Sheehan and Sheehan (Child support)

Sheehan and Sheehan (Child support) [2024] AATA 2893 (26 June 2024)

DIVISION:Social Services & Child Support Division
REVIEW NUMBER:  2023/HC026999
APPLICANT:  Mr Sheehan
OTHER PARTIES:  Child Support Registrar
Mrs Sheehan

TRIBUNAL:Member S Hoffman
DECISION DATE: 26 June 2024
DECISION:

The Tribunal sets aside the decision under review and, in substitution, decides as follows:

Mr Sheehan’s adjusted taxable income is varied as follows:
oFrom 1 March 2023 to 31 December 2023, to $126,000
oFrom 1 January 2024 until the case ends, to $129,000
For the period 1 March 2023 to 31 March 2023, the annual rate of child support payable by Mr Sheehan is increased by $11,400 in respect of school fees.

CATCHWORDS
CHILD SUPPORT – departure determination – ground for departure – income, property and financial resources – overseas income – some expenses disregarded for child support purposes – just and equitable – earning capacity – 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

The child support case relevant to this review was registered with Services Australia – Child Support (Child Support) on 12 July 2017. The case was ended on 4 January 2022 and re-registered on 1 September 2022, with Child Support responsible for collecting child support payments.
The father paid child support to the mother for the children [Child 1] and [Child 2] until 8 November 2023, and just for [Child 2] from 9 November 2023. [Child 1] turned 18 in September 2023. [Child 2] will turn 18 in December 2025. The mother has had 100% care of the children.
On 28 November 2022, the mother applied for a change of assessment (COA). At that time, the father’s annual child support liability was $12,144, based on his overseas adjusted taxable income of $69,006 for 2021–22 and the mother’s adjusted taxable income of $27,713 for the same year.
An original decision was made by an officer from Child Support on 21 April 2023 as follows:
·     For the period from 1 March 2023 to 1 September 2023, the annual rate of child support payable by the father is set at $15,228.
·     For the period from 2 September 2023 to 30 November 2023, the annual rate of child support payable by the father is set at $12,052.
·     From 1 December 2023 to 31 December 2024, the father’s adjusted taxable income is varied to $80,000.
On 24 May 2023, the father objected to the original decision. On 21 September 2023, an objections officer from Child Support set aside the original decision and made the following decision (the objection decision):
· From 1 January 2023 to 9 April 2023, the annual rate of child support payable by the father is increased by $15,293 in recognition of his share of school fees for the children.[1]
· From 1 March 2023 until the case ends, the father’s adjusted taxable income is varied to $237,691.
[1]As this applied only for the period 1 January 2023 to 9 April 2023, the additional amount of child support payable was $4,148.

On 3 November 2023, the father lodged an application for review of the objection decision with this Tribunal.
A directions hearing was held on 8 May 2024 via MS Teams audio (equivalent to conference telephone) and attended by both parents, after which written directions were issued to them to provide certain evidence to the AAT.
The mother requested a variation to the directions such that the father be required to provide payslips as at August 2023 and perhaps for December 2023 and April 2024 as well, and/or a bank statement showing monthly income from his employer.
The Tribunal declined to make the variation as it considered the annual pay information that the father was directed to provide was adequate for the purposes of this review. In addition, it remained open to the Tribunal to issue further directions after the substantive hearing if it transpired that further evidence was needed.
The substantive hearing was held on 26 June 2024. Both parents attended via MS Teams Audio and gave sworn evidence.
Child Support had provided documents in two bundles numbered 1 to 449 and 450 to 452. The father submitted documents numbered A1 to A45 and the mother submitted documents B1 to B35. Copies of the documents before the Tribunal were provided to the parents before the main hearing.
During the hearing, there was discussion of business expenses claimed by the mothe, including rent of $844. She provided an explanation for the rent expense after the hearing, in a one-page document which has been numbered B36. The Tribunal did not forward B36 to the father for comment before it made its decision as there had been discussion about it during the hearing, and the additional evidence has not changed the Tribunal’s decision. There is further discussion of this expense at paragraph 43 of the Reasons. Paragraph 47 is also relevant.

