s documents numbered B1 to B196.

[2] Mr Salah’s documents numbered A202 to A249 and Ms Morden’s documents numbered B242 to B260.

The legislative framework

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) Act1989 (the Assessment Act). This involves the application of a statutory formula, which takes into account factors such as the number of children, the age of each child, the level of care provided and the income of each parent. The income used in the calculation has a number of components making up the adjusted taxable income, which is worked out using section 43 of the Assessment Act. The general approach is that the Child Support Registrar (the Registrar) will utilise a parent’s adjusted taxable income as assessed by the Australian Taxation Office for the last relevant year of income.
The liable parent or a carer may apply for a determination departing from the administrative assessment under Part 6A of the Assessment Act. Section 98C establishes a three-step process to be satisfied prior to a departure determination being made: that there is a ground for a departure from the administrative assessment; that it is just and equitable to depart; and that it is otherwise proper. Once satisfied, the Tribunal may make one of the determinations prescribed in section 98S of the Assessment Act.
The child support documents suggest that the parents have lodged a previous departure application in respect of the child support, but there is no evidence before the Tribunal in relation to this application. In any event, this is not relevant to the current review. The application before the Tribunal for a departure determination was initially made with Child Support on 30 January 2023, with the final decision of child support being made on 19 March 2024. A further application for review was made to the Tribunal in April 2024 with a hearing in October 2024. There have been extensive written submissions to Child Support and the Tribunal in respect of this application.
After having the benefit of their oral testimony and written submissions, it is apparent to the Tribunal there is little on which the parents can agree. Ms Morden’s oral and written submissions to the Tribunal have focused on Mr Salah having a higher earning capacity and the use of corporate structures to minimise child support payments. Mr Salah’s oral evidence and submissions have focused on the property settlement in the Family Court proceedings. Mr Salah has also stated that he has no interest in the Companies referred to by Child Support. The issues which relate to the decision under review have been considered. Those submissions that do not relate to the determination of the departure from the administrative assessment have not been considered.
The decision under review has focused on whether a departure determination ought to be made by considering the following:
·     whether there is a ground for a departure from the administrative assessment;
·     whether it is just and equitable to depart; and
·     whether it is otherwise proper.
Accordingly, the Tribunal first considered whether there is a ground established for a departure from the administrative assessment.

Reason 2 – Children’s special needs

The grounds for departure from an administrative assessment of child support are those set out in subsection 117(2) of the Assessment Act. Subparagraph 117(2)(b)(ia) of the Assessment Act – commonly referred to as “Reason 2”– states as follows:
(b) that, in the special circumstances of the case, the costs of maintaining the child are significantly affected:
…
(ia) because of special needs of the child …
The term “special circumstances” is not defined in the Assessment Act. In Gyselman and Gyselman [1991] FamCA 93 the Full Family Court indicated that for there to be special circumstances, the facts of the case must establish something which is special or out of the ordinary. Ms Morden’s submission to the Tribunal was that [the children’s] psychology costs and [Child 2]’s orthodontic costs were special needs.
Ms Morden stated that [Child 2] commenced orthodontic treatment in January 2024 with a total cost of $9,860. Ms Morden stated this figure included the initial consultation fee with the orthodontist. Ms Morden further explained that she paid an initial lump sum amount of $1,900 and the remainder will be repaid in monthly instalments of $317 per month. Ms Morden’s health insurance provides a $1,200 per annum rebate for dental costs.
The Tribunal notes Ms Morden has provided a letter from [Dr A], specialist orthodontist,[3] which describes [Child 2] as having a severe overbite which is a risk factor for wear on her front teeth and for gum recession as the lower teeth are in contact with the gum behind the front teeth. The letter outlines that treatment is necessary for [Child 2]’s oral health and that it is not for cosmetic reasons. The letter also outlined the proposed treatment recommendations, with an estimated treatment time of 24 to 30 months and confirms the cost of treatment as $9,500, exclusive of the initial consultation cost of $360.
[3] Pages B104 to B109 of Ms Morden’s documents.
Mr Salah stated that he was informed of the orthodontic treatment and spoke to his brother, who is an orthodontist, about the treatment. Based on his discussion with his brother, he was of the view that the treatment was not necessary right now. Mr Salah submitted that he did not believe the treatment was a special need. He stated that he is not objecting to the treatment but he is not in a financial position to contribute to the cost.
In addition, Ms Morden outlined at hearing that [Child 2] commenced counselling in September 2024 and that [Child 2] will attend monthly sessions. Ms Morden stated that her out of pocket expenses were approximately $100 per visit. The Medicare information provided to the Tribunal, as discussed above, shows that [Child 2] attended on 3 September 2024 and that the out of pocket cost for this session was $103.35.[4] In the absence of other evidence as to the frequency, the Tribunal has taken into account these costs are occurring on a monthly basis and finds that the out of pocket costs for [Child 2]’s counselling will be $1,200 per annum.
[4] Page B117 of Ms Morden’s documents.
The Tribunal has considered the Mental Health Treatment Plan and email from [Child 2]’s school counsellor regarding her referral for counselling.[5] Mr Salah’s oral evidence was that he did not consider the counselling as a special need. Mr Salah stated that he has also provided courses and camps for self-improvement. He believed the issues had been resolved.
[5] Pages B110 and B112 of Ms Morden’s documents.
In respect of [Child 1], Ms Morden stated that [Child 1] attends counselling on a monthly basis at present but depending on the need, this can increase in frequency. Ms Morden stated she receives a Medicare rebate and that her out of pocket cost is around $100 per session. The Medicare information provided shows [Child 1] attended [Mr B] on 8 occasions between January 2024 and August 2024.[6] Prior to this period, [Child 1] attended on 3 occasions in 2023.[7] The Child Support documents show that [Child 1] has received psychological counselling for a number of years, including anxiety in relation to vaccinations. Both parents acknowledge in their statements to Child Support that [Child 1] is seeing [Mr B], clinical psychologist. In the absence of any other evidence as to the frequency, the Tribunal finds that [Child 1] attends on a monthly basis and further finds that the out of pocket costs for [Child 1]’s counselling to be $1,200 per annum.
[6] Page B186 of Ms Morden’s documents.
[7] Page B185 of Ms Morden’s documents.
Mr Salah’s oral evidence was that [Child 1]’s ongoing difficulties related to his home environment. The report provided to the Tribunal indicates that these issues have remitted and that the sessions have been focused on emotional regulation. The report recommends less frequent but regular sessions to consolidate the progress.[8] The Tribunal notes that [Child 1] has been attending psychological counselling for some time.
[8] Page B141 of Ms Morden’s documents.
The Tribunal is satisfied that, in the special circumstances of this matter, [Child 2]’s orthodontic treatment is necessary and for a functional purpose. The Tribunal has therefore determined that this treatment is a special need. The Tribunal further finds that the cost of Ms Morden maintaining the children are significantly affected by the costs of [Child 2]’s orthodontic costs, which are in total, $9,860. The Tribunal also finds that [the children’s] psychology treatment are a special need which, in the special circumstances of this matter, are costs of Ms Morden which significantly affect the cost of maintaining the children. The Tribunal therefore concludes, based on the special circumstances in this case that a ground for departure under subparagraph 117(2)(b)(ia) of the Assessment Act has been established.

