Shaw and Goldsmith (Child support)

[2020] AATA 4291

Shaw and Goldsmith (Child support) [2020] AATA 4291 (6 July 2020)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2020/PC018326

APPLICANT:  Mr Shaw

OTHER PARTIES:  Child Support Registrar

Ms Goldsmith

TRIBUNAL:Member W Budiselik

DECISION DATE:  6 July 2020

DECISION:

The decision under review is affirmed.

CATCHWORDS

CHILD SUPPORT – departure determination – whether there was a ground for departure – costs of special needs do not significantly affect the cost of maintaining the child – costs of child care do not significantly affect the cost of maintaining the child – no ground for departure – application to depart is refused – decision under review affirmed

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. Mr Shaw (the father) and Mrs Goldsmith (the mother) are the parents of [Child 1] (born 2006) (the elder child) and [Child 2] (born 2007) (the younger child).

2. On 7 March 2019, when both the children were in her care, the mother lodged an application with the then Department of Human Services Child Support, now Services Australia, (the department) for a departure from the determination of child support by the application of the administrative formula. The mother sought a departure from the administrative assessment on two grounds:

   a)The children have special needs

   b)There are extra costs in caring for, educating or training the elder child in the way both parents intended.

3. The process of seeking a departure from the administrative assessment of child support is also referred to as a change of assessment application or COA.

4. On 10 May 2019, the department made a care determination that from 8 May 2019 the elder child was in neither parents’ care.

5. On 16 May 2019, a senior case officer from the department decided in respect of the mother’s departure application:

   ·For the period 7 March 2019 to 7 May 2019, the father’s annual rate of child support payable is increased by $4,211. This represents the father’s contribution to the children’s [medical] work.

   ·For the period 8 May 2019 to 6 March 2021, the father’s annual rate of child support is increased by $2,368. This represents the father’s contribution to the younger child’s [medical] work.

6. On 21 May 2019, the mother contacted the department and asked if she could withdraw her departure determination application. She explained, now the elder child was living with the father she wanted to be responsible for the younger child’s costs and for the father to be responsible for the elder child’s costs. The department advised the mother if she wanted the departure determination decision changed, she needed to object to it, which she did on 21 May 2019. A file note recorded her objection reason:

   The elder child is no longer in my care and the younger child has not yet started his [medical] treatment.

7. On 24 May 2019, the department made a care determination that from 23 May 2019, the elder child was in the father’s care for 100% of the time.

8. On 25 May 2019, the mother withdrew her objection to the senior case officer’s decision. She withdrew her objection following her discussion with a departmental officer who advised her that the father could seek her contribution in respect of the elder child’s [medical] costs. The file note indicated the mother intended to discuss the children’s on-going [medical] costs with the father with a view to each of them meeting the [medical] costs for the child for whom they cared.

9. On 28 May 2019, the father objected to the 16 May 2019 decision. The father objected to the decision because since the elder child changed care he (the father) had incurred additional costs in respect of the elder child’s schooling and [medical] costs.

10. On 29 July 2019, the father lodged with the department an application to depart from the administrative assessment of child support. The father cited as one of the reasons for seeking a departure determination as:

    The costs of spending time with or communicating with the child(ren) are more than 5% of my adjusted taxable income amount.

11. On 31 July 2019, a departmental objections officer dealt with the father’s objection lodged on 28 May 2019 to the decision made on 16 May 2019. The objections officer decided a ground to depart from the administrative assessment had not been found. The objections officer set aside the earlier decision to depart from the administrative assessment.

12. From 13 August 2019, the father has been providing income estimates to the department. The income estimate recorded for the period 1 July 2019 was $86,895. This changed to $0 from 24 December 2019.

13. On 3 September 2019, the father contacted the department and attempted to object to the department’s objections officer’s decision. On 19 September 2019, an officer of the department advised the applicant he needed to lodge an appeal to the department’s objections officer’s decision with the Administrative Appeals Tribunal (the tribunal). The file note recording this discussion set out:

    Discussed his COA app R1 contact costs has been received, still waiting allocation to a DM, DM will not be able to review R3 as previously addressed. AAT may be able to consider new reason (addition of R1) but may need to go through COA process for this, he can take direction from AAT when he contacts them re his appeal to objection decision.

14. On 8 October 2019, a further departmental file note set out that the father advised the department he believed all the issues were under consideration at the tribunal. He withdrew the objection he lodged on 29 July 2019.

