Shipway and Rolt (Child support)

[2021] AATA 3685

Shipway and Rolt (Child support) [2021] AATA 3685 (22 July 2021)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2020/MC020499

APPLICANT:  Mr Shipway

OTHER PARTIES:  Child Support Registrar

Ms Rolt

TRIBUNAL:Member M Martellotta

DECISION DATE:  22 July 2021

DECISION:

The tribunal sets aside the decision under review so that from 1 May 2020 until 31 December 2021 Mr Shipway’s ATI is varied to $125,000.

CATCHWORDS

CHILD SUPPORT – departure determination – income, property and financial resources of the liable parent - benefits derived from business - 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 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 Shipway and Ms Rolt are the parents of two children born [in] 2016 and [2017]. The children are in the primary (100%) care of Ms Rolt.

2. On 5 December 2019 Ms Rolt lodged a change of assessment application on the grounds of reason 8A which refers to a parent’s income, financial resources and property. At that point of time, the administrative assessment in place was as follows:[1]

   [1] The tribunal noted that the child support periods referenced in the objections officer’s decision appeared to be different from the child support periods provided in the Agency papers, see page 501. The tribunal has referenced the periods as set out in the Agency screens.

Child Support Period	Mr Shipway	Ms Rolt	Annual Liability
22 Aug 2019- 21 Nov 2019	$83,368 (18/19 Provisional)	$37,112 (18/19 ATI)	$13,792
22 Nov 2019 -31 Aug 2020	$24,120 (18/19 ATI)	$37,112 (18/19 ATI)	$435 (FAR)[2]
1 Sept 2020-30 Nov 2021	$0 (19/20 ATI)	$63,035 (19/20 ATI)	$435 (FAR)

[2] Fixed Annual Rate applies where a parent declared income below the max. parenting payment single rate and is not in receipt of income support.

1. Services Australia – Child Support (the Agency) found the ground established and decided to vary the assessment on 19 March 2020 so that for the period 22 August 2020 to 21 November 2020 Ms Rolt’s adjusted taxable income (ATI) was varied to $53,000 and Mr Shipway’s ATI was varied to $82,220 for the period 22 August 2020 to 31 October 2021.

2. Mr Shipway objected to the decision. On 2 December 2020 the Agency decided to vary Mr Shipway’s ATI to $146,832 for the period 1 May 2020 to 30 November 2021. This increased Mr Shipway’s annual liability to $25,316. Mr Shipway lodged an application seeking independent review by the tribunal.

3. The tribunal convened a telephone directions hearing attended by the parental parties. Mr Shipway did not fully comply with those directions. A hearing was held on 22 July 2021. Mr Shipway and Ms Rolt participated by conference telephone and they each gave their evidence on affirmation.

4. The following documents were provided: The Agency (518 pages), Mr Shipway (A1-A542) [3]and Ms Rolt (B1-B64).[4]

   [3] A507 -A542 received post hearing.

   [4] Mr Shipway sought to provide a number of documents post hearing, on review those documents did not provide any new relevant information that would assist the tribunal in its decision making and as such those documents were not considered and were returned.

ISSUES

1. The statutory provisions relevant to this review are contained in the Child Support (Assessment) Act 1989 (the Act).

2. Child support legislation is interpreted by the Department with the aid of the Child Support Guide (the Guide). The tribunal is not bound by law to apply the policy as set out in the Guide but, provided the policy is consistent with the legislation, it is required to have regard to it and in the ordinary course follow it.[5]

   [5] See Re Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634.

3. The issues for the tribunal to determine in this case are:

   ·      Does a ground for departure exist? If so,

   ·      Would it be just and equitable as regards the children, the liable parent, and the carer entitled to child support determination to depart from the administrative assessment of child support? And

   ·      Is it otherwise proper to make a departure determination?

Other issues

1. As a preliminary point the tribunal notes that Mr Shipway did not fully comply with the Directions issued by the tribunal. This aspect is addressed in the Reasons for Decision under Issue One. 