Reason 3: [Child 2]’s education costs

The Tribunal notes that Ms Morden has sought departure from the administrative assessment in the special circumstances of the case, on the basis that, the costs of maintaining [Child 2] are significantly affected because the child is being cared for, educated or trained in the manner that was expected by their parents (subparagraph 117(2)(b)(ib) of the Assessment Act).
In accordance with Wild and Ballard [1997] FamCA 41, in determining whether this ground was established, the Tribunal considered the type of education intended by both parents, rather than the child’s attendance at any particular school.
In F & S [2003] FMCAfam 531, Brant CFM summarised the principles identified in Mee and Ferguson (1986) 84 FLR 179 as follows:
15. The principles that emerged from the case in relation to school fees can be summarised as follows:
a) where the non-custodian has agreed to the child attending a private school, that person is liable to contribute to the fees so long and to the extent that he or she has a reasonable financial capacity to continue to do so;
b) where the non-custodian has not agreed to the child attending such a school, he or she is not liable to contribute to those expenses unless there are reasons relating to the child’s welfare which dictate attendance at the school rather than a non-private school. Then the non-custodian is required to contribute to the extent that he or she has a reasonable financial capacity to do so; and
c) the mere fact that a non-custodian can afford the fees or is a wealthy person is not in itself a reason for imposing that liability. Although Mee v Ferguson was decided prior to the introduction of the Child Support (Assessment) Act, the reasoning has been applied to child support cases [see Lightfoot v Hampson (1996) 20 FamLR 69 and Wild v Ballard (1997) 22 FamLR 291.
Ms Morden stated that she signed the enrolment forms for [the children] to attend [School 1] in 2016. She stated that [Child 1] commenced in year two (2017) and that [Child 2] started in day care and has continued at the school since starting. Ms Morden confirmed that Mr Salah did not sign the enrolment for [School 1] and she was unable to enrol them in the public school system without both parents signing the enrolment forms at the time, as Mr Salah wanted the children to attend school in Sydney. The Tribunal notes that both children have been attending [School 1] for a number of years.
Ms Morden stated that she has raised the issue of [Child 2]’s school fees as a ground for departure because [Child 2] had been offered enrolment at [School 2], which is a special entry public school, but that due to Mr Salah refusing to consent to the enrolment and declining the offer of enrolment, [Child 2] had to remain at [School 1]. Mr Salah confirmed in his oral evidence that he had declined the offer of enrolment at [School 2]. Ms Morden submits that by his veto of [Child 2] attending [School 2], he actively selected for [Child 2] to attend [School 1].
The correspondence of [School 2] on 19 October 2023 stated that due to Mr Salah not consenting to [Child 2]’s enrolment at the school, and based on the NSW Department of Education family law guidelines, in particular clause 8.6 of those guidelines, they were unable to proceed with [Child 2]’s enrolment at [School 2] for 2024.
Mr Salah stated that in respect of [Child 2]’s schooling, he didn’t think the school should change because that is what the court orders stated. A copy of the court orders relating to the care of the children, is found in the Child Support documents.[9] Of particular relevance to the children’s schooling, to which Mr Salah refers, is Notation A to the orders made on 13 February 2020, which states as follows:
A. The Court notes that both children currently attend [School 1] and the spend time with Orders reflect the term timetable of that school; in the event that the children attend a school with different term times, failing agreement, the parties shall attend Family Dispute Resolution for the purpose of considering the Father’s time with the children.
[9] Pages 260 to 265 of statement and documents provided by Child Support.
The Tribunal notes that the reference to the court orders by Mr Salah is a reference to a notation to the court orders and not to an order of the Court. Furthermore, the notation referred to by Mr Salah does not prescribe which school the children should attend but rather notes that they are attending [School 1] and that the care arrangements reflect the term timetable of [School 1]. They note that if the children were to attend a school with different term times, then the care arrangements for Mr Salah would most likely require adjustment. There is nothing in the orders that requires either child attending a particular school. In any event, the issue before the Tribunal does not turn on the interpretation of the court order.
Rather, the Tribunal must be satisfied that the children are being educated in the manner expected by the parents. In Mee v Ferguson [1986] FamCA 3, the Full Court of the Family Court stated, in considering a similar provision in the Family Law Act 1975 said (at [37]):
It refers to the manner in which the child "is being", and which the parties to the marriage "expected" the child to be educated. That provision appears to have direct relevance to the issue of private school education, particularly its reference to the manner in which the parties "expected" the child to be educated. The word "expected" in the past tense presumably relates to some expectation of the parties at a point in time earlier than the hearing.

