Spiller and Spiller (Child support) - [2018] AATA 4988

Spiller and Spiller (Child support) [2018] AATA 4988 (21 December 2018)

DIVISION:Social Services & Child Support Division
REVIEW NUMBER:  2018/HC014665
APPLICANT:  Mr Spiller
OTHER PARTIES:  Child Support Registrar
Mrs Spiller

TRIBUNAL:Senior Member R Ellis
DECISION DATE: 21 December 2018
DECISION:

The Tribunal sets aside the decision under review and, in substitution, decides that:

for the period from 1 August 2017 to 31 December 2017, Mr Spiller’s adjusted taxable income is set at A$98,321;
for the period from 1 January 2018 to 31 December 2019, Mr Spiller’s adjusted taxable income is set at A$85,895;
for the period from 1 August 2017 to 30 June 2018, Mrs Spiller’s adjusted taxable income is set at A$33,518; and
for the period from 1 July 2018 to 31 December 2019, Mrs Spiller’s adjusted taxable income is set at A$46,718.

CATCHWORDS

CHILD SUPPORT – departure determination – income, property and financial resources of both parents - rental income - hardship - 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 removed 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

BACKGROUND

This review is about whether or not there should be a departure from the administrative assessment of child support.
Mr Spiller and Mrs Spiller are the parents of [Child 1] (born September 2005) and [Child 2] (born December 2007). There has been a child support assessment in place since 12 July 2017 and Mr Spiller is the liable parent under the assessment.
The following child support assessment is under consideration:
· for the period 12 July 2017 to 1 September 2018 the annual rate of child support payable by Mr Spiller was $2,780 based on a 2016-17 adjusted taxable income of $13,312 for Mr Spiller and Mrs Spiller’s 2016-17 provisional income of $11,322.
On 1 December 2017 Mrs Spiller applied to the Department of Human Services, Child Support (the Child Support Agency) for a departure from the administrative assessment and on 12 April 2018 the Child Support Agency made the decision to change the assessment as follows:
·     for the period 1 August 2017 to 31 January 2018 Mr Spiller’s adjusted taxable income is set at $115,185;
·     for the period 1 February 2018 to 31 July 2018 Mr Spiller’s adjusted taxable income is set at $69,111;
·     for the period 1 August 2018 to 31 December 2018 Mr Spiller’s adjusted taxable income is set at $70,054;
·     for the period 1 January 2019 to 31 December 2019, Mr Spiller’s adjusted taxable income is set at $71,315;
·     for the period 1 January 2020 to 31 December 2020 Mr Spiller’s adjusted taxable income is set at $72,599;
·     for the period 1 August 2017 to 31 December 2018 Mrs Spiller’s adjusted taxable income is set at $90,600;
·     for the period 1 September 2019 to 31 December 2019 Mrs Spiller’s adjusted taxable income is set at $92,231;
·     for the period 1 January 2020 to 31 December 2020 Mrs Spiller’s adjusted taxable income is set at $93,891;
·     for the period 1 January 2018 to 31 December 2018 the annual rate of child support payable by Mr Spiller is increased by $5,135;
·     for the period 1 January 2019 to 31 December 2019 the annual rate of child support payable by Mr Spiller is increased by $5,255; and
·     for the period 1 January 2020 to 31 December 2020 the annual rate of child support payable by Mr Spiller is increased by $7,061.
This was done on the basis of Mr Spiller’s income, property and financial resources (the ground commonly referred to as Reason 8A) and the high costs of caring for, educating or training the children (the ground commonly referred to as Reason 3).
On 1 May 2018 Mr Spiller objected to this decision and on 22 June 2018 the Child Support Agency allowed the objection and made the decision to change the assessment so that:
·     for the period 1 August 2017 to 31 July 2018 Mr Spiller’s adjusted taxable income is set at $115,766;
·     for the period 1 August 2018 to 31 December 2018 Mr Spiller’s adjusted taxable income is set at $117,351; and
·     for the period 1 August 2017 to 31 December 2018 Mrs Spiller’s adjusted taxable income is set at $52,676.
This was done on the basis of Mr Spiller’s income, property and financial resources (Reason 8A).
On 25 July 2018 Mr Spiller applied for a review of the objection decision by the Administrative Appeals Tribunal (the Tribunal).
A telephone directions hearing was held on 9 October 2018. Both Mr Spiller and Mrs Spiller attended by conference telephone. Prior to the telephone directions hearing the Child Support Agency provided the Tribunal and the parties with a bundle of documents in accordance with section 37 of the Administrative Appeals Tribunal Act 1975 (1,160 pages).
Mr Spiller and Mrs Spiller were directed to provide further information to the Tribunal and both complied.
On 22 November 2018 Mrs Spiller made a request to the Tribunal for an English translation of a previously provided document to also be submitted as evidence for consideration at hearing. As the translation was of an existing document and was not new evidence, the Tribunal granted permission for this to be submitted late.
A hearing was held on 26 November 2018. Mr Spiller gave evidence on affirmation by conference telephone. Mrs Spiller appeared before the Tribunal and gave evidence under oath. The Tribunal received documents from Mr Spiller (A1-A52) and from Mrs Spiller (B1-B255). Supplementary documents were also received from the Child Support Agency (1161-1164). These were distributed to the parties prior to the hearing.
At the telephone directions hearing and at the commencement of the hearing the Tribunal clarified with Mr Spiller and Mrs Spiller the reasons for their applications. Mr Spiller told the Tribunal he wanted his actual income taken into consideration for the purposes of child support. Mrs Spiller said she was looking for a decision that reflected her own true income as well as that of Mr Spiller. She said she also wanted the Tribunal to consider the costs of educating the children and the apportionment of those costs plus the cost of orthodontics.

