Simson and Garner (Child support)
[2024] ARTA 431
•18 December 2024
Simson and Garner (Child support) [2024] ARTA 431 (18 December 2024)
Applicant: Mr Simson
Other Parties: Child Support Registrar
Ms Garner
Tribunal Number: 2024/MC028150
Tribunal:General Member Mr J Nalpantidis
Place:Melbourne
Date:18 December 2024
Decision:The Tribunal affirmed the decision under review.
CATCHWORDS
CHILD SUPPORT – change of assessment – absence of a ground to depart from the administrative assessment – income, property and financial resources – no new matters raised – decision under review affirmed
Names used in all published decisions are pseudonyms. Any references appearing in square brackets indicate that information has been omitted from this decision and replaced with generic information pursuant to subsection 16(2AB) of the Child Support (Registration and Collection) Act 1988.
Statement of Reasons
BACKGROUND
Mr Simson and Ms Garner are the separated parents of [Child 1] (born [date] January 2008). For the purposes of child support, the child is recorded as being in the 75% care of Ms Garner (271 nights) and 25% regular care (94 nights) of Mr Simson. The case was registered on 23 January 2017 and Child Support has collected child support liability on Ms Garner’s behalf from 5 March 2019.
The assessment in place prior to an earlier change of assessment (COA) decision on 23 February 2023 (which is not the subject of this objection) was as follows:
For the period 1 July 2022 to 31 August 2022, Mr Simson was assessed to pay the annual rate of child support of $869 using on an adjusted taxable income (ATI) of $35,660 for Mr Simson and an ATI of $40,156 for Ms Garner. Both parents’ incomes are as reported by the Australian Taxation Office (ATO) for the 2020/21 financial year.
For the period 1 September 2022 to 31 October 2022, Mr Simson was assessed to pay the annual rate of child support of $3,021. This was based on Mr Simson’s ATI of $45,695 and Ms Garner’s ATI of $31,332, as reported by the ATO for the 2021/22 financial year.
On 17 October 2022, Ms Garner applied for a COA based on: the costs of maintaining the child are significantly affected by the child’s special needs (called Reason 2 by Child Support); the costs of maintaining the child are significantly affected because of the costs of caring for, educating or training the child in the way both parents expected (called Reason 3 by Child Support); and the child support assessment is unfair because of a parent’s income, property and financial resources (called Reason 8A by Child Support).
On 23 February 2023, the Child Support original decision‑maker found Reason 8A is established and Reasons 2 and 3 are not established. Through the change of assessment process, the original decision‑maker set Mr Simson’ income at $100,000 per annum from 1 November 2022 to 2 January 2026. Following this change of assessment, Mr Simson was assessed to pay an annual rate of child support of $12,256. Adjustment to the annual rate from 1 November 2022 will result in an increase in liability of $2,308 for Mr Simson.
On 13 May 2024, Mr Simson applied for a COA on the basis of Reason 8A, that is, his income, property and financial resources make the child support assessment unfair (Reason 8A), stating his income is now less than $100,000.
On 4 June 2024, the Child Support original decision‑maker found Reason 8A was not established and decided not to change the child support assessment.
On 19 June 2024, Mr Simson objected to this decision and on 26 June 2024, an objections officer disallowed the objection. The impact of the objections officer’s decision on the assessment was that there was no change to the child support assessment, and Mr Simson’s income is set at $100,000 per annum from 1 November 2022 to 2 January 2026, resulting in an annual rate of child support of $12,256.
On 27 June 2024, Mr Simson applied to the Administrative Appeals Tribunal (the Tribunal) for a review of the objections officer’s decision.
From 14 October 2024, the AAT became the Administrative Review Tribunal (the Tribunal). Under the transitional provisions in the Administrative Review Tribunal (Consequential and Transitional Provisions No. 1) Act 2024 (the Transitional Act), applications for review to the AAT that were not finalised before 14 October 2024 are taken to be an application for review to the Tribunal. The Transitional Act gives the Tribunal the authority to continue and finalise any aspect of the review not already completed by the AAT. This decision and statement of reasons is made by the Tribunal.
10. A directions hearing was conducted by the Tribunal on 25 October 2024, on which date the parties spoke to the Tribunal by MS Teams audio. Following the directions hearings, directions were issued to the parties to provide further information.