15. On 25 October 2019, the father lodged an application for review of the department’s decision with the tribunal.  In his application the father wrote:

    Appealing an objection decision from child support dated 31/07/2019 regarding my child’s [medical cost] and private schooling. Also, in addition child support said they had forwarded travel cost application to be reviewed all together.

16. On 7 November 2019, the father contacted the department fearing he might have made a mistake in withdrawing his 29 July 2019 change of assessment application. A department file note recorded:

    I advised the father that if AAT were not going to deal with Reason 1 then he’d better lodge a new COA.

    On 12 November 2019, a further file note recorded:

    I advised that AAT can, and may consider the contact costs. I advised if they don’t then he can reapply to us

    I advised I can see that he raised contact costs when he provided information in the objection process. I advised the document was incorrectly classified as correspondence for care decision that was being made at the same time. I advised that as classified incorrectly the DM did not see it… advised fact we did not consider information relevant to the decision is a good ground of appeal.

17.On 14 April 2020 the tribunal conducted a telephone directions hearing (TDH) with the parents and issued directions. On 6 July 2020 the tribunal conducted a hearing into the father’s application. The parents participated in the hearing via telephone conference. Prior to the hearing the department provided papers to the tribunal and the parents (folios 1–625). The father provided additional papers (A1–A182) and the mother provided papers (B1–B 19).

ISSUES

1. The statutory provisions relevant to this review are contained in the Child Support (Assessment) Act 1989 (the Act). The three issues to be determined by the tribunal are:

   a)   whether a ground is established to depart from the administrative assessment of child support; and if so,

   b)   whether it is just and equitable to make a particular departure determination; and if so,

   c)   whether it is otherwise proper to make a particular departure determination.

CONSIDERATION

1. The rate of child support payable by a liable parent is usually based on an administrative assessment calculated using the relevant formula under Part 5 of the Act. This involves the application of a statutory formula which takes into account factors such as the adjusted taxable income of each parent, the number of children and the level of care provided. A parent’s adjusted taxable income for a given year is calculated according to a formula that includes a parent’s previous year’s taxable income (see section 43 of the Act).

2. Part 6A of the Act allows for a departure from an administrative assessment. The liable parent or a carer entitled to child support may apply to the Child Support Registrar (the Registrar) for a determination to depart from the child support administrative assessment under Part 6A of the Act.

3. Section 98C of the Act provides that the Registrar (and the tribunal in the Registrar’s place) may make a determination to depart from the administrative assessment if satisfied that a ground exists and that it would be just and equitable and otherwise proper to make a particular determination. The tribunal may make one of the determinations set out in section 98S of the Act. Such determinations include varying the annual rate of child support paid by a parent (see paragraph 98S(1)(a) of the Act).

4. The grounds for departure from the administrative assessment are set out in subsection 117(2) of the Act. Each ground for departure is prefaced by the words, “in the special circumstances of the case”. Therefore, when considering whether a ground exists, the tribunal must be satisfied that there are “special circumstances” in the case. The phrase “special circumstances” is not defined in the Act. The Full Family Court, in the case of Gyselman and Gyselman (1992) FLC 92-279, held that:

   It is intended to emphasise that the facts of the case must establish something which is special or out of the ordinary. That is, the intention of the Legislature is that the court will not interfere with the administrative formula result in the ordinary run of cases.

Issue a): Is a ground established to depart from the administrative assessment of child support?

The children’s special needs

1. Subparagraph 117(2)(b)(1a) of the Act provides that a ground for departure from the administrative assessment exists where in the special circumstances of the case, the capacity of either parent to provide financial support for the child is significantly affected because of the special needs of the child.

2. The mother’s departure application cited the children’s special needs as [medical] expenses.

3. Following the TDH the mother provided evidence of payments to [Clinic 1]in respect of the elder child in the sum of $1,016.50 (folio B14). The mother provided evidence of payments in respect of the younger child in the sum of $7,400 (see folios B17 and B18).

4. All payments made by the mother in respect of the younger child were made after the objections officer’s decision of 31 July 2019.

5. The father provided a transaction list of payments for the elder child’s [medical] costs which set out he had paid $3,810 and had obligations to pay a further $2,640. That is, a total commitment of $6,450 (see folio A171).

