Scacchi and Scacchi (Child support)

[2024] AATA 3818

Scacchi and Scacchi (Child support) [2024] AATA 3818 (19 September 2024)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2024/SC028074

APPLICANT:  Ms Scacchi

OTHER PARTIES:  Child Support Registrar

Mr Scacchi

TRIBUNAL:Member J Leonard

DECISION DATE:  19 September 2024

DECISION:

The Tribunal sets aside the decision under review and, in substitution, decides to refuse to credit an amount of $20,051 under section 71A or 71C of the Child Support (Registration and Collection) Act 1988.

CATCHWORDS

CHILD SUPPORT – non-agency payment – payments made to a third party – prescribed payment for school fees – intention of both parents – regular care – decision under review set aside and substituted

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

REASONS FOR DECISION

BACKGROUND

1. Mr Scacchi and Ms Scacchi are the parents of four children. There has been a child support assessment in place since 9 October 2018. The eldest child ceased to be an eligible child of the assessment from [date] June 2023 when he turned 18.

2. Mr Scacchi made an application to Services Australia – Child Support (Child Support) on 19 April 2023 for a number of payments received by third parties, including an amount of $34,024.96 which he claimed was made on 3 February 2023, to be credited against his maintenance liability.

3. On 19 April 2023, Child Support made the decision to refuse to credit any of the payments as ‘prescribed non-agency payments’ on the basis Mr Scacchi had at least regular care of a child. On 21 April 2023 Child Support made a correction to its decision under section 42 of the Child Support (Registration and Collection) Act 1988 (the Act) on the basis that it had incorrectly categorised the payments. As such, the fact that Mr Scacchi had at least regular care of a child was not materially relevant to the decision. On 25 August 2023 Child Support decided to credit an amount of $20,051 out of a total of $34,024.96 paid in respect of school fees as ‘non-agency payments’.

4. On 20 September 2023, Ms Scacchi objected to this decision. On 3 June 2024 an objections officer disallowed her objection. Ms Scacchi applied to the Social Services and Child Support Division of the Administrative Appeals Tribunal (the Tribunal) for a review of the objection decision.

5. A hearing was conducted on 19 September 2024. Ms Scacchi attended the hearing in person. Mr Scacchi was notified on 28 August 2024 that a hearing would be conducted at 10.45 AM on 19 September 2024. He was reminded by SMS on 16 September 2024 and 18 September 2024 that the Tribunal would call him on his nominated phone number. The Tribunal was unable to reach Mr Scacchi, and proceeded to hear the matter in his absence as provided for by paragraph 40(1)(b) of the Administrative Appeals Tribunal Act 1975. Child Support provided a bundle of documents relevant to the review (209 pages).

ISSUES

1. The statutory provisions relevant to this review are contained in the Act.

2. The child support liability has been registered for collection since 26 February 2019. When a case is registered for collection the amount payable is a debt due to the Commonwealth and must be paid to Child Support and not the payee. In some circumstances Child Support may credit payments made directly to a payee or to a third party against a child support liability that is registered for collection (section 71, 71A or 71C of the Act).

3. Child Support refers to the credits under sections 71 and 71A as ‘non‑agency payments’ and the credits under section 71C as ‘prescribed non‑agency payments’ as this section applies to payments of the kind specified in section 19 of the Child Support (Registration and Collection) Regulations 2018 (the Regulations).

4. The issue which arises in this case is whether a payment of $34,024.96 purportedly made by Mr Scacchi for children’s school fees on 3 February 2023 can be credited against his child support liability.

CONSIDERATION

1. Section 71A of the Act provides for payments made by the payer of an enforceable maintenance liability to a third party to be credited against the amount payable under the child support liability. It must be the intention of both parties that the payments, or part of the payments, be credited against the payer’s child support liability and the payment must partially or completely satisfy a debt owed by the payee, the payer or both the payer and the payee.

2. In 2022 and 2023 [Child 1] and [Child 2] were attending [College 1]. Mr Scacchi provided Child Support with bank statements which show that the following amounts were paid to [College 1]:

   ·     $13,673.17 paid on 7 February 2022,

   ·     $9,211.67 paid on 5 May 2022, and

   ·     $10,840.12 paid on 22 July 2022.

3. It seems to the Tribunal that the amounts which Child Support credited related to the payments on 5 May 2022 and 22 July 2022 which total $20,051.79. There is no evidence before the Tribunal that Mr Scacchi paid an amount of $34,024.96 on 3 February 2023.

4. Ms Scacchi stated that there had been a longstanding agreement that Mr Scacchi would pay the children’s school fees, and that the amount he paid was not in lieu of child support but in addition to his liability.

5. A decision was made by Child Support to depart from the administrative assessment on 12 May 2023. It was decided to increase the annual rate of child support payable by Mr Scacchi by $8,874 for the period 1 January 2023 to 31 December 2023 in recognition of his 65% contribution to the costs of education of the three children. The decision-maker stated:[1]

   I do not propose to make any changes for earlier costs. I am satisfied if there are amounts outstanding for [Child 2’s] education that the retrospective nature of this decision (starting from 1 January 2023) will sufficiently assist with this. Previously, Mr Scacchi was paying the majority of the education costs, which given the parents earlier arrangements and Mr Scacchi indicating he would do this, I find is appropriate. I do not consider there should be any change relevant to the children’s education costs prior to 2023 or to reflect the payment of these.

   [1] Page 81.

6. Mr Scacchi also referred to the earlier arrangement to pay the school fees in addition to his child support liability in a letter to Child Support dated 11 February 2024.[2]

   [2] Pages 147 to 150

7. The payment cannot be credited under section 71A of the Act because Ms Scacchi did not intend for the payment (or payments) to [College 1] to be in partial or full satisfaction of the amount payable under the maintenance liability.

8. Where payments cannot be credited under section 71A of the Act, they may be credited under section 71C, subject to section 71D, even if there is no mutual intention between the parents. This is commonly referred to as a prescribed non-agency payment as the payment to be credited must also be a payment of the kind specified in section 19 of the Regulations such as (i) “fees charged by a school”; and (ii) “amounts payable for…books required by a school”.[3]

   [3] Regulation 19 of the Child Support (Registration and Collection) Regulations 2018.

9. Section 71C of the Act also requires, among other things, that at the time payment was made, and at the time the payment is to be credited, the payer must not have at least regular care (14%) of any of the children to whom the assessment applies.

10. At the time of the payments set out in paragraph 11, and at the time of notification on 19 April 2023, Mr Scacchi had at least regular care of all of the children. Paragraphs 71C(1)(ba) and 71C(1)(d) of the Act are not satisfied. The payments cannot be credited under section 71C of the Act.

DECISION

The Tribunal sets aside the decision under review and, in substitution, decides to refuse to credit an amount of $20,051 under section 71A or 71C of the Child Support (Registration and Collection) Act 1988.