2. The tribunal also notes that some days prior to the schedule hearing date (16 and 28 July 2021) Mr Shipway requested the Presiding Member re-schedule the hearing to allow the Member more time to consider evidence submitted by him prior to hearing.  He also requested that certain documents not be provided to the other party.  These requests were refused by the tribunal.  Post hearing Mr Shipway complained that the hearing had not been re-scheduled. The tribunal is satisfied that there was no proper basis to grant the re-schedule request.[6]

   [6] See AAT Child Support Review Practice Directions 14 and 28

3. Post hearing Mr Shipway provided additional documents.[7]  The tribunal accepted some of the documents which it considered relevant (in the sense that they related to matters raised in Mr Shipway’s evidence at hearing).  Documents the tribunal did not consider relevant were not accepted post hearing. In relation to the post hearing documents accepted the tribunal was satisfied that it was not necessary to obtain post hearing submissions from Ms Rolt as they raised no adverse matters requiring her response.

   [7] See AAT Child Support Review Practice Direction 30

4. The tribunal finally notes that at the conclusion of the hearing both parties confirmed that they were satisfied that the hearing had provided them with the opportunity to put their submissions and evidence to the tribunal.  The tribunal is satisfied that Mr Shipway has been provided ample opportunity to provide evidence relevant to the matters to be determined by the tribunal.

CONSIDERATION

Issue 1 – Is there a ground to depart from the administrative assessment?

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 number of children, the age of each child, the level of care provided and the income of each parent. The income used in the calculation has a number of components making up the adjusted taxable income, which is worked out using section 43 of the Act. The general approach is that the Child Support Registrar (“the Registrar”) will utilise a parent’s ATI as assessed by the Australian Taxation Office (ATO) for the last relevant year of income.

2. Part 6A of the Act allows for a departure from an administrative assessment (a process commonly known as a change of assessment). The liable parent or a carer may apply to the Registrar for a determination to depart from the child support administrative assessment under Part 6A of the Act (section 98B). Section 98C of the Act provides that the Registrar may make a determination to depart from the formula assessment and as noted, establishes a three step process.

3. The grounds for departure from the administrative assessment are set out in subsection 117(2) of the Act. Only one ground is required in the special circumstances of the case to depart from the administrative assessment and thereby satisfy the requirements of subsection 117(2) of the Act.[8] In this matter the only ground contested at hearing was whether a ground for departure is established pursuant to reason 8A.

   [8] The phrase “special circumstances of the case” is not defined in the Act. However, the Family Court has held that “it is intended to emphasise that the facts of the case must establish something special or out of the ordinary” (Gyselman and Gyselman (1992) FLC 92-279). Likewise, in Phillippe and Phillippe (1978) FLC 90-433 the Court held that “special circumstances” are “facts peculiar to the particular case which set it apart from other cases”.

Reason 8A – income, property and financial resources of the parties

1. Subparagraph 117(2)(c)(ia) of the Act provides a ground for departure exists where, in the special circumstances of the case, application of the provisions of the Act relating to the administrative assessment of child support would result in an unjust and inequitable determination of the level of financial support to be provided by the liable parent for the child because of the income, property and financial resources of either parent.

Mr Shipway

1. Mr Shipway told the tribunal that the objection decision has incorrectly assessed his income. He said that following the breakdown of his relationship with Ms Rolt over the last three and half years, he suffered mental health issues, and this affected his ability to work. He says that his income is limited to about $500 per week ($26,000) but it is not a set amount as he has not had a regular income for the last three years. He has many debts that he is trying to service. The Agency has garnisheed his accounts; this is not fair nor is their assessment. He has lodged complaints with the Commonwealth Ombudsman and the Agency to no avail.

