Sandham and Monroy (Child support)

[2022] AATA 4997

Sandham and Monroy (Child support) [2022] AATA 4997 (14 December 2022)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2022/PC024720

APPLICANT:  Mr Sandham

OTHER PARTIES:  Ms Monroy

Child Support Registrar

TRIBUNAL:  Member S Hoffman

DECISION DATE:  14 December 2022

DECISION:

The tribunal affirms the decision under review.

CATCHWORDS

CHILD SUPPORT – non-agency payment - payment correctly refused - decision under review affirmed

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

REASONS FOR DECISION

BACKGROUND

1. This review is about child support paid by Mr Sandham to Ms Monroy in respect of [the child], born 14 March 2004. The case ended on 13 March 2022, the day before [the child] turned 18 years old.

2. On 27 May 2022, Mr Sandham contacted the Child Support Agency (the CSA) to request that 62 payments totalling $2,576.55, which were paid directly by him to Ms Monroy between 13 March 2020 and 4 June 2021, be accepted as non-agency payments (NAPs). If accepted as NAPs, they would be credited against his child support liability.

3. On 15 June 2022, a CSA case officer decided to accept all the payments as NAPs, meaning they could be offset against Mr Sandham’s child support liability (the original decision).

4. On 25 June 2022, the CSA received Ms Monroy’s objection to the original decision.

5. On 25 August 2022, the CSA allowed the objection, and decided that the payments totalling $2,576.55 were not to be accepted as NAPs.

6. Mr Sandham lodged an application for review with this tribunal on 23 September 2022.

7. A hearing was held on 14 December 2022 which both parties attended via MS Teams audio (similar to a hearing by telephone). Both parties gave affirmed evidence.

8. The tribunal had before it a bundle of documents provided by the CSA, numbered 1 to 196, copies of which were provided to the parties before the hearing.

ISSUES

1. The statutory provisions relevant to this review are contained in the Child Support (Registration and Collection) Act 1988 (the Act) and the Child Support (Registration and Collection) Regulations 2018 (the Regulations).

2. The issues which arise in this case are whether some or all of the payments made by Mr Sandham directly to Ms Monroy should be accepted as NAPs and be credited against his child support liability.

CONSIDERATION

Legislation

1. Section 71 of the Act is about payments made by the paying parent directly to the receiving parent. It provides that if certain conditions are met, such payments can be credited against a parent’s child support liabilities. The reference to ‘child support liabilities’ means the amount of child support a person is required to pay as determined by the CSA. If both parents intended for the direct payments to be paid in lieu of the child support liability as determined by the CSA, then the direct payments can be accepted as NAPs.

2. Section 71C of the Act provides that when a payer who has less than 14% care of the child makes payments of a particular kind (prescribed payments) to the payee or another person, these payments may be credited against up to 30% of the child support liability regardless of the intentions of the payer and payee, if at least 70% of the liability has been paid.

3. Regulation 19 of the Regulations specifies the kinds of payments (prescribed payments) that could be credited against a child support liability regardless of the parents’ intentions. These can include payments made by the payer for fees charged by a school, amounts paid for uniforms and books required by a school, and essential medical and dental services for the child.

4. Section 71D of the Act allows for NAPs not to be credited under section 71, 71A or 71C if, in the circumstances of the particular case, the amount ought not to be credited.[1]

   [1] Section 71A of the Act refers to payments made to third parties which is not relevant to this review as all the direct payments in question were made to Ms Monroy.

Evidence and consideration of evidence

1. The parents were largely in agreement as to the facts of what has occurred.

2. They had agreed via email during November 2019 that Mr Sandham would pay child support of $100 a week for [the child] from 1 March 2020. This was made up of two components. One part was the amount Mr Sandham was assessed to pay by the CSA (his child support liability). The second was a top-up payment, being the difference between his child support liability and $100. The agreement was that Mr Sandham would pay the difference – the top‑up payment – directly to Ms Monroy.

3. Ms Monroy told the CSA and the tribunal that this arrangement was simpler and quicker than going through the CSA to get the child support assessment changed through a change of assessment process.

4. The parents agreed that Mr Sandham kept up to date with his child support liability payments (i.e. the payments made directly to the CSA) until the case ended on 13 March 2022; and that until 4 June 2021, he made the top-up payments to Ms Monroy as agreed between them.

5. Between 13 March 2020 and 18 September 2020, Mr Sandham made 25 weekly top‑up payments of $16. He made a top-up payment of $59.75 on 25 September 2020. From 2 October 2020 to 4 June 2021, he made 36 weekly top-up payments of $58.80.

6. It was clear from 2019 and 2020 emails and other documents provided, and the oral evidence of the parents, that the top-up payments were made in addition to Mr Sandham’s child support liability (i.e. the liability according to the CSA). The intention behind the top‑up payments was that when they were added to the payments Mr Sandham made to the CSA, he paid $100 a week in child support.