6. Only $250 of the elder child’s [medical] costs paid by the father was paid prior to the objections officer’s decision of 31 July 2019.

7. The mother incurred the $1,016.50 costs for the elder child’s [medical] treatment prior to him leaving her care on 8 May 2018.

8. Both parents misunderstood the effects of the senior case officer’s and objections officer’s decisions. They both believed the father was required to contribute to the mother in respect of the [medical] costs

9. The tribunal explained the consequence of the objections officer’s decision to the parents was that the decision of 16 May 2019 was set aside, and that the father was not required to contribute to the mother in respect of the children’s [medical] costs.

10. The mother accepted the tribunal’s explanation she had not received additional child support. The father was sceptical that he had not contributed additional child support in respect of the children’s [medical] costs. The father said part of his reason for coming to the tribunal was because he understood he had paid the mother additional child support in respect of the children’s [medical] costs (in effect that he was being required to pay twice, given he was now paying the [medical] costs for the elder child).

11. To aid the father’s understanding the tribunal further reviewed the papers and sets out for him:

    ·After the senior case officer’s 16 May 2019 decision, the department issued several assessments with an issue date of 16 May 2019. Folio 199 of the department’s papers shows an assessment period 7 March 2019 to 7 May 2019. In this assessment the father’s annual amount of child support is $25,171.

    ·After the objections officer’s 31 July 2019 decision, the department issued several assessments with an issue date of 2 August 2019. Folio 111 of the department’s papers show an assessment period 1 August 2018 to 7 May 2019. In this assessment the father’s annual amount of child support is $20,960.

    ·The difference between $25,171 and $20,960 is $4,211, which is the amount the senior case officer’s decision increased the father’s child support rate in respect of both children’s [medical] costs for the period. That is, that amount has been removed from the assessment.

    ·Comparing folios 202 and 114 of the department’s papers shows a reduction in the father’s liability of $2,368, which reflects the amount in the senior case officer’s decision to increase the father’s child support in respect of the younger child’s [medical] costs for the period 8 May 2019 to 6 March 2021.

12. The tribunal is satisfied the objections officer’s decision undid the senior case officer’s decision. The objections officer’s decision set out that the impact of the decision was a reduction in the arrears owing by the father.

13. The mother said that while she had incurred [medical] expenses for the elder child prior to 8 May 2019, given the elder child’s care had changed she now did not want the father to be required to contribute toward these expenses.

14. The tribunal concluded at this time the costs (met by the mother and partly met and partly anticipated by the father) in respect of each of the children’s [medical] costs are about the same.

15. The tribunal then considered whether the capacity of either parent to provide financial support for the child is significantly affected because of the special needs of the child.

16. The parents each provided a Statement of Financial Circumstances to the tribunal.

17. The father listed his income as $1,520 per week (comprising jobseeker, family tax benefit and child support payments). In reviewing the father’s Statement of Financial Circumstances it is evident he also receives $15,000 as dividend income (presumed to be annually). Consequently, the tribunal concluded the father receives income at this time of $1,808 per week (noting this is not the father’s adjusted taxable income).

18. The father’s dividend income is derived from a portfolio of shares valued by him at 11 June 2020 at $337,866. In addition, the father has $112,000 in superannuation. The father has modest savings ($2,200).

19. On the basis of its analysis the tribunal is satisfied the father’s capacity to support the children is not significantly affected because of the children’s [medical] costs.

20. The mother’s Statement of Financial Circumstances set out her weekly income of $1,700, from which she is currently paying $553 per week in child support. The mother identified she was not in receipt of government benefits. The mother revised her Statement of Financial Circumstances at the hearing advising that she is currently building a home. She estimated the total value of property owned by her at this time is approximately $470,000 and that she has a mortgage of over $400,000. She has superannuation of approximately $53,000.

21. Given the changed care arrangement and on the understanding the father is meeting the elder child’s [medical] costs, the mother is not pursuing an argument that the [medical] needs of the children significantly affect her capacity to provide financial support to the children.

22. It is evident to the tribunal that at the time the objections officer made her objections decision the actual costs incurred by either parent in respect of their children’s [medical] needs were minimal, and commitments had not been made at that time by the parents to pursue [medical] treatments for the children.

23. The additional information provided by the parents subsequently sets out each has paid money toward the [medical] costs of providing treatment to the children. In time it is anticipated each will pay a similar amount of money for [medical] costs for the child in their care.