2. In response to questions asked by the tribunal Mr Shipway provided the following evidence:

   a)He established a private company, [Business 1], of which he is the sole director and shareholder. It was established about four or five years. The purpose of the company was to purchase an investment property in [Town 1]. He did not want to purchase that property in his name, so he created a company to purchase and take on the mortgage for that property.

   b)The company has never lodged a tax return as the businesses associated with the company ([Businesses 2 and 3]) have never really got off the ground and never had an income to a level which required it to lodge a return. The company has never prepared financial statements for this reason.

   c)He set up the [service] businesses around July 2017 and these operated until about January 2018 because he became homeless due to the breakdown of the marriage. He can’t say if the company or business names have been de-registered as he stopped paying the fees and hasn’t checked since then.

   d)The tribunal noted that according to ASIC records[9] the company was registered in August 2016 and is still registered. ASIC searches also confirm that Mr Shipway and not the company is the registered owner of the businesses [Businesses 3 and 2] which are both still registered.

   [9] Accessed 26 July 2021.

   e)During 2018 and until 2019 he had a casual staffer who did all the work for the businesses. He was not able to work due to his mental state. He earned about $500 per week during that time. In 2019/20 he probably still on average earns about $500 per week. The businesses still trade with one casual employee. This is his main source of income.

   f)The businesses have two active vehicles, there were three, but he gave one to his friend to whom he owed money ( he owed about $40,000). The businesses do not operate from business premises but from his home. In May 2021 he purchased another vehicle for $20,000 but it is unregistered.

   g)The expenses for the businesses all go through his two credit card accounts ([institution names]).[10] He does not claim business-related expenses as his personal and business income and expenses are all inter-mingled. He operates a business transaction account and a personal account into which business income is paid. From those accounts he pays the monthly credit card balance.

   [10] A108 Visa card.

   h)He owns properties. One is an apartment in [Town 2] currently valued at $280,000 which he has owned since 2007. The mortgage on that property is about $250,000. That property is rented out and the rent goes into his personal [Bank 1] account and he transfers $500 per week from that account to the home loan.

   i)The variable home loan statement for that property (xxxx 8005) shows a balance of $180,196 as of May 2021. The fixed loan for the property (xxxx 7414) has a balance of about $70,000. Mr Shipway says that he deposited $180,000 of his own money into the variable account after his separation. He has since been drawing against the equity to cover his living expenses. He regularly withdraws $5,000 per month to cover his costs of living. Anything coming out of that account is for his personal or business expenses. He agrees that his access to these funds is a relevant financial resource.

   j)A second property located in [Town 1] is solely registered in the name of the company [Business 1]. He says that his father paid $100,000 towards that property. His father has since passed away and according to his culture he will be required to pay money to his siblings when they turn 30 years of age. That property has been sitting vacant for about 18 months because he has not paid the business loan taken out to purchase the property for the last 18 months and the mortgagor [business] is in the process of re-possessing and selling the property. The business loan on the property is about $330,000.

   k)Mr Shipway later said that following a complaint he lodged with Australian Financial Complaints Authority (AFCA)  in [2020][11] he has got a moratorium on the re-possession and he has six months to try and come up with the money for the mortgage, but he has not engaged with the situation due to his stress.

   [11] A16 and A20.

   l)According to the document provided by Mr Shipway, AFCA in their determination dated [in] 2021 concluded that none of Mr Shipway’s complaints against the lender were substantiated. It determined the complaint in the lender’s favour but has allowed a six-month period to allow for an unconditional contract of sale of the property. Failing that, the lender is to be provided with vacant possession.[12]

   [12] A515.

   m)Post hearing Mr Shipway sent in a document which he says explains why he cannot rent the [Town 1] property. In that email Mr Shipway says that the property has been classified by the local council as not habitable. The document provided by Mr Shipway however actually states that the local council has become aware of potential non-compliant building to convert a garage into a habitable room and also an alleged change of the dwelling use to a boarding house.[13]

   [13] A509.

   n)He and Ms Rolt also still jointly own the former matrimonial home. Ms Rolt lives in that property and Ms Rolt pays the mortgage and outgoings for that property.

