Scollick and Tompkin (Child support)

[2017] AATA 2907

Scollick and Tompkin (Child support) [2017] AATA 2907 (17 August 2017)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2016/BC010845

APPLICANT:  Mr Scollick

OTHER PARTIES:  Child Support Registrar

Ms Tompkin

TRIBUNAL:Member K Buxton

DECISION DATE:  17 August 2017

DECISION:

The tribunal sets aside the decision under review and, in substitution, decides that the annual rate of child support payable by Mr Scollick to Ms Tompkin for the children be set at:

·     $18,000 per annum for the period 1 January 2017 to 31 March 2018; and

·     $16,000 per annum for the period 1 April 2018 until the child support case ends for [Child 3], indexed annually on 1 April of each subsequent year by the annual index rate applied to the costs of children by the Child Support Registrar.

CATCHWORDS

Child support – Departure determination – Special needs of the child – Costs of education for the child – Income and financial resources of parents – Business income – 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. Ms Tompkin and Mr Scollick are the parents of [Child 1], born May 2003, [Child 2], born January 2005 and [Child 3], born February 2009.  Assessments of child support issued by the Child Support Agency (CSA) record the children as in the 100% care of Ms Tompkin.

2. Administrative assessments from 1 July 2015 to 31 December 2016 assessed the annual rate of child support payable by Mr Scollick to Ms Tompkin of about $25,000 per annum. This amount was calculated using adjusted taxable incomes of $137,500 per annum for Mr Scollick and $115,000 for Ms Tompkin, set by a decision of the Administrative Appeals Tribunal (AAT) dated 13 August 2015, and with an increase to the annual rate of $3,300 per annum for the same period, also set in that decision. Neither parent has appealed that decision. From 1 January 2017, the administrative assessment of child support resulted in an annual rate of child support payable by Mr Scollick of $4,835, calculated using 2016 adjusted taxable income of $5,503 for Mr Scollick and provisional income of $72,377 per annum for Ms Tompkin.

3. On 16 February 2016 Mr Scollick applied for a departure from the administrative assessment on the basis that his circumstances had changed and the assessment did not take into account a medical condition affecting his earning capacity. Ms Tompkin cross-applied seeking an increase in the rate of child support as she had been meeting certain necessary orthodontic costs for [Child 1] and she submitted that these costs provided a ground to depart from the administrative assessment of child support.

4. A senior case officer considered the departure application and determined that, although there was a ground to depart from the administrative assessment, it would not be just and equitable to do so. Mr Scollick objected to that decision and the objection was allowed. The objections officer decided to increase the annual rate of child support payable by Mr Scollick by $5,075 for the period 17 March 2016 to 31 December 2016 for [Child 1]’s orthodontic costs and for private school fees ($1,745 per annum for orthodontic work plus an amount of $3,300 per annum previously allowed by the AAT for private school fees) and by $1,745 per annum for the period 1 January 2017 to 16 March 2018 for the orthodontic costs alone.

5. Mr Scollick sought review by the tribunal. A hearing took place and Mr Scollick and Ms Tompkin both appeared at the hearing in person and gave sworn evidence. The Child Support Registrar did not participate in the hearing, but the CSA provided subsection 37(1) documents which were marked Exhibit 1. Mr Scollick provided further documents and written submissions, which were marked Exhibit A. Ms Tompkin provided further documents and written submissions, which were marked Exhibit B.

6. Ms Tompkin lodged a further departure application with the CSA in relation to school fees which she continues to meet for [Child 1] and which she has begun to incur for [Child 2] from early 2017 and Mr Scollick cross-applied in relation to his income. With the encouragement of the CSA the application and cross-application have been withdrawn.

ISSUES

1. The statutory provisions relevant to this review are contained in the Child Support (Assessment) Act 1989 (the Act). The issues that must be considered under section 98C of the Act are:

   • whether a ground for departure from the administrative assessment exists; and, if so
   • whether a departure would be just and equitable; and
   • whether a departure would be otherwise proper.

CONSIDERATION

Does a ground for departure from the administrative assessment exist?

