Sanders and Sweeney (Child support)

Sanders and Sweeney (Child support) [2018] AATA 3290 (20 July 2018)

DIVISION:Social Services & Child Support Division
REVIEW NUMBER:  2018/SC013222
APPLICANT:  Ms Sanders
OTHER PARTIES:  Child Support Registrar
Mr Sweeney

TRIBUNAL:Member W Kennedy
DECISION DATE: 20 July 2018
DECISION:

The Tribunal sets aside the decision under review and, in substitution, decides to vary Mr Sweeney’s adjusted taxable income to $46,210.00 for the period from 5 September 2017 until a terminating event.

CATCHWORDS
Child support - Departure determination - Income, property and financial resources of liable parent - A ground for departure exists - Adjusted taxable income of liable parent varied - Decision under review set aside and substituted

Names used in all published decisions are pseudonyms. Any references appearing in square brackets indicate that information has been removed from this decision and replaced with generic information so as not to identify involved individuals as required by subsections 16(2AB)-16(2AC) of the Child Support (Registration and Collection) Act 1988.

REASONS FOR DECISION

BACKGROUND

This decision concerns an application for a departure from the formula assessment of child support. Ms Sanders and Mr Sweeney are the parents of [Child 1], who was born in 2002. There has been a child support assessment in place for [Child 1] made by the Child Support Agency of the Department of Human Services (the Department) since 12 January 2012. The assessment is based on Ms Sanders having a care percentage of 100%.
At the time of Ms Sanders’ application to the Department the child support assessment was based on Mr Sweeney’s adjusted taxable income (ATI) of $30,713.00 and Ms Sanders’ ATI of $37,564.00. The former is a provisional figure derived from Mr Sweeney’s 2016 taxable income while the latter figure is derived directly from Ms Sanders’ 2017 taxable income. The annual rate of child support payable by Mr Sweeney was $951.00 for the period from 1 September 2017 to 30 November 2018.
On 5 September 2017 Ms Sanders applied to the Department for a departure from the formula assessment based on Reason 8A (the income, property and financial resources of one or both of the parents) and Reason 8B (the earning capacity of one or both of the parents).
On 19 October 2017 a delegate of the Child Support Registrar considered the departure application and decided that no reason to depart from the formula assessment of child support had been established. The delegate found that there was no evidence that Mr Sweeney’s actual income is higher than the income on which he is assessed and that Mr Sweeney continued to work full-time and had not changed his occupation, industry or working pattern.
On 14 November 2017 Ms Sanders lodged an objection to that decision, stating that she believed that Mr Sweeney had supplied false information. On 21 December 2017 a Department objections officer disallowed Ms Sanders’ objection, finding that no reason to depart from the formula assessment of child support had been established.
On 3 January 2018 Ms Sanders lodged an application for a review of the decision with this Tribunal. The Tribunal had access to documents provided by the Department. The documents are at folios 1 to 156 of the hearing papers and were provided to the parents in advance of the hearing. Before the hearing the Tribunal directed Ms Sanders and Mr Sweeney to provide further documentation. Ms Sanders provided documents that are at folios A1 to A52 of the hearing papers. Mr Sweeney failed to provide documents but said that this was due to difficulties he had obtaining the correct email address and then technical issues with transmission of the documents. At the hearing Mr Sweeney acknowledged that he had received copies of the additional documents provided by Ms Sanders.
The matter was initially heard in Sydney on 17 July 2018. Ms Sanders and Mr Sweeney both attended the hearing by telephone and gave their oral evidence under affirmations. The Child Support Registrar was not represented at the hearing.
Subsequent to the hearing Mr Sweeney provided further documentation that partially responded to the Tribunal’s directions. The Tribunal determined that it was not necessary to exchange the documents provided by Mr Sweeney and on 20 July 2018 the Tribunal reconvened the hearing without the parties and determined the matter.