   o)He has a [Bank 2] account but his sister who lives in [Country 1] accesses money from that account because when his sister visited him some years ago, they sold jewellery for $70,000 and she also gave him another $30,000 and this is his way of paying her back. This is the $180,000 that he deposited into his [Town 2] home loan and that is what he draws down. He transfers money into the [Bank 2] account from his personal account.

   p)He has a personal [Bank 1] account and all the rental income and business income goes into that account. Also proceeds from sales he makes of various items on [websites] goes into that account. He can’t say how much he makes from the sale of various items, but it would form part of the $500 per week.

   q)He has had several loans provided to him by friends and family.[14] These personal loans are for things such as his legal costs and the cost of his wedding to Ms Rolt. His parents lent him $200,000 for his education and living costs in Australia and this amount also included the money for the [Town 1] property. He has not paid that back, but it needs to go back to the family at some point. None of these loans are formal in the sense that they have been documented or require interest to be paid. He has not paid any of the loans back apart from giving one of his friends the van. These should not be viewed as financial resources.

   [14] A21.

   r)The only way he can meet his weekly expenses is because he can draw down on the home loan account and from his income of about $500 per week. The tribunal asked why he pays rent of $660 per week. He says that he was homeless for 12 months then living with friends, he could not get a cheaper rental, but he had no choice but to rent this property. It is a three-bedroom property.

   s)Ms Rolt makes money from [her stated hobby] which she has not disclosed.

   t)Post hearing Mr Shipway sent in documents stating that Ms Rolt had sold a unit in 2020 for $394,500.  Letters he provided from his solicitors advised that they were awaiting his instructions to ensure that the funds will be considered in the final property settlement.

Ms Rolt

1. Ms Rolt says that she knows the way Mr Shipway operates. He set up his businesses in such a way to avoid paying tax as he works for cash. The loans he has listed are not actually loans but money he has earned which he then gets friends to hold on his behalf. His bank accounts are kept deliberately low for child support and family court purposes. She knows this as he started the business when they were together and so has firsthand knowledge of how he operates.

2. His account of his sister and family lending him money is false. His parents had no money to give; they were living in poverty in [Country 1]. It is part of a strategy to manipulate the family court property settlement. The objections officer’s decision is the right decision. The assessment is fair.

3. He had left access of his work bookings on an iPad that his daughter accessed, and she was able to see the amount of work that he has undertaken.

4. She is employed and this is her sole source of income and she has been with the same company for 13 years. [Her stated hobby] does not generate income, it is just a hobby and she might sell [products] occasionally, but it is not a business.

Documents

1. The tribunal reviewed documents provided by the Agency and by the parties. In relation to Mr Shipway, the tribunal has noted Mr Shipway failed to comply fully with the directions issued by the tribunal. He did not provide any financial statements showing the profit and loss or break down of the expenses relating to his businesses or company. Mr Shipway told the tribunal that expenses were paid by credit cards and could be found in those statements. This was of limited assistance to the tribunal as it would require the tribunal to go through his credit card statements to identify what may be business-related expenses. Likewise Mr Shipway did not provide any tax returns instead only providing the assessment notices which provided limited information. Mr Shipway also did not provide business activity statements instead providing an activity summary.

2. The tribunal notes his explanation that the ‘business never really got off the ground’ but on the available evidence does not accept this to be the case as a review of the available financial information shows that the businesses are trading. In this regard, the tribunal notes authorities regarding the duty of parties to provide full and frank disclosure regarding their financial affairs and that this duty extends to presenting information in a way that can be reasonably and readily understood and examined.[15] It is open to the tribunal to draw adverse inferences from a party’s failure in this regard.

   [15] Humphries & Berry [2008] FMCAfam 409.

3. As noted, Mr Shipway told the tribunal that all his income goes through his personal accounts. The tribunal reviewed a document that Mr Shipway said was his personal bank account statement (there was no account number or other identifying features on this document other than a list of dates and credit and debt transactions).

