Silcock and Silcock (Child support)

[2019] AATA 381

Silcock and Silcock (Child support) [2019] AATA 381 (15 January 2019)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2018/SC014869

APPLICANT:  Ms Silcock

OTHER PARTIES:  Child Support Registrar

Mr Silcock

TRIBUNAL:Member W Kennedy

DECISION DATE:  15 January 2019

DECISION:

The Tribunal sets aside the decision under review and, in substitution, sets Mr Silcock’ adjusted taxable income at $40,000.00 for the period from 1 July 2017 to 31 October 2018, and sets Ms Silcock’ adjusted taxable income at $88,000.00 for the period from 8 July 2016 to 11 January 2018, and at $40,000.00 for the period from 12 January 2018 until 1 May 2018, and at $75,000.00 for the period from 2 May 2018 to 31 October 2018. 

CATCHWORDS

CHILD SUPPORT – departure determination – income, property and financial resources of the liable parent – decision under review set aside and substituted

Names used in all published decisions are pseudonyms. Any references appearing in square brackets indicate that information has been removed from this decision and replaced with generic information so as not to identify involved individuals as required by subsections 16(2AB)-16(2AC) of the Child Support (Registration and Collection) Act 1988.

REASONS FOR DECISION

BACKGROUND

1. This decision concerns an application for a departure from the formula assessment of child support.  Mr Silcock and Ms Silcock are the parents of [Child 1], who was born in 2006. There has been a child support assessment in place for [Child 1] made by the Child Support Agency of the Department of Human Services (the Department) since 29 May 2008.

2. At the time of Ms Silcock’s application for a departure from the formula assessment, in January 2018, the annual rate of child support payable by Ms Silcock was $3,759.00, based on adjusted taxable incomes (ATI) of $53,000.00 for Ms Silcock and $24,244.00 for Mr Silcock.  Ms Silcock’s ATI was established by a decision to depart from the formula assessment made by the Department on 21 April 2017, while Mr Silcock’s ATI was based on his 2015/16 taxable income.  At the time Mr Silcock had 71% care of [Child 1].

3. On 17 January 2018 Ms Silcock applied to the Department for a departure from the formula assessment of child support based on Reason 8A, being the income, property and financial resources of one or both of the parents.

4. On 20 March 2018 a delegate of the Child Support Registrar considered the departure application and decided that Reason 8A had been established in respect of Mr Silcock’s income.  The delegate decided to set Mr Silcock’s ATI at $40,000.00 for the period from 1 July 2017 to 19 February 2019.  The delegate also decided that there was sufficient evidence to set aside the Department’s previous determination of 21 April 2017.  The delegate decided to set Ms Silcock’s ATI at $79,500.00 for the period from 27 February 2017 to 30 June 2017 and at $89,500.00 for the period from 1 July 2017 to 19 February 2019.

5. On 30 April 2018 Ms Silcock lodged an objection to that decision.  On 12 July 2018 a Department objections officer allowed the objection, setting aside the Department’s decision of 20 March 2018.  The objections officer decided to set Mr Silcock’s ATI at $40,000.00 for the period from 1 July 2017 to 31 October 2018 and to set Ms Silcock’s ATI at $79,500.00 for the period from 13 February 2017 to 30 June 2017 and at $67,000.00 for the period from 1 July 2017 to 31 October 2018.

6. On 22 August 2018 Ms Silcock lodged an application for a review of the Department’s decision with this Tribunal.  The Tribunal had access to the statement and documents provided by the Department.  The documents are at folios 1 to 396 of the hearing papers and were provided to the parents in advance of the hearing.  Prior to the hearing Ms Silcock provided documentation which is at folios A1 to A13 of the hearing papers.  Mr Silcock provided documentation which is at folios B1 to B19 of the hearing papers.  The documents were provided to the parties prior to the hearing.

7. The matter was heard and determined in Sydney on 15 January 2019.  Ms Silcock attended the hearing in person and gave her oral evidence under oath.  Mr Silcock declined to make himself available for the hearing.  The Child Support Registrar was not represented at the hearing.

CONSIDERATION

The legislative framework and issues for the Tribunal to determine

1. The rate of child support payable by a liable parent is usually based on an administrative assessment under Part 5 of the Child Support (Assessment) Act 1989 (the Act).  This requires the application of a statutory formula which takes into account factors such as the number and ages of the children, the level of care provided and the income of each parent.

2. The liable parent or a carer may apply to the Child Support Registrar for a determination to depart from the child support administrative assessment under Part 6A of the Act.  Section 98C of the Act provides that the Registrar may make a determination to depart from the formula assessment and establishes a three step process for considering applications to do so.  The Registrar, and the Tribunal standing in place of the Registrar, must be satisfied:

   ·that one, or more than one, of the grounds for departure referred to in subsection 117(2) of the Act exists; and

   ·that it would be just and equitable as regards the child, the liable parent and the carer entitled to child support; and

   ·that it would be otherwise proper to make a particular determination.