CONSIDERATION
The legislative framework and issues for the Tribunal to determine

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). This requires the application of a statutory formula which takes into account factors such as the number and ages of the children, the level of care provided and the income of each parent.
The liable parent or a carer may apply to the Child Support Registrar for a determination to depart from the child support administrative assessment under Part 6A of the Act. Section 98C of the Act provides that the Registrar may make a determination to depart from the formula assessment and establishes a three step process for considering applications to do so. The Registrar, and the Tribunal standing in place of the Registrar, must be satisfied:
·that one, or more than one, of the grounds for departure referred to in subsection 117(2) of the Act exists; and
·that it would be just and equitable as regards the child, the liable parent, and the carer entitled to child support; and
·that it would be otherwise proper to make a particular determination.
The grounds for departure from the administrative assessment are set out in subsection 117(2) of the Act. Each of the grounds, which for administrative purposes are referred to as reasons, require that special circumstances be established. The term “special circumstances” is not defined in the Act. In Gyselman and Gyselman [1991] FamCA 93 the Full Court of the 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.
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 must make one of the determinations prescribed in section 98S of the Act. These include varying the annual rate of child support payable or a parent’s adjusted taxable income.

Issue one – Does a ground exist to depart from the administrative assessment?

The Tribunal’s first task is to determine whether a ground for departure from the administrative assessment can be established. In her application to the Department, Ms Sanders asserted that there are two grounds (or reasons) for a departure from the administrative assessment. The Tribunal considered each of these in turn.

Does a ground exist to depart from the administrative assessment under Reason 8A?