ISSUES

The statutory provisions relevant to this review are contained in the Child Support (Assessment) Act1989 (the Act) and the Child Support (Assessment) Regulations 2018 (the Regulations).
The Act provides for an administrative assessment of child support to be paid. Pursuant to section 98C of the Act, a decision to depart from the administrative assessment may be made if the following three requirements are met:
i.A ground is established; and
ii.It would be just and equitable as regards the child, the liable parent and the carer entitled to child support to make a particular determination; and
iii.It would be otherwise proper to make a particular determination.

The grounds for departure from an administrative assessment of child support are set out in subsection 117(2) of the Act.
If the Tribunal is satisfied that the three requirements are met, it may make one of the determinations prescribed in section 98S of the Act, which include variations to the annual rate of child support payable, or to the adjusted taxable incomes of the parents and/or carer, or to other components of the statutory formula used to calculate child support.
Regulation 12 of the Regulations is about conversion of currency in relation to a person’s overseas income.

CONSIDERATION

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

Subparagraph 117(2)(c)(ia) of the Act provides a ground for departure exists where, in the special circumstances of the case, the administrative assessment of child support would result in an unjust and inequitable determination of the rate of child support because of the income, property and financial resources of either parent.

The father’s income

The father lives and works in Switzerland. He is a [Occupation 1]. Overseas taxable incomes of $69,006 for 2021–22 and $87,806 for 2022–23 were used for him in the child support assessments during periods relevant to this review.[2]
[2] To be clear, when the dollar symbol - $ - is used, it denotes Australian dollars.
The tax year in Switzerland runs from 1 January to 31 December. The father provided Child Support with his 2022 tax return in German and translated into English. He provided the AAT with his 2023 tax return in German. The Tribunal has used the 2022 original and translated versions to understand his 2023 tax return. The 2023 tax return is the more relevant of the two for this review. It has two columns, one which results in a taxable income figure for the Canton of Zurich and the other for Switzerland.
The father explained that different expenses can be claimed for each of the cantonal and federal tax systems. His 2023 tax return recorded the following information:
CHF (Swiss francs)
Canton   Federal
Income from main occupation  86,831  86,831
Less:
Professional expenses  7,265  7,265
Maintenance payment  6,586  6,586
Voluntary contribution to pension scheme         7,056  7,056
Insurance premiums and interest on savings     3,900  1,800
24,807  22,707
Net income  62,024  64,124
Deductions for person maintained  2,700  0
Taxable income  59,324   64,124

