Scamander and Pasley (Child support)

[2018] AATA 3209

Scamander and Pasley (Child support) [2018] AATA 3209 (13 June 2018)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2017/BC012460

APPLICANT:  Miss Scamander

OTHER PARTIES:  Child Support Registrar

Mr Pasley

TRIBUNAL:Member S Lewis

DECISION DATE:  13 June 2018

DECISION:

The tribunal sets aside the decision under review and, in substitution, decides that no departure determination is made.

CATCHWORDS
Child support – Departure determination – Child being educated in the manner expected by the parents – Costs of maintaining the child not significantly affected by education costs – Income, property and financial resources of the liable parent – Income from a discretionary trust – Payment of liable parent’s expenses by his father a financial resource – No ground for departure – 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

1. This application for review has been brought by Miss Scamander who disagrees with a decision made by the Department of Human Services, Child Support (the Department).

2. Miss Scamander and Mr Pasley are the parents of the children, [Child 1] (born September 2008) and [Child 2] (born August 2012). The Department records that Miss Scamander currently has 78% care of the children and Mr Pasley has 22%. This change in care came into effect on 20 March 2017. Prior to that, Mr Pasley had a care percentage of 0%. Mr Pasley is the parent liable to pay child support.

3. On 14 October 2016 Mr Pasley applied to the Department for a decrease to the assessed rate of child support on the ground that in the special circumstances of this case the administrative assessment results in an unjust and inequitable level of child support because of his income, property and financial resources. At the time of his application, Mr Pasley was assessed to pay an annual rate of child support of $16,944. Mr Pasley’s adjusted taxable income, used in the administrative assessment, was derived from a departure determination made on 17 March 2016; a senior case officer decided that for the period 6 January 2016 to 31 January 2018 Mr Pasley’s adjusted taxable income was varied to $96,000. Mr Pasley’s application of 14 October 2016 was refused on 29 November 2016 on the basis that there had been no change in his circumstances. Neither the decision of 17 March 2016 nor the decision of 29 November 2016 is under review by the tribunal. Mr Pasley has taken action in the Federal Circuit Court seeking orders in relation to child support for the period 6 January 2016 to 31 December 2019. No orders had been made at the date of hearing.

4. On 5 December 2016, in responding to Mr Pasley’s application, Miss Scamander lodged a further application for a change of assessment. Miss Scamander applied to the Department for an increase to the assessed rate of child support on the ground that in the special circumstances of this case:

   ·       the costs of maintaining [Child 1] are significantly affected by the costs of educating her in the manner that was expected by the parents; and

   ·       the administrative assessment results in an unjust and inequitable level of child support because of Mr Pasley’s income, property, financial resources and earning capacity.

5. On 3 April 2017, a senior case officer, acting as a delegate of the Child Support Registrar, considered the departure application and determined that for the period 1 December 2016 to 31 January 2019, the annual rate of child support payable by Mr Pasley is $33,847.

6. On 12 May 2017, Mr Pasley objected to this decision. Mr Pasley’s objection was allowed in part by an objections officer on 10 August 2017. The objections officer determined that:

   ·       for the period 1 December 2016 to 31 December 2019, the adjusted taxable income for Mr Pasley is varied to $110,000;

   ·       for the period 1 January 2017 to 31 December 2017, Mr Pasley’s annual rate is increased by $1,067 to account for 50% of [Child 1]’s school fees;

   ·       for the period 1 January 2018 to 31 December 2018, Mr Pasley’s annual rate is increased by $1,120 to account for 50% of [Child 1]’s school fees;

   ·       for the period 1 January 2019 to 31 December 2019, Mr Pasley’s annual rate is increased by $1,176 to account for 50% of [Child 1]’s school fees.

7. On 7 September 2017 Miss Scamander lodged an application with the Administrative Appeals Tribunal (the tribunal) seeking review of the decision of the Department.