In the present matter, there is no evidence that both Mr Salah and Ms Morden expected the children, or in particular [Child 2], to be educated in the private school system. The enrolment at [School 1] was Ms Morden’s decision in 2016 based on the need to enrol the children at school (and day care) and the inability of the parties to reach agreement as to where the children would attend school. Accordingly, the Tribunal was not satisfied that the children are being educated in the manner that is expected by both parents. As the Tribunal has found that the ground is not established, the Tribunal has not considered the school costs for [Child 2] to attend [School 1]. A ground for departure from the administrative assessment is not established on the basis of subparagraph 117(2)(b)(ib) of the Assessment Act.

Other grounds

The Tribunal also notes that Ms Morden sought a departure from the administrative assessment in the special circumstances of the case, based on the income, property and financial resources of Mr Salah (Reason 8A) and Mr Salah’s earning capacity (Reason 8B). However, the Tribunal has already determined that there is a ground to depart from the administrative assessment based on the considerations above. The Tribunal will therefore consider the submissions on these issues in the context of whether it is just and equitable and otherwise proper to depart from the administrative assessment.

Is it fair or “just and equitable” in relation to Mr Salah, Ms Morden and [the children] to make a particular departure determination?

As the Tribunal is satisfied that there is a ground to depart from the administrative assessment of child support, the next step is to consider whether it is fair as regards the parents and the children to make a particular determination in accordance with sub-subparagraph 98C(1)(b)(ii)(A) of the Assessment Act. This in turn requires the Tribunal to have regard to a range of factors, including but not limited to those set out in subsections 117(4) and (6) to (8) of the Assessment Act, such as the needs of the children, the parents’ assets, liabilities, income and commitments, and any hardship that would be caused by departing or not departing from the formula.
The Courts have observed on numerous occasions, in relation to departure determinations, that the Tribunal is not required to undertake a “forensic audit” or major investigation of the financial circumstances of a party (Podmore & Pillai (SSAT Appeal) [2011] FMCAfam 952 and Frost and Frost (SSAT Appeal) [2011] FMCAfam 1311). Rather, the Tribunal must be satisfied on the balance of probabilities as to the income, property and financial resources available to the parties for child support purposes, such that a fair decision can be made in respect of the child support liability (Shearer & Benson (SSAT Appeal) [2011] FMCAfam 623).
The Tribunal must also consider the duties of parents and the objects of the Act, set out in sections 3, 4 and 114 of the Assessment Act. These include:
·The duty of a parent to maintain a child and that this duty has priority over all commitments of the parent other than commitments necessary for the self-support of the parent and any other child or person that they have a duty to maintain.
·The level of support should be determined in accordance with the costs of the children, and according to the parent’s capacity to provide.
·Parents should share equitably in the support of the child, and the child should have his or her proper needs met from reasonable and adequate shares in the income, earning capacity, property and financial resources of both parents.
The Tribunal does not propose to explore every matter in detail but has discussed below those it regards as pertinent to this application and the assessment of whether it is just and equitable to make a departure determination.