As is apparent from the figures set out above, the father’s income from his main occupation during calendar year 2023 was CHF86,831 and his tax return recorded various deductions. The father claimed that the taxable income figure of CHF59,324 should be used in the child support assessment. The Tribunal is of the view that some of the deductions applied to the father’s gross income should be disregarded for the purpose of arriving at an income for him for child support purposes.
The Tribunal determined which expenses should be disregarded for child support purposes based on the father’s explanation of the deductions, as follows:
·     Professional expenses – expenses linked to his work which include books, work-related courses, clothes required for work. Under the Australian system, a person can claim for work-related expenses. Therefore, the Tribunal will not add back this deduction.
·     Maintenance payment – this represents payments made to Child Support. The Tribunal will add back this deduction as the Australian child support system does not exclude a parent’s child support payments when arriving at an income figure for child support purposes.
·     Voluntary contribution to pension scheme – the Act requires that voluntary contributions made by a parent to a superannuation fund under the Australian system that reduces their taxable income will be added back for the purposes of child support (paragraph 43(1)(f) of the Act). To be consistent with that, the Tribunal will add back this deduction.
·     Insurance premiums and interest on savings – the Swiss system allows people to claim these amounts. There is no equivalent in the Australian system and the Tribunal will add these deductions back.
·     Deductions for person maintained – the father provides support to his mother and can claim an allowance for this under the cantonal system but not the Federal system. The Tribunal will add back this deduction as there is no equivalent in the Australian system but will consider the support the father provides to his mother later in these Reasons for Decision.
The Tribunal considers that CHF79,566 (CHF 86,831 less CHF7,265) represents the father’s income during 2023 for child support purposes.
There was another salary-related document for 2023 which recorded gross income of CHF98,925 and deductions of CHF6,331 and CHF5,763 totalling CHF12,094, which resulted in the income figure of CHF86,831. The father explained that the amounts of CHF12,094 were compulsory payments made into a pension scheme. The Tribunal is satisfied that these can be disregarded for the purpose of this review. There had also been mention of a practice in Switzerland whereby a person gets an extra month’s salary by way of a bonus. The father provided a letter from his employer which advised that the 13th month salary was paid during the year, essentially in instalments included in each monthly pay.
When considering the rate to use to convert CHF79,566 into Australian currency, the Tribunal had regard to regulation 12 of the Regulations which states as follows (regulation 12(2)):
(2) The equivalent amount in Australian currency must be worked out using:
(a) the average exchange rate for the foreign currency for the financial year in which the income was derived, being the average of the international money transfer buying rates published by the Commonwealth Bank of Australia for that currency for that financial year; or
(b) if no such rate is available for the foreign currency for that financial year--an exchange rate for the foreign currency that the Registrar considers appropriate.
The Tribunal was unable to locate any information from the Commonwealth Bank of Australia which set out the average of international money transfer buying rates for the relevant financial year. However, the Australian Taxation Office does provide a foreign income conversion calculator and the Tribunal has used that.[3]
[3] The calculator can be found at
The average exchange rate during the 2022–23 tax year was 0.6322. Applied to CHF79,566 gives AUD125,856, which the Tribunal will round up to $126,000.
The Tribunal acknowledges that the father’s 2023 income cuts across two Australian tax years. At time of writing, the average exchange rate for the 2023–24 tax year was not yet available from the ATO website. Therefore, the Tribunal has relied on the average exchange rate for 2022–23.
In his Statement of Financial Circumstances (SFC) dated 21 November 2023, the father suggested using an exchange rate of 0.662, which was the yearly average exchange rate according to Swiss tax authorities. However, as the Tribunal is applying Australian law when undertaking this review, it determines that it should use the ATO rate rather than that of the Swiss tax authorities.
The Tribunal considered the father’s income for the calendar year 2024. He said he received a pay increase in July or August 2023. That was therefore applied to his pay for, say 6 months of 2023 and for 12 months of 2024. He said he got pay increases every second year.
The father’s income from his main occupation for 2022 was CHF84,366 and for 2023, it was CHF86,831, representing an increase of 2.9%. This was more than the average annual inflation rate of +2.1% in 2023.[4]
[4] Federal statistical office (2024) Swiss Consumer Price Index in December and annual inflation 2023, accessed 28 June 2024 at
The 2023 inflation rate would be relevant to a pay increase that was applied from mid-2023. Based on the father’s income figures for 2022 and 2023, the year-on-year increase was more than the inflation rate recorded for 2023.
An increase to the father’s income for 2024 of, say, 2.4% results in a figure of $129,024 which, rounded down, is $129,000.
The Tribunal notes that during the hearing the father said that he thought his pay increase would be in the region of CHF1,500 to CHF2,000, equivalent to $2,265 to $3,021. An increase in income from $126,000 to $129,000 falls within this range.
In summary, the Tribunal considers that $126,000 adequately reflects the father’s income, property and financial resources for the 2023 calendar year and $129,000 will be used from 1 January 2024.
The Tribunal observes that in his SFC, the father recorded a weekly income for 2022 of $2,787 which is $144,924 a year. This is more than his income calculated by the Tribunal based on the father’s 2023 tax return. The Tribunal cannot account for this discrepancy.