3. The grounds for departure from the administrative assessment are set out in subsection 117(2) of the Act.  Each of the grounds, which for administrative purposes are referred to as reasons, require that special circumstances be established.  The term “special circumstances” is not defined in the Act.  In Gyselman and Gyselman [1991] FamCA 93 the Full Court of the Family Court indicated that for there to be special circumstances, the facts of the case must establish something which is special or out of the ordinary.

4. If satisfied that a ground or grounds exist and that it would be just and equitable and otherwise proper to make a particular determination, the Tribunal must make one of the determinations prescribed in section 98S of the Act.  These include varying the annual rate of child support payable or a parent’s adjusted taxable income.

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

1. The Tribunal’s first task is to determine whether a ground for departure from the administrative assessment can be established.  In her application to the Department Ms Silcock sought a departure from the administrative assessment on the ground that Mr Silcock’s income, property and financial resources are greater than is reflected in the ATI used for him in the child support assessment in effect at the time of his application.  This ground for departure, which is known as Reason 8A for administrative purposes, is set out at subparagraph 117(2)(c)(ia) of the Act:

   (c)that, in the special circumstances of the case, application in relation to the child of the provisions of this Act relating to 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:

   (ia)   because of the income, property and financial resources of either parent; or

   …

2. Mr Silcock has provided a Statement of Financial Circumstances (SOFC) (folios B1 to B9).  In the SOFC Mr Silcock states that his average weekly income is $807.21, being $688.00 in earnings and $119.21 in family tax benefit (FTB).  The latter is not a taxable payment and is not normally included in child support income for the purpose of calculating child support liability.  Mr Silcock estimates that his weekly expenses, including income tax and health insurance amount to $687.00. 

3. The Tribunal also has before it Mr Silcock’s income tax return for 2016/17 (folios 201 to 206) and various payment summaries (folios 91 to 93).  These are consistent with the figures provided by Mr Silcock in his SOFC.  At the hearing Ms Silcock pointed out many matters in Mr Silcock’s documentation which she considered to be inconsistent.  The Tribunal finds that most of these matters may be susceptible to a reasonable explanation (for instance an increase in Mr Silcock’s superannuation balances and a decrease in rent payable by Mr Silcock) and those where no immediate explanation is apparent or obvious do not necessarily lead to a conclusion adverse to Mr Silcock.  As Mr Silcock chose to not participate in the hearing the Tribunal was unable to question him.  The Tribunal must therefore rely on Mr Silcock’s income tax return, his payment summaries and his SOFC.  These do not disclose anything out of the ordinary.  As Ms Silcock’s conclusions are based mainly on supposition as to circumstance, in the absence of documentary evidence, they are of little assistance to the Tribunal.

4. At the hearing Ms Silcock raised the issue of [Child 1]’s attendance at an expensive private school.  Although [Child 1] is currently attending a public school there is evidence before the Tribunal that Mr Silcock has enrolled [Child 1] in a school where fees amount to some $15,000.00 per annum (folios 176 and 177).  It is quite valid for Ms Silcock to question how Mr Silcock could afford such fees on his income.  However, the evidence is that [Child 1] will not attend the school until the 2019 school year, after the period covered by the decision before the Tribunal.  If [Child 1] were to attend an expensive private school it may prompt further inquiries to be made.

5. The Tribunal finds that, taking into account the value of the vehicle provided by his employer, Mr Silcock has available to him financial resources of some $40,000.00 per annum.

6. The Tribunal finds that Mr Silcock’s ATI of $24,244.00 under the formula assessment does not reflect the actual income, property and financial resources available to him.  The Tribunal finds that such a difference makes the formula assessment unfair and that it is a special circumstance which would allow a departure from the formula assessment of child support under subparagraph 117(2)(c)(ia) of the Act.

Issue two – Would departure from the administrative assessment be just and equitable?