Ms Sanders sought a departure from the administrative assessment on the grounds that Mr Sweeney’s income, property and financial resources are greater than is reflected in the ATI (adjusted taxable income) used for him in the child support assessment in effect at the time of her application. This ground for departure, which is known as reason 8A for administrative purposes, is set out at subparagraph 117(2)(c)(ia) of the Act:
(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
…
Ms Sanders has previously said that she believes that Mr Sweeney’s income is greater than he has declared. Ms Sanders has provided documentation that show Mr Sweeney’s ownership of various assets going back to 2003. Much of the documentation provided by Ms Sanders relates to a period prior to the registration of the child support case and little of the documentation provided by Ms Sanders is recent.
Ms Sanders has said that Mr Sweeney earns more than he discloses and that he owns assets that are in other persons’ names. She makes the general claim that Mr Sweeney’s evidence is misleading or incorrect. She bases these assertions on her first-hand knowledge and experience. Although at the hearing, Ms Sanders claimed to have provided proof of her allegations, the documentary evidence she has provided is of little value in determining Mr Sweeney’s current or very recent financial circumstances. The Tribunal is therefore substantially reliant on the evidence obtained and provided by the Department or provided directly by Mr Sweeney.
The evidence before the Tribunal is that Mr Sweeney’s taxable income in 2015/16 was $30,200.00 and that in 2016/17 it was $28,494.00. At the hearing Mr Sweeney said that his only income is from his employment with [Company 1].
The actual ATI used in the assessment at the time that Ms Sanders applied for the departure from the assessment was $30,713.00, being a provisional figure derived from Mr Sweeney’s 2016 taxable income. On 1 November 2017 the Mr Sweeney’s ATI was changed to $28,494.00 with effect from 1 September 2017. This change was made following the receipt of Mr Sweeney’s 2017 taxable income from the Australian Taxation Office. This has resulted in a reduction in the child support assessment from $951.00 per annum to $630.00 per annum.
Although Mr Sweeney provided a number of reasons for his failure to respond to the Tribunal’s directions, it appears that this is consistent with a pattern of behaviour by Mr Sweeney. In a previous change of assessment decision dated 20 May 2013 (folio 8) the Department failed to obtain any information directly from Mr Sweeney, however information from Mr Sweeney’s employer allowed it to set Mr Sweeney’s ATI at $42,240.00 for the period up to 14 July 2014. Mr Sweeney subsequently applied for a change of assessment but in a decision dated 10 July 2014 his application was refused, the Department noting that Mr Sweeney had failed to provide the documentation requested. Ms Sanders subsequently applied for change of assessment but in a decision dated 28 January 2016 her application was refused, the Department having tried and failed to obtain any documentation from Mr Sweeney.
In the current matter the original decision maker sought information from Mr Sweeney and from his employer but both failed to provide any documentation. The original decision maker commented:
It should be noted that it is always difficult to make a decision on a case where a parent provides little or no information about their income. The change of assessment process is meant to be a quick and cost effective means to obtain a change to a child support assessment. It is not a judicial process and the onus of substantiating the claims is borne by the applicant parent.
As both Mr Sweeney and his employer had failed to respond, the Department found that there was insufficient evidence to establish a reason to depart from the assessment.
Following Ms Sanders’ objection the matter was further considered by a Departmental objections officer. The objections officer noted that Mr Sweeney did not provide a response to the Department, however the objections officer was able to use a notice issued under section 161 of the Act to obtain statements of a bank account owned by Mr Sweeney for the period from 23 August 2017 to 22 November 2017. The objections officer stated:
The bank statements show no regular or unexplained deposits, and Mr Sweeney is meeting his personal expenses from this account.
This statement by the objections officer is incorrect in all particulars. The bank statements disclose regular and unexplained deposits and Mr Sweeney does not meet his living expenses from this account. The statements disclose almost no personal expenditure. In the absence of any evidence provided by Mr Sweeney, the objections officer relied on this evidence, and a mistaken conclusion as to the facts disclosed by the evidence, to disallow Ms Sanders’ objection.
At a telephone directions hearing on 1 May 2018 Mr Sweeney was directed by the Tribunal to provide the following documentation:
·Income tax return for 2016/17
·Completed Statement of Financial Circumstances (SOFC)
·Statements for all bank accounts which Mr Sweeney is authorised to use for the period from 1 October 2017 to 31 December 2017
·Statements for all credit cards which Mr Sweeney is authorised to use for the period from 1 October 2017 to 31 December 2017
·
The Tribunal directed Mr Sweeney to provide the documentation by 25 May 2018. Having failed to respond to the Directions, on 1 June 2018 Mr Sweeney was contacted by the Tribunal. He advised that he wanted to send documentation by email but that he did not have the Tribunal’s email address. He said that he had the documentation and that he would send it to the Tribunal “on the weekend”. Having not received the documentation the Tribunal again contacted Mr Sweeney on 12 July 2018. At that time he said that he had had trouble sending the documentation but that he would now send it in. It appears that Mr Sweeney sent some documentation to the Tribunal on the evening before the hearing however this was not available at the time of the hearing. Following the hearing the Tribunal examined the documentation provided by Mr Sweeney and found that the documents consisted of four pages of a bank account statement which adds nothing to the Tribunal’s understanding of Mr Sweeney’s finances and two credit card statements which disclose no expenditure other than debits made by the Department. None of these documents relate to the period for which Mr Sweeney was directed to provide documentation.
At the hearing the Tribunal reiterated to Mr Sweeney the directions that it had previously issued and gave him until 19 July 2018 to fully comply. The Tribunal explained to Mr Sweeney that if he failed to provide the documentation the Tribunal would be able to draw adverse inferences as to the information that would be disclosed had he complied. Subsequent to the hearing Mr Sweeney provided:
·a completed SOFC;
·an income tax return summary from his tax agent and a Taxation Notice of Assessment (but not the tax return);
·further bank statements, apparently for the same account for which the Department had earlier obtained statements; and,
·credit card statements disclosing no expenditure other than Departmental debits.
Thus, through three change of assessment applications and an objection process, over the course of five years, Mr Sweeney failed to provide any of the information that has been requested of him. In the current proceedings Mr Sweeney has provided some of the documentation required, but that only after persistent action by the Tribunal. Having examined the documentation provided and considered the other evidence available to it the Tribunal is not satisfied that Mr Sweeney has provided all of the documentation he was directed to provide. Crucially the Tribunal believes that Mr Sweeney has not provided statements for all of the bank accounts and credit cards he is authorised to use. The Tribunal finds that Mr Sweeney’s failure to respond to the Tribunal’s directions is part of a deliberate strategy to provide insufficient information to illuminate his actual financial circumstances. Up to this point this strategy has proven to be successful in that Ms Sanders’ applications have been unsuccessful due to the lack of documentation.
In considering how to proceed the Tribunal took into account the decision in Humphries & Berry [2008] FMCAfam 409 where Federal Magistrate Slack dealt with the issue of the disclosure of financial information in matters before administrative tribunals. His Honour stated that the principle of full and frank disclosure applicable to proceedings in the Family Court was also applicable to proceedings before the former Social Security Appeals Tribunal. His Honour stated at paragraphs 26 and 27 of the decision:
Although the SSAT has the power to obtain information (s.103K) and the power to require the Child Support Registrar to exercise powers under the Assessment Act and the Child Support Registration and Collection Act for the purposes of gaining information relevant to a review (s.103L), there nevertheless remains a primary duty and obligation on the parties to the review to make a full and complete disclosure of their financial affairs relevant to the matter before the hearing and a duty to assist the Tribunal to come to its determination in the application. The obligation to disclose information and documents extends to the presentation of that material in a way that the true nature of their financial affairs can be readily understood. The obligation extends not just to providing financial records but also includes presenting the information in a way that can be reasonably and readily understood and examined.
His Honour went on to state at paragraphs 30 and 31 of the decision:
In circumstances where a party (in this case the appellant) places before the SSAT inconsistent, confusing and incomplete financial information, the fact that the SSAT can and may exercise its powers to obtain further information that might clarify the financial circumstances of a party does not relieve a party of their primary obligation to disclose their financial affairs in a manner that can readily be understood. The extent to which the SSAT should exercise its powers of information gathering and testing of evidence in each case will depend on the circumstances of the matter but the exercise of such power or the failure to exercise such power does not in any way derogate from the immutable obligation and duty of both parties throughout the proceedings before the SSAT to make full, frank and cogent disclosure of all relevant information pertaining to their financial affairs in order that the Tribunal can make a proper assessment of their respective capacities to provide for the needs of their children.