1. A ground will exist to depart from the administrative assessment of child support if, in the special circumstances of the case, the costs of maintaining the children are significantly affected because of their special needs: subparagraph 117(2)(b)(ia) of the Act. The words “in the special circumstances of the case” are not defined in the legislation. Whilst it is not possible to define with precision the meaning of that term, it is intended to emphasise that the facts of the case must establish something which is special or out of the ordinary. In Gyselman v Gyselman (1992) FLC 92-279, it was held that “special circumstances” were “facts peculiar to the particular case which set it apart from other cases”.

2. The tribunal will consider whether costs incurred by Ms Tompkin to meet particular needs for [Child 1] and for [Child 2] establish a ground to depart from the administrative assessment. [Child 1] has been receiving orthodontic treatment and Ms Tompkin has been meeting this cost directly. She presented evidence to the CSA of her out-of-pocket expenses for [Child 1] totalling $6,980 ($8,680 less health fund rebates totalling $1,700 over a four year period) and she sought a 50% contribution to these fees from Mr Scollick by way of an increase to the child support assessed as payable by Mr Scollick. Ms Tompkin stated during the hearing that [Child 1] had now completed her treatment, although [Child 2] had commenced the same treatment at the same cost. She stated that she would remain liable to meet orthodontic expenses for both children by way of periodic payments at the same rate as she previously paid for only [Child 1] until March 2018. The AAT had calculated 50% of those expenses to total $1,745 and had increased the rate of child support payable by Mr Scollick to allow for a contribution towards those costs dating back to 2014. Mr Scollick accepted that Ms Tompkin had incurred the expenses. However, he stated that he lacked the financial capacity to contribute to them.  

10.  The tribunal is satisfied, having regard to the magnitude of the out-of-pocket expenses met by Ms Tompkin for [Child 1]’s and [Child 2]’s orthodontic care across a four year period, that those costs significantly affect the overall costs of caring for the children, and that Ms Tompkin was still meeting those significant costs at the time Mr Scollick lodged his departure application in February 2016. The tribunal is satisfied, having regard to their magnitude, that special circumstances exist in relation to those out-of-pocket costs, which are not taken into account in the administrative assessment, such that those costs provide a ground to depart from the administrative assessment under subparagraph 117(2)(b)(ia) of the Act.

Just and equitable

11.  The requirement to consider whether a departure would be just and equitable directs attention to what is fair to the parents and their children. Regard must be had to a variety of factors such as the needs of the children, the parents’ commitments and any hardship that would be caused by departing or not departing from the formula.

Private schooling

12.  It was established in the AAT’s earlier decision that private education for the children from year 7 onwards was the manner of education expected by the parents. In 2017 [Child 1] and [Child 2] are both enrolled in [a private school], in years 9 and 7 respectively. Mr Scollick submitted before the AAT in the previous hearing in 2015 that, as the parents also signed enrolment forms for other schools, there was no evidence that education at the college was in the manner expected by the parents. He also submitted in writing that any intention or expectation of privately schooling the children ended when he could no longer afford to contribute to those costs and that he had faced financial hardship including having been declared bankrupt since initially agreeing to contribute. The tribunal notes that the parents both signed a document on 16 April 2011 which reflected the parents’ agreement that Mr Scollick contributes 70% of the costs of educating the children at the college from year 7 onwards. Clearly, the children are being educated at one of the secondary schools expected by the parents, as evidence by their having both signed the agreement and the requisite enrolment forms. That is consistent with the AAT findings made in August 2015 which were not challenged by either parent (although the tribunal notes that the AAT increased Mr Scollick’s child support liability by an amount equal to 50%, rather than 70%, of the costs of private schooling). The proper needs of the children include the costs of their education in that manner, and therefore the tribunal will consider those costs.

13.  Ms Tompkin has produced evidence that the children’s compulsory fees and levies which she has met directly for 2017 are, together, about $14,000 per annum and are likely to continue at this rate for the duration of the child support case as, in the year immediately following [Child 1]’s completion of secondary school, [Child 3] will commence in year 7, and the fees are likely to continue at about the same rate with nominal increases year on year. Ms Tompkin sought a contribution from Mr Scollick of 50% of those fees by way of an increase to the child support assessment, or about $7,000 per annum.