1. The tribunal ascertained that in a 12-month period commencing 1 July 2020 to 30 June 2021 an amount of about $78,000 was paid into that account (not including ATO refunds and amounts identified as loans). These amounts appeared to be cash deposits, payments for [specified services], payments for items sold online as well as regular payments from [Business 4]. A search undertaken by the tribunal identifies this to be a [business type].[16]

   [16] [Details deleted.]

2. Grossing up the figure of $78,000 would equate to an annual gross income of about $100,000.[17] The tribunal has limited information about Mr Shipway’s business and rental expenses as these have not been presented in a form that would allow the tribunal to reasonably examine that information.

   [17] Mr Shipway is self-employed and the evidence suggests that he is GST registered as he lodges BAS. This is only a requirement where a person has registered for GST which is required when a business has gross income of $75,000 and above, see >

   Mr Shipway says all his business and personal expenses are paid by credit card. A review of those cards shows a significant proportion of the expenditure relates to personal expenses (groceries, eating out, hair treatment etc). Costs which could be work-related include fuel and transport costs, vehicle repairs and communications. From what the tribunal can ascertain there is about $500 of expenses per month in the latter category ($6,000 per annum) of which Mr Shipway would also receive some personal benefit. There would also be expenses relating to the rental properties however Mr Shipway stated that he has not rented the [Town 1] property for some 18 months and that he has only recently re-let the [Town 2] property.

3. On balance on the available evidence the tribunal decided to allow $20,000 for expenses. This would leave Mr Shipway with income from his various sources of about $80,000[18]. In addition, however, are lump sums which are described as loans totalling $45,000 paid into the account. The tribunal is satisfied that these lump sums are financial resources[19] relevant to the assessment and including this amount in the income figure results in a figure of about $125,000.[20]  

   [18] Using the gross income of $100,000.

   [19] According to authorities a financial resource refers to something that is not property but from which a financial benefit is or may be gained. The term is to be broadly defined and refers to any financial benefit that would enhance the capacity of a parent to provide a proper level of support for their children.

   [20] In reaching this figure the tribunal notes that based upon Mr Shipway’s credit card repayments for the 12 months of 2020/21 as well as payment of rental of $665 per week he would have required at least access to income and financial resources of about $118,168.

4. Ms Rolt provided copies of her personal income tax returns. These confirm that she earns her income as a PAYG employee. Mr Shipway made submissions that Ms Rolt earns income [from her stated hobby] and relies upon social media extracts which he submitted into evidence. Ms Rolt says that she may sell an occasional [product], but it is largely a hobby and something for the children. The tribunal is satisfied that in her case the only relevant income is what she earns from her employment.

5. The tribunal notes that both parties’ own property.  There is evidence that Ms Rolt has sold a unit.  Mr Shipway owns a property ([Town 2]) which is being rented.  His company owns the [Town 1] property which he has been given six months to sell.  The evidence however is that these assets will form part of the considerations relevant to any final division of marital assets as part of final property settlement which is currently being dealt with. The tribunal considered in these circumstances that those assets are not to be treated as relevant financial resources in determining the income, property and financial resources relevant to a child support determination at this point in time.

6. In this matter, the administrative assessments in place at the time the change of assessment was lodged relied upon provisional and ATO issued adjusted taxable income for Mr Shipway. The tribunal concluded that the ATO issued ATI does not reflect the actual income and financial resources available to Mr Shipway. His failure to provide full disclosure and the way in which he chooses to operate his business interests made it difficult to obtain a clear view of his financial circumstances, however the tribunal is satisfied that the approach it has taken provides a reasonable assessment of relevant income and financial assets available to Mr Shipway for purposes of the assessment.

7. The tribunal has concluded that the appropriate amount which takes into account each of the parties’ relevant income, financial resources and property is $125,000 for Mr Shipway and for Ms Rolt her last relevant income tax return.

8. Utilising these amounts in the assessment in place of the amounts utilised in the administrative assessment in place at the time of the change of assessment application would result in a significant change in the level of child support payable by Mr Shipway. For this reason, the tribunal concludes that a ground of departure exists because in the special circumstances of the case, application of the provisions of the Act relating to the administrative assessment of child support would result in an unjust and inequitable determination of the level of financial support to be provided by the liable parent for the children.