In financial proceedings under the Family Law Act, the authorities make it clear that a Court should not be unduly cautious about making findings in favour of the other party if it is not satisfied that proper disclosure has been made (see Chang & Su (2002) FLC93- 117). Such principles, in my consideration, have similar application to these matters before the SSAT.
While the Tribunal takes heed of the advice of the Family Court that it should not be unduly cautious, the Tribunal must base its decision on probative evidence and not on speculation.
The evidence that is available to the Tribunal is limited. The Tribunal has statements for a bank account for a period between 23 August 2017 and 2 February 2018. During the period covered by the statements Mr Sweeney received $11,968.00 from [Company 1]. This consisted of 22 regular weekly payments of $544.00. Other deposits are made in cash and are $500.00 (2), $200.00, $1,050.00 and $2,062.53. At the hearing Mr Sweeney said that the additional deposits were made by his daughter. He said that she had purchased a vehicle for him as a gift and that she put money into his account to make the finance payments. He said that the vehicle was in his name only because that made it cheaper to register and insure. At the hearing Mr Sweeney also said that his daughter sometimes made deposits into his account because she was having difficulty with her own bank.

The payments from this account are mostly directed towards loan repayments:
·Toyota Finance             $4,622.20
·Latitude  $2,817.73
·“Loan Repayment”       $6,264.00
From this evidence it would appear that more than 80% of Mr Sweeney’s income is devoted towards repaying loans. During the three month period an additional $2,200.00 is directed towards reducing his child support arrears. It appears that these payments are directed to the credit card disclosed by Mr Sweeney and that the credit card is debited by the Department. This appears to be the only use made of the credit card disclosed by Mr Sweeney. Of the more than $16,000.00 deposited into the account only $870.14 is directed towards what might be known as living expenses. Of that amount $235.07 is paid to NRMA Insurance and $125.00 is paid to Colonial Mutual. A total of $107.40 is spent at service stations and $301.47 is spent at Woolworths, being mainly a single purchase of $203.67.
At the hearing Mr Sweeney said that all of his personal expenses are met by members of his family, particularly his brother, his daughter and his girlfriend. He said that he lives at various places and does not pay rent. He said that his clothing, food, chemist’s needs and all other personal requirements are met by family members. In his SOFC, which Mr Sweeney provided after the hearing, he repeats these claims, saying that his household expenditure amounts to only $15.00 per week, that amount being directed to “hairdressing, toiletries”. Ms Sanders disputed this evidence, saying that she lives in the same country town as Mr Sweeney and she knows from first-hand personal knowledge that his evidence is completely untrue. She said that he lives with his girlfriend and does not move around between relatives. She said that he makes purchases just like anyone else.
The Tribunal finds that Mr Sweeney’s oral evidence is not credible, particularly in the face of his resistance to providing corroborating documentary evidence. For instance, it is not credible that Mr Sweeney’s daughter would purchase for him an expensive automobile (the payments being over $900.00 per month) when, according to his evidence, his circumstances are so dire that he relies on family members for shelter, food, clothing and all other essentials. It is also not credible that he would maintain a vehicle that he values at $25,000.00 when he is unable to afford food.
The decision made by the Department on 20 May 2013 set Mr Sweeney’s ATI at $42,240.00 for the period from 15 April 2013 to 14 July 2014. This figure was based on information provided by Mr Sweeney’s employer. The Tribunal has decided that in the absence of more recent documentation, it will rely on this evidence to make a determination as to Mr Sweeney’s current income. According to the Australian Bureau of Statistics private sector wages have increased by an average of 0.5% per quarter in the 18 quarters that have elapsed between the commencement of the decision of 20 May 2013 and the date of Ms Sanders’ application. Compounding and applying this figure to the previous determination produces a figure of some $46,210.00. As Mr Sweeney works full-time this suggests an hourly rate of some $22.21 per hour. According to [workers in his industry] working in a NSW country town receive an average wage of $22.53 per hour. The Tribunal finds that the figure of $46,210.00 is very fair to Mr Sweeney.
As the Tribunal has determined that Mr Sweeney’s earnings are $46,210.00 per annum the Tribunal finds that a child support assessment based on an ATI of $30,713.00 produces an assessment that is unfair. The Tribunal finds that this is a special circumstance that would allow a departure from the formula assessment of child support under subparagraph 117(2)(c)(ia) of the Act.