The mother’s income

The mother’s taxable income was $27,713 in 2021–22 and $29,056 in 2022–23. The mother’s income was derived mainly from her business, [Business 1], which she operates as a sole trader. She also received income from renting out accommodation via Airbnb.
According to her tax return, the main activity of [Business 1] was [specified activity] in the form of [Activity 1]. The gross income during 2022–23 from [Business 1] was $40,172 and business-related expenses were $17,534 leaving a net business income of $22,638.
The mother said that she had contracts to teach in two schools, although one of those has now finished. She provided [lessons] from her home but was also required to travel for her work, for example, to the schools where she taught. She claimed $3,900 in motor vehicle costs, applying a rate per kilometre.
The business-related expenses included an amount of $2,117 for travel and accommodation. The mother said that one of her students was on [specified competition] and she (the mother) travelled to Sydney to support her as a [coach]. The father suggested that this was personal travel rather than business-related. The Tribunal is satisfied it can be regarded as a business expense.
The tax return listed contract payments of $1,550. The mother contacted her accountant during the hearing about this expense and was advised it was in relation to [a specified event] and represented payments made to contractors: [specified].
There was also a question as to why rent of $844 was claimed and if this was related to Airbnb. The mother said it was not related to Airbnb and that she only claimed expenses that were work-related. After the hearing, the mother contacted the AAT to advise she had spoken with her accountant and the amount of $844 recorded as rent was made up of payments to different venues that were hired for her business. This evidence was recorded in document numbered B36, a copy of which is provided to the father with this decision.
The father contended that the mother claimed personal expenses as business expenses. The Tribunal was satisfied with the explanations given by the mother for the various expenses. The father also said the mother works for cash and she denied this. She said all the payments she gets, even if she is paid in cash, are recorded as income for her business.
Gross rental income from Airbnb for 2022–23 was $13,916 and the net income was $6,417. The biggest single expense was $1,250 a year, being interest on loans. The next was $1,001 being gardening and lawn mowing.
The mother said that the last Airbnb booking was in June 2023 and she stopped the Airbnb business in September 2023 after realising she did not have the right paperwork for it. She anticipated her taxable income for 2023–24 would be similar to the previous year even though she no longer had any income from Airbnb.
For the record, the Tribunal estimates that if the father’s income is $126,000 and the mother’s income is $29,056, the annual child support liability for both children would be $27,466. If her income was determined to be, say, $10,000 more, the annual child support liability reduces to $27,210. The difference of $256 is not material.
The Tribunal considers that the mother’s taxable income adequately reflects her income, property and financial resources for child support purposes.

How does the administrative assessment compare with an assessment of child support using the Tribunal’s income figures for the parents?

The figures that follow should be regarded as estimates, due to the complexity of the child support formula.
On 28 November 2022, the mother applied for a COA. As recorded earlier, the father’s annual child support liability at that time was $12,144, using his adjusted taxable income for 2021–22 of $69,006 and the mother’s adjusted taxable income for 2021‑22 of $27,713.
Using the Tribunal’s income figures of $126,000 for the father and the mother’s 2022‑23 taxable income of $29,056, the father’s annual child support liability would be $27,466 for both children.

Given the difference between the father having an annual child support liability of about $27,466, rather than $12,144, the Tribunal is satisfied that in the special circumstances of this case, the administrative assessment does result in an unjust and inequitable rate of child support, and that a ground for departure from the administrative assessment has been established pursuant to subparagraph 117(2)(c)(ia) of the Act.

Issue 2 – Is it just and equitable to make a particular departure determination?

As the Tribunal is satisfied that there is a ground to depart from an administrative assessment of child support, the next step is to consider whether it is just and equitable as regards the children, the father and the mother to make a particular determination in accordance with sub-subparagraph 98C(1)(b)(ii)(A) of the Act. This in turn requires the Tribunal to consider a variety of factors, as set out in subsection 117(4) of the Act.[5]
[5] The Tribunal is required to give “overt consideration” to relevant factors listed in subsection 117(4) of the Act: Tyagi and Meares (SSAT Appeal) [2008] FMCAfam 886.

Section 3 of the Act makes it clear that parents have the primary duty to maintain their children, and that this duty has priority over all commitments of the parents other than commitments necessary for self-support or the support of another person the parent has a duty to maintain. In this case, the father and the mother have the primary duty to financially support the children of this case.

Income, property and financial resources – the father

In his SFC, the father wrote that he had $3,413 in his bank account as at December 2022.
The father said he does not own a car as he uses a bicycle. He valued his household contents at $3,500 and other personal property at $2,000. He recorded a total of $93,297 held in his Australian and Swiss superannuation accounts. He stated that he owed about $10,000 in tax for the most recent financial year.
The father does not own property. He pays rent of about the equivalent of $711 a week. Other than that, his highest weekly expenditure was $270 a week ($14,040 a year) for holidays. The father resides in Switzerland and the children live in Australia. The Tribunal considers that it is reasonable for him to allow for travel, accommodation and related costs to see and spend time with them. Whether those costs would amount to $14,040 a year is an open question.
In his SFC the father wrote that he had provided figures that would apply to 2022. If applied to 2023 or 2024, the figures would be similar or a little higher due to inflation, and also would be affected by the exchange rate.
The father recorded that his income was $2,787 a week ($144,294 a year) and his outgoings total $2,967 a week ($154,284 a year), giving a shortfall of $9,990 a year.
As noted earlier the income recorded by the father in his SFC was higher than that calculated by the Tribunal based on his 2023 tax return. If the Tribunal’s income figure is used, then the annual shortfall increases to $28,284 ($126,000 - $154,284).
According to Child Support’s records, as at 1 June 2024 the father owed $33,806 in child support payments. He was up to date with his payments until arrears of $16,741 were created by the objection decision in September 2023.

