Sargood and Sargood (Child support)

[2024] AATA 485

Sargood and Sargood (Child support) [2024] AATA 485 (31 January 2024)

DIVISION:Social Services & Child Support Division

REVIEW NUMBERS:  2023/SC026534

2023/SC026583

2023/SC026604

2023/SC026605

APPLICANT:  Mr Sargood

OTHER PARTIES:  Child Support Registrar

Ms Sargood

TRIBUNAL:Senior Member K Dordevic

DECISION DATE:  31 January 2024

DECISION:

The decisions under review are affirmed.

CATCHWORDS

CHILD SUPPORT – non-agency payments - whether payments made by liable parent to third parties from joint account of both parents should be credited – no mutual intention – where liable parent did not have regular care of the child – where property settlement between parents yet to finalise - refusal to credit non-agency payment - 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. Ms Sargood (the mother) and Mr Sargood (the father) are the parents of two children.  A child support case was registered with Services Australia – Child Support (Child Support) on 18 March 2023.

2. In this matter the father applied to Child Support to have various payments credited to his child support liability.[1]

   [1] At Appendix 1.

3. On 11 and 29 May 2023 and 21 June 2023, Child Support credited the father’s child support liability with payments totalling $4,474.96.[2] The mother lodged timely objections to these decisions.

   [2] At Appendix 2.

4. On 11 May and 21 June 2023 Child Support refused to credit $3,616.90[3] in payments to the father’s child support liability. The father lodged timely objections to these decisions on 2 July 2023.

   [3] At Appendix 3.

5. On 4, 11 and 17 August 2023 an objections officer determined that none of the payments were to be credited to the father’s child support liability, so allowing the mother’s objections and disallowing the father’s objections.

6. The father requested a review of the objections officer’s decisions by application to the Social Services and Child Support Division of the Administrative Appeals Tribunal (the Tribunal) on 7 August 2023.

7. The hearing was convened on 31 January 2024. The mother attended by MS Teams audio and the father attended the hearing in person.  The Child Support Registrar was not represented at the hearing. The Tribunal considered the parents’ evidence as well as the documents provided by Child Support (folios 1 to 359).

8. The Tribunal reached its decision on the day of 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 relevant regulations.

2. The issue in this case is whether all or part of the payments outlined in Appendix 2 and Appendix 3 can be credited to the father’s child support liability.

CONSIDERATION

1. Sections 71 and 71A of the Act allow Child Support to credit a payment made to the payee[4] or a third party on behalf of the payee of an enforceable maintenance liability in lieu of a payer’s[5] child support liability in certain circumstances. Such payments are known as non-Agency payments. In this case the father is the payer (that is, he is liable to pay child support) and the mother is the payee (that is, she is paid child support). These provisions also require that the amount is “intended by both the payer and payee to be paid in complete or partial satisfaction” of the child support liability.

   [4] Defined under section 4 of the Act as the “person who is entitled … to receive payments under the liability”.

   [5] Defined under section 4 of the Act as the “person who is liable to make payments under the liability”.

2. The father’s position can be summarised as follows. After reading the Act and the regulations, in addition to all the information on the relevant websites (including myGov) he cannot understand how it is that he pays money from his own bank account and gets no recognition for this. He has no control over the fact that the payments are being made. The mother receives a benefit from these payments, and he receives none. By way of example, he is not in receipt of any rent from the mother, even though she is living in a house that he is paying for. He is prevented from living in the home because of an apprehended violence order and so technically, it is not even his house anymore. He is only asking for fairness and the “pub test” to be applied; otherwise, there is “double-dipping”.

3. The father went on to explain that upon separation on 2 January 2023 the mother withdrew $35,000 from joint savings and changed the security on the bank account that held their savings. From separation the account required both parents to authorise withdrawals or changes to the existing direct debit arrangements. He asserts that about $100,000 in this account is part of a business loan, relating to his business. He does not dispute that there was no agreement between himself and the mother that these payments were to be credited towards his child support liability. The father went on to explain that the parents have been in negotiations regarding the property settlement for about 13 months; he alleges that the mother is incentivised to withholding agreement to ensure that she maintains complete control over the children, the former family home (which is held in joint names) and the funds held in the joint account. He states that had there been a property settlement, it would be determined that he held 50% of all assets, including the funds held in the joint account. It is for this reason that 50% of all direct debits from this account paid for the benefit of the mother and children should be credited to his child support liability. In his view the regulations support such a finding. Otherwise, he is placed under enormous financial strain as he is meeting the mother’s costs in addition to his child support liability.