14.  The tribunal has already concluded that the children’s proper needs also include the costs of orthodontic care. Ms Tompkin has sought an increase to the rate of child support payable by Mr Scollick equivalent to 50% of those fees, or about $1,745 per annum, until March 2018.

Mr Scollick

15.  Mr Scollick gave evidence at the hearing that he had commenced a relationship with [Ms A] in 2011 and that the relationship with [Ms A] ended in May 2015. He stated that, at about the same time, he suffered an emotional breakdown so significant that he was unable to work. He provided medical reports from his GP and a psychologist obtained during 2016 which confirmed that he reported severe symptoms of depression at that time. He also reported suffering a form of post-traumatic stress disorder as a result of recalling several distressing events that had occurred when Mr Scollick was a teenager.

16.  Mr Scollick’s income used in the administrative assessment of child support was set at $137,500 per annum from 1 July 2015 based on Mr Scollick’s equal contribution with [Ms A] to the joint enterprise known as [Business 1]. Both Mr Scollick and [Ms A] worked in that mortgage broking and finance business and the AAT looked behind [Ms A]’s legal ownership to ascribe 50% of the income and financial resources of that business, being $137,500 per annum, to Mr Scollick.  The tribunal notes that Mr Scollick submitted that [Business 1] was never his, either beneficially or legally, and it followed that the decision of the AAT was incorrect. Mr Scollick did not exercise his appeal rights in respect of that decision. Therefore, this tribunal will not revisit, by way of a de facto appeal, the findings made by the AAT in respect of that joint enterprise.

17.  Mr Scollick gave sworn evidence that when his relationship with [Ms A] ended in May 2015 his access to the financial resources of [Business 1] also ceased and that this constituted a significant change in his circumstances. He further stated that [Ms A] then dissolved [Business 1] and began her own business, styled as [Business 2] with which Mr Scollick has had no involvement. He denied being an employee or assisting [Ms A] in any way with [Business 2] and the effect of his submissions is that he is not legally or beneficially entitled to the income of [Business 2].

18.  This submission is difficult to accept. Mr Scollick gave evidence to the AAT in 2015 to the effect that he was working in [Business 1] and it has been established that he was beneficially entitled to the income earned by that business. At the core of [Business 1] was mortgage broking, an industry in which Mr Scollick has been involved for many years. Mr Scollick confirmed during the hearing that the business earned income both at the time the mortgages were initially written and for each year thereafter, by way of “trail income”. Mr Scollick stated that, when [Business 1] was dissolved, the benefit of mortgage trail income of [Business 1] was transferred to [Business 2]. The mortgage trail income is passive or, put another way, Mr Scollick’s health would not have affected his entitlement to continue to receive such income. Therefore, when [Ms A] dissolved [Business 1] and commenced to operate [Business 2] she transferred to [Business 2] a passive income stream to which Mr Scollick was beneficially entitled.

19.  The effect of the evidence of Mr Scollick is that he did not pursue his entitlement to that income whilst he and [Ms A] were separated. He stated that he was in “no fit state” to do so. According to Mr Scollick he is now well enough to work. It follows that he is also now well enough to pursue those entitlements. This prospect has been made significantly easier for Mr Scollick as he and [Ms A] are now married. Insofar as his own lifestyle is concerned, Mr Scollick is availing himself of the benefits of the income of [Business 2].  He lives in a home purchased by [Ms A] with resources received, at least in part, from a passive income stream to which Mr Scollick was beneficially entitled. He uses a car financed by [Business 2]. He makes no more than a modest contribution to [Ms A] for his regular expenses. There is no basis for the tribunal to conclude that he is not entitled to the benefit of at least part of the income of [Business 2] generated by the historic trail income.