11. The Tribunal hearing was conducted on 6 December 2024. Mr Simson gave sworn oral evidence in person, and Ms Garner gave sworn evidence via MS Teams audio. Child Support did not attend the hearing. At the hearing the Tribunal had before it documents provided by Child Support (pages 1 to 178, 179 to 189 and C1 to C31) and further documents provided by the parties, in response to the Tribunal’s directions: ‘A documents’ provided by Mr Simson (A1 to A88) and ‘B documents’ provided by Ms Garner (B1 to B17). The documents provided by Child Support and Ms Garner were exchanged between the parties prior to the hearing. Mr Simson consented to documents A1 to A31 being exchanged with Ms Garner, and they were exchanged prior to the hearing. Mr Simson and Ms Garner confirmed receipt of the exchanged documents with the Tribunal.
ISSUES
12. The statutory provisions relevant to this review are contained in the Child Support (Assessment) Act 1989 (the Assessment Act) and the Child Support (Registration and Collection) Act 1988.
13. The rate of child support payable by a liable parent is usually based on an administrative assessment under Part 5 of the Assessment Act. The liable parent or carer may apply to the Child Support Registrar for a determination to depart from the child support administrative assessment under Part 6A of the Assessment Act. Section 98C of the Assessment Act provides that the Registrar may make a determination to depart from the formula assessment and establishes a three‑step process. The Registrar, and the Tribunal standing in the place of the Registrar, must be satisfied that:
(i)there is a ground to depart from the administrative assessment of child support;
(ii)it is just and equitable to depart; and
(iii)it is otherwise proper to depart.
14. The grounds for departure from an administrative assessment of child support are those set out in subsection 117(2) of the Assessment Act. Each ground is prefaced by the term “in the special circumstances of the case”. The term “special circumstances” is not defined in the Assessment Act. In Gyselman and Gyselman (1992) FLC 92-279, the Full 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.
15. 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 may make one of the determinations prescribed in section 98S of the Assessment Act.
Issue 1 – Is there a ground established to depart from the administrative assessment of child support?
16. Section 117 of the Assessment Act provides that the Tribunal may make a departure order if it is satisfied a ground exists under subsection 117(2) of the Assessment Act, it would be just and equitable as regards the child, the carer entitled to child support and the liable parent and it is otherwise proper to make an order. The Tribunal considered the ground relating to the income, property and financial resources of Mr Simson. Subparagraph 117(2)(c)(ia) of the Assessment Act provides that a ground for departure exists where, in the special circumstances of the case, Mr Simson’s income, property and financial resources make the child support assessment unfair.
Evidence before the Tribunal
17. Ms Garner applied for a COA on 17 October 2022 based on Reasons 2 – the costs of maintaining the child are significantly affected by the child’s special needs, 3 – the costs of maintaining the child are significantly affected because of the costs of caring for, educating or training the child in the way both parents expected and 8A – the child support assessment is unfair because of a parent’s income, property and financial resources. Child Support found Reason 8A was established and it was just and equitable and otherwise proper to change the assessment, setting Mr Simson’s income at $100,000 per annum from 1 November 2022 to 2 January 2026; accordingly, Mr Simson was assessed to pay an annual rate of child support of $12,256.
18. Mr Simson provided a written and verbal response to Child Support and does not oppose an increase to the annual rate of child support.
19. There is no dispute that Mr Simson trades under an Australian Business Number (ABN) and business name [Business 1]. Ms Garner contends that Mr Simson is able to minimise his income under the structure of his business. She gave evidence that Mr Simson has employed a receptionist and has been advertising for a person to commence an apprenticeship as well as employing other staff. Mr Simson purchased a house at [address] in May 2022 for $650,000 and Ms Garner contends Mr Simson’s mortgage repayments would be unaffordable on his declared income of $36,694 per annum. She gave evidence that the [Business 1] workshop is situated at [address] where nearby rents are at least $500 per week plus GST and other outgoings. She said Mr Simson has purchased a new vehicle and a dirt bike that disappeared from the asset pool, as well as purchasing a dirt bike for the child.
