Smadden and Amable (Child support)
[2024] AATA 2759
•6 June 2024
Smadden and Amable (Child support) [2024] AATA 2759 (6 June 2024)
DIVISION:Social Services & Child Support Division
REVIEW NUMBER: 2024/PC027462
APPLICANT: Mr Smadden
OTHER PARTIES: Child Support Registrar
Ms Amable
TRIBUNAL:Deputy President K Synon
DECISION DATE: 6 June 2024
DECISION:
The Tribunal sets aside the decision under review and, in substitution, decides that $369.81 of the total claimed NAPs of $3,075.00, being the child support liability of $123.27 a week for 3 weeks, be credited to the father’s child support liability.
CATCHWORDS
CHILD SUPPORT – non-agency payments – legal advice and draft consent orders – payments for share of mortgage and utilities and for benefit of children while mother and children lived in house until settlement of sale – agreement that mother would not apply for child support until settlement – smaller amounts collected by agency during same period – mutual intention for smaller amounts, but not full amounts – other payments credited in full – mother’s right to seek review of those payments – 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.
REAONS FOR DECISION
BACKGROUND
Mr Smadden (the father) and Ms Amable (the mother) are the parents of [Child 1], born 24 November 2014, and [Child 2], born 30 October 2017 (the children).
A child support case has been in place with Services Australia – Child Support (Child Support) since 12 April 2023. Presently, Child Support collects the registered child support liability on behalf of the mother.
On 9 May 2023, the father advised Child Support that he had made a non-agency payment (NAP) of $1,025 on 12 April 2023. On 17 May 2023, he advised Child Support that he made a further NAP of $1,025 on 15 May 2023 and on 22 May 2023, he advised of another NAP of $1,025 on 22 May 2023. On 1 June 2023, Child Support refused to credit, against his child support liability, any of these three payments totalling $3,075.
The father lodged a timely objection to this decision on 9 June 2023 stating:[1]
I would like a reassessment of the prescribed non-agency weekly payments made between 12 April to 22 May 2023. Reasons being: both parties had legal representation and advice prior to signing the consent orders on 28 Feb 2023, it was agreed between both parties that my ex-spouse have exclusive use of the property from 28 Feb and I was to deposit weekly a $1,025 payment that was used to cover mortgage payments, utilities and [for] the benefit of the children whilst in her care, until settlement of the property. These payments were made for her sole benefit and was agreed through our lawyers on the explicit understanding that my ex-spouse not apply for child support until settlement of the property. She proceeded to apply a month later. This can be confirmed with both lawyers.
[1] At folio 106 of the hearing papers.
On 7 January 2024 his objection was disallowed on the basis of no mutual intention.
The father requested a review of the objections officer’s decision by application to the Social Services and Child Support Division of the Administrative Appeals Tribunal (the Tribunal) on 2 February 2024.
The father attended the hearing convened on Thursday 6 June 2024 by MS Teams video. As is a second party’s right, the mother declined to attend the hearing, relying on her written submission detailed at paragraphs 15 and 16. In reaching my decision, I considered the father’s sworn evidence, the submission provided by the mother (B1-B15) as well as the documents provided by Child Support (folios 1 to 200). There were additional submissions provided, firstly by the father in response to the mother’s submission (A1-A6) and then from the mother responding to the father’s response to her submissions. However, much of these submissions are not relevant to the question before me of whether the payments should be credited as NAPs. To the extent that these submissions canvas other matters between the parties, they have not been extracted in this decision.
CONSIDERATION
The statutory provisions relevant to this review are contained in the Child Support (Registration and Collection) Act 1988 (the Act) and the relevant regulations.
The issue in this case is whether all or part of the $3,075 payment made by the father to the parents’ home loan joint account ending #xx5138, for mortgage repayments to discharge the outstanding mortgages against the parties’ [Suburb 1] property, may be credited as his child support liability as NAPs under section 71A. They cannot be credited as prescribed non-agency payments (PNAP) under section 71C of the Act because the father had, at all relevant times, more than regular care of the children.