8. Prior to the hearing of the application for review, directions were issued to both Miss Scamander and Mr Pasley requiring them to provide the tribunal with specified documents. Miss Scamander provided the tribunal with documents (folios A1 to A96). Mr Pasley provided the tribunal with documents (folios B1 to B51). Both parties have been provided with a copy. The tribunal and the parties also had access to the statement and documents provided by the Department under subsection 37(1) and section 38AA of the Administrative Appeals Tribunal Act 1975 (the AAT Act) (folios 1 to 934).

9. The matter was heard on 13 June 2018. Both Miss Scamander and Mr Pasley attended the hearing by conference telephone and gave evidence on affirmation. Mr Pasley was represented by Ms [A] of [a law firm].

ISSUES

1. The statutory provisions relevant to this review are found in the Child Support (Assessment) Act 1989 (the Assessment Act). The rate of child support payable by the liable parent is usually based on an administrative assessment under Part 5 of the Assessment Act. This requires the application of a statutory formula which takes into account such factors as the number of children, the level of care provided, the income of each parent and the costs of the children.

2. The liable parent or a carer may apply to the Child Support Registrar for a determination to depart from the administrative assessment under Part 6A of the Assessment Act (section 98B). Section 98C provides that the Registrar may make a determination to depart from the formula assessment and establishes a three-step process. In the first instance, a ground for departure from an administrative assessment must be established. The grounds are set out in subsection 117(2) of the Assessment Act. If satisfied that:

   ·       a ground or grounds exist (step one); and

   ·       that it would be just and equitable (step two); and

   ·       otherwise proper to make a particular determination (step three),

   the tribunal may make one of the determinations prescribed in section 98S of the Assessment Act. Section 98S permits a range of determinations, including varying the annual rate of child support payable and/or the adjusted taxable income of a parent.

3. To deal with Miss Scamander’s application for review, the tribunal stands in the shoes of the Child Support Registrar.

CONSIDERATION

1. In lodging her application, Miss Scamander stated that her major reasons for seeking review were that the care percentages used in the administrative assessment are incorrect and she is seeking to have the child support decision backdated to 19 April 2014. At the outset, Ms [A] submitted that as the question of child support is currently before the Federal Circuit Court and the care issues raised by Miss Scamander cannot be determined by the tribunal, the current application should be dismissed. The tribunal explained to Miss Scamander the role of the tribunal in making a new decision; the extent of its ability to review the matters identified by her and also that a less favourable decision was a possible outcome. Ms Scamander declined to withdraw her application for review. The powers of dismissal are found in sections 42A and 42B of the AAT Act. The tribunal was not persuaded that the requirements for the exercise of the power of dismissal under these sections were satisfied. The tribunal declined to dismiss the application and notes:

   ·       the tribunal is not reviewing the care arrangements for the children;

   · the tribunal cannot make a departure determination for a day which is more than 18 months prior to the date of the current application (subsection 98S(3B) of the Assessment Act); and

   ·       the period for which Miss Scamander is seeking review is not wholly outside the period of 18 months before her application and so the tribunal may make a departure determination with limited backdating (if the three-step process is satisfied).

Issue 1 – Does a ground exist to depart from the administrative assessment?

Costs of child being educated in the manner expected by her parents

1. Miss Scamander has sought a departure from the administrative assessment on the ground that, in the special circumstances of the case, the costs of maintaining [Child 1] are significantly affected because she is being cared for, educated or trained in the manner that her parents expected. This ground for departure is found in subparagraph 117(2)(b)(ii) of the Assessment Act.

2. The term “special circumstances” is not defined in the Assessment Act. In Gyselman v Gyselman (1992) FLC 92-279 (Gyselman) 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.

3. The issue with respect to the payment of school fees and how it is to be dealt with in an issue of child support, was dealt with by the Full Court of the Family Court in Mee and Ferguson [1986] FamCA 3. The principles that emerge from this case in relation to school fees can be summarised as follows:

   ·       Where the non-custodian has agreed to the child attending a private school, that person is liable to contribute to the school fees so long and to the extent that he or she has a reasonable financial capacity to continue to do so;

   ·       Where the non-custodian has not agreed to the child attending a private school, he or she is not liable to contribute to those expenses unless there are reasons relating to the child’s welfare that dictate attendance at the school rather than a non-private school. Then the non-custodian is required to contribute to the extent that the non-custodian has a reasonable financial capacity to do so; and

   ·       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.

