Sloan and Sloan (Child support)

[2020] AATA 881

Sloan and Sloan (Child support) [2020] AATA 881 (14 February 2020)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2019/BC017975

APPLICANT:  Ms Sloan

OTHER PARTIES:  Mr Sloan

Child Support Registrar

TRIBUNAL:Member P Jensen

DECISION DATE:  14 February 2020

DECISION:

The decision under review is affirmed.

CATCHWORDS

CHILD SUPPORT – particulars of the administrative assessment – whether post separation costs should be excluded from the adjusted taxable income for the last relevant year – additional income was not earned in the ordinary course after separation – an amount should be excluded - 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 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. A child support case was registered with the Department of Human Services – Child Support (“the CSA”) in November 2018 in respect of Ms Sloan and Mr Sloan’s three children. The Child Support (Assessment) Act 1989 (“the Act”) provides for an administrative assessment of child support payable. It uses a formula which contains variables such as the parents’ adjusted taxable incomes, as assessed by the Australian Taxation Office. When the child support case was registered, the administrative assessment was based, in part, on Mr Sloan’s 2017-18 adjusted taxable income of $122,082.

2. In the ordinary course, from 1 September 2019, the administrative assessment would have been based on Mr Sloan’s 2018-19 adjusted taxable income of $153,860. However, he applied to have a portion of that income excluded for child support purposes pursuant to section 44 of the Act. The CSA decided to refuse his application. He promptly objected to that decision. An objections officer allowed his objection and decided to vary his adjusted taxable income to $122,082 per annum from 1 September 2019 to 30 November 2020, thereby excluding the difference of $153,860 - 122,082 = $31,778. Ms Sloan promptly applied to the Tribunal for further review. I heard the matter on 14 February 2020. Ms Sloan and Mr Sloan gave sworn evidence by conference phone.

3. Subsection 44(1) relevantly states:

   Application for post-separation income to be excluded 

   (1)A parent (the applicant ) of a child may apply to the Registrar to amend an administrative assessment of child support payable by or to the parent for the child for part of a child support period if: 

   [paragraphs (a), (b) and (c)]; and 

(d)in the last relevant year of income, or in the application period for an income election (if such an election has been made by the parent), the applicant earns, derives or receives income: 

(i)in accordance with a pattern of earnings, derivation or receipt that is established after the applicant and the other parent first separate; and 

(ii)that is of a kind that it is reasonable to expect would not have been earned, derived or received in the ordinary course of events.

1. I have not reproduced paragraphs 44(1)(a), (b) and (c) because there is no dispute that those paragraphs are satisfied. The issue in this case is whether paragraph 44(1)(d) is satisfied.

2. Mr Sloan’s application was in respect of the child support period commencing 1 September 2019. The “last relevant year of income” was the preceding financial year, which was 2018‑19: section 5 of the Act. Mr Sloan explained that he is employed as [an Occupation]. He [details deleted] that are used by other [people in that Occupation]. He stated that around the date of the parents’ separation, which was 16 August 2018, he started doing additional work with [another work task]. The [other work task] work is unrelated to his primary employment with the [Employer].

3. Ms Sloan stated, and Mr Sloan acknowledged, that he started doing the [other work task] work prior to their separation. He said he started doing the [other work task] work approximately three weeks prior to their separation. After the parents’ separation, Mr Sloan continued doing the [other work task] work, and, broadly speaking, he increased his hours of work. Ms Sloan said Mr Sloan had always done overtime when he could, but since the separation he has been doing “excessive overtime”. Mr Sloan stressed that the [other work task] work was not overtime in respect of his primary employment; it was additional work that was organised via a different section of the [Employer], and was undertaken during his spare time. In any event, the important point, which is not disputed, is that Mr Sloan started earning additional income around the time that the parents separated. In my opinion, the three weeks of additional work that Mr Sloan performed prior to separation did not establish a “pattern of earnings” for the purposes of paragraph 44(1)(d). The pattern of additional earnings was established after separation.

4. Ms Sloan stated, and Mr Sloan agreed, that he did overtime during [an Event] in 2014, and during [another Event] in early 2018. More generally, Ms Sloan stated that Mr Sloan did overtime from time to time. The overtime that Mr Sloan performed during 2017-18 would be reflected in his 2017-18 adjusted taxable income of $122,082, and I consider that figure to be the best evidence of Mr Sloan’s earnings “in the ordinary course of events.” Mr Sloan stated, and I accept, that he started doing [the other work task] in his spare time to re-establish himself financially. I consider the additional $31,778 that he earned during 2018-19 to be the best evidence of the additional income that he would have not have earned “in the ordinary course of events.” The requirements of subsection 44(1) of the Act are satisfied. Subsection 44(2) states that a decision-maker “may determine that the applicant’s adjusted taxable income for the child for a day in the child support period is a specified amount that excludes the income referred to in paragraph [44](1)(d).” It is appropriate to make such a determination. The relevant child support period commenced on 1 September 2019 and is expected to end on 30 November 2020: page 88 of the hearing papers. The decision to vary Mr Sloan’s adjusted taxable income to $122,082 per annum for the duration of that child support period, thereby excluding the additional income of $31,778 per annum, was the preferable decision, and will be affirmed.

DECISION

The decision under review is affirmed.