Small and Catleugh (Child support)

This matter concerned an application by Mr Small to the Child Support Registrar to amend an administrative assessment of child support. The dispute arose when Child Support initially accepted Mr Small's application to exclude post-separation income, specifically $31,846 representing cashed-in leave, from his adjusted taxable income for the relevant period. However, upon objection, this decision was reversed by an objections officer. Mr Small then sought review of this reversal.

The primary legal issue before the court was whether the additional income Mr Small derived from cashing in annual leave, following his separation from the other parent, should be excluded from his adjusted taxable income under section 44 of the Child Support (Assessment) Act 1989. Specifically, the court had to determine if the requirements of section 44(1)(d)(ii) of the Act were met, which relates to income derived in accordance with a pattern of earnings established after separation.

The court reasoned that while Mr Small had cashed in some leave in previous years, the scale of leave cashed in during the financial year following his separation was significantly greater. The court disagreed with Child Support's approach, which appeared to preclude Mr Small from the benefit of section 44 simply because he had cashed out leave in prior years. The court held that the intention of section 44 was not to exclude individuals based on minor instances of a particular income pattern in the past, but rather that the scale of the income derived after separation was the determinative factor. The court found that Mr Small's circumstances, including meeting significant financial commitments post-separation and cashing out a much larger amount of leave than usual, were precisely the type of scenario section 44 was intended to address.

The court set aside the decision of the objections officer and remitted the matter back to Child Support for reconsideration in accordance with the court's findings.