Section 71A of the Act allows Child Support to credit a payment made to a third party on behalf of the payee of an enforceable maintenance liability in lieu of a payer’s child support liability in certain circumstances. Such payments are known as NAPs. Paragraph 71A(1)(c) of the Act also requires that the amount is “intended by both the payer and payee to be paid in complete or partial satisfaction” of the child support liability.
In its decision dated 1 June 2023, Child Support did not accept the following payments made by the father as NAPs refusing to credit them against his child support maintenance liability. At the time of each payment, Child Support records the children as being in 49% care of the father and 51% care of the mother.
| Date | Amount | The payment was made to |
| 12 April 2023 | $1,025.00 | Mother (Deposit into Joint Account (ending xx5138) |
| 15 May 2023 | $1,025.00 | Mother (Deposit into Joint Account (ending xx5138) |
| 22 May 2023 | $1,025.00 | Mother (Deposit into Joint Account (ending xx5138) |
The evidence before me
The father’s sworn testimony during the hearing can be summarised as follows:’
The final court orders do not include a clause in the financial settlement that the mother would not apply for child support until the settlement of the sale of the [Suburb 1] Property, because his lawyers advised that a court order cannot limit or deny a party’s right to seek child support.
This was the arrangement proposed by the mother’s lawyers in their letter dated 27 February 2023[2] and it is on this basis that he asserts mutual intention.
In accordance with the correspondence dated Monday 27 February 2023 and until the [Suburb 1] property was sold and settled, he was to maintain the status quo, which required him to transfer two thirds of his salary (which amounted to $1,025 per week, equating to $4,100 per month) into the joint bank account he held with the mother and this was to cover a half a share of mortgage repayments, utilities and the benefit of the children whilst they were in the mother’s care.
His family lawyers had signed the final draft consent orders on 28 February 2023, before they were lodged with the Court on 1 March 2023. As such, the 27 February 2023 final draft consent orders were evidence of the mutual intention of the parties that the mother would not apply for child support until the settlement of the [Suburb 1] property.
The payments he made from 12 April 2023 to 22 May 2023 (inclusive) were before the [Suburb 1] property settlement and so should be credited. After the mother applied for child support, he started to label the $1,025 per week payments as ‘CS’ (instead of ‘HL’).
The [Suburb 1] Property was initially scheduled for settlement on 30 May 2023 but was postponed to 6 June 2023 with final settlement on 30 June 2023.
[2] Pages 27-31 of the hearing papers.
I asked the father why he was claiming the full $1,025 of each payment when it was clear from his evidence that the majority of this was to pay the mortgage. He responded that his child support liability is about $100 a week and he would be happy to just have this credited as it was being paid twice.
As noted above, the mother elected not to attend the hearing due to the existence of an intervention order, however her relevant evidence, based on her written submission, can be summarised as:
According to the Court orders[3], the father was required to pay $1,025 per week to cover the costs of the mortgage repayments until the settlement of the [Suburb 1] Property was complete.
This was in addition to the father’s child support maintenance liability; not in lieu of him paying child support.
The father had been transferring amounts of $1,025 (Court ordered amount, intended for mortgage repayments) with a transfer name of ‘child support.’ The mother referred to a text message she sent the father, asserting that there was no mutual intention for the $1,025 weekly payment to be in lieu of child support.
In a text message dated 8 May 2023 the mother wrote to the father:[4]
Please do not label the $1025 deposit “child support.” Child support will be collected through the Child Support Agency. We do not have private child support arrangements in place. This has been confirmed by the Agency.
[3] Paragraph 6 of the court orders, at folio 16 of the hearing papers.
[4] At folio 68 of the hearing papers.
On 26th May 2024, the mother submitted[5]:
[5] At B2 – B3.