4. The mother’s evidence is summarised as follows. Prior to separation the joint account in question was the account into which both parents had their wages deposited and from which direct debits regarding the mortgage, utilities and other household costs were made. The father is currently provided a motor vehicle from the family business (they are joint directors and shareholders) and has some of his costs paid for by the business, including part of his rent, his mobile telephone, travel and motor vehicle costs. In her view all the payments made from the joint account and the business account will be taken into account in the property settlement. Without the settlement, no determination can be made as to what portion of the payments represent a payment by the father. 

5. The Tribunal makes the following findings. There is no dispute that there was no agreement between the parents whereby all or part of the payments claimed by the father as non-Agency payments were intended to be credited towards the child support liability. Application of these findings to the above law leads to a conclusion that the payments cannot be credited to the father’s liability pursuant to sections 71 or 71A of the Act. 

6. Section 71C of the Act states payments made by a liable parent for certain specified items may be taken into account in partial satisfaction of the liable parent’s child support liability. Joint intention or agreement is not required:

   (1)  If:

   (a) the payer of an enforceable maintenance liability in relation to a payment period or initial period has made one or more payments to the payee of the liability, or to another person; and

   (b) the payment is a payment of the kind specified in the regulations; and

   (ba) at the time the payment is made, the payer does not have at least regular care of any of the children to whom the relevant administrative assessment relates; and

   (c) the sum of those payments exceeds the sum of all such payments previously credited under this section against the amount payable under the liability for all past periods; and

(d) the payer does not, at the time at which the Registrar applies this section, have at least regular care of any of the children to whom the relevant administrative assessment relates;

then the Registrar must, despite section 30, credit the excess amount mentioned in paragraph (c) against the amount payable under the payer's liability for the period, up to a maximum of 30% of the amount payable.

1. The father contends that he made payments of the kind specified in regulation 19 of the Child Support (Registration and Collection) Regulations 2018:

   19 Specified payments

   For the purposes of paragraph 71C(1)(b) of the Act, payments of the following kinds in relation to an enforceable maintenance liability are specified:

   (a)child care costs for the child who is the subject of the enforceable maintenance liability;

   (b)fees charged by a school or preschool for that child;

   (c)amounts payable for uniforms and books required by a school or preschool for that child;

   (d)fees for essential medical and dental services for that child;

   (e)the payee’s share of amounts payable for rent or a security bond for the payee’s home;

   (f)the payee’s share of amounts payable for utilities, rates or body corporate charges for the payee’s home;

   (g)the payee’s share of repayments on a loan that financed the payee’s home;

   (h)costs to the payee of obtaining and running a motor vehicle, including repairs and standing costs.

2. The Tribunal finds that at the time of the payments and at the time the Registrar (and this Tribunal) has considered the section, the father has not had at least regular care of the children.

3. The Tribunal turned its mind to paragraph 71C(1)(a) of the Act, which requires in this case that the father has made a payment to the mother or another person. The father contends that he has a 50% interest in the joint account from which all the direct debits were made.[6] The Tribunal is not so persuaded. Both parents agree that the property settlement has not been finalised.  Therefore, it has not been determined what portion, if any, of the funds in the joint bank account are held for the benefit of the mother and father. Thus, it is unknown what portion of the payments made towards the mortgage, rates, utilities, motor vehicle, private health insurance and child care costs were made by the father or what portion of these costs represent the mother’s share. This is not to say that the mother or the children do not derive a benefit from these payments; it is self-evident that they do. However, in respect of the mortgage payments, it can also be said that these are to made to maintain a joint asset until such time as the settlement can occur. In any event, the father seeks a 50% credit of these payments. However, a more forensic examination of the parents’ contributions is required to determine the division of property in line with considerations of what is just and equitable. It may be that the father has a greater or lesser equitable interest in the joint account than the 50% he contends he has. The Tribunal is not satisfied what portion, if any, of the direct debits paid from the joint account are payments made by the father to the mother or another person. Therefore, section 71C of the Act is not established.

   [6] At folio 220.