Relevant law and evidence

1. As the Tribunal is satisfied that there is a ground under subparagraph 117(2)(c)(ia) of the Act to depart from the administrative assessment of child support, the next step is to consider whether it is just and equitable to depart from the assessment.  In deciding whether it is just and equitable the Tribunal had regard to the following matters set out in subsection 117(4) of the Act:

   (4)  In determining whether it would be just and equitable as regards the child, the carer entitled to child support and the liable parent to make a particular order under this Division, the court must have regard to:

   (a)  the nature of the duty of a parent to maintain a child (as stated in section 3); and

   (b)      the proper needs of the child; and

   (c)  the income, earning capacity, property and financial resources of the child; and

   (d)  the income, property and financial resources of each parent who is a party to the proceeding; and

   (da)  the earning capacity of each parent who is a party to the proceeding; and

   (e)  the commitments of each parent who is a party to the proceeding that are necessary to enable the parent to support:

   (i)       himself or herself; or

   (ii)  any other child or another person that the person has a duty to maintain; and

   (f)  the direct and indirect costs incurred by the carer entitled to child support in providing care for the child; and

   (g)      any hardship that would be caused:

   (i)       to:

   (A)      the child; or

   (B)      the carer entitled to child support;

   by the making of, or the refusal to make, the order; and

   (ii)       to:

   (A)      the liable parent; or

   (B)  any other child or another person that the liable parent has a duty to support;

   by the making of, or the refusal to make, the order; and

   (iii)  to any resident child of the parent (see subsection (10) by the making of, or the refusal to make, the order.

2. The Tribunal considered the evidence provided by the parties, including the documents that each party provided to the Tribunal, as well as the documents provided by the Department.

Assessment of evidence, findings of fact and application of the law

1. Section 3 of the Act states that it is the duty of both parents to financially support their children.  [Child 1] should receive a proper amount of financial support from her parents in accordance with their capacity to contribute.

[Child 1]’s needs

1. Paragraph 117(4)(b) of the Act requires the Tribunal to consider the proper needs of [Child 1].  The Tribunal has done this in accordance with the legislation under which this determination is made.  At the hearing Ms Silcock said that [Child 1] has no special needs and there is no documentary evidence before the Tribunal that suggests otherwise.

2. The Tribunal finds that [Child 1] has no special needs or costs that are unusual or out of the ordinary and which need to be taken into account in the assessment.

[Child 1]’s income and earning capacity

1. [Child 1] is 12 years old.  At the hearing Ms Silcock confirmed that [Child 1] is not working and does not have an independent income.

The income, property and financial resources and earning capacity of Ms Silcock and her necessary commitments

1. Ms Silcock has provided a SOFC (folios A4 to A12). In the SOFC Ms Silcock states that her average weekly income is “500 – 1000 whilst on w comp”.  Ms Silcock estimates that her weekly expenses amount to $930.00.  Ms Silcock has only partially completed the SOFC form, putting no figures down against normal household expenditure items such as clothing, medical, dental, entertainment, hobbies and others.  Against motor vehicle maintenance and registration she has written “yes”.  At the hearing Ms Silcock said that when she completed the form she did not have access to her papers and was therefore not able to fill in the form accurately.

2. The Tribunal has before it screen shots from the Australian Taxation Office database which shows that Ms Silcock was issued with two payment summaries in relation to the 2016/17 taxation year.  The first, for the period from 8 August 2016 to 10 February 2017, shows gross payments of $44,954.00 while the second, for the period from 13 February 2017 to 30 June 2017, shows gross payments of $34,260.00 (folio 243).  At the hearing Ms Silcock said that she had only been working from February 2017 but when shown the payment summaries agreed that she had been employed since August 2016.  The payment summaries show that Ms Silcock earned a total of $79,214.00 for the period from 8 August 2016 to 30 June 2017.  This is an annual rate of some $88,419.00.   On 19 February 2018 Ms Silcock’s employer reported that Ms Silcock has been receiving workers’ compensation payment at the rate of $782.89 per week from 12 January 2018 (folio 214).  On 2 May 2018 the rate of payment increased to $1,454.62 per week, however the Department’s garnishee order resulted in Ms Silcock’s net payment only increasing to $780.00 per week (folio 61).  At the hearing Ms Silcock said that she is now netting about $1,000.00 per week but was unable to provide evidence.

3. The Tribunal is unable to establish Ms Silcock’s true expenses as she has failed to provide the necessary information on her SOFC and at the hearing Ms Silcock was unable to provide useful oral evidence in relation to her expenses.  Initially Ms Silcock claimed to be homeless however following questioning by the Tribunal Ms Silcock acknowledged that she is not homeless but that she had lived in a hostel for “about a month” around October or November 2017.  When asked why she would be in financial hardship when she is receiving a net income of $1,000.00 per week, and has been receiving a relatively good income for more than two years, Ms Silcock said that she has many debts.  However on her SOFC Ms Silcock listed total debts of $25,000.00.  Against this Ms Silcock stated that she has a superannuation balance of $185,000.00 and that she owns some shares as well as other modest assets.  The screen shots from the Australian Taxation Office show that Ms Silcock receives modest amounts of interest on her savings and dividends on her shares (folios 231 to 242).