4. It is noted that Mee and Ferguson was decided prior to the introduction of the Assessment Act but that reasoning has been accepted as the applicable law to child support cases (see Lightfoot and Hampson [1996] FamCA 8 and Wild and Ballard [1997] FamCA 41). In F & S [2003] FMCAfam 531, Chief Federal Magistrate Bryant restated the law as set out in Mee and Ferguson and accepted that these are the established principles in this area but also noted that Mee and Ferguson is based on there being an agreement between the parents whereas the Act refers to “the manner expected by his or her parents”.

5. The term “significantly affected” is not defined in the Assessment Act. While referring to this term in the context of education expenses in Potter & Burbage (SSAT Appeal) [2010] FMCAfam 1009, Riethmuller FM stated that when considering whether the costs of maintaining the child are “significantly affected” because the child is being educated in the manner that was expected by the parents, it is necessary to take into account not only the rate of child support but also the income of the parents.

6. It is undisputed that when [Child 1] commenced primary school, she was initially enrolled at [School 1] (until the end of year 2) and subsequently transferred to her current school, [School 2]. [Child 1] is currently in year 4. Mr Pasley explained that his parents paid the fees at [School 1].  [Child 1]’s current school is a private school for which fees are payable. Ms [A] submitted that Mr Pasley concedes that [Child 1] is being educated in a manner expected by her parents. Mr Pasley agreed.

7. On the basis of the chronology, the verbal evidence and the documentary evidence (including the 2009 application for admission to a waiting list at[School 3]), the tribunal was satisfied that both Mr Pasley and Miss Scamander expected that [Child 1] would attend a private fee-paying school at the date of application.

Is there a significant impact on the costs of maintaining the children?

1. Based on the available evidence, the tribunal was satisfied that Miss Scamander is currently responsible for payment of the fees for [Child 1] and was so responsible at the time of her application for a change of assessment. Mr Pasley confirmed that his parents had been willing to pay school fees until the end of 2015 but withdrew this support after that time.

2. Miss Scamander did not provide receipts for the fees paid by her in the 2016 to 2018 calendar years for [Child 1]. She told the tribunal that the fees were deducted from her bank account in 2016 and 2017 (about $200 per month) and, for 2018, she has applied under the financial hardship policy of [School 2] to have fee relief until the child support issues have been resolved.  Miss Scamander confirmed that she has not paid any fees in 2018 for either [Child 1] or [Child 2].  Based on the 2017 fee schedule provided in the Department documents, the tribunal calculated and finds that the costs of compulsory tuition and capital levy for [Child 1] in the 2017 calendar year were $1,668.

3. Miss Scamander also identified uniform, stationery and other costs which she incurs for [Child 1] in relation to her education. The tribunal also notes that the fee schedule for the school also includes a facilities levy, general purpose levy and P&F levy. The tribunal has not taken these into account, as payment of items of that nature is common to both public and independent schools. The tribunal considered that these costs are usual expenses of children’s education which are adequately addressed by the administrative assessment of child support. Payment of such items does not amount to special circumstances justifying a departure from the administrative assessment.

4. Having found that it was the common expectation of the parties that [Child 1] attend a private fee-paying school, the tribunal must consider whether in the special circumstances of the case the costs of maintaining the child are significantly affected by that private education. Miss Scamander did not provide a breakdown of the children’s expenses. She explained that they each have medical and/or dental concerns which are being addressed under the public health system. The tribunal notes that the child support payable for the child ([Child 1]) under the administrative assessment is $8,472. Miss Scamander’s verbal evidence was that the school fees are affordable when Mr Pasley pays the level of child support assessed under the current administrative assessment. Based on the available evidence, the tribunal finds that:

   ·       the compulsory costs of [Child 1] attending the private school are greater than attending a government school and are expenses that are out of the ordinary;

   ·       Miss Scamander is able to meet the costs associated with [Child 1]’s education from the child support payable under the administrative assessment of child support at the date of application; and

   ·       while Miss Scamander’s adjusted taxable income at the date of application was $18,054, her actual income for the financial year in which the application was made was $32,233. This together with the child support payable results in Miss Scamander having adequate funds to meet the school fees for [Child 1].