24. In all the circumstances of the case the tribunal decided a ground to depart from the administrative determination in respect of the children’s special needs was not able to be established at the time the department made its decision.  

The child’s education

1. Subparagraph 117(2)(b)(ii) of the Act provides that a ground for departure from the administrative assessment exists where, in the special circumstances of the case, the costs of maintaining the child are significantly affected because the child is being cared for, educated or trained in the manner that was expected by their parents.

2. The matter of school fees in child support cases has been considered judicially on various occasions. The principles that emerged from the Full Court of the Family Court (Mee and Ferguson [1986] FamCA 3) in relation to school fees can be summarised as follows:

   ·      where a parent has agreed to the child attending a private school, that parent is “liable to contribute to the fees involved so long and to the extent that they have a reasonable financial capacity to continue to do so”; and

   ·      where a parent has not agreed to the child attending such a school, they are not liable to contribute to those expenses unless there are reasons relating to the child’s welfare which dictate attendance at the school rather than a non-private school. Then the parent is required to contribute to the extent that they have a reasonable financial capacity to do so.

3. The mother advised the younger child attends a state school. She said he will attend a private school next year when he enters secondary school.

4. Neither the father nor mother argued they had an expectation the elder child would be educated in a private school.

5. The father said it would be disruptive if the child was required to change schools because he had trouble settling into the school and because the school had put extra resources in place to support him.

6. The father provided a letter from the child’s school, signed by the Year 8 Coordinator and Assistant Principal – Students, dated 22 May 2020 which set out:

   On commencement, I observed that [Child 1] had some difficulty in settling into both the academic and social aspects of school. Since this time, [Child 1] has undergone some initial assessment with regard to his learning and as a result has been referred for additional cognitive and speech and language assessments. In the interim, [Child 1] is supported through a Personal Learning Plan that informs each of his teachers of strategies to engage him effectively in his learning. In late 2019, [Child 1] was engaged with a psychologist around his peer relationships, social skills development, and emotional and mental health. I am also aware that [Child 1] is awaiting a review with a paediatrician.

   This year, [Child 1] appears to be much more settled, having established some positive peer relationships, participating across various aspects of school life, and being generally well engaged with his teachers and each of his class subjects. The support of an external psychologist and consistent attendance and engagement in classes and with teachers appears to have positively impacted [Child 1]’s development and his experience of his education.

1. The tribunal did not find the information provided by the school was sufficient for it to conclude there were reasons relating to the elder child’s welfare which dictated attendance at the school, rather than a non-private school.

2. There is no evidence before the tribunal that the elder child had special needs or that the particular school selected was selected because of its particular program to address special needs.

3. That is, in the tribunal’s assessment the steps taken by the elder child’s school are those that it anticipates would have or could have been taken in a non-private school.

4. The tribunal was unable to find a ground existed to depart from the administrative assessment because of the child’s education.

Conclusion:

57.Given a ground to depart from the administrative assessment has not been found, the tribunal is satisfied the parents’ child support liability should be determined by application of the administrative formula.

Other matter

58.Shortly after the mother applied for a departure determination on 7 March 2019, the circumstances in the case changed.

59.It seems to the tribunal that the father’s objection to the department’s decision of 16 May 2019 was in part an objection to the earlier decision and in part an application for a further departure based on changed circumstances (see folio 269 of the department’s papers).

60.On 29 July 2019, the father lodged a new departure application in respect of the costs of travel and the child’s education/special needs. The department provided the father with advice that led the father to withdraw his application.

61.The tribunal decided it was inappropriate for it to consider the matters raised in the father’s 29 July 2019 change of assessment application because the costs of travel reason raised by the father had not been subject to consideration by the department.

62.It is evident from the department’s file notes that it anticipated the tribunal may not deal with the matters raised by the father in his 29 July 2019 application. The father was advised by the department he may need to lodge a new change of assessment application.

63.Given the changed circumstances, it is appropriate therefore for the father to lodge a further change of assessment application, if he wishes further consideration of the matters he has raised.

64.The tribunal appreciates the father need not be disadvantaged by his withdrawn application because of the effect of subsection 98S(3B) of the Act), which provides a decision made by the department can be applied for a past period of child support which is not earlier than 18 months from the day on which the application for determination is made.

DECISION

The decision under review is affirmed.