20. In response Mr Simson acknowledged he rents a separate space for his business operations and his depreciation expenses were particularly high in the 2022/23 financial year due to purchasing a vehicle, [which] had some personal use, but has since been sold. Mr Simson told Child Support that he expected his income for 2022/23 will be around $100,000 unless he buys another vehicle.
21. A search of the ATO database by Child Support shows the following details for Mr Simson:
ABN registered 15 May 2020 including registration for Goods and Services Tax; business name [Business 1].
Individual tax return for 2021/22 showing total business income of $231,048, total expenses of $188,753 and net business income of $42,295. Business expenses include depreciation expenses of $50,010.
Business Activity Statement (BAS) for 1 July 2022 to 30 September 2022 showing total sales of $179,586.
22. Mr Simson provided a profit and loss statement for the year ended 30 June 2022 to Child Support which included the following information:
Sales: $221,048
Profit on sale of Plant and Equipment: $10,000
Depreciation plant: $50,010
Materials and supplies: $44,081
Rent on land and buildings: $16,676
Wages: $19,968
Wages-CVGT (wage subsidy): $20,823.
Bank statements provided by Mr Simson show savings account debit transactions on 4 August 2022 of $7,505, notated as ‘more for home loan’, and $5,497 on 15 August, notated as ‘to Mr Simon’s home loan’.
24. The Child Support material also included a legal notice issued to Mr Simson’s banking institution and the response received on 27 January 2023, which provides details on a mortgage offset account and home loan application. The home loan application is signed and dated 22 December 2021 and the declared purpose of the loan is to purchase a property. The loan amount is $389,400. Mr Simson declares his total net monthly income as $8,559.50.
25. Child Support found the latest BAS figures for [Business 1] show sales totalling $179,586 for the first business quarter of 2022/23. This, compared with total sales figures of $221,048 for 2021/22, suggests a marked increase in sales. Mr Simson acknowledged that the income he will generate from his business in the 2022/23 financial year will be around $100,000 and he has declared a monthly income of $8,559.50 (annualising at $102,708) in his bank loan application in December 2021.
26. Child Support accepted Mr Simson’s likely annual income is in the order of $100,000, which is significantly more than the adjusted taxable income of $45,695 used in the current assessment. Applying an income of $100,000 to the child support assessment would result in the annual rate of child support payable by Mr Simson increasing from $3,021 to $12,256.
27. In considering whether the COA was just and equitable, Child Support found the child does not have income or financial resources that allow her to be self-supporting and she relies solely on Ms Garner and Mr Simson for her support. Neither parent raised any issues, other than those dealt with in the COA application, which would be considered as being special or out of the ordinary. Ms Garner’s ATO‑assessed 2021/22 income used in the assessment is $31,332 and there was no evidence to suggest this income is not an accurate reflection of her current financial resources. For the purposes of the assessment Child Support determined Mr Simson’s annual income is better reflected as $100,000.
While Ms Garner requested that consideration be given to backdating a higher income for Mr Simson, Child Support determined this would place an immediate debt on Mr Simson before he was made aware of the possibility that a change would be made to their child support. This would be an unfair burden on Mr Simson. It was also noted that there is an expectation that parents lodge an application for a change to an assessment promptly if they are dissatisfied with that assessment.
29. Ms Garner is in receipt of Family Tax Benefit (FTB) from Centrelink and an increase in her child support entitlement as determined by Child Support may decrease Ms Garner’s FTB payments, which means there will be a decrease in the extent to which the community will be supporting the child. Accordingly, Child Support determined that it is otherwise proper to depart from the administrative assessment in this matter.
Therefore, on 23 February 2023, Child Support set the adjusted taxable income of Mr Simson at $100,000, commencing from 1 November 2022, which is the first day of the month following Ms Garner’s COA application, and ending on 2 January 2026, the day before the case is due to end when the child turns 18 years of age. The COA resulted in the annual rate of child support payable by Mr Simson for the period 1 November 2022 to 30 November 2023 increasing from $3,021 to $12,256, and resulted in an increase in liability of $2,308 for Mr Simson.