   Hence, in this particular case, the tribunal was not satisfied that the costs of maintaining the children are significantly affected by [Child 1]’s education. Given these findings, the tribunal finds that the ground for departure in subparagraph 117(2)(b)(ii) of the Assessment Act did not exist in relation to [Child 1]’s education at the date of application.

5. Miss Scamander also advised that [Child 2] has commenced at [School 2] in 2018. It is open to Miss Scamander to lodge a further change of assessment application in relation to the children’s ongoing school fees.

Mr Pasley’s income, property and financial resources

1. Miss Scamander has sought a departure from the administrative assessment on the ground that in the special circumstances of this case the administrative assessment would result in an unjust and inequitable level of child support because of Mr Pasley’s income, property and financial resources. This ground for departure is found in subparagraph 117(2)(c)(ia) of the Assessment Act.

2. There are a range of circumstances which may support the finding that the administrative assessment would result in an unjust and inequitable determination of the level of child support. The tribunal referred to case law and the Child Support Guide (the Guide) which sets out government policy in relation to child support. The tribunal notes that the calculation of income and benefits for the purposes of taxation law does not limit its consideration of the true resources available to a party to child support proceedings and is but one factor to be taken into account in the particular circumstances of the case.

What incomes are used in the administrative assessment of child support?

1. The administrative assessment of child support is calculated for a child support period. The child support period at the time of Miss Scamander’s application for a change of assessment ran from 1 August 2016 to 31 October 2017. The incomes reflected in the administrative assessment at that time were:

   ·       Mr Pasley’s adjusted taxable income:  $96,000

   ·       Miss Scamander’s 2016 adjusted taxable income:        $18,054

2. The tribunal then considered Mr Pasley’s income, property and financial resources.

Mr Pasley’s income, property and financial resources

1. As noted above, Mr Pasley’s income under the administrative assessment was varied to $96,000 by a previous departure determination. In reaching the decision, the senior case officer made the following observations:

   ·       Mr Pasley receives regular payments from a discretionary family trust in [Country 1] which is his only income source;

   ·       “Mr Pasley’s access to funds via the trust is not unlimited and is controlled by a trustee … [h]e currently receives significant payments from the trust with the flexibility to seek additional payment if his circumstances require it, such as to meet his legal fees.”;

   ·       Payment to the Heritage Bank account amounted to $41,224 for the period 8 July 2015 to 27 January 2016 which extrapolates to an annual amount of $70,669 and a gross income of approximately $96,000.

2. In considering the current application, the tribunal must be satisfied that there has been a change in Mr Pasley’s circumstances such that the ground for departure is established. This is not a review of the previous departure determination.

3. Miss Scamander told the tribunal that she agreed with the objections officer’s decision that Mr Pasley had income, property and financial resources with an annual value of $110,000. She further submitted that Mr Pasley’s financial resources include both the distributions from and the assets of the Pasley Children’s Trust (the Trust). Miss Scamander disputed Mr Pasley’s evidence that he does not hold any real estate. She also expressed disbelief that a property held by Mr Pasley’s parents in [State 1] did not have any financial benefit for Mr Pasley. Miss Scamander submitted that any funds paid from the Trust and/or from Mr Pasley’s parents for his use should be taken into account as income for child support purposes. Miss Scamander also submitted that Mr Pasley should be compelled to fully disclose his financial resources, including by implication his parents’ resources from which Mr Pasley may benefit. Miss Scamander offered to submit a copy of a title for a [Country 1] property which she claimed was in Mr Pasley’s name and in which they had resided together as a couple. The tribunal declined to defer the decision. The tribunal notes that the title was offered to the Department but has not been forthcoming and Miss Scamander had adequate opportunity to submit any further documentary evidence prior to the hearing. There was no evidence before the tribunal which would lead to a conclusion that Mr Pasley was receiving any income or financial benefit from such residential property at the date of application. Mr Pasley told the Department that the property was now held by a pension fund; the tribunal could not verify this. Miss Scamander contended that Mr Pasley’s pension fund could be accessed to meet his child support obligation; there was no evidence that Mr Pasley had sought access to retirement funds at the date of application.