Income, property and financial resources – the mother

The mother’s SFC is dated 22 February 2024. According to that, her weekly income including family tax benefit (FTB) and child support was $991 and her weekly outgoings amounted to $1,773 ($292 plus $1,481), resulting in a shortfall of $782 a week or $40,664 a year. The father enquired about this discrepancy.
The mother wrote in her SFC that her income tax was $100 a week ($5,200 a year). Based on other documents she provided, it was about $1,580 a year for 2023. The difference is $3,620.
The mother included a copy of her bank statement that showed she borrowed $5,000 from her home loan facility on 18 December 2023 and a further $5,000 on 19 February 2024. She sold a family heirloom for $4,600. She was paid two FTB top-up payments of $4,152 and $2,642. These amounts account for $21,394. After allowing for the overstatement of weekly income tax, $25,014 (21,394 + 3,620) of the difference of $40,664 is explained, leaving $15,650 to be explained.
In her SFC, the mother recorded spending $300 a week on food and $268 a week on her mortgage. When she filled in the form, both children were living at home but since then, the son has left home to attend university. She paid $250 a week to assist her son during January and February 2024 with his accommodation after he left home but has stopped making those payments. Her ongoing expenses will be reduced accordingly.
The mother submitted that she had $190 in her bank account. She owns a [vehicle], which she valued at $18,000. She valued her home at $900,000 and wrote that the balance of her home loan was $146,648.
In her SFC, the mother wrote that she owed $4,624 on her credit card. She said that the balance is now about $1,375.
The mother also recorded an amount of $12,150 she owes to the father which she described as court damages. She is repaying this debt at the rate of about $500 a month. She said that arose because she started a child support case under the Swiss system and then had to end it as she did not have the funds to continue with it.
There was nothing else of particular note in the mother’s SFC.
The Tribunal observes that there were discrepancies in both parents’ SFCs that have not been fully explained. It also observes that many people make mistakes filling in their SFCs. They may inadvertently over- or under-estimate an expense. The Tribunal draws no adverse inference from this in relation to either parent.

Other issues pertaining to the parents’ incomes, property and financial resources

Should a parent’s earning capacity be taken into account in the child support assessment?

Subsection 117(7B) of the Act prescribes the circumstances in which a parent’s earning capacity may be taken into account; certain criteria have to be met.
These include that the parent has failed to demonstrate that decisions made about their work arrangements were not substantially motivated by the effect they would have on the rate of child support.
The decision maker is required to consider whether, for example, changes to a person’s work arrangements are justified on the basis of their caring responsibilities and/or their state of health. If those do not apply, the decision maker is then required to consider whether the parent has demonstrated that affecting the rate of child support was not a major purpose of decisions the parent made about their work arrangements.

The Tribunal will first consider the father. The mother said that when the father started [working] in Zurich, he was not able to work in the public system because he had a provisional licence. He has since achieved the necessary qualification and he could now work in the [public system] where the pay is better than in the [private system].
The Tribunal would note that the earning capacity provisions are not about what a person could earn if they chose a different career or a different employer.
In his SFC, the father wrote that he has been employed at the same [employer] for more than six years and that he worked 93% full-time. He said the Swiss system was such that if the [employer] had specialist [employees], then he – even when employed on a full-time basis – was not required to [work] those particular [specialised areas], which was why his workload reduced from 100% to 93%. He had no say in the matter.
The Tribunal observes that the father is working close to full-time at the same [employer] which has employed him for over six years, and his overseas taxable income has increased over recent years.
The mother works part-time. She provided Child Support with letters from [Dr A], one dated 13 August 2021, which confirmed that the mother has a chronic condition that would require long-term treatment, and she may need to take medication for the rest of her life. He wrote that the illness significantly affected her ability to work outside the home and for longer hours than she was then currently working.[6]
[6] Pages 172 and 173 of the Child Support documents. Child Support redacted the doctor’s name and other details from those pages but his name is stated in the original decision.
The Tribunal is satisfied that there is no basis for adjusting either parent’s income for child support purposes in relation to their earning capacity. The Tribunal concluded that it need not consider the application of subsection 117(7B) of the Act in relation to either parent any further.