20.  So, how much does [Business 2] earn from historic trail income generated by [Business 1] and how much from the endeavours of [Ms A] alone? Unfortunately, the tribunal cannot answer this question by reference to the financial statements of [Business 2]. Mr Scollick was directed to produce for the tribunal the documentary evidence showing all income to which he was beneficially entitled. He was provided with a number of opportunities to provide these documents, and given ample warning that failure to do so may lead the tribunal to draw an inference adverse to his interests. He did not produce such documents. It is open to the tribunal in those circumstances to conclude that the income and financial resources of [Business 2] to which Mr Scollick is beneficially entitled amount to at least $137,500 per annum consistent with the findings of the AAT in 2015.

21.  Mr Scollick stated that he has now recommenced working and that he has been earning income from his new mortgage broking and financial services business, [Business 3], since June 2016, which coincided with a recovery to his health sufficient to recommence work. He reported taxable income of about $5,500 in the 2015/16 year but accepted that [Business 3] retained profits of $14,000 in addition to this, which should also be attributed to him as income for the 2015/16 year. He stated that he has earned about $48,000 from [Business 3] in the 2016/17 year and he submitted that he was optimistic that his business would grow and his income, and therefore his capacity to assist with the children’s needs, would increase accordingly. However, he stated that he did not think a substantial increase to his income from his own business would occur in the current 2017/18 financial year.

22.  He also stated that he reconciled with [Ms A] in March 2016 and moved in with her into her rented home at that time. Mr Scollick married [Ms A] in June 2016 and now lives in a home that he stated she purchased with her own resources in April 2017. He contributes $300 per week towards all of the household expenses and [Ms A] otherwise meets those expenses entirely. [Ms A]’s business also funds a vehicle that is available to Mr Scollick as he needs it, so long as he structures his time carefully. The tribunal is satisfied that the evidence demonstrates that Mr Scollick’s lifestyle now is not significantly different from that enjoyed by him at the time of the AAT’s decision in August 2015.

23.  The tribunal questioned Mr Scollick about his living arrangements and regular expenses between May 2015 and March 2016 whilst separated from [Ms A]. He gave sworn evidence that he lived between a caravan at his parents’ home and the downstairs part of their house. He stated that his parents met his regular household expenses during this period. He stated that [Ms A] lived in [Town 1] with her parents during the same period and that she worked from their home on her new business, [Business 2]. He stated that he used a car that had been leased by [Business 2] because [Ms A] was “still being nice” to him, but he stated that he met the lease repayments of $300 per month from his own savings.

24.  Ms Tompkin submitted that Mr Scollick’s relationship with [Ms A] had not ended in May 2015. She stated that there was no evidence of a genuine breakdown in that relationship and noted that the couple quickly married in June 2016 after apparently reconciling just three months earlier in March 2016. Ms Tompkin further stated that Mr Scollick had followed the same pattern with [Ms A] and he had with her in the past by nominating her as shareholder of his company when they were married to minimise his child support obligations to the parent of his older child and invited the tribunal to conclude similar motives for describing a non-existent relationship breakdown with [Ms A].

25.  It is not necessary for the tribunal to decide whether the relationship breakdown in May 2015 was genuine, or whether, alternatively, Mr Scollick fabricated evidence of that breakdown in a cynical attempt to avoid his child support obligations. Mr Scollick submitted that the report of the psychologist he attended made reference to the relationship breakdown and that this therefore establishes that the breakdown was genuine. However, the tribunal notes that the psychologist’s report is based upon, and assumes the accuracy of, information provided by Mr Scollick in a session with the psychologist which took place many months after May 2015 and at a time when Mr Scollick reported to the same psychologist that the relationship was by then in the process of reconciling.

26.  The tribunal notes, significantly, that there is no reference whatsoever to any breakdown in the relationship between Mr Scollick and [Ms A] in the reasons for the decision of the AAT published in August 2015, nor is there any reference in those reasons to Mr Scollick’s failing health. The hearing before the AAT took place on 20 July 2015 and an accountant represented Mr Scollick at the hearing. Enquiries were made by the AAT during that hearing as to the nature of the joint enterprise then known as [Business 1]. The hearing on 20 July 2015 would have been the obvious opportunity for Mr Scollick to have mentioned that he was no longer working at [Business 1], that his relationship with [Ms A] had broken down and, for that matter, that he no longer had the capacity to work. However, Mr Scollick did not do so.