Although the Child Support records show Mr Simson objected to the original decision of 23 February 2023, in a discussion with the objections officer on 4 April 2023, Mr Simson withdrew his objection to the original decision of 23 February 2023, and on 6 April 2023 Child Support sent a notice to Mr Simson advising that the original decision of 23 February 2023 remains in place and there are no changes to his child support assessment.
32. On 13 May 2024, Mr Simson applied for a COA on the basis that his annual income is now less than $100,000 (Reason 8A) and he cannot afford to continue to pay the current rate of child support. Mr Simson confirmed he is self‑employed in [an] industry, operating his business [Business 1] , and estimated his annual income at approximately $40,000.
33. Mr Simson told the objections officer that he does not have copies of financial statements, balance sheets and profit and loss statements for his business, but he recently spoke to his accountant who said his half yearly profit was about $20,000. Mr Simson also told the objections officer that he recently provided $20,000 of his own funds into the business to keep it afloat.
34. Mr Simson told the objections officer that there was one year where his taxable income was inflated due to the sale of a [vehicle]. The proceeds of the sale of the [vehicle] were included in his taxable income, however that was an isolated incident and not reflective of his actual earnings through his work at [Business 1]. Mr Simson advised that he pays himself a wage of $1,000 per week, which was reflected in bank statements provided by Mr Simson to Child Support. The bank statements also show payments to Mr Simson for work completed ranging in amounts and frequency in 2024 from between $3,205 to $10,647.
35. Ms Garner advised the objections officer Mr Simson’s income is likely to be much higher than $40,000 per annum. She said that Mr Simson recently gifted their adult son $10,000 in cash and purchased a caravan. She submitted that Mr Simson has access to large amounts of cash.
36. The objections officer reviewed ATO records which show Mr Simson is self‑employed in [an] industry, and the most recent BAS for Mr Simson’s business reflects the following information:
· 1 January 2024 to 31 March 2024, total sales minus GST: $55,208
· 1 October 2024 to 21 December 2024, total sales minus GST: $73,023
· 1 July 2023 to 30 September 2023, total sales minus GST: $49,788
· 1 April 2023 to 30 June 2023, total sales minus GST: $54,391
· Total sales for this one year period minus GST: $232,410.
37. The objections officer concluded that Reason 8A was not established, stating:
Mr Simson has not provided financial documents for his business. Mr Simson did provide copies of his bank statements which verify his statement that he pays himself a wage of $1000 per week.
They also reflect payment for work completed of varying amounts. It is not possible to determine an exact income figure for the business based solely on these statements. They simply confirm that Mr [Simson] earns an income from his business [Business 1] .
ATO records show that in the last 12 months, the business generated total sales of $232,410 after GST.
There is nothing in the BAS statements that would suggest these sales figures have been inflated in one quarterly period due to the sale of a [vehicle] or for any other reason, rather they indicate the business is consistently producing sales of between $54,000 to $73,000 per quarter. I acknowledge this figure does not include operating expenses for the business. As Mr Simson stated he is not in a position to provide the financial documents for his business that would contain this information, I must make some assumptions and generalisations in regards to what the operating expenses for his business may be. Limiting the scope of this decision to the business operations in the [industry] in Australia, it would appear that Mr Simson business is producing regular income well in excess of $40,000. As the owner of this business, it is reasonable to draw the conclusion that Mr Simson has direct access to funds earned through the business, beyond the $1000 wage he pays himself each week.
It Is also relevant to note in matters such as this, I am not required to make a determination based on mathematical precision; but only need to be reasonably satisfied on the balance of probabilities as to the state of a parents income, property and financial resources. In this case, I have not located any information to indicate that Mr Simson income is less than $100,000. I fact, I find this figure to be a modest reflection of his actual earnings.
No new information has been provided or located through this process that may indicate Mr Simson income has reduced.
With that in mind, I find it reasonable to determine that Mr Simson has an annual income in the range of $100,000.
Mr Simson’s evidence and contentions
38. Mr Simson told the Tribunal that his annual taxable income over the years has consistently been in the range of $35,000 to $48,000 per annum and he agreed to a figure of $100,000 per annum because he thought he made a lot more money in the 2022/23 financial year. He told the Tribunal he sold a [vehicle] in that year and that may have been reflected as increased income, but it was a once off. He bought the [vehicle] in 2019 or 2020 for $100,000 and sold it after two years in 2021 for $80,000. He purchased the [vehicle] for cash from the proceeds of his property settlement and did not owe any money on the [vehicle] . The [vehicle] was not used 100% for business and he had some personal use. He estimates that it may have been used 80% for the business.