Commitments of each parent to support him or herself

The Tribunal is required to have regard to the commitments of each parent that are necessary to enable the parent to support himself or herself, or any other child or another person that the person has a duty to maintain (paragraph 117(4)(e) of the Act).
There was no evidence before the Tribunal of either parent having a legal duty to support another child or person, or that either of them had particular needs that should be taken into account with regard to the amount of child support payable.
The father’s tax return recorded a deduction of CHF2,700, which he said was related to him assisting his mother. The Tribunal has taken this into account when considering an appropriate start date for its determination, as discussed towards the end of these Reasons.
The Tribunal is satisfied that it need not consider paragraph 117(4)(e) of the Act any further.

Costs related to the children

In determining the proper needs of the children, it is necessary to have regard to the manner in which they are being, and in which the parents expected them to be, cared for, educated or trained, and any special needs they may have (subsection 117(6) of the Act).
The parents have an agreement about sharing the costs of education. The only issue has been in relation to term one of 2023 for both children. The mother paid those fees herself. At the hearing, the father said he was agreeable to paying his share.
The father thought his share was about $600 or $700. The mother thought it was a little higher. She said that the fees tended to be higher in term one compared to other terms.
A letter from [School 1] dated 16 September 2022 forecast that each parent’s 50% share of school fees for 2023 for both children would be $3,805. As there are four terms, then each parent’s share for one term would be $951.[7] The Tribunal could not locate any analysis of the 2023 school fees by term.
[7] Page 153 of the Child Support documents.
At the hearing, both parents were agreeable to the father making a contribution of $950 to school fees in respect of the first term.
The Tribunal determines that the father’s annual rate of child support will be increased by $11,400 (950 x 12) for one calendar month, which will have the effect of him paying an additional $950.
The mother filled in only the total column of the ‘average weekly expenses’ schedule in the SFC, and did not allocate the costs between her and the children. That being the case, the Tribunal considers it appropriate to rely on the Costs of the Children Table available from Child Support’s website.[8]
[8] For the parents’ information, a Costs of the Children Table is available at the Services Australia website which can be found at align="left">Hardship
1. The Tribunal is required to consider any hardship its determination might cause and is guided by Gyselman and Gyselman[9] in this respect:
  This requires the Court to balance the “hardship” which the parents or the children may suffer as a result of either making or refusing to make the order. It is a recognition of the circumstance that in this area there is likely to be hardship both ways and the Court is required to take into account the balance of that hardship and give it the weight which is appropriate to the circumstances of the individual case.
  [9] [1991] FamCA 93.
2. The mother had 100% care of both children and now has 100% of one, as the oldest child has turned 18. The mother has a limited capacity to work because of her health. Her income is significantly less than the father’s and is not regular or predictable because of the nature of her work. It is apparent that the mother has a limited income and struggles financially. She accessed her home loan to obtain more funds but, of course, her mortgage repayments then increase.
3. In relation to the father, it was acknowledged that the cost of living in Zurich is high compared to other cities. The father works full-time and has a reasonable salary. He provided evidence of sending $700 a month to the oldest child to assist him with living expenses. The father allowed $270 a week ($14,040) in his SFC for holidays. The Tribunal considers it appropriate that he make allowance for travel to see the children. The father also chose to pay extra contributions to the equivalent of a superannuation scheme, in the amount of CHF7,056 a year, which is about $11,160. It is apparent that the father’s income gives him the capacity for discretionary spending.
4. In addition, the mother is paying the father about $500 a month in damages after she ended the child support case she had started in Switzerland.
5. It is apparent that the father is in a stronger financial position than the mother. The Tribunal has considered the effect of its decision on the father’s arrears which were $33,806 as at 1 June 2024.
6. The figures that follow are only estimates due to the complexity of child support calculations. Child Support will issue notices of assessment in due course.
7. The objection decision resulted in the father being assessed to pay an annual rate of child support as follows:[10]
  1 March 2023 to 9 April 2023  $50,688
  10 April 2023 to 31 August 2023                  $46,540
  1 September 2023 to 8 November 2023       $47,106
