Siviter and Siviter (Child support)

[2023] AATA 2133

Siviter and Siviter (Child support) [2023] AATA 2133 (24 May 2023)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2022/MC025225

APPLICANT:  Mr Siviter

OTHER PARTIES:  Child Support Registrar

Ms Siviter

TRIBUNAL:Member S Letch

DECISION DATE:  24 May 2023

DECISION:

The Tribunal sets aside the decision under review and, in substitution, restores the original decision of 12 October 2022 to accept Mr Siviter’s estimated 2022/23 adjusted taxable income in the sum of $83,428.

CATCHWORDS

CHILD SUPPORT – particulars of the administrative assessment – estimate of income – whether the estimate should have been refused – estimate of income accepted – 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

1. This matter concerns a decision by Child Support to refuse an estimate election for the 2022/23 financial year made by Mr Siviter on 12 October 2022.

2. It is convenient by way of background to set out some extracts from the objections officer decision dated 7 December 2022:

   …

   WE CONSIDERED THE FOLLOWING EVIDENCE IN THE DECISION

   On 12 October 2022, Mr Siviter contacted us and advise he had had a change in circumstances.

   Mr Siviter elected to lodge an estimate of adjusted taxable income for the period 12 October 2022 to 30 June 2023 of $83,428 (annualised).

   On the same day, we made the decision to accept Mr Siviter’s estimate of adjusted taxable income of $83,428 (annualised) for the period 12 October 2022 to 30 June 2023.

   …

   REASONS FOR THE DECISION

   The current child support assessment has been active between Ms Siviter and Mr Siviter since 28 September 2022 for [their five children]. There are no income amount orders in place at the time Mr Siviter lodged his estimate of adjusted taxable income.

   Mr Siviter’s estimate of income of $83,428 (annualised) lodged on the 12 October 2022 is the first estimate election in the relevant year of income. The estimate period is 12 October 2022 to 30 June 2023. This is known as a part year estimate of income.

   Mr Siviter’s estimate of income of $83,428 (annualised) is less than 85% of his 2021/2022 taxable income of $160,467 which is his last relevant year of income.

   Mr Siviter has supplied a year to date (YTD) income figure of $31,933 for the period 1 July 2022 to 11 October 2022.

   We are satisfied Mr Siviter has made a valid estimate election.

   We now need to examine if Mr Siviter has provided all the relevant income information when making his estimate of adjusted taxable income election of $83,428 (annualised), to apply in the estimate period 12 October 2022 to 30 June 2023. The estimate must be the total of all income component amounts of Mr Siviter's adjusted taxable income expected in this period. Mr Siviter must also provide his year to date (YTD) income for the period 1 July 2022 to 11 October 2022.

   Mr Siviter states his income has decreased due a reduction in income.

   Information obtained by us indicates Mr Siviter's has received regular payments from other sources since 12 October 2022, and that his income is higher than he estimated. Taking this additional information into consideration we have found that the gross taxable income will be significantly higher than his estimated income of $83,428 (annualised) in the period 12 October 2022 to 30 June 2023.

   We can refuse to accept an income estimate election for part of a year if we are satisfied that:

   the parent's partial year income amount is less than what we consider is likely to be the parent's actual adjusted taxable income for the remaining period in relation to the income election (63AA(2)(a)); or

   the total of the income component amounts for the year to date income amount is more than the amount that we consider is likely to be the total of the actual income component amounts (section 63AA(2)(b)).

   On the evidence available, we are satisfied Mr Siviter's estimate of $83,428 (annualised) is less than what we consider is likely to be his actual adjusted taxable income for the period 12 October 2022 to 30 June 2023.

   As such, we have made the decision to refuse to accept Mr Siviter's estimate of income of$83,428 (annualised) for the period 12 October 2022 to 30 June 2023.

   The objection is allowed.

   …

3. Mr Siviter participated in the Tribunal’s hearing by conference telephone. Ms Siviter, in an email to the Tribunal dated 10 May 2023, informed the Tribunal that she did not wish to participate in the hearing, which proceeded in her absence.