39. Mr Simson told the Tribunal that the 2022/23 financial year was a particularly good year for his business from a financial point of view and he agreed his annual income may have been $100,000 in that year, but the following year (2023/24) was not as good and his annual taxable income was $26,000. He put this down to fewer sales and having to pay more for parts and materials. He also employed an apprentice from the employment group ‘CVGT’ and this affected his profitability. The apprentice made a lot of mistakes which Mr Simson had to correct at no cost. The apprentice ceased employment with Mr Simson five months ago.
40. Mr Simson told the Tribunal that business has since levelled out and is now more stable; he expects his income to be in the $35,000 to $45,000 range in the current financial year. Mr Simson submitted that the pattern of his taxable income has averaged over the last six years in the $35,000 to $45,000 range and last year his taxable income was $26,000, which is a quarter of the $100,000 Child Support applied to the assessment.
41. Mr Simson gave evidence that he keeps a cash float of approximately $30,000 for the business and last year the float went down significantly and he contributed personal funds of $20,000 to his business account. The money has since been repaid back to him because the business has levelled out again.
42. Mr Simson provided a detailed profit and loss statement for his [Business 1] business for the year ended 30 June 2024. He told the Tribunal that $60,000 of the $69,000 in depreciation expenses in his profit and loss for 2022/23 may be related to the [vehicle], which he has since sold, explaining why the depreciation expense reduced to $5,772 in the 2023/24 financial year. The increase in CVGT from $26,133 to $56,033 was related to apprentice wages. The profit and loss statement shows wages increased from $40,662 in 2022/23 to $47,376 in 2023/24. Mr Simson told the Tribunal all the listed expenses in the profit and loss statement were for the business and included no private expenses. He had no private use of the telephone and the motor vehicle costs were for business use. The business shows income of $255,931 with a net profit of $25,846 in 2023/24 compared to income of $367,098 (including profit from sale of plant and machinery of $60,582) and net profit of $119,240 in 2022/23.
43. Mr Simson told the Tribunal that he purchased his house for $650,000 with borrowings of $380,000 and he acknowledged that in his loan application in December 2021 he listed his income at approximately $8,600 per month. He told the Tribunal this is what his broker advised him to state in the application so he could obtain the loan. Mr Simson told the Tribunal that he makes repayments of $600 per week on his loan. He said that he supplements his work income by selling various assets on ‘Marketplace’, such as motor bikes ($1,500 and $5,000), parts such as mud guards ($700, $500 and $300), furniture, old household items, tools such as a tyre pump ($40) and ski gear ($1,500). He told the Tribunal that some payments from these sales are reflected in his bank statements while others may have been cash and are not listed in his bank statements.
44. Mr Simson told the Tribunal that cash sales are deposited into his business accounts. Each month he collects cash in an envelope and at the end of the month he makes a deposit into his bank account.
45. Mr Simson told the Tribunal that he amended his PAYG with the ATO in the last financial year to reflect the reduction in his income. He also reduced the child support he paid over the last five months; instead of paying $1,058 per month, he paid half that amount because that is all he could afford. He was due a tax refund of some $9,000 but $2,500 was withheld to pay his child support arrears. Mr Simson told the Tribunal that he calculated he has paid child support of $14,000 over the last 19 months which he believes is not a fair amount. He submitted that using his assessed taxable income is a fairer basis of working out his child support and that can usually be determined three months after the end of the financial year when he completes his tax returns.
46. In response to Ms Garner’s evidence, Mr Simson acknowledged he purchased his home for $650,000, paid a depot of $293,000 from the proceeds of his property settlement and the sale of the [vehicle] and borrowed $356,000. He acknowledged that his liabilities total $135,000 as shown in his statement of financial circumstances because he has an offset account with savings of $225,000 attached to his loan. He told the Tribunal that he has saved this money over the years from selling assets. His savings have increased from $175,000 to $225,000 since taking out his home loan from his wages and selling assets. In response to the Tribunal’s question, Mr Simson told the Tribunal that his offset account had $200,000 in February 2023 and he saved these funds over an eight‑ or nine‑year period. He added $25,000 to the account from selling assets and savings from his income of $1,000 per week net. By way of example, Mr Simson told the Tribunal that he sold [a car] for $12,000 a couple of years ago, and more recently he sold a [motorbike] for $7,000 and a boat and ski gear for $2,000 and $1,500.