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

1. As the tribunal is satisfied that there is a ground to depart from the assessment of child support as set out above, the next step for the tribunal is to consider whether it is just and equitable as regards the children and the parental parties 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 the matters set out in subsection 117(4) of the Act: which is discussed in the following paragraphs.[21]

   [21] The tribunal notes the Federal Magistrates Court case of Tyagi & Meares [2008] FMCAfam 886 which directs that in considering the matters set out in subsection 117(4) the section need not be ‘slavishly followed, each of the relevant factors listed in … should be considered’.

Proper needs of the children

1. In determining the proper needs of the children it is necessary to have regard at a broad level to the manner in which the children are being, and in which the parents expect the children to be, cared for, educated or trained, and also any other needs of the children. No specific submissions were made at hearing in relation to this. On the basis of the presented evidence and submissions; the tribunal concluded that there was no basis to further vary the assessment for this reason.

Income, earning capacity, property and financial resources of the children

1. In having regard to the income, earning capacity, property and financial resources of the children the tribunal must disregard any entitlement of the children or the carer entitled to child support to an income tested pension, allowance or benefit (subparagraph 117(7)(b)(ii) of the Act).

2. There was no evidence presented to the tribunal that the children have any income or unused earning capacity that needs to be taken into account in the child support assessment and as such the tribunal concludes that there is no basis for any adjustment pursuant to this consideration.

Other party receiving money, goods and property for the benefit of the children

1. Neither party made submissions in this regard, as such the tribunal concludes there is no basis for any adjustment pursuant to this consideration.

The income, property and financial resources of each parent who is a party to the proceeding

1. In this matter the tribunal has concluded that Mr Shipway has income and financial resources of $125,000 and that Ms Rolt’s relevant income and financial resources are that as reflected in her ATO assessed personal tax return.

2. As noted, Mr Shipway also owns two investment properties. One is in his name ([Town 2]) which he rents out. That property Mr Shipway values at $250,000.

3. A second property ([Town 1]) has been purchased by the company of which Mr Shipway is the sole director and shareholder. Mr Shipway (or the company) has stopped meeting the loan repayments on that property. The current situation appears to be that Mr Shipway has six months in which to sell the property and to settle the outstanding mortgage that is owed.

4. Mr Shipway states that the estate of his late father has an interest in the property. The tribunal was not satisfied that this is the case and concluded that the property is owned by a company wholly controlled by Mr Shipway. Mr Shipway suggests a value of $750,000 for that property. As of September 2020, there is a mortgage owing of $337,043.

5. Mr Shipway and Ms Rolt jointly own the former matrimonial home. Ms Rolt is meeting all the outgoings for that property.

6. Other assets disclosed by Mr Shipway are three work vehicles which he values at $30,000, one of which he says he has recently given away. He says that he has superannuation valued at $144,832.

7. Ms Rolt discloses 50% interest in the former matrimonial home. Savings of about $15,000 and superannuation valued at $120,999. The home which is valued at about $350,000 is subject to a mortgage of close to that amount. The tribunal also notes evidence that she sold a property in 2020 for $394,500.

Earning capacity

1. A ground for departure exists if, in the special circumstances of the case, the administrative assessment of child support would result in an unjust and inequitable determination of the level of financial support to be provided by the liable parent for the child because of the earning capacity of either parent (subparagraph 117(2)(c)(ib)). The tribunal was satisfied that there was no basis to consider earning capacity in any proposed departure.

The commitments of each parent who is a party to the proceeding 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

1. No specific submissions were made at hearing. The tribunal is satisfied taking into account the relevant costs of self-support utilised in the assessments and based upon evidence provided at hearing that neither party has extraordinary costs of self-support that are relevant to the assessment.

Any hardship that would be caused

1. Mr Shipway says that the departure made by the objections officer has caused him financial hardship. He owes arrears of child support. Ms Rolt says that Mr Shipway has been able to avoid paying a proper rate of child support due to the way he organises his business. She says that this has caused her and the children hardship.