4. The decision contemplated by the Tribunal will increase Ms Silcock’s child support arrears and her ongoing liability in comparison with her arrears and liability at the time that she originally applied to the Department.  The Tribunal’s decision will also increase her arrears in comparison with the decision of the objections officer.  However Ms Silcock’s ongoing child support liability will increase for part of the period and decrease for a subsequent part of the period, when compared with the decision of the objections officer.

5. At the hearing Ms Silcock described a very troubled history in relation to child support.  However most of what she described is not relevant to the matter before the Tribunal and much of the balance is not documented in the hearing papers.  Based on the documentation before it the Tribunal sees no reason why Ms Silcock should not be able to meet her commitments.  Even with substantial debts a net income (after the deduction of child support through a garnishee) of $1,000.00 per week should ensure that she is able to support herself.

The income, property and financial resources and earning capacity of Mr Silcock and his necessary commitments

1. Mr Silcock’s financial circumstances were examined by the Tribunal and are described above.  The Tribunal finds that Mr Silcock is in a position to meet his necessary commitments.

The parents’ duty to support others

1. There is no evidence that either parent has a legal duty to support any other person, other than [Child 1].

Hardship 

1. Taking into account the parents’ primary obligation to support their children and the financial resources that the Tribunal has found are available to the parents the Tribunal finds that the decision contemplated by it will not cause hardship to either parent.

Terms and period of departure

1. Having regard to the matters in subsection 117(4) of the Act the Tribunal finds that it would be just and equitable to depart from the formula assessment by setting Mr Silcock’s ATI at $40,000.00 and by setting Ms Silcock’s ATI at a varying amount to take into account her varying circumstances.  With regard to Ms Silcock’s ATI the Tribunal is aware that the ATI that was in place at the time of Ms Silcock’s original application was the result of a determination made by the Department on 21 April 2017 to depart from the formula assessment of child support.  The Tribunal has determined that there is evidence as to Ms Silcock’s actual income which was known to Ms Silcock but which she did not reveal to the decision maker at the time of the decision of 21 April 2017.  The Tribunal finds that this new evidence is compelling and persuasive.

2. Ms Silcock lodged her application on 17 January 2018.  In her application she requested that the departure be backdated seven years.  Only a court may backdate an assessment more than 18 months from the date of application.  The Tribunal is not prepared to backdate the assessment any further than the period for which it has strong evidence.  There is sufficient evidence for the Tribunal to backdate the assessment for Ms Silcock to the date from which she commenced employment and the Tribunal will set Ms Silcock’s ATI from that date.  There is sufficient evidence for the Tribunal to backdate the assessment for Mr Silcock to the commencement of the 2017/18 financial year and the Tribunal will set Mr Silcock’s ATI from that date. 

3. The Tribunal is aware that Ms Silcock’s income is dependent on the continuation of her workers’ compensation.  Should she cease to qualify for workers’ compensation her circumstances could change significantly.  The Tribunal has decided to set the departure from the formula assessment to expire on 31 October 2018.  It would normally be expected that a party would have lodged their income tax return (ITR) by that time and the assessment can revert to the formula.  However at the hearing Ms Silcock said that she has not lodged her ITR (and has not lodged an ITR for many years) because she could not afford to do so.  As a result her ATI has reverted to a provisional ATI in accordance with the legislative and administrative provisions.  The Tribunal finds that this is appropriate in the circumstances.

Issue three – Is it otherwise proper to depart from the administrative assessment?

1. The final step for the Tribunal to undertake is to determine whether it is “otherwise proper” to depart from the administrative assessment. Subsection 117(5) of the Act requires the Tribunal to take into consideration the following matters:

   (a)the nature of the duty of a parent to maintain a child (as stated in section 3) and, in particular, the fact that it is the parents of a child themselves who have the primary duty to maintain the child; and

   (b)           the effect that the making of the order would have on:

   (i)any entitlement of the child, or the carer entitled to child support, to an income tested pension, allowance or benefit; or

   (ii)the rate of any income tested pension, allowance or benefit payable to the child or the carer entitled to child support.

2. The child support law recognises that each parent has a primary duty to maintain their children.  In this case Mr Silcock receives family tax benefit.  The level of FTB received by Mr Silcock could change as a result of the decision of the Tribunal.  The Tribunal finds that any such change is entirely appropriate and consistent with the intent of the legislation.  The Tribunal is satisfied that it is otherwise proper to depart from the administrative assessment in this matter.

DECISION

The Tribunal sets aside the decision under review and, in substitution, sets Mr Silcock’s adjusted taxable income at $40,000.00 for the period from 1 July 2017 to 31 October 2018, and sets Ms Silcock’s adjusted taxable income at $88,000.00 for the period from 8 July 2016 to 11 January 2018, and at $40,000.00 for the period from 12 January 2018 until 1 May 2018, and at $75,000.00 for the period from 2 May 2018 to 31 October 2018.