  9 November 2023 to date  $31,130
  [10] Pages 433 to 439 of the Child Support documents
8. For the purpose of this rough calculation, the Tribunal will assume the annual rate of child support from 1 March 2023 to 8 November 2023 was $47,000.
9. The Tribunal’s decision means that the father’s annual child support liability will be about $27,500 for both children until 8 November 2023 and $20,350 for one child from 9 November 2023.
100.For the period 1 March 2023 to 8 November 2023 (253 days) at $47,000 a year, the child support liability is $32,578. If $27,500 a year, the liability is $19,061. This represents a reduction in arrears of $13,517 ($32,578 less $19,061).
101.For the period 9 November 2023 to 1 June 2024 (206 days), at say $31,000 a year, the child support liability is $17,495. If $20,350 a year, the liability is $11,485. This represents a reduction in arrears of $6,010 ($17,495 less $11,485).
102.The Tribunal estimates that its decision will reduce the father’s arrears of $33,806 as at 1 June 2024 by about $19,527 ($13,517 plus $6,010).
Any other relevant matters
103.The Tribunal may take into account any other matters it considers relevant in making a particular departure determination (subsection 117(9) of the Act).
104.The mother lodged her COA application on 28 November 2022 and had requested that any changes be backdated to 13 September 2022. Child Support first tried to contact the father about the COA application on 16 March 2023 and first spoke to him about it on 20 March 2023. During the period between November 2022 and March 2023, it was reasonable for him to rely on the child support assessment then in place. For that reason, the original and objection decisions increased the father’s child support liability and adjusted taxable income respectively, from 1 March 2023 and not an earlier date.
105.The nearly four-month delay in notifying the father of the COA application disadvantaged the mother as the start dates of the decisions to increase his child support liability were later than they may otherwise have been.
106.The Tribunal’s decision has resulted in a reduction of the arrears owed by the father but he still has arrears of child support that need to be paid. The Tribunal also takes note that the father provides support to his mother and the costs he incurs in order to see the children.
107.The Tribunal also notes that according to the original decision dated 21 April 2023, the father advised Child Support that his confirmed taxable income for 2023 was CHF48,300 (equivalent to $80,281). Based on his 2023 tax return, discussed in detail above, that figure was understated.
108.There are competing considerations with regard to the start date, but on balance the Tribunal considers it is appropriate to start its determination from 1 March 2023 and not an earlier date, consistent with the original and objection decisions. As that benefits the father, the Tribunal will not make further adjustments in his favour regarding the assistance he provides to his mother or the costs he incurs in seeing the children.
109.The Tribunal has determined that the father’s income for calendar year 2024 is $129,000. It has not increased it for 2025. This is because an increase of, say, $3,000 applied to his income would increase the annual rate of child support for one child by about $240 a year, which is immaterial against an annual rate of child support of about $20,000 a year.
110.As the youngest child’s 18th birthday is in December 2025, it is anticipated that the case will end then. The Tribunal’s decision therefore ends when the case is expected to end. This will give both parents some certainty into the future as regards child support.
111.It remains open to either parent to apply for a change of assessment between now and the end of this determination if circumstances change.
Issue 3 – Is it otherwise proper to make a particular departure determination?
112.The requirement to consider whether a departure determination would be otherwise proper is concerned with what is fair to the community; it is preferable for a child or children to be primarily supported by their parents rather than by government assistance. Paragraph 117(5)(b) of the Act means that the Tribunal must consider whether the level of a benefit, in particular FTB, received by the party caring for a child or children, may be affected by the level of child support.
113.During the period relevant to this review, the mother has been in receipt of FTB. The Tribunal is satisfied that its determination will result in an appropriate apportionment of financial responsibility between the parents and the community and would be otherwise proper.
DECISION
The Tribunal sets aside the decision under review and, in substitution, decides as follows:
- Mr Sheehan’s adjusted taxable income is varied as follows:
  oFrom 1 March 2023 to 31 December 2023, to $126,000
  oFrom 1 January 2024 until the case ends, to $129,000
- For the period 1 March 2023 to 31 March 2023, the annual rate of child support payable by Mr Sheehan is increased by $11,400 in respect of school fees.

[2024] AATA 2893

26 June 2024

Key Legal Topics

Areas of Law

Family Law

Administrative Law

Legal Concepts

Statutory Construction

Jurisdiction

Remedies

Judicial Review