7. In a letter to the tribunal dated 21 September 2022, Mr Sandham wrote that he stopped making the top-up payments on 4 June 2021. At the hearing, he confirmed this was correct. He had written that he stopped making the top-up payments because Ms Monroy started a fly in/fly out job with [Employer] and would be earning more than him. He wrote that he was waiting for her to lodge her tax return and for a new assessment to be advised by the CSA. Clearly, he had a concern that if he continued making top-up payments of $58.80 a week, he might end up paying more than $100 a week in child support to her.

8. Ms Monroy’s 2021 taxable income of $62,301 was applied by the CSA from 1 October 2021. At that time, a provisional income of $47,165 was being used for Mr Sandham, and the annual rate of child support payable by him was $1,635 ($31.44 a week).

9. On 16 May 2022, after the case had ended, the CSA wrote to the parents advising them that they had new information about Mr Sandham’s taxable income for 2021. The CSA retrospectively updated the assessment using his 2021 taxable income of $65,812. Based on tables at page 154 of the CSA documents, Mr Sandham’s 2021 taxable income was applied from 1 October 2021. This increased his annual child support liability to $4,816 from 1 October 2021 to when the case ended, on 13 March 2022.

10. Applying Mr Sandham’s 2021 taxable income in his way created arrears of child support of $1,438.62 in relation to the period 1 October 2021 to 13 March 2022. The tribunal understands that this prompted Mr Sandham to apply for the top‑up payments he made from March 2020 to June 2021 to be accepted as NAPs, and therefore be offset against the arrears.

11. Clearly the top-up payments made from March 2020 to June 2021 had no direct relationship to the arrears of child support as per the CSA records for the period 1 October 2021 to 13 March 2022.

12. It is apparent from the evidence before the tribunal that from March 2020 to June 2021, Mr Sandham made regular weekly top-up payments to Ms Monroy, and it was understood by both of them at the time these payments were made, that they represented the difference between Mr Sandham’s child support liability (as per the CSA) and $100. They were not paid in lieu of, or instead of, Mr Sandham’s child support liability. They therefore cannot be accepted as NAPs now, pursuant to section 71 of the Act. The intention of the parents at the time the payments were made is a critical factor here.

13. The tribunal notes that for most of the period relevant to this review, Ms Monroy provided 79% of [the child]’s care and Mr Sandham provided 21% of his care. However, for the period from 10 March 2020 to 14 September 2020, Ms Monroy provided 93% of [the child]’s care and Mr Sandham provided 7% of his care. It was agreed that Mr Sandham kept up to date with the payments he was required to make to the CSA. That being the case, the tribunal considered the application of section 71C of the Act, which becomes relevant when the payer has less than 14% care of the child (see paragraphs 12 and 13 above). The tribunal is satisfied that payments made during that six-month period do not meet the criteria to be accepted as NAPs as they were top-up payments in the manner already described, and not prescribed payments.

14. It is very clear that the top-up payments were made as part of a child support agreement between the parents. As mentioned at the hearing, it is not unusual for parents to have a private arrangement as to the amount of child support one will pay to the other. However, it is unusual to have an agreement of this type, whereby part of the agreed amount is paid via the child support system and the balance paid directly from one parent to the other.

15. The tribunal notes the following paragraphs in Mr Sandham’s letter of 21 September 2022:

    [Ms Monroy] has blatantly changed her mind about her intentions of the extra money she asked me for. She is now claiming that she did not agree to this money being part of the child support payment …

    The intention of [Ms Monroy] asking for more money, was in her words, ‘more child support’ until [the child] turned 18. The intention of my paying that amount was to provide ‘more child support.’ Any exchange of money between myself and [Ms Monroy] would never have been anything other than child support.

16. In the tribunal’s view, the unusual nature of the parents’ agreement has resulted in some unclarity about the use of the term “child support” as recorded in the documents; is it a reference to the agreement that Mr Sandham will pay $100 a week in child support or a reference to the amount he is required to pay according to the child support liability?

17. For example, in her reasons for objecting to the original decision, Ms Monroy wrote as follows:[2]

    The money was never paid as a “child support payment” … I believe that the extra payment should not be taken into account as child support payments.

    [2] See page 119 of the CSA documents.

18. It is apparent from that quote, as Ms Monroy put quotation marks around her first use of the words “child support payment”, that she was referring to the fact that the top‑up payments were not made in lieu of the assessed child support liability. She was not suggesting that the top-up payments were not a component of the child support agreement made between the parents.

19. In any event, the tribunal is satisfied that the payments made by Mr Sandham to Ms Monroy from 13 March 2020 to 4 June 2021 cannot be accepted as NAPs. This is because at the time the payments were made, there was no intention on the part of both parents that these payments were made in lieu of, or instead of, the child support liability as determined by the CSA; the top-up payments were made in addition to the child support liability.

20. Given the legislation referred to earlier (sections 71 and 71C of the Act and Regulation 19 of the Regulations), the tribunal can only affirm the decision under review.

DECISION

The tribunal affirms the decision under review.