47. Mr Simson gave evidence that his minimum repayments for the loan are approximately $2,300 per month. Bank statements show that the loan opening balance was $371,136 on 25 July 2023 and the closing balance at 25 January 2024 was $361,618 with payments of $13,874 recorded for the six-month period; off set interest savings of $6,961 were recorded. An opening balance of $361,618 was recorded on 25 January 2024 and the closing balance at 25 July 2024 was $350,758 with payments of $14,137 for the six‑month period; off set interest savings of $6,905 were recorded. Mr Simson told the Tribunal he puts as much as he can into his home mortgage so as to minimise the interest payments.
Ms Garner’s evidence and contentions
48. Ms Garner disputed the income figures provided by Mr Simson and referred in particular to Mr Simson’s statement of financial circumstances which list liabilities of $135,000, which is a marked reduction from the $380,000 Mr Simson borrowed in December 2021 to purchase his home. Such a reduction and Mr Simson’s lifestyle, general living costs and support of his business cannot be explained by Mr Simson’s stated income. Ms Garner told the Tribunal that Mr Simson also appears to take a lot of time off work and he is often away on weekends, which would affect his ability to earn an income.
49. Ms Garner told the Tribunal that Mr Simson’s purchase of a house and what she sees as lifestyle expenses incurred by Mr Simson triggered her to lodge a COA. Ms Garner submitted that it is not plausible that Mr Simson’s apparent expenses can be met from an annual income of $40,000 and she submits that an annual income in the order of $100,000 is more reflective of Mr Simson’s financial circumstances.
Findings
50. For a number of reasons, it is often the case that taxable income does not reflect a true picture of a self-employed parent’s ability to provide support for their children. A self‑employed parent may or may not pay themselves a wage from the business, they may take drawings whereby goods or money are withdrawn from the business profit for personal purposes, a business may be able to deduct certain expenses from income for tax purposes and as a result legitimately may have a reduced income or may even run at a loss. This may mean that for the self-employed parent, their full financial resources may not be taken into account in a child support assessment and assessing child support on the basis of taxable income can result in an unjust and inequitable level of child support.
51. It is well established that the taxable income of a self-employed parent should be the starting point when determining child support assessments and when considering business expenses and losses in a change of assessment, it is therefore necessary to examine the full financial position of the business to determine any personal financial resources available to the parent from the business.
52. Furthermore, it is not necessary for decisions to be justified by reference to precise mathematical calculations and that a broad approach to figures is satisfactory.
53. The assessment prior to the COA (by Ms Garner) which occurred on 23 February 2023 was:
· For the period 1 July 2022 to 31 August 2022, the annual rate of child support is $869 using on an income of $35,660 for Mr Simson and an income of $40,156 for Ms Garner.
Both parents’ incomes are as reported by the ATO for the financial year 2020/2021.
· For the period 1 September 2022 to 30 November 2023, the annual rate of child support is $3,021 using an income of $45,695 for Mr Simson and an income of $31,332 for Ms Garner.
Both parents’ incomes are as reported by the ATO for financial year 2021/2022.
54. For the reasons outlined above, Child Support found Reason 8A was established and it was likely Mr Simson’s income was in the order of $100,000, which is significantly more than the adjusted taxable income of $45,695 used in the current assessment. Mr Simson accepted this assessment, despite the new income figure being some $54,000 more than his taxable income.
55. There is no dispute Mr Simson is self-employed, operating [a] business trading as [Business 1].
56. As well as his business income, Mr Simson gave evidence that he sells assets including items such as motor vehicles and motor bikes, tools, boats, ski gear and furniture. He gave evidence that he has an offset account which at the time of the hearing had a balance of some $225,000. He gave evidence that the account increased from some $200,000 in February 2023. He gave evidence that the account has been built up over the years via selling items and from his income of $1,000 per week from his work with [Business 1] .