27.  About two months after the tribunal’s decision was conveyed to Mr Scollick he registered [Business 3] and began to work in that business. He gave evidence at the hearing that he was too unwell to manage the business and that, in December 2015, he transferred the directorship to a trusted friend who was able to assist him with aspects of the business. The directorship was transferred back to him in about March 2016 when he stated he was feeling better. Despite stating that he was unwell for the great majority of the 2015/16 year Mr Scollick accepts that the income earned by [Business 3] resulted from his own endeavours and should be attributed to him. There are certainly a great many inconsistencies in Mr Scollick’s evidence as to the relationship breakdown with [Ms A]. However, the tribunal does not have to form a view about the accuracy of his evidence in relation to the breakdown of his relationship with [Ms A] because, even if there was a brief period when Mr Scollick could not, or did not, access his entitlements to income earned by entities under the control of [Ms A], he has overcome any impediment in accessing that income by marrying [Ms A]. Mr Scollick can ask [Ms A] for access to those resources in order to meet his child support obligations. He clearly has access to whatever financial support he needs through the financial resources of the business trading in the name of [Ms A]. Children are entitled to share in the financial resources available to the parents and the objects of the child support legislation are best served by ensuring that it is not only Mr Scollick but also his children who are able to benefit from the financial resources available to him.

28.  The tribunal will conclude that the finding made by the AAT in August 2015, of entitlement to $137,500 per annum in income, continues to be a reasonable representation of the income and financial resources of [Business 2] to which Mr Scollick remains beneficially entitled and that he earned additional income through [Business 3] of around $19,000 in the 2015/16 financial year and around $48,000 in the 2016/17 year. The tribunal accepts Mr Scollick’s evidence that he is likely to earn at least that amount in the 2017/18 year and beyond. He therefore had access to income and financial resources of about $157,000 per annum in the 2015/16 financial year and about $185,000 for the 2016/17 year and for the foreseeable future.

Ms Tompkin

29.  Ms Tompkin described herself during the hearing as a stay-at-home mum. She lives with the three children of the assessment together with her husband and their 18-month-old baby. Her husband is [an occupation at] a construction company through a company called [Company 1] Pty Ltd. Ms Tompkin is the only shareholder of that company and is therefore legally entitled to its profits. She stated that she is not beneficially entitled to those profits as they are, in fact, generated by her husband. She stated that she had in the past provided administrative assistance for the company but that she has not done so since the birth of her youngest child. She further stated that any distribution of profits from the company is declared in her income tax return and this was about $30,000 in the 2014/15 tax year and will be similar on an ongoing basis. She stated that the company’s shareholding is structured in that way for tax and child support purposes and the income of the company is generated by the endeavours of her husband.

30.  Ms Tompkin was directed by the tribunal to produce evidence of all income she is in receipt of, and she has produced evidence only of trace income paid to a trust of which she is the beneficiary. This income stream was transferred to her as part of the property settlement with Mr Scollick and financial records show that she currently receives about $80,000 per annum from this source. Ms Tompkin was directed to produce her 2015/16 income tax return but she has not done so, because she stated that she has been unable to pay her accountant in order to produce the tax return. In the context of the trace income, and income and financial resources from the [Company 1], the tribunal finds this explanation difficult to accept. However, Ms Tompkin did not deny that she and her husband were financially comfortable and that her taxable income did not include all income available to her as the trace income was reported within the trust rather than in her personal income tax return. She further stated that [Company 1] paid for a vehicle that was available for her personal use and accepted that this financial resource would be worth around $10,000 per annum.