Does a ground exist to depart from the administrative assessment under Reason 8B?

Ms Sanders also sought a departure from the administrative assessment on the ground that Mr Sweeney’s earning capacity is not reflected in the formula assessment. This ground, known as Reason 8B for administrative purposes, is set out in subparagraph 117(2)(c)(ib) of the Act:
(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:
…
(ib)because of the earning capacity of either parent; or
Subsection 117(7B) of the Act provides:
(7B) In having regard to the earning capacity of a parent of the child, the court may determine that the parent's earning capacity is greater than is reflected in his or her income for the purposes of this Act only if the court 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 or otherwise engaged;
(iii)the parent has changed his or her occupation, industry or 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
(ii)the parent's state of health; and
(c)the parent has not demonstrated that it was not a major purpose of that decision to affect the administrative assessment of child support in relation to the child.
In order to make a finding in relation to earning capacity the Tribunal must make three determinations:
(a)that the parent does not work despite ample opportunity, or that the parent has reduced their work hours, or that the parent has changed their occupation, industry or working pattern; and
(b)that the parent’s decision is not justified due to the parent’s caring responsibilities or health; and
(c)that the parent has not demonstrated that any change was not to affect their child support liability.
At the hearing both parents acknowledged that Mr Sweeney continues to work full-time and that he has not changed his occupation, industry or working pattern. There is no contradictory evidence before the Tribunal and as a result paragraph 117(7B)(a) of the Act is not satisfied and it is not open to the Tribunal to make a finding as to Mr Sweeney’s earning capacity.
The Tribunal finds that there are no special circumstances that would allow a departure from the formula assessment of child support under subparagraph 117(2)(c)(ib) of the Act.

Issue two – Would departure from the administrative assessment be just and equitable?

Relevant law and evidence

As the Tribunal is satisfied that there is a ground to depart from the administrative assessment of child support under Reason 8A, the next step is to consider whether it is just and equitable to depart from the assessment. In deciding whether it is just and equitable the Tribunal had regard to the following matters set out in subsection 117(4) of the Act:
(4) In determining whether it would be just and equitable as regards the child, the carer entitled to child support and the liable parent to make a particular order under this Division, the court must have regard to:
(a) the nature of the duty of a parent to maintain a child (as stated in section 3); and
(b) the proper needs of the child; and
(c) the income, earning capacity, property and financial resources of the child; and
(d) the income, property and financial resources of each parent who is a party to the proceeding; and
(da) the earning capacity of each parent who is a party to the proceeding; and
(e) the commitments of each parent who is a party to the proceeding that are necessary to enable the parent to support:
(i)himself or herself; or
(ii) any other child or another person that the person has a duty to maintain; and
(f) the direct and indirect costs incurred by the carer entitled to child support in providing care for the child; and
(g) any hardship that would be caused:
(i) to:
(A) the child; or
(B) the carer entitled to child support;
by the making of, or the refusal to make, the order; and
(ii) to:
(A) the liable parent; or
(B) any other child or another person that the liable parent has a duty to support;
by the making of, or the refusal to make, the order; and
(iii) to any resident child of the parent (see subsection (10)) by the making of, or the refusal to make, the order.
The Tribunal considered the oral evidence provided by both parents, as well as the documents provided by the parents and the documents provided by the Department.