Proposed departure

1. Overall, the tribunal did not find Mr Shipway a compelling witness. He says that he suffers from depression and this affects his ability to think clearly.  Mr Shipway provided copies of clinical notes from counselling sessions held post separation. Whilst the tribunal accepts that this may be a contributing factor, at the same time his explanation of circumstances was often at variance with other evidence provided to the tribunal.

2. Mr Shipway submits that Ms Rolt has not fully disclosed her financial circumstances by not revealing the sale of the unit in 2020[22] and her involvement in [her stated hobby].  The tribunal in this regard notes that sale of the unit was disclosed by her lawyers as part of the property settlement proceedings.  The tribunal has noted that properties owned by each of the parties will form part of the assets to be settled in those proceedings.

   [22] The sale was disclosed in her COA applicaiton

3. Mr Shipway is meeting the mortgage repayments on the [Town 2] property whilst Ms Rolt’ is meeting the mortgage on the former matrimonial home. Mr Shipway has stopped paying the mortgage on the [Town 1] property. He has six months to effect a sale to pay out what is owed. There would appear to be some equity in that property. Ms Rolt has sold a property in 2020.  Ultimately property settlement issues between the parties are to be determined by applications that are on foot.

4. The tribunal has concluded that for the purposes of the child support assessment Mr Shipway should be assessed on an amount of $125,000 and Ms Rolt should continue to be assessed on her ATO assessed ATI.

5. In terms of the period of any departure determination.  The tribunal notes that Ms Rolt made her change of assessment application on 5 December 2019. The tribunal is unable to make any departure for a period greater than 18 months prior to that date. The Agency in their decision set the departure period 1 May 2020 to 30 November 2021. The rationale being that to go back further would unfairly raise additional arrears and concluding the departure to 30 November 2021 would give the parties an opportunity to lodge their most recent and relevant income tax returns.

6. At hearing neither party made specific submissions on the period of any departure.  Ms Rolt stated that she agreed with the objection decision made by the Agency. The tribunal concluded that the departure should commence 1 May 2020. In terms of concluding the departure, from what the tribunal can ascertain Mr Shipway’s personal income tax returns are unlikely to reflect relevant income due to the way he operates his business.  The tribunal is also mindful however that the parties are going through a property settlement which may have an impact on the financial resources and property relevant to any assessment.  The tribunal proposes ending the assessment on 31 December 2021.  This allows the parties some certainty going forward and allows time for the settlement of the matrimonial assets.

7. The tribunal proposes changing the determination so that for the period 1 May 2020 until 31 December 2021 Mr Shipway’s ATI is varied to $125,000. The tribunal is satisfied that a departure in these terms is in the circumstances fair and equitable; it will result in some adjustment of his liability to about $422 per week and from 1 September 2020 to about $404. The tribunal is satisfied that on the available evidence and information provided in his Statement of Financial Circumstances that Mr Shipway has capacity to meet a child support liability in these terms.

Issue 3 – Would it otherwise be proper to make a particular departure determination?

1. The final step is for the tribunal to determine whether it is ‘otherwise proper’ to make a particular departure determination. Subsection 117(5) requires the tribunal to take into account whether the proposed departure is proper in the context of public interest and welfare expenditure of the community. A prime objective of the legislation is that parents are obliged to support their own children to the extent of their real capacity and such obligation should not be unnecessarily abrogated to the public welfare system.

2. According to her Statement of Financial Circumstances Ms Rolt is in receipt of family tax benefit and the proposed departure from the administrative assessment may impact upon any entitlement to government assistance. In this case the tribunal finds that the requirements under paragraph 117(5)(a) of the Act are met. The tribunal concludes that it is otherwise proper to depart from the administrative assessment.

DECISION

The tribunal sets aside the decision under review so that from 1 May 2020 until 31 December 2021 Mr Shipway’s ATI is varied to $125,000.