1. Miss Scamander was not satisfied that the evidence as to the value of Mr Pasley’s interests was sufficient or had been disclosed in accordance with court orders. The tribunal reminded Miss Scamander that the proceedings before the tribunal are of an administrative nature with the objective of being fair, just, economical, informal and quick (section 2A of the AAT Act). The tribunal has reviewed the evidence provided by the parties and the evidence arising from the Department’s investigation of the case. In this case, the tribunal has reached a level of satisfaction required for an administrative decision to be made.

2. In summary, Ms [A] explained to the tribunal that the previous determination was made on the erroneous finding that the funds to which Mr Pasley had access via the Heritage account were sourced exclusively from the Trust. Ms [A] told the tribunal that Mr Pasley receives quarterly distributions from the Trust which are now taken into account in his income tax returns (these have recently been brought up to date). The tribunal notes that at the time of the previous departure determination Mr Pasley had advised the Department that the quarterly distributions were not taxable in Australia. Ms [A] and Mr Pasley confirmed that this was a misunderstanding related to the payment of foreign tax. Ms [A] drew the tribunal’s attention to the available bank statements and Austrac records on the Department file which indicate that there were a number of other deposits in the period to March 2017 paid for Mr Pasley’s benefit which came from his father (not the Trust). Ms [A] further explained that the loan account in Mr Pasley’s name reflected in the Trust accounts arose as a result of the trustee’s past practice of declaring distributions in favour of Mr Pasley and his sibling in excess of the income of the Trust available for distribution. The excess amount of the declared distributions over the amount available for distributions is reflected in the balance sheet of the Trust as a beneficiary loan. Ms [A] submitted that the trustee of the Trust is now conscious of this and has reduced distributions to be in line with the income of the Trust.

3. With assistance from Ms [A], Mr Pasley told the tribunal that:

   ·       the quarterly distributions from the Trust are paid into his bank account in the [Country 1] [in] March, June, September and December;

   ·       his father also provides funds for his use which are deposited into his Heritage account;

   ·       the funds provided by his father are described as “loans” or “emergency loans”. The funds are used to meet legal expenses and other expenses as needed;

   ·       Mr Pasley draws the available funds from the [Country 1] account and deposits them into his Australian bank account (the Heritage account). The funds are transferred to Australia by Mr Pasley on a needs basis and, where possible, by reference to favourable foreign exchange rates;

   ·       Mr Pasley’s father has also paid legal fees directly to the respective legal firms;

   ·       Mr Pasley will have to repay the funds from his father. There are no formal loan agreements at this time and he has limited prospects to earn additional income to repay those funds due to his heart condition and age (60 years). Mr Pasley also told the tribunal that his father has ceased providing additional funds (Ms [A] submitted that the last transaction was in March 2017).

4. The senior case officer identified payments of $693,686 to Mr Pasley from overseas in the period 25 January 2016 to 17 January 2017 which were considered to be financial resources. As this level of funding was far in excess of Mr Pasley’s adjusted taxable income of $96,000, the senior case officer found that the ground for departure had been established and so determined that the maximum rate of child support should be set.

5. Mr Pasley provided evidence to the Department that the majority of the funds were not paid to him but related to a property development by his father. The objections officer accepted that $623,328 was not transferred to Mr Pasley; the Austrac records support this finding. On the available evidence, the tribunal accepts that this amount was not transferred to Mr Pasley and, at the date of application, Mr Pasley had no access to those funds or any benefit from the investment of those funds.