It is my understanding that the applicant has sought credit for approximately 7 payments made during our separation which, as per our Final Financial Consent Orders, were to cover mortgage costs and outgoing costs for the primary home which was to be sold as part of the settlement. The applicant has been granted credit for 4 payments, and 3 payments have been denied. It is my understanding that he objects to the denial of the latter 3 payments.
On Friday the 5th of May 2023, I corresponded with the applicant’s lawyer about his decision to no longer pay the court ordered amount of $1,025 per week. Please see Attachment A[6] (Please refer to Attachment B[7] for original correspondence from the applicant’s lawyer). This correspondence also included a number of other items in which the applicant was deemed to have defaulted in terms of his financial responsibility and commitment. No mention of this has been made in his application.
[6] At B4 – B5.
[7] At B6 – B7.
I would like to confirm that there was a delay in the settlement of the primary home as a result of:
·A request by the buyers to accommodate the Easter period
·A requirement to line up new accommodation for myself and my children upon the sale of our home.
I note that the email correspondence from my lawyer to [Law firm] on the 27th of February 2023 stipulates that:
“[the mother] will top up this amount and pay for all outgoings in relation to the [Suburb 1] Property as specified at paragraph 7 of the Order, as the contribution of $1,025 per week is not sufficient for all expenses associated with the [Suburb 1] Property to be met, when factoring in a portion of the $1,025 per week is set aside for the loan secured on the [Suburb 2] property.”
It is unclear to me how it could be construed that the payment could be in any way sufficient to not only pay for multiple mortgages, all other outgoing debts, but my children’s needs as well. It was not my understanding that the $1,025 payment was in any way something that could even resemble Child Support.
The applicant indicates there was an agreement that I not seek to apply for Child Support until the sale of the primary home. Our Financial Consent Orders do not accommodate such an agreement nor does our Parenting Plan.
I am unaware of any legislation that stops an individual from seeking Child Support or denies the right to seek Child Support to help meet the costs of caring for children. My decision at the time to seek Child Support was as a result of being in financial hardship.
I note that on the 8th of May 2023 I requested that the applicant not label the mandated payment “Child Support”. Up until that point it had not been labelled Child Support but “HL Bills” denoting a payment for Home Loan and Bills. This is as per the evidence he has provided to you.
It is therefore clear that the applicant had a change of intention during the payment process that he would prefer to have the payment considered as Child Support...
After the mother’s submission was exchanged with the father on 30 May 2024, he relevantly responded on 2 June 2024:[8]
[8] At A2 – A3.
On 27 February 2023, [the mother’s] lawyer, on instructions, emailed to confirm and agree in writing to the following terms prior to signing the Final Financial Consent orders:
·The parties’ primary residence situated in [Suburb 1] (‘[Suburb 1] Property’) will be placed on the market for sale as soon as possible.
·Until the [Suburb 1] Property is sold, the “status quo” will be maintained requiring me to transfer the sum of $1,025 per week into the parties’ joint account.
·[The mother] will top up this amount and pay for all outgoings in relation to the [Suburb 1] Property as she had exclusive use and occupation of the Wilson Property.
·Until the [Suburb 1] Property is sold, the “status quo” will be maintained requiring me to transfer the sum of $1,025 per week into the parties’ joint account.
·[The mother] will top up this amount and pay for all outgoings in relation to the [Suburb 1] Property as she had exclusive use and occupation of the [Suburb 1] Property.
·I am to pay for all outgoings for the parties’ [Suburb 2] Property; and
·[The mother] will not apply for child support until the settlement of the sale of the [Suburb 1] Property (the Agreement).
Copy of the full email that the Respondent refers to in her submission dated 27 February 2023 is attached.[9]
[The mother] in breach of the Agreement, claimed for child support on 12 April 2023. My application therefore seeks for the said weekly payments of $1,025, an amount totalling $7,178.00, to be determined as an extraordinary payment of child support.
An agreed settlement date of the [Suburb 1] Property was 6 June 2023. Accordingly, I say that child support should have only been applied after this date.