31.  Taking into account income from [Company 1], the use of the vehicle and the trail income, Ms Tompkin submits that she should be assessed for child support purposes as having annual income of around $120,000. Mr Scollick submits that Ms Tompkin’s income is far higher. He points to the fact that Ms Tompkin is the legal owner of [Company 1] and invites the conclusion that all of the income of that company ought to be attributed to Ms Tompkin. He submitted that Ms Tompkin has undertaken property developments in her name and enjoys a lifestyle consistent with an income far greater than $120,000 per annum. So, what is the level of income and financial resources available to Ms Tompkin through the various trusts and companies with which she is involved? Unfortunately, it is difficult for the tribunal to reach an accurate view of Ms Tompkin’s true income.

32.  Ms Tompkin was directed to produce for the tribunal the documentary evidence showing all income to which she was beneficially entitled. She was provided with a number of opportunities to provide these documents, and given ample warning that failure to do so may lead the tribunal to draw an inference adverse to her interests. She did not produce the financial statements for [Company 1], her completed income tax returns or other documents that, together, might have permitted the tribunal to form a view as to her actual financial resources with any degree of accuracy. It is open to the tribunal in those circumstances to conclude that the income and financial resources to which Ms Tompkin has access amount to substantially more than the $120,000 per annum to which she concedes.

Conclusions as to whether a departure would be just and equitable

33.  The tribunal has set out above certain findings and observations as to the incomes and financial resources available to each parent and the proper needs of the children. Ms Tompkin, who has 100% of the care of the children and meets the costs of their needs directly, would benefit from any contribution to those costs which Mr Scollick has the capacity to make.

34.  As a result of the AAT’s decision of August 2015, Mr Scollick was required to pay to Ms Tompkin child support at the annual rate of around $26,000 per annum from 1 July 2015 to 31 December 2016. Ms Tompkin submitted that it would not be just, equitable and otherwise proper to depart from the assessment of child support that was determined by the AAT as applying until 31 December 2016. The effect of Ms Tompkin’s submission is that she had made arrangements to meet the needs of the children, including their school fees and orthodontic costs, in reliance on that assessment. She further submitted that there had been no genuine change to Mr Scollick’s capacity to contribute to those needs. She submitted that any departure from the administrative assessment should apply from 1 January 2017, from when the decision of the AAT ceased to apply.

35.  Ms Tompkin invited the tribunal to depart from the administrative assessment for a period as far into the future as possible. She submitted that either the incomes of the parents, or the rate of child support, should be set until the end of the child support case so as to provide certainty for the parents in circumstances where their taxable incomes were unlikely to reflect their income and financial circumstances for child support purposes. Ms Tompkin submitted that it would be just and equitable to set an annual rate of child support which was reliable, and fair to Mr Scollick, and which would provide genuine assistance to her in meeting the proper needs of the three children. She submitted that an annual rate of child support of $18,000 per annum from 1 January 2017 would be adequate to assist with the schooling and orthodontic costs and to assist in meeting the children’s other needs. The tribunal notes that the orthodontic expenses will have been paid in full by 1 April 2018 and, therefore, the sum of $1,745 per annum in orthodontic costs will no longer be met by Ms Tompkin from that date. It would follow that an annual rate of closer to $16,000 per annum would be adequate to assist her needs from that date.

36.  Mr Scollick submitted that he had the capacity to pay child support to Ms Tompkin at the annual rate of $6,000 per annum.

37.  If child support were calculated from 1 January 2017 using adjusted taxable income of $157,000 for Mr Scollick and $125,000 for Ms Tompkin, and assuming the other variables in the child support assessment remained unchanged, child support payable by Mr Scollick would be about $27,000 per annum. The tribunal is satisfied that it is just and equitable that Mr Scollick contribute equally with Ms Tompkin to the orthodontic and private schooling costs for the children, which amounts to $8,745 per annum until March 2018, and $7,000 per annum thereafter. The assessed rate calculated using those assumptions about income and the special needs together would lead to an annual rate of child support in excess of $34,000 per annum. However, Ms Tompkin has not submitted that Mr Scollick should be assessed to pay child support at that level.