4. Mr Siviter told the Tribunal that Child Support did not take into account the extraordinary payment in 2021/22 of annual leave and long service leave from a past role (see folio A18). This inflated his income to some $160,000. Mr Siviter told the Tribunal that his income as a subcontractor varied from $700 one week to over $2,000 the next; he genuinely thought about $1,600 per week represented a likely income, on average. In formulating his estimate, he took into account not only the receipts from [Employer 1]; he did other “odd jobs” small in scale to “fill the gaps” in weeks he had no work from [Employer 1] (for example, transfer from [Mr A] on 28 October 2022: folio A17). Mr Siviter conceded that, in hindsight, it was “not a great estimate” as his income was more in the vicinity of $2,000 per week by February 2023. He said that he understood he would re‑evaluate his situation every month and update his estimate; however, as the estimate was not accepted by Child Support, he did not have the opportunity to provide updates. Mr Siviter said that he is now a wage earner, having started work with “[Employer 2]” in late February 2023 (see folio A3).

5. The pivotal provision in this application is section 63AA of the Child Support (Assessment) Act1989:

   63AA  Registrar may refuse to accept an income election

   (1)  If:

   (a)  a parent makes an income election to which subsection 60(2) applies; and

   (b)  the Registrar is satisfied that the amount worked out under that subsection is less than the amount that the Registrar considers is likely to be the parent’s actual adjusted taxable income for the year of income to which the income election relates;

   the Registrar may refuse to accept the income election.

   (2)  The Registrar may refuse to accept a parent’s income election to which subsection 60(3) applies if the Registrar is satisfied that:

   (a)  the partial year income amount for the income election is less than the amount that the Registrar considers is likely to be the parent’s actual adjusted taxable income for the remaining period in relation to the income election; or

   (b)  the total of the income component amounts estimated by the parent under paragraph 60(3)(b) for the period referred to in that paragraph is more than the amount that the Registrar considers is likely to be the total of the actual income component amounts for the parent for that period.

   (3)  If:

   (a)  a parent makes an election under subsection 62A(1); and

   (b)  the Registrar is satisfied that the partial year income amount for the income election is less than the amount that the Registrar considers is likely to be the parent’s actual adjusted taxable income for the remaining period in relation to the income election;

   the Registrar may refuse to accept the income election.

   (4)  In making the decision as to whether to refuse to accept the income election, the Registrar:

   (a)  may act on the basis of information that the Registrar has received or obtained as to the financial circumstances of the parent; and

   (b)  may, but is not required to, conduct an inquiry into the matter.

   (5)  Except for the purposes of Parts VII, VIIA and VIII of the Registration and Collection Act (dealing with objections and appeals), if the Registrar refuses to accept the income election, the election is taken never to have been made.

6. In short, the Registrar may refuse to accept an income election if the estimated amount is less than the amount that the Registrar considers is likely to be the parent’s actual adjusted taxable income for the year of income to which the income election relates.

7. Here, the objections officer, somewhat vaguely with respect, refers to “information” obtained that Mr Siviter had “received regular payments from other sources since 12 October 2022, and that his income is higher than he estimated”. No reference is made to any particular payment or payments.

8. I accept Mr Siviter’s evidence that he made a genuine attempt to estimate his income for the balance of the year. I accept that the estimate was reasonable given the variation in his receipts as a subcontractor. I accept that he “factored in” other “odd jobs” in between his primary work for [Employer 1] when he formulated the figure of $1,600 per week, on average. I do not agree with the approach by Child Support that receipt of payment from “other sources”, of itself, rendered the estimate inadequate.

9. This is not an exercise in applying the benefit of hindsight to evaluate the likely accuracy of an estimate election. The focus is upon what was known at the time and whether, at the time the estimate was made, it was likely to be lower than the actual adjusted taxable income. The application of hindsight is dealt with after the fact by the estimate reconciliation regime (here, assuming Mr Siviter’s adjusted taxable income for 2022/23 will be more than the estimated $83,428, the assessment will be retrospectively revisited by the insertion of his actual 2022/23 adjusted taxable income for any period to which the estimate has been applied).

10. I therefore find that at the time of election on 12 October 2022, the Registrar could not have been satisfied Mr Siviter’s actual adjusted taxable income would be more than his estimated income. Child Support ought not have refused to accept the estimate.

11. Accordingly, as I have reached a different conclusion to the objections officer, the decision under review will be set aside.

DECISION

The Tribunal sets aside the decision under review and, in substitution, restores the original decision of 12 October 2022 to accept Mr Siviter’s estimated 2022/23 adjusted taxable income in the sum of $83,428.