I confirm that I have always labelled payments into the parties’ joint account as “HL Bills” and saw no need to clarify what was already agreed to.
I qualified for the WA Student Assistance Payment and applied accordingly. The [mother] did not notify, nor request for contribution towards the children’s stationary. I have always maintained and provided for the children and continue to do so whilst they are in and out of my care…
[9] At A5 – A6.
On 4 June 2024, the mother provided a final submission which bore minimal relevance to the issue of whether the payments ought to be credited as NAPs except for the following clarification:
·The suggestion that I should ask the applicant for money when court orders such as ours have been in place, and when the applicant has indicated through legal representation that he will no longer be providing a payment of $1,025, which he considered as “Child Support”, is contradictory and non-sensical. It provides further context to the situation at hand. Please also note I am the sole contributor for the children’s private health insurance.[10]
[10] The mother provided a copy of correspondence she had received from HBF Health Limited on 17 March 2024 confirming that the children and herself are covered by a health cover policy, comprising of Hospital and Extras Cover. The email notes that the current premium is $213.39 per month. The new premium as of 1 April 2024 is $228.78 per month.
Based on the oral and written evidence before me, I find that while the mother’s lawyers’ email of 27 February 2023 clearly indicated draft consent orders would include an agreement that the mother would not apply for child support until the settlement of the [Suburb 1] Property, the Court order of 3 April 2023, which includes consent orders signed by the parties on 1 March 2023, does not mention such an agreement. Furthermore, the Court order does not specify that the weekly payments made by the father of $1,025.00 were intended to be in lieu of his child support maintenance liability payable to the mother. However, I consider it to have been the father’s reasonable assumption, given the draft consent orders prepared by her own lawyers, that the mother would not apply for child support until after the [Suburb 1] property was sold and that these draft consent orders can be representative of an implied mutual intention. However, it would be totally unreasonable and not in line with the final court orders or the draft consent orders for the entirety of each payment of $1,025 to be credited as NAPs against the father’s child support liability with the bulk of these payments (irrespective of how they were categorised by the father on his bank statements) clearly intended to be for the purpose of mortgage repayments on the [Suburb 1] property. The father, from the time of collection, was required to pay $123.27 a week.[11] On balance I find that the draft consent orders of the mother’s lawyers dated 27 February 2023, establishes mutual intention but only to the extent of $123.27 a week (which was at the same time being collected by Child Support).
[11] Page 50 of the hearing papers.
It follows that the totality of the father’s weekly payments of $1,025.00 made on 12 April 2023, 15 May 2023 and 22 May 2023, cannot be credited as NAPs but that $123.27 from each payment can be credited as a NAP because I am satisfied that this was intended by both the payer and payee to be paid in complete or partial satisfaction of an amount payable under the enforceable agreement: paragraph 71A(1)(c). The total amount to be credited is therefore $369.81.
Finally, I note in its decision dated 18 October 2023[12], Child Support accepted payments made by the father and credited them in full as NAPs towards his child support maintenance liability. These total $4,100 and comprise 4 payments each of $1,025 made on 17 April 2023, 24 April 2023, 2 May 2023 and 8 May 2023. The mother referred to the fact that these payments had been accepted in her submission of 26 May 2023. On all these dates the children were recorded as being in the 51% care of the mother and 49% care of the father. I record that my decision in respect of the payments the father made on 12 April 2023, 15 May 2023 and 22 May 2023, does not extinguish the mother’s right to seek a review of the other payments which were credited in full against the father’s child support liability.
[12] At pages 160 – 163 of the hearing papers.
DECISION
The Tribunal sets aside the decision under review and, in substitution, decides that $369.81 of the total claimed NAPs of $3,075.00, being the child support liability of $123.27 a week for 3 weeks, be credited to the father’s child support liability.
Key Legal Topics
Areas of Law
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Family Law
Legal Concepts
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Jurisdiction
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Statutory Construction
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Appeal
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