38.  The tribunal has already concluded that the level of income and financial resources available to Ms Tompkin is unclear. However, by way of example of the impact of using a higher income for Ms Tompkin upon the formula used to calculate child support, the tribunal notes that if child support were calculated from 1 January 2017 using adjusted taxable income of $157,000 per annum for Mr Scollick and, say, $450,000 per annum for Ms Tompkin, and assuming the other variables in the child support assessment remained unchanged, the base rate of child support payable by Mr Scollick would be about $11,000 per annum. This would increase to $12,000 per annum if income of $185,000 per annum were used for Mr Scollick from 1 July 2017 onwards. Put another way, even if Ms Tompkin’s true income were three times what she has stated, Mr Scollick would still be liable to pay about $1,000 per month as a base rate of child support. As Ms Tompkin has not made full disclosure of her own financial position the tribunal is prepared to conclude that, and having regard to the operation of the child support formula and Ms Tompkin’s submission that an annual rate of child support of $18,000 per annum including school fees and orthodontic costs was reasonable, she is able to access sufficient financial resources to meet the balance of the children’s costs. It further follows that an annual rate more like $16,000 per annum would be sufficient to assist her in meeting the children’s needs, including schooling, from April 2018 when she is no longer meeting orthodontic costs on an ongoing basis.

39.  As Mr Scollick has stated that he meets personal expenses of $300 per week in total, the tribunal is satisfied that Mr Scollick has the capacity to meet without hardship an assessment of child support which takes account of both the ordinary needs of the children and the cost of [Child 1]’s and [Child 2]’s orthodontic care and the school fees for the children, at the level sought by Ms Tompkin.

40.  Mr Scollick applied for a departure in February 2016. However, the tribunal is not satisfied that it would be just and equitable to depart from the administrative assessment in place until 1 January 2017 as there has been no significant change in circumstances prior to that date which would lead to a need to change that assessment. The tribunal proposes to depart from the administrative assessment for the period 1 January 2017 until 31 March 2018 by setting the annual rate of child support at $18,000 per annum and, from 1 April 2018 until the child support case ends for [Child 3], by setting the annual rate of child support at $16,000 per annum. This annual rate should be indexed each year to keep pace with the costs of meeting the children’s needs. This proposed departure will result in an increase to the significant arrears currently owing by Mr Scollick. The tribunal is satisfied, having regard to his available financial resources, that this decision will not place Mr Scollick in a position of hardship.

Otherwise proper

41.  The requirement to consider whether a departure would be otherwise proper directs attention to what is fair to the community. It is necessary to consider the effect of any departure from the administrative assessment on entitlements to income-tested pensions, allowances and benefits. Parents rather than the community have the primary duty to maintain a child. The tribunal is satisfied that the proposed departure reflects the obligation of both parents to take financial responsibility for the children. A departure in those terms is therefore proper.

Conclusion

42.  The tribunal has found that a departure ground exists because the costs of caring for [Child 1] and [Child 2] have been significantly affected by their orthodontic needs, and that their proper costs also include the cost of private schooling. The tribunal is also satisfied that the parents’ incomes and financial resources will not be adequately reflected in the administrative assessment of child support which uses their adjusted taxable incomes and that this is likely to continue indefinitely. The tribunal has determined that it is just and equitable to vary the annual rate of child support payable by Mr Scollick for the period 1 January 2017 to 31 March 2018 to $18,000 per annum and from 1 April 2018 until the child support case ends for [Child 3] to $16,000 per annum to be indexed annually on 1 April of each subsequent year by the annual index rate applied to the costs of children by the Child Support Registrar. The tribunal is satisfied that such a departure is otherwise proper.

43.  As the tribunal has reached a decision which differs from that of the objections officer, that decision is set aside and a decision substituted which gives effect to the tribunal’s findings.

DECISION

The tribunal sets aside the decision under review and, in substitution, decides that the annual rate of child support payable by Mr Scollick to Ms Tompkin for the children be set at:

·     $18,000 per annum for the period 1 January 2017 to 31 March 2018; and

·     $16,000 per annum for the period 1 April 2018 until the child support case ends for [Child 3], indexed annually on 1 April of each subsequent year by the annual index rate applied to the costs of children by the Child Support Registrar.