6. The objections officer then identified payments into Mr Pasley’s Heritage account in the 16-month period from February 2016 to 5 June 2017 of $84,727 which equated to an annual amount of $63,545. To this, the objections officer added direct payments of legal fees of $17,065 and found that Mr Pasley’s financial resources of $80,610 grossed up to an annual amount of $110,000. The tribunal notes that by grossing up the total amount, the objections officer has not taken into account that the Trust distributions are taxed in Australia and carry foreign tax credits and so this overstates the value.

7. The tribunal considered the available evidence, including the bank statements submitted to the Department and the tribunal as well as the Austrac records. In his objection, Mr Pasley identified funds in the 2016 calendar year of approximately $51,000 which were variously described by Mr Pasley as “loans” or “emergency loans” paid to Mr Pasley or the direct payment of legal fees ($7,960). In addition, there were transfers which broadly correlated with the dates on which the quarterly distributions made by the Trust would be available. Thus, the tribunal was satisfied that Mr Pasley had control of funds paid directly to him for his benefit by his father of around $43,000 in the 2016 calendar year. These funds were available for Mr Pasley to apply as he saw fit; Mr Pasley said that the majority were applied in payment of legal fees. Using the Australian Taxation Office Gross Pay Estimator, the tribunal calculated that an ordinary salary and wage earner would have to earn a gross amount of approximately $62,000 to fund this level of expenditure (that is, the amount over and above the Trust distributions).  The tribunal was satisfied that at the date of application Mr Pasley’s father was funding Mr Pasley’s lifestyle with an annual gross value of around $62,000.

8. Mr Pasley told the tribunal that he has not worked for many years; he was last in employment in 2003. He explained that he had [a] surgery about two years ago and is participating in medical trials. Mr Pasley said that he has limited capacity for employment but has been trying in recent times to find employment because his parents have now “cut him off” and he must rely on the Trust distributions alone. Taking into account the totality of the circumstances, including the sustained period of unemployment; Mr Pasley’s expenses, including legal fees, which are repeatedly met by funds made available from his father when requested; and Mr Pasley’s reliance on those funds, the tribunal finds that the payments from his father are a financial resource to Mr Pasley. The tribunal considers that this reliance on his father to meet his excess expenses remained a consistent theme whether the payments (over and above his income) came from the Trust which is controlled by his father (as found in the previous departure determination) or from his father as the tribunal accepts is the true position. Notwithstanding the factual error, the tribunal considers that the conclusion is the same.

9. Paragraph 117(7A)(b) of the Assessment Act prevents the income or financial resources of another person who does not have a duty to maintain the children from being taken into account, unless there are special circumstances that make it appropriate to do so. In Jordan & Verne (SSAT Appeal) [2012] FMCAfam 21, the Federal Magistrates Court considered the position of a parent who was supported by her spouse whilst she was unemployed. The Court accepted that the support of the spouse was a relevant financial resource, but noted that spousal support was a usual or ordinary circumstance. The tribunal has taken this reasoning into consideration. It is often the case that parents will provide financial assistance to an adult child. On occasions, where parents have the financial capacity to do so, they may assist an adult child with the purchase of a home or the one-off payment of debts. The tribunal considers that the extent of the financial support being provided to Mr Pasley by his father and his willingness to meet some of his regular expenses on an ongoing basis is out of the ordinary, and should be regarded as a special circumstance. In any event, what is being considered in these circumstances is not the financial circumstances of Mr Pasley’s father as such, but the actual financial support that he provides to Mr Pasley.