The needs of the children

Section 3 of the Assessment Act makes it clear that the parents of a child have the primary duty to maintain the child, and that this duty has priority over all commitments of the parents other than commitments necessary for self-support or the support of another person the parent has a duty to maintain (Ashcroft and Ashcroft (SSAT Appeal) [2008] FMCAfam 1250). In this case Mr Salah and Ms Morden have the primary duty to financially support [the children] and contributing to their costs should take priority over all other costs other than their “necessary” costs of self-support.
In determining the proper needs of the child, paragraph 117(6)(b) of the Assessment Act also requires the Tribunal to have regard to any special needs of the children. The Tribunal has already discussed in the preceding paragraphs [the children’s] special needs. No other special needs for the children have been raised in this application. The Tribunal notes that the children do not have any income of their own and are dependent on Mr Salah and Ms Morden to meet their needs. Ms Morden’s Statement of Financial Circumstances shows savings for [the children] of $12,144 ($6,072 each) held by Ms Morden on their behalf.
The Tribunal notes that [Child 1] attends [School 1] and that the education costs are being met by Ms Morden. Mr Salah has submitted that [Child 1] is in receipt of a scholarship at [School 1], which reduce the costs for Ms Morden. The documents provided by Ms Morden also confirm that [Child 1]’s education costs are reduced by the amount of his scholarship.[10]
[10] Pages B93 to B94 of Ms Morden’s documents.
In respect of the special needs of the children discussed previously, including [Child 2]’s orthodontic treatment and both of the children’s counselling, Ms Morden submitted that regarding the rebate she receives from the private health insurance for these costs, Mr Salah should not reduce the total costs as she is meeting the cost of private health insurance and Mr Salah should not benefit from this expense. Ms Morden also submitted that the rebate for [Child 2]’s dental costs, which is being used for orthodontic costs, results in the other dental costs being met by Ms Morden with no rebate from her health insurance.
The Tribunal does not accept that the rebate received by Ms Morden should be excluded from the determination of the amount of these costs. The Tribunal finds that as the rebate received is for the benefit of the children’s costs, it must determine what the actual cost for this special need would be without insurance or Medicare rebates. This amount is the out-of-pocket cost for the children’s special needs. The Tribunal has determined that it would not be just and equitable to exclude these rebates from the calculation of these costs and has therefore determined that the Medicare and health insurance rebates have been deducted, for orthodontics and counselling, from the total costs. As discussed previously, the Tribunal finds that the out of pocket cost of [Child 2]’s orthodontics is $7,960 and the out of pocket cost of the counselling is $2,400 per annum for both children.