Assessment of evidence, findings of fact and application of the law

Section 3 of the Assessment Act states that it is the duty of both parents to financially support their children. [Child 1] should receive a proper amount of financial support from his parents in accordance with their capacity to contribute.

The children’s needs

Paragraph 117(4)(b) of the Act requires the Tribunal to consider the proper needs of the children. The Tribunal has done this in accordance with the legislation under which this determination is made. At the hearing Ms Sanders said that [Child 1] has no needs that are out of the ordinary. There is no evidence of special needs or extraordinary costs in relation to [Child 1]’s needs that must be taken into account by the Tribunal.

The children’s incomes and earning capacities

[Child 1] is a full-time student in year 10; however at the hearing Ms Sanders said that he works up to three shifts per fortnight. She said that he earns up to $200.00 per fortnight. Although acknowledging that [Child 1]’s income lessens Ms Sanders’ financial burden, the Tribunal decided that [Child 1]’s earnings are not so great that they must be taken into account by the Tribunal.

The income, property, financial resources and earning capacity of Mr Sweeney and his necessary commitments

Mr Sweeney’s financial circumstances were examined by the Tribunal to the extent that that was possible, given that Mr Sweeney failed to cooperate fully and the Tribunal has found that he has not been open about his financial circumstances. Following the consideration of the facts as described above the Tribunal has decided that it would be appropriate to set Mr Sweeney’s ATI at $46,210.00.
Although noting the lack of documentation the Tribunal is satisfied that Mr Sweeney has sufficient financial resources to meet his necessary commitments.

The income, property, financial resources and earning capacity of Ms Sanders and her necessary commitments

Ms Sanders’ financial circumstances were closely examined by the Tribunal. The Tribunal examined the SOFC and the other documentation provided by Ms Sanders. According to her SOFC Ms Sanders’ income is derived from her employment ($750.00 per week) and also from a partial newstart allowance and parenting payment. Ms Sanders also acknowledged receiving $25.00 per week in child support (although the relevant assessment actually amounts to some $18.00 per week and this has since fallen to some $12.00 per week). The amount she refers to mostly consists of payments deducted from Mr Sweeney’s bank account to reduce his arrears of child support. A further amount was received by Ms Sanders after the Department intercepted Mr Sweeney’s tax refund.
Ms Sanders has provided statements for one NAB bank account and also for three NAB loan accounts, one of which is apparently a mortgage. Ms Sanders also provided statements for an account with [a] Credit Union. It appears that the credit union account receives Ms Sanders’ salary, her parenting payment and child support. It appears that most of Ms Sanders’ day to day expenses are met directly from this account. There are also regular ATM withdrawals, for instance $1,000.00 on 4 October 2017, $200.00 on 7 October 2017 and $1,500.00 on 18 October 2017. At the hearing Ms Sanders said that she uses the cash withdrawals to make loan repayments. The bank account receives cash deposits of $320.00 roughly each fortnight. On three occasions the cash deposits were $450.00. The bank account makes payments towards the mortgage and also makes monthly payments to Allianz Insurance. At the hearing Ms Sanders said that the other loans were repaid using the cash she withdraws from the credit union account.
Ms Sanders also provided statements for an NAB Visa credit card. The card is seldom used and it appears that the payments are made in cash.
The Tribunal found Ms Sanders to be a credible witness and it concludes that the documents provided to the Tribunal together with Ms Sanders’ oral evidence presents an accurate picture of the financial resources available to her. The Tribunal is satisfied that Ms Sanders has no unexplained income and that she has sufficient financial resources to meet her necessary commitments.

