Scrubb and Scrubb (Child support)

[2021] AATA 1290

Scrubb and Scrubb (Child support) [2021] AATA 1290 (2 March 2021)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2020/MC020495

APPLICANT:  Mr Scrubb

OTHER PARTIES:  Child Support Registrar

Ms Scrubb

TRIBUNAL:Senior Member R Ellis

DECISION DATE:  02 March 2021

DECISION:

The decision under review is affirmed.

CATCHWORDS

CHILD SUPPORT – non-agency payments – no mutual intent – whether payments direct to parent entitled to receive child support were prescribed payments – payments could not be credited due to care level of children – 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. Mr Scrubb and Ms Scrubb are the parents of [Child 1] (born June 2014) and [Child 2] (born July 2016). There has been a child support assessment in place since 20 December 2019 with collection by the Child Support Agency from the same date. Mr Scrubb is currently the parent liable to pay child support under the assessment.

2. From 5 December 2019 the child support assessment reflected that the children were in the 21 per cent care of Mr Scrubb and the 79 per cent care of Ms Scrubb.

3. On 14 July 2020 Mr Scrubb applied to the Child Support Agency for credit of 13 payments of $500 each made direct to Ms Scrubb as non-agency payments. These payments were made during the period from 17 April 2020 to 10 July 2020.

4. On 4 September 2020 the Child Support Agency made the decision to credit the 13 payments, totaling $6,500, as non-agency payments.

5. On 23 September 2020 Ms Scrubb objected to this decision and on 7 December 2020 the Child Support Agency allowed the objection and made the decision to refuse to accept the 13 payments as non-agency payments (the objection decision).

6. On 18 December 2020 Mr Scrubb applied to the Administrative Appeals Tribunal (the Tribunal) for a review of the objection decision.

7. The Tribunal conducted a hearing into the application on 2 March 2021. Mr Scrubb and Ms Scrubb gave evidence on affirmation by conference telephone. The Child Support Agency provided the Tribunal and the parties with papers relevant to the review (119 pages).

ISSUES

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

2. When a child support liability is registered under the Act for collection, the amount payable is a debt due to the Commonwealth and must be paid to the Child Support Agency not the payee. In some circumstances the Child Support Agency may credit payments made directly to a payee or to a third party against a child support liability that is registered for collection (sections 71, 71A or 71C of the Act). The Child Support Agency refers to the credits under sections 71 and 71A as ‘non-agency payments’. Credits under section 71C are known 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).

3. Section 71C of the Act provides a mechanism whereby payments made by a liable parent to the payee or to another person for items specified in section 19 of the Regulations may be taken into account in partial satisfaction of the liable parent’s child support liability. A number of specific criteria must be satisfied for this provision to apply. Even where all the criteria are met, there is still a discretion in section 71D of the Act to refuse to credit amounts that would otherwise be able to be credited against the liability.

4. The issue which arises in this case is whether or not any of the payments made by Mr Scrubb direct to Ms Scrubb can be credited against his child support liability.

CONSIDERATION

1. Mr Scrubb told the Tribunal he started paying Ms Scrubb $500 per week for child support [on] 28 September 2019. Mr Scrubb said Ms Scrubb then applied for a child support assessment, however, he continued paying the $500 per week for the children direct to her as he did not want to upset the apple cart.

2. Mr Scrubb said that at one point a child support officer had advised him to stop making the private payments direct to Ms Scrubb as he was already paying child support under the administrative assessment. Mr Scrubb explained that it was his preference to continue paying child support as well as the $500 per week direct to Ms Scrubb and then claim these back as non-agency payments. Mr Scrubb said to consider that he would only pay spousal support to Ms Scrubb and not pay child support for the children was incomprehensible. Mr Scrubb said in his mind the $500 payments were for child support.

3. Ms Scrubb told the Tribunal she did not dispute that Mr Scrubb made the 13 payments in question but considered these payments to be for spousal maintenance. Ms Scrubb said the weekly payments he was making direct to her were never to be considered in lieu of child support. Ms Scrubb said after the parents separated, she was uncertain what the $500 payments were supposed to be for. Ms Scrubb said when realised Mr Scrubb was only going to provide her with $500 per week she applied for child support as well. She said the $500 weekly payments were for her costs while child support was for the children.

4. Ms Scrubb said in a discussion with a child support officer she had initially agreed that Mr Scrubb was making the weekly payments direct to her as well as child support but was uncertain about how the non-agency payments worked. Ms Scrubb said when it was explained that the $500 payments Mr Scrubb was making were being offset against her child support payments, she objected. Ms Scrubb said Mr Scrubb had signed an affidavit which made it clear the weekly payments of $500 were in addition to the child support.

5. The Tribunal notes in evidence from the Child Support Agency an extract from an affidavit submitted to the Federal Court and signed by Mr Scrubb. The extract is undated but includes a date stamp of 13 April 2020. Under the heading ‘Spousal Maintenance and Child Support’ the extract states at clause 151:

   Pursuant to the administrative assessment of child support that is in place at present, I have a legal obligation to pay the sum of $519.68 per week for both [Child 1] and [Child 2]. Despite my now much reduced income compared with prior years, I am however paying to Ms Scrubb the sum of $500.00 per week, in addition to the $519.68 current child support assessment …

6. Mr Scrubb told the Tribunal he had not agreed to pay spousal maintenance to Ms Scrubb and did not believe in spousal maintenance. He said Ms Scrubb was able to work. Mr Scrubb said at that time he was already supporting Ms Scrubb by paying utility and other costs for the family home as well as private school fees and child care costs. He said the affidavit simply documented all the costs he was meeting. Mr Scrubb reiterated the weekly payments direct to Ms Scrubb were for child support.

7. Section 71 of the Act provides for a payment received by the payee of an enforceable maintenance liability direct from the payer to be credited against the amount payable under the liability. The amount received must be intended by both the payer and the payee to be paid in complete or partial satisfaction of an amount payable under the liability in relation to the child support enforcement period (paragraph 71(1)(a)).

8. The Tribunal is not satisfied, based on the evidence provided, that the 13 weekly payments of $500 each made by Mr Scrubb to Ms Scrubb were intended to be in lieu of child support. Although Mr Scrubb has argued these payments were for child support, his affidavit, under the heading ‘Spousal Maintenance and Child Support’, refers to both the payments of $500 being made to Ms Scrubb and “in addition” the payments made under the administrative assessment. Ms Scrubb does not dispute the payments were made to her but has told the Tribunal the payments were for spousal maintenance and she did not agree to them being considered in lieu of child support.

9. The Tribunal finds these payments cannot, therefore, be considered as non‑agency payments under section 71.

10. Where such payments cannot be credited under section 71, they may be credited under section 71C even if there is no mutual intention between the parents. Section 71C provides, subject to section 71D, for an amount to be credited against a payer’s child support liability regardless of the intention of the parents at the time the payment was made provided that it does not exceed 30 per cent of the amount payable and the balance of child support is paid as it becomes due and payable. Section 71C also requires that at the time payment was made, or at the time the payment is to be credited, the payer must not have at least regular care (14 per cent) of any of the children to whom the assessment applies.

11. The payment to be credited must also be a payment of the kind specified in section 19 of the Regulations. This section states that for the purposes of paragraph 71C(1)(b) of the Act, specified payments are payments of the following kinds in relation to an enforceable maintenance liability:

    (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.

12. The Tribunal is satisfied that at the time the 13 payments were made, Mr Scrubb had at least regular care of the children. Irrespective of the reason for these particular payments, they cannot, therefore, be considered as prescribed non-agency payments.

DECISION

The decision under review is affirmed.