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

Mr Salah’s income, property and financial resources

Mr Salah told the Tribunal that he now works part-time, 3 days per week, for [Employer]. Mr Salah stated that he has been employed in this role since May 2023. He does not have a contract of employment but he provided payslips to the Tribunal.[11] The payslips show his annual salary as $93,883 per annum and he is paid monthly. Mr Salah stated that he has no other employment and that he is employed on a part-time basis due to his caring responsibilities for the children. He stated that prior to starting with [Employer], he did not work between January 2023 and April 2023.
[11] Page A36 to A44 of Mr Salah’s documents.
The Tribunal notes that [bank] account information of Mr Salah’s partner was relied upon by Child Support in the objection decision relating to the payments received from Mr Salah’s contract work. These bank accounts were provided by Child Support to the Tribunal and the parties[12] and show deposits from [Employer], to whom Mr Salah was contracted to, and undertook work prior to his employment with [Employer], of $15,125 per month for the period from 8 March 2022 to 5 October 2022. In addition, the bank account information shows monthly transfers, and in some months more than monthly, for a home office. This account also shows payments to Mr Salah’s personal [account] of fortnightly wages.
[12] Pages 416 to 424 of statement and documents provided by Child Support.
Mr Salah stated that prior to his current employment, he had done project work. These projects included [work sector] work and required that he have insurance for this work. Mr Salah’s evidence was that this work was not covered through his registration as [an occupation] and that he required additional insurance for this work. As he couldn’t afford the insurance, his partner allowed him to use an entity that she was the shareholder and director of, [Company 1], to obtain insurance. Mr Salah stated that he was paid a salary through [Company 1], of around $85,000-$90,000, and in return [Company 1] paid for the associated expenses such as insurance, bookkeeping and other expenses.
Mr Salah stated that prior to the contract through [Company 1], he was a director and shareholder with his sister of [Company 2]. This entity has been deregistered. The ASIC information shows that he was a director of [Company 2] until 1 February 2023.[13] The Tribunal is satisfied, based on the evidence provided by Mr Salah, that [Company 2] was deregistered [in] October 2023 following a strike off application.[14] He stated that the company was set up by his sister’s children to undertake developments and he was able to use this entity in the past but did not use it in regard to the contract work for [Employer] prior to his employment.
[13] Page A197 of Mr Salah’s documents.
[14] Page A196 of Mr Salah’s documents.
The work he undertook through [Company 2] paid him income and a dividend, but Mr Salah could not recall the amount he was paid. The Tribunal notes that the profit and loss statement for [Company 2] for the 2021-22 and 2022-23 financial year shows salary expenses of $60,000 and $5,688 paid to an associated person. The amount in the [Company 2] financial statements for 2022-23 is replicated in Mr Salah’s income tax return for 2022-23 as having been received from [Company 2] in this financial year. The Tribunal does not have Mr Salah’s income tax return for 2021-22. [Company 2] also paid a dividend to Mr Salah in 2022-23, which was partially franked and unfranked, of $27,368.[15] The prior financial year shows that profits were retained and no dividend was paid. Mr Salah stated at hearing that while this dividend was allocated to him, it was not paid to him.
[15] Page A17 of Mr Salah’s documents.
The Child Support CUBA Screens show that Mr Salah’s 2021-22 taxable income was $70,627[16] and his 2022–23 taxable income was $74,033.[17] Mr Salah’s payslip information from [Employer] shows an annual salary of $93,883.36.[18] Mr Salah’s 2023–24 taxable income was $81,167.[19] This income is higher than his taxable income for the 2021-22 and 2022–23 financial year. Mr Salah claimed rental costs as part of his deductions in both the 2022-23 and 2023-24 financial years.
[16] Page 730 of statement and documents provided by Child Support.
[17] Page 730 of statement and documents provided by Child Support.
[18] Pages A36 to A44 of Mr Salah’s documents.
[19] Page A24 of Mr Salah’s documents.
Mr Salah’s Statement of Financial Circumstances includes his household expenditure at $1,397 per week. This expenditure, according to the Statement of Financial Circumstances, is for Mr Salah and the children. The Tribunal notes that Mr Salah lists $66 per week in holiday and entertainment expenses for himself and the children. Mr Salah also lists $700 per week in rental expenses. In respect of personal expenditure, Mr Salah’s Statement of Financial Circumstances indicates expenses for life and health insurance ($74 per week). While Mr Salah has also included child support, the Tribunal has not taken into account the child support expenses in the Statement of Financial Circumstances as this is the subject of the current review. While not listed in the Statement of Financial Circumstances, the Tribunal notes that Mr Salah’s payslips show $440 per week in income tax payable on his salary.
The Statement of Financial Circumstances lists cash at bank of approximately $51, a motor vehicle valued at $6,800, household contents of $2,000 and $303,405 in superannuation. Mr Salah’s Statement of Financial Circumstances shows total liabilities of $917,476. Mr Salah stated that he is jointly liable with his partner for a mortgage of $707,611. This mortgage is secured by real property solely held by his partner. These include, according to Mr Salah’s evidence, an investment property and also additional funds to purchase a second property off the plan. In addition, Mr Salah’s Statement of Financial Circumstances shows a personal debt of $209,865 to his partner. Mr Salah produced a loan agreement signed on 15 March 2021[20] to which it is agreed his partner will pay expenses as follows:
50% Groceries, utilities, and subscriptions
75% Rent, Kids holiday & weekend expenses
100% Specific expenses for Mr Salah, [Child 1] and [Child 2]
[20] Page A244 of Mr Salah’s documents.
The loan agreement provided to the Tribunal states that interest is payable at 8% per annum, calculated monthly, on the outstanding balance. No repayment schedule is provided in the agreement, other than that the loan is to be paid in full at ‘such time that Mr Salah can reasonably afford to repay it, or a subsequent agreement is made’. Even though this agreement specifies the payment of these expenses by Mr Salah’s partner on his behalf, his Statement of Financial Circumstances discloses payments of rent, food and like expenses, which he claimed to be funded by Mr Salah’s partner. The Tribunal also observes that Mr Salah’s [bank] statements show transfers for living expenses (in 2023) and rent (in 2024) to other accounts.
Ms Morden referred in written submissions to Mr Salah (and his partner) renting two apartments in the building where he resides. Ms Morden submits that the rental costs are claimed as part of ongoing business costs. As discussed above, Mr Salah’s income tax return included deductions for rent. The Tribunal also notes that payments from Mr Salah’s bank account towards rental costs in 2024 with reference to two separate apartments. There is inconsistency in the evidence provided as to who is paying these costs and whether Mr Salah contributes to these costs or whether, as expressed in the loan agreement between Mr Salah and his partner, his partner is responsible for the majority of the costs.