10. On the available evidence and in the absence of loan agreements or any defined prospect of repayment, the tribunal considers the better view of the evidence is that Mr Pasley has had funds from his father which are financial resources. Further, at the date of application he was still drawing on his father’s funds repeatedly, and clearly could do so reliably. In so finding the tribunal does not consider that Mr Pasley’s resources include those of his father. The tribunal also accepts that the assistance from Mr Pasley’s father with legal fees paid directly to the legal firms should be characterised as the type of support provided by a parent which of itself is not unusual – his parents have clearly been involved with the support of the children given the school fees paid in the past. However, the tribunal finds that Mr Pasley’s access to funds paid directly into his account for him to choose how to apply such funds has a different character and amounts to a financial resource. Mr Pasley has had access to distributions from the Trust plus additional funds from his father to meet his ongoing expenses.

11. Mr Pasley’s taxable income for the 2017 year was $39,634 – this comprised income received from the Trust of $35,760 and foreign tax paid of $3,874. Mr Pasley declared in this income tax return that he does not “own, or have an interest in, assets located outside Australia which had a total value of AUD$50,000 or more”. Ms [A] submitted that in the period under review, subject to variations in exchange rate, Mr Pasley has had the benefit of trust distributions of around $35,000 per annum. The tribunal accepts that the Trust is Mr Pasley’s only source of income. Based on the extracts of the Trust deed and the financial statements, the tribunal notes that: the Trust is a discretionary trust which was established by Mr Pasley’s parents for the benefit of him and his sister; Mr Pasley is not the trustee nor is he an appointor; Mr Pasley and his sister are named beneficiaries and are entitled to the income of the Trust; the children of the assessment are potential beneficiaries. The Trust held net assets of GBP969,041 at 5 April 2016; the majority of the assets comprise funds held in an investment fund under management (recorded as GBP850,016 with the market value noted as GBP1,503,907). On balance, the tribunal was satisfied and finds that the Trust is a financial resource of Mr Pasley, the annual value of which is adequately reflected in the income distributed to him.

12. Thus at the date of application the tribunal finds that Mr Pasley had access to income and financial resources with an annual value of around $101,000 (Trust distributions plus resources from his father after allowing for a modest level of tax deduction to account for the ongoing costs of preparing an income tax return).  The tribunal considers that this is only 5% more and not significantly higher than the amount in the previous determination. Given this, the tribunal did not consider that there had been any material change in Mr Pasley’s income or the circumstances considered in the departure dated 17 March 2016 and there are no special circumstances which would justify a further departure.

13. In reaching this conclusion, the tribunal also considered Miss Scamander’s financial position. The administrative assessment applies her 2016 adjusted taxable income of $18,054. This is significantly less than her 2017 taxable income of $32,233. However, given the levels of care provided by Miss Scamander, changes in her income have a minimal impact on the child support payable by Mr Pasley. The tribunal notes that Miss Scamander disclosed a very high level of expenditure and has received some financial assistance from her family. Miss Scamander explained that the expenses reflected the nature of expenses which she could incur when she and Mr Pasley were members of a couple and in receipt of regular gifts from his family. There was no documentary evidence that Miss Scamander receives sustained support from her family or that she has income over and above taxable Centrelink benefits and her casual wages as[an occupation]. The tribunal was satisfied that Miss Scamander’s income, property and financial resources are adequately reflected in the administrative assessment of child support.

14. Mr Pasley told the tribunal that since his father withdrew his support in March 2017, Mr Pasley is struggling to meet his outgoings and has had to use some GBP in cash (approximately AUD$1,000) which he had leftover from past travel and he also closed a savings account which he described as his “rainy day fund”. A bank statement was available for this account. The tribunal did not consider that any of the other items disclosed at hearing or in Mr Pasley’s statement of financial circumstances have a significant impact on his ability to contribute to the children’s support in the context of this application.

15. Having considered the documentary and other evidence, the tribunal is of the view that there are no special circumstances in this case that make the level of child support payable under the administrative assessment unjust and inequitable at the date of application. On the available evidence, the tribunal was not satisfied that the ground for departure in subparagraph 117(2)(c)(ia) of the Assessment Act has been established in relation to the parents’ income, property and financial resources.

16. In light of the available evidence, the tribunal finds that no ground has been established to depart from the administrative assessment of child support.

DECISION

The tribunal sets aside the decision under review and, in substitution, decides that no departure determination is made.