The parents’ duty to support others

At the hearing Ms Sanders said that she has no legal duty to support any person other than [Child 1]. Mr Sweeney said that he has the legal duty to support a younger son. The Tribunal notes that this is taken into account in the child support assessment.

Hardship

The Tribunal has found that both parents have access to financial resources that are sufficient to meet their necessary commitments, although it notes that in Ms Sanders’ case she would have considerable difficulty meeting her expenses solely from her own resources and it notes that in Mr Sweeney’s case there is a paucity of documentation.
The Tribunal found Mr Sweeney to be a poor witness, and for that reason, establishing the actual financial resources available to him has been problematic. The Tribunal has found that it is not possible to precisely establish Mr Sweeney’s income, property and financial resources. Setting Mr Sweeney’s ATI at $46,210.00 would result in a child support assessment of some $5,000.00. This will result in significant arrears and in the short term Mr Sweeney may have some difficulty meeting his liability. However the Tribunal’s opinion, based on all the information before it, is that Mr Sweeney has access to sufficient financial resources to meet the child support liability contemplated by the Tribunal. The Tribunal also notes that as a result of his failure to provide documentation when directed to do so Mr Sweeney has for some years benefitted from an inadequate assessment. Taking into account Mr Sweeney’s primary obligation to support his children, the Tribunal finds that the decision contemplated by it will not cause undue hardship to Mr Sweeney.
With regard to Ms Sanders, the decision contemplated by the Tribunal will help ensure that she has sufficient resources to meet [Child 1]’s necessary needs. The Tribunal finds that the decision contemplated by it will not cause hardship to Ms Sanders.

Terms and period of departure

The Tribunal has decided that it would be appropriate to depart from the formula assessment by setting Mr Sweeney’s ATI at $46,210.00.
The child support assessment started on 12 January 2012. There was a previous departure from the assessment that continued in effect until 14 July 2014. Since that time Ms Sanders has twice applied for a departure from the formula assessment based on her belief that Mr Sweeney has greater resources than is disclosed by his income tax returns. By a decision dated 28 January 2016 the Department found that no reason had been established to depart from the formula assessment. This decision was based entirely on the inability of Ms Sanders and the Department to obtain documentation, the latter entirely the result of Mr Sweeney’s failure to provide evidence.
The application for departure that is currently before the Tribunal was lodged by Ms Sanders on 5 September 2017. The Tribunal considered backdating the commencement of the departure; however, this would add significantly to Mr Sweeney’s arrears. Having regard to the matters in subsection 117(4) of the Act, the Tribunal finds that it would be just and equitable for the departure to commence from the date Ms Sanders lodged her application.
Unless Ms Sanders applies for an extension, the child support assessment will end on 6 September 2020. The Tribunal considers that it is desirable for the child support assessment to be predictable, and given the relatively short period remaining, the Tribunal finds that it would be just and equitable to extend the departure until a terminating event.

Issue three – Is it otherwise proper to depart from the administrative assessment?

The final step for the Tribunal to undertake is to determine whether it is “otherwise proper” to depart from the administrative assessment. Subsection 117(5) of the Act requires the Tribunal to take into consideration the following matters:
(a)the nature of the duty of a parent to maintain a child (as stated in section 3) and, in particular, the fact that it is the parents of a child themselves who have the primary duty to maintain the child; and
(b)the effect that the making of the order would have on:
(i)any entitlement of the child, or the carer entitled to child support, to an income tested pension, allowance or benefit; or
(ii)the rate of any income tested pension, allowance or benefit payable to the child or the carer entitled to child support.
The child support law recognises that each parent has a primary duty to maintain their children. In this case Ms Sanders receives parenting payment. Although she stated that she also receives a small amount of newstart allowance, the Tribunal finds that this would be so minor as to not require consideration. As a result of the Tribunal’s decision, Ms Sanders’ parenting payment may change marginally. The Tribunal finds that this is appropriate and is satisfied that it is otherwise proper to depart from the administrative assessment in this matter.

DECISION

[2018] AATA 3290

20 July 2018

Key Legal Topics

Areas of Law

Family Law

Administrative Law

Legal Concepts

Jurisdiction

Statutory Construction

Remedies

Judicial Review