Mr Salah’s earning capacity

While the Tribunal has determined that there is a ground established for departure from the administrative assessment, a consideration of Mr Salah’s earning capacity is appropriate in the context of determining whether it is just and equitable to make a departure determination, specifically in the context that this has been raised by the parties in the application.
Ms Morden’s submissions regarding Mr Salah’s earning capacity, in broad terms, was that he has a higher capacity to earn than what was reflected in his income from employment. Ms Morden’s submission was that [an occupation] of Mr Salah’s experience and qualification, based on her assessment, should be earning a higher income than his current income. In support of this contention, Ms Morden provided Child Support with information from advertised positions, and the income payable for these positions, commensurate with Mr Salah’s experience. Ms Morden also provided Child Support previous job offers that Mr Salah had received where his income was higher than his current income.
A parent’s earning capacity can only be taken into account in limited circumstances, as set out in subsection 117(7B) of the Assessment Act. This subsection requires the Tribunal to consider the following criteria before determining whether the parent’s earning capacity is greater than is reflected in his or her income as used in the administrative assessment:
·      Whether the parent is:
onot working despite ample opportunity to do so (subparagraph 117(7B)(a)(i)); and/or
ohas reduced their weekly hours of work to below full-time work (subparagraph 117(7B)(a)(ii)); and/or
ohas changed their occupation, industry or working pattern (subparagraph 117(7B)(a)(iii)); and
·      If the parent’s decision about his/her work arrangements is not justified by either his/her caring responsibilities (subparagraph 117(7B)(b)(i)) or his/her state of health (subparagraph 117(7B)(b)(ii)); and
·      If 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 stop working, reduce their hours of work or change their occupation, industry or working pattern to affect the administrative assessment of child support (paragraph 117(7B)(c)).
Based on the evidence discussed above in the preceding paragraphs, the Tribunal determines that Mr Salah is working but that his working hours are below full-time work. Mr Salah gave evidence that he was working on a contract basis, through his partner’s corporate entity, for a time prior to his current circumstances. He stated at hearing that this arrangement ended in December 2022 when the contract work finished. After this time, he was not working from January 2023 until May 2023 when he commenced working for [Employer] on a part-time basis.
Mr Salah stated that the basis for his decision to work on a part-time basis was due to his caring responsibilities of the children. He stated that he works, on average, 3 days per week, to allow him to have sufficient time to spend with the children when in his care during school and school holidays. Ms Morden submitted that Mr Salah’s reasons for not working on a full-time basis due to his caring responsibilities of the children, did not preclude him from working full-time. Ms Morden’s submissions on the issue of Mr Salah’s caring responsibilities restricting his capacity to work full-time, was that the level of care that he currently has of the children is not sufficient to limit his capacity for full-time employment.
Ms Morden’s submissions also stated that Mr Salah has had capacity to work notwithstanding his caring responsibilities.[21] The Tribunal has considered this information in considering the justification for Mr Salah’s decision about his work arrangements. The Tribunal observes that subparagraph 117(7B)(b)(ii) of the Assessment Act requires the Tribunal to objectively assess whether the change in Mr Salah’s working pattern is not justified by his caring responsibilities. The Tribunal, having found that Mr Salah is working part-time, accepts that this is justified by his caring responsibilities.
[21] Pages B213 to B218 of Ms Morden’s documents.
Even if the Tribunal was not satisfied that the change in Mr Salah’s working pattern was justified by his caring responsibilities, it must also be satisfied that the change was not for the purpose of affecting the administrative assessment of child support. Mr Salah’s income prior to the application for a departure determination was assessed on a deemed income of $70,627 from 1 November 2022.[22] From 1 September 2023, Mr Salah’s child support income was based on taxable income of $74,033.[23] Mr Salah’s annual gross income from [Employer], according to his payslips is $93,883. The major purpose test to affect the administrative assessment of child support is not supported.
[22] Page 730 of statement and documents provided by Child Support.
[23] Page 730 of statement and documents provided by Child Support.

Ms Morden’s income, property and financial resources

In respect of Ms Morden circumstances, her Statement of Financial Circumstances shows total income of around $2,148 per week ($111,728 per annum) from full‑time employment and child support. The Tribunal has not considered the child support payments. Ms Morden provided payslips and her income tax returns for the 2022–23 and 2023–24 financial periods which confirm her income. The Tribunal accepts Ms Morden’s income as stated in the Statement of Financial Circumstances and confirmed by her payslips and income tax returns.
Ms Morden’s Statement of Financial Circumstances also shows assets which include her principal home valued at $807,000 (50% share), funds in the bank of around $53,500 (50% share), motor vehicle valued at $15,000, household contents of $10,000 and superannuation of around $812,876. In respect of her liabilities, Ms Morden’s Statement of Financial Circumstances indicates a mortgage of $865,554 (50% share), a tax debt of $40,000, and other debts of $24,158 relating to Centrelink and school fees.
Ms Morden’s Statement of Financial Circumstances includes her household expenditure at $3,963 per week, including the children’s costs. This is in addition to Ms Morden’s personal expenditure of $671 per week, which includes income tax, health insurance and credit card repayments. The Tribunal notes that this expenditure includes $330 per week for holidays, entertainment, gifts, donations, art and home improvements for Ms Morden and the children. The Tribunal has excluded the home improvement costs as these have been paid, according to Ms Morden’s written submissions, from savings. In respect of the other expenses that have not been taken into account, the Tribunal does not consider these expenses, in the context of the considerations under subsections 117(4) and (6) to (8) the Assessment Act, as necessary for self-support. Notwithstanding these amounts being excluded from Ms Morden’s personal and household expenses, the expenses for her and the children are greater than her income.
Ms Morden’s submission was that while her Statement of Financial Circumstances showed savings, the home requires roof repairs, due to leaking which has caused water damage and flooding in parts of the home. These repairs will significantly reduce their savings and affect her ability to meet other expenses. Ms Morden submitted that these repairs were to commence in 2024 and that as a consequence, the joint savings have now reduced to $38,668 as at October 2024. Further to these funds, Ms Morden stated that she has an outstanding capital gains tax debt ($40,000) to repay and an overpayment to be repaid to Centrelink ($17,000), which she is presently repaying at $200 per month.