57. Mr Simson did not provide financial documents from his business to the objections officer. Child Support referred to information from the ATO and BAS statements for the business. Mr Simson provided some bank statements which show some income and expenses for the business. Mr Simson verified he pays himself a wage of $1,000 per week net, which provides an annualised gross income of approximately $66,000.
58. While the Tribunal agrees with the objections officer that it is not possible to determine a precise income figure form Mr Simson’s business based on the information before the Tribunal, in the last 12 months, sales have been between $54,000 and $73,000 per quarter and Mr Simson’s business generated total sales of $232,410 after GST. The objections officer referred to the business operations in the [industry] in Australia, concluding that Mr Simson’s business is producing regular income well in excess of $40,000 and Mr Simson has access to financial resources beyond the $1,000 per week (net) he pays himself each week. The Tribunal has found that Mr Simson has listed his monthly income in his December 2021 application for a home loan at approximately $8,600 per month (annualised at $103,200), at a time when his most recent taxable income was assessed by the ATO at approximately $40,000.
59. The Tribunal has found that Mr Simson took out a home mortgage in December 2021 in the amount of $380,000 and has met his mortgage repayments of approximately $2,300 per month consistently since that time, often making extra repayments. In the statement of financial circumstances dated 11 July 2024, provided to the Tribunal, Mr Simson listed the outstanding loan at $130,921, albeit linked to an offset account with a balance of some $225,000.
60. The Tribunal needs to be reasonably satisfied on the balance of probabilities as to the state of Mr Simson’s income, property and financial resources. On balance, the Tribunal accepts in this case it is reasonable to apply an annual income to Mr Simson of $100,000 as this appropriately reflects Mr Simson’s income, property and financial resources for the purposes of assessing child support in his case.
61. The Tribunal therefore determines that there is no ground for departure from the administrative assessment based on the earning capacity of Mr Simson and this ground is therefore not established as all of the criteria specified under subsection 117(7A) of the Assessment Act have not been met.
Are there new matters raised in Mr Simson’s departure application made on 13 May 2024?
62. The Tribunal examined the objections officer’s decision of 26 June 2024 and the application for a change of assessment made by Mr Simson on 13 May 2024 seeking a departure from the administrative assessment based on Reason 8A (income, property and financial resources) as it related to Mr Simson. The Tribunal is satisfied that the objections officer considered changing the assessment but refused to do so because no ground was established. Accordingly, the Tribunal accepts that Child Support previously refused to make a determination on the application.
The Tribunal also examined the material provided by Child Support including the reasons for decision for the previous decision of Child Support on 23 February 2023. The Tribunal has found that Mr Simson’s application for a departure determination (on 13 May 2024), as considered by the original decision maker on 23 February 2023, was made on the same basis as the application made on 17 October 2022 by Ms Garner and he has not raised any new reasons for a departure determination in his application of 13 May 2024. Mr Simson’s application for a change of assessment is based entirely on his income, property and financial resources, as was the early COA application by Ms Garner.
64. Mr Simson’s evidence to Child Support in relation to the objection decision was broadly the same as previously considered by the original decision‑maker on 23 February 2023. This information is not new information and was considered in both the original decision and the objections officer’s decision and was dealt with by Child Support in its refusal to depart from the administrative assessment on 26 June 2024.
65. Taking the above into account, the Tribunal concluded that the discretion to refuse Mr Simson’s application for a change of assessment without further consideration should be exercised. In these circumstances, the Tribunal is of the view that reconsidering the decision previously made by the objections officer on 26 June 2024 where there are no new matters raised would not be appropriate and heavily favours the exercise of the discretion to refuse Mr Simson’s application to change the assessment.
The Tribunal therefore determined to refuse Mr Simson’s application for a change of assessment without further consideration of its merits. It therefore affirms the decision to refuse his application to change the assessment but does so pursuant to section 98J of the Assessment Act rather than section 98F of the Assessment Act.
67. Given the absence of a ground to depart from the administrative assessment, there is no requirement for the Tribunal to consider whether a departure would be just and equitable and otherwise proper.
DECISION
The Tribunal affirmed the decision under review.
Date of hearing: | 6 December 2024 |
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