4. The Tribunal makes the following observations. Even if the Tribunal were to accept that the father held a 50% interest in the joint account and so 50% of the direct debits made from the joint account represent payments made by the father for the benefit of the mother, the Tribunal would be required to consider whether, in the circumstances of the particular case, the amounts ought not to be credited, as required by section 71D of the Act. Generally, property matters are accounted for separately from child support. Therefore, there is merit to the view that the amounts should not be credited given that the property settlement has not concluded. In such circumstances, it is generally considered appropriate that these payments be taken into account in the property settlement, where an examination of the parents’ respective contributions and the parents’ and children’s future needs may be properly made.

5. The Tribunal concludes that the father’s applications to have direct debt payments from the parents’ joint account credited to his child support liability were correctly refused. This means the decisions under review are correct.

DECISION

The decisions under review are affirmed.

APPENDIX 1

Date	Description	Amount
22 March 2023	Mortgage	$343.34
23 March 2023	[Insurer 1]	$141.16
23 March 2023	[Utility 1]	$21.38
27 March 2023	Family Health Insurance	$148.05
29 March 2023	Mortgage	$343.61
30 March 2023	School camp	$81.28
30 March 2023	Half of child’s piano fees	$339.00
31 March 2023	[Telecom 1]	$137.50
5 April 2023	Mother’s Car Insurance	$78.74
5 April 2023	Mortgage	$347.42
6 April 2023	[TV Service 1]	$13.99
12 April 2023	Mortgage	$343.34
13 April 2023	School camp	$81.28
19 April 2023	Mortgage	$343.34
24 April 2023	Home Insurance	$141.16
26 April 2023	Mortgage	$347.42
26 April 2023	Family Health Insurance	$148.05
2 May 2023	[Telecom 1]	$29.50
3 May 2023	Gas[7]	$105.16
3 May 2023	Mortgage	$353.54
5 May 2023	Mother’s Car Insurance	$78.74
8 May 2023	Sydney Water	$101.72
10 May 2023	Mortgage	$353.54
16 May 2023	[Utility 1]	$104.58
17 May 2023	Mortgage	$353.54
23 May 2023	Home Insurance	$141.16
24 May 2023	Mortgage	$347.42
25 May 2023	Health Insurance	$148.05
31 May 2023	Mother’s Mobile	$59.00
31 May 2023	[Telecom 1]	$29.50
31 May 2023	Mortgage	$353.54
31 May 2023	Rates	$198.60
5 June 2023	Mother’s Car Insurance	$78.74
7 June 2023	Mortgage	$353.54
8 June 2023	Child Care	$35.10
14 June 2023	Mortgage	$353.54
21 June 2023	[Insurer 1]	$78.74
24 June 2023	Mortgage	$353.54

[7] At folio 162. This was for the property in which the father resides.

APPENDIX 2

Date	Description	Amount
22 March 2023	Mortgage	$343.34
23 March 2023	[Utility 1]	$21.38
29 March 2023	Mortgage	$343.61
30 March 2023	School camp	$81.28
31 March 2023	[Telecom 1]	$137.50
5 April 2023	Mother’s Car Insurance	$78.74
5 April 2023	Mortgage	$347.42
12 April 2023	Mortgage	$343.34
13 April 2023	School camp	$81.28
19 April 2023	Mortgage	$343.34
2 May 2023	[Telecom 1]	$29.50
5 May 2023	Mother’s Car Insurance	$78.74
8 May 2023	Sydney Water	$101.72
16 May 2023	[Utility 1]	$104.58
23 May 2023	Home Insurance	$141.16
24 May 2023	Mortgage	$347.42
25 May 2023	Health Insurance	$148.05
31 May 2023	Rates	$198.60
31 May 2023	[Telecom 1]	$29.50
31 May 2023	Mortgage	$353.54
7 June 2023	Mortgage	$353.54
8 June 2023	Child Care	$35.10
14 June 2023	Mortgage	$353.54
21 June 2023	[Insurer 1]	$78.74

APPENDIX 3

Date	Description	Amount
22 March 2023	Mortgage	$343.34
29 March 2023	Mortgage	$343.61
5 April 2023	Mortgage	$347.42
12 April 2023	Mortgage	$343.34
19 April 2023	Mortgage	$343.34
23 May 2023	Home Insurance	$141.16
24 May 2023	Mortgage	$347.42
25 May 2023	Health Insurance	$148.05
31 May 2023	Rates	$198.60
31 May 2023	Mortgage	$353.54
7 June 2023	Mortgage	$353.54
14 June 2023	Mortgage	$353.54