Mr Salah’s submissions relating to the property settlement

Mr Salah has submitted, both to Child Support and the Tribunal, that the departure determination does not take into account the decision of Justice [C] in the Family Court of Australia regarding their property division.[24] Mr Salah submits that the adjustment in the Family Court’s decision of 5% relates directly to his future child support obligations and that this amount should be taken into account in any consideration of a departure determination and that the Court’s decision to increase the proportion of Ms Morden’s share of the matrimonial property should be considered in regard to any departure from the administrative assessment.
[24] The Tribunal has referred to the published version of the decision: [FamCA Citation].
Subparagraph 117(2)(c)(ii) of the Assessment Act provides for the consideration as a ground for departure, any payments, and any transfer or settlement of property, made or to be made by the liable parent to the child, to the carer entitled to child support or to any other person for the benefit of the child. Furthermore, in considering whether it is just and equitable to depart from the administrative assessment, subsection 117(9) allows for other matters, not listed in subsection 117(4) to (8) of the Assessment Act, to be taken into account.
In the reasons for decision for the division of the matrimonial property, the Court found, in respect of Mr Salah, as follows: ‘The husband has made no contribution to the financial support of the children, pursuant to an Administrative Assessment, since at least November 2017. The evidence gave no reason for optimism that he will make a meaningful contribution to the support of the children in the near future’.[25] On the basis of this and other factors, the division of property was increased by 5% in favour of Ms Morden, to 65% of the matrimonial pool of assets. In particular, the decision considers Mr Salah’s payment of child support from 2017 and the ‘apparent unlikelihood that he will do so in the near future’.[26]
[25] Ibid. Paragraph 66.
[26] Ibid. Paragraph 73.
While the decision of the Court does increase the division of the matrimonial pool of assets in favour of Ms Morden by taking into account Mr Salah’s historical payment of child support, and his unlikelihood to meaningfully contribute in the near future, this is one of several factors considered. Furthermore, the Tribunal does not accept Mr Salah’s submission that these considerations were solely for the future consideration of child support. The Court’s decision clearly states that this was in consideration of both past and the prospect of child support payments in the foreseeable future, but does not state that the adjustment was for Mr Salah’s ongoing obligations to meet the costs of the children. The Tribunal notes that the court could have made an order relating to the child support payable under the Family Law Act 1975 but did not make such an order. The Tribunal does not accept that the intention of the Court’s decision was for the purpose of addressing Mr Salah’s ongoing obligation to provide for the children completely. If that was the intention, the Court would have made orders specific to the payment of child support. In addition to these submissions, Mr Salah has also submitted his dissatisfaction with the amount of the property received by Ms Morden being higher. The Tribunal has not considered these matters.

Conclusion

After consideration of the income, resources and assets, together with the commitments and liabilities of Mr Salah and Ms Morden, and the needs of the children, the Tribunal considers it is just and equitable to make a departure determination from the current administrative assessment in accordance with section 98S of the Assessment Act. Section 98S sets out a range of determinations, including varying the annual rate of child support payable, the adjusted taxable income of a parent or the costs of self-support.
Therefore, the Tribunal makes a departure determination as follows:
·     For the period 1 January 2023 to 31 December 2025, Mr Salah’s adjusted taxable income is varied to $100,000 per annum.
·     For the period 1 January 2024 to 31 December 2025, the annual rate of child support payable by Mr Salah is increased by $1,865 per annum for [Child 2]’s orthodontic costs.
·     For the period 1 July 2024 to 31 December 2025, the annual rate of child support payable by Mr Salah is increased by $1,200 per annum for [the children’s] counselling costs.
·     For the period 1 January 2023 to 31 August 2023, Ms Morden’s adjusted taxable income is varied to $110,407 per annum.
The Tribunal has determined to set Mr Salah’s adjusted taxable income as stated in paragraph 71 above, for the purpose of producing the rate of child support of approximately $8,322 per annum from 1 January 2023 to 31 December 2025. The Tribunal has determined that it is appropriate to set Mr Salah’s adjusted taxable income, as per section 98S of the Assessment Act, and has done so to produce this rate of child support for the period for the period. By setting the adjusted taxable income for Mr Salah as outlined above, the Tribunal has determined the amount child support payable by Mr Salah before making further adjustments for orthodontic and counselling. The Tribunal has made the determination thus so that it is clear to both parties what additional increased amount has been determined for orthodontic and counselling.
The above determination has considered the factors in subsection 117(4) of the Assessment Act and the factors discussed above. The Tribunal is also required to consider whether any departure determination, or failure to make a departure determination, will cause any hardship to the children, the carer, the liable parent or any other person the liable parent has a duty to support. The Tribunal finds that the above determination is reflective of Mr Salah’s capacity to pay based on the Tribunal’s assessment of his current circumstances and his personal and household expenses.
The Tribunal has found that Mr Salah’s expenses are less than his income and allow him to meet the additional expenses of the children without causing hardship in meeting his necessary commitments for self-support. Mr Salah’s submissions were that he has expenses for the household of $1,397 per week according to his Statement of Financial Circumstances. As discussed in the preceding paragraphs, the Tribunal does not accept that all of these expenses are met by Mr Salah. In addition, the Tribunal finds that the needs of the children should have priority. Taking into account his personal and household expenditure, his weekly income of $1,805 per week is higher than this expenditure.
Mr Salah has referred to debts, including a joint liability for a mortgage and personal debt to his partner. In relation to the mortgage, this is not for any asset that Mr Salah has an interest. It is for investments by his partner. In relation to the personal loan to his partner, Mr Salah’s evidence is that he is not making any payments towards this loan presently. Once again, in the consideration of these liabilities, the Tribunal has prioritised his duty for the support of the children over these loans, in circumstances where he is not making repayments and as required under the Assessment Act.
The above determination will result in an amount of approximately $160 per week for the 2023 calendar year. This amount will increase to approximately $195 per week from 1 January 2024 and then to approximately $218 per week from 1 July 2024. These amounts, based on Mr Salah’s income and expenses and the Tribunal’s consideration, are well within Mr Salah’s capacity to pay and the Tribunal finds that they will not cause hardship. The Tribunal acknowledges that the increase from 2024 will result in some arrears, but in any event, the position will be reduced when compared to Child Support’s objection decision. Once again, the Tribunal has considered the hardship to the children and Ms Morden if no departure determination were to be made.
The Tribunal has determined to increase Ms Morden’s adjusted taxable income commensurate with her income from 1 January 2023, during which Ms Morden’s income was based on a previous income which was not reflective of her income at the time. The Tribunal’s view is that the above determination will mean that hardship will be minimised in relation to some of the children’s costs. It is apparent that from the evidence that the costs of the children are high and that there will still be a level of hardship. Ms Morden has additional expenses which are not shared. The Tribunal has determined to extend the period of the departure determination until 31 December 2025 to provide a level of certainty to the parents as to the amount of child support payable in relation to the children. While the Tribunal considered extending the period further, it has determined that it is not appropriate to do so in this application.
The Tribunal has departed from the administrative assessment based on the children’s special needs and commensurate with Mr Salah’s income and resources and the Tribunal was satisfied that that a decision not to depart would create an unjust and inequitable outcome. The Tribunal further finds that the costs associated with the children’s special needs should be shared equally between the parents.
The Tribunal also considered Ms Morden’s submission regarding the determination commencing prior to the date of the application to Child Support. The Tribunal has made the determination from 1 January 2023, which is from the first day of the month from the date of the application for the departure from the administrative assessment by Ms Morden.
In considering whether to make a retrospective determination, subsection 98S(3B) of the Assessment Act allows a departure determination to be made up to 18 months earlier than the day on which the application was made. The Tribunal, in making such a determination, must consider whether it would be just and equitable to do so in respect of the past period,[27] as well as the overall impact of the proposed retrospective determination.[28]
[27] Tyagi & Meares (SSAT Appeal) [2008] FMCAfam 886 at paragraph [30].
[28] Hides & Hatton [1997] FamCA 28.
The Tribunal finds that a retrospective determination in this application is not just and equitable. In the circumstances, and considering the information already discussed, including just and equitable and the impact of a retrospective determination, the Tribunal has decided that it is not appropriate to make the determination earlier than 1 January 2023. The Tribunal considered Ms Morden had an opportunity to seek a departure determination in the past and has not done so. While the Child Support objection decision seems to suggest that such an application was previously made, there is no evidence of an earlier application. Furthermore, there is nothing in the evidence before the Tribunal which suggests that Ms Morden was not able to make such an application earlier. Ms Morden’s submissions to the Tribunal indicate that she was aware of the possibility to apply for a departure determination and decided not to make an application. In determining not to make a retrospective departure determination, the Tribunal has taken into account Mr Salah’s submissions regarding the division of the matrimonial property. While the decision of the Court, as stated above, was did not intend to remove Mr Salah’s obligation to pay child support, it is relevant in the consideration of whether a retrospective determination should be made in this matter. Accordingly, considering all of these factors above, the Tribunal has determined that the departure determination will commence from 1 January 2023.

Is it otherwise proper to make a particular departure 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 Assessment 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.
The information before the Tribunal shows that Ms Morden is not in receipt of family tax benefit.
The child support law recognises that each parent has a primary duty to maintain their child. For the reasons outlined above, the Tribunal is satisfied it is appropriate to depart from the administrative assessment.
The Tribunal notes that it is open to either party to lodge a further change of assessment application should the future circumstances of either party change significantly from the circumstances upon which this decision is based.

DECISION

The Tribunal sets aside the decision under review and makes the following decision in substitution:

For the period 1 January 2023 to 31 December 2025, Mr Salah’s adjusted taxable income is varied to $100,000 per annum.
For the period 1 January 2024 to 31 December 2025, the annual rate of child support payable by Mr Salah is increased by $1,865 per annum for [Child 2]’s orthodontic costs.
For the period 1 July 2024 to 31 December 2025, the annual rate of child support payable by Mr Salah is increased by $1,200 per annum for [the children’s] counselling costs.
For the period 1 January 2023 to 31 August 2023, Ms Morden’s adjusted taxable income is varied to $110,407 per annum.

Date(s) of hearing:	Tuesday, 1 October 2024
Representative for the Applicant:	Self-represented
Representative for the Other party:	Self-represented