ISSUES

The statutory provisions relevant to this review are contained in the Child Support (Assessment) Act 1989 (the Act).
The rate of child support payable by the liable parent is usually based on an administrative assessment under Part 5 of the Act.
Under Part 6A of the Act, the liable parent or the carer of the child or children may apply to the Child Support Registrar for a determination to depart from the administrative assessment (section 98B).
Section 98C provides that the Registrar may make a determination to depart from the administrative assessment and it establishes a three step process such that the issues for determination by this Tribunal are:
·     whether a ground is established to depart from the administrative assessment of child support; and if so
·     whether it is just and equitable to make a particular departure determination; and if so,
·     whether it is otherwise proper to make a particular departure determination.
The grounds for departure from an administrative assessment of child support are set out in subsection 117(2) of the Act.
Each ground is prefaced by the words “in the special circumstances of the case”. The meaning of this expression is not defined in the Act, but the Family Court in Gyselman and Gyselman [1991] FamCA 93 has held:
as a generality it is intended to emphasise that the facts of the case must establish something which is special or out of the ordinary. That is, the intention of the Legislature is that the court will not interfere with the formula in the ordinary run of cases.
In Philippe and Philippe (1978) FLC 90-433 the Court held that “special circumstances” are “facts peculiar to the particular case which set it apart from other cases”.
If the Tribunal is satisfied that a ground exists 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 Act.
The range of determinations which can be made includes variations to the annual rate of child support payable; or to the adjusted taxable incomes of the parents and/or carer; or to other components of the statutory formula used to calculate child support.

CONSIDERATION

Issue 1 – is there a ground for departure?

A ground for departure exists where, in the special circumstances of the case, application of the administrative assessment of child support would result in an unjust and inequitable determination of child support to be provided by the liable parent in respect of the child because of the income, property and financial resources of either parent (subparagraph 117(2)(c)(ia) of the Act).
Mr Spiller and Mrs Spiller provided considerable evidence to both the Child Support Agency and the Tribunal in support of the matters under consideration. Both parents also raised issues at hearing which, although obviously important to them, were not directly relevant to the change of assessment application. The Tribunal will only refer to the evidence it considers pertinent to making a just and equitable and otherwise proper decision in this case.
Mr Spiller told the Tribunal he was employed as a [occupation] at [Organisation 1] in [Country 1]. Mr Spiller said he initially commenced as a [casual worker] and then on 1 March 2017 he received a contract to replace [another staff member] on maternity leave.
Mr Spiller said this original contract was at 89 per cent of a full-time position and his salary was set at [local currency] 84,766 [for a level 7 role]. Mr Spiller said on 26 February 2018, following the return of [another staff member] from maternity leave, he then received a permanent part-time contract at 60 per cent. Mr Spiller said his income dropped substantially as a result, but the Child Support Agency had refused to take this into account.
Mr Spiller told the Tribunal it was not his decision to work at only 60 per cent but rather a choice made by the returning [staff member] to only work at 40 per cent. Mr Spiller said he would remain in this part-time role for the foreseeable future as [Organisation 1] was very small and there were limited opportunities. In addition he was currently working under a provisional [work] licence and was now undertaking further study at university in order to receive a full [work] licence. He said this could take approximately two years.
Mr Spiller added that on 1 August 2018 his salary increased as he had moved up to a level 8 [position], although was still part-time at 60 per cent.
The Tribunal notes the following documents[1] in evidence from the Child Support Agency:
·     an employment contract from [Organisation 1] showing Mr Spiller started on 1 March 2017 as a [occupation] with his level of employment being 89 per cent and the salary classification at level 7;
·     an ongoing employment contract from [Organisation 1] showing Mr Spiller started on 26 February 2018 as a [occupation] with his level of employment being 60 per cent and the salary classification at level 7;
·     a salary table which shows a step 7 [occupation classification] at [Organisation 1] has an annual salary of [local currency]84,766 and local currency [85,922]at level 8; and
·     a letter in English dated 20 March 2018 from [Organisation 1] confirming that Mr Spiller replaced [a staff member] who was on maternity leave and works part time “on a 60/40 basis.”
[1] All documents others than those in English are certified translations from [different language] originals.
The Tribunal also notes in evidence from the Child Support Agency a salary certificate in the name of Mr Spiller for the period 20 January 2017 to 31 December 2017. The English translation of this certificate provided by Mrs Spiller shows a gross salary of [local currency] 74,321. Mr Spiller explained this was similar to a group certificate as the [Country 1] tax year was based on a calendar year. Mr Spiller said the certificate showed his full income for 2017 from the time he commenced employment. Mr Spiller said this certificate was a true indication of his income in 2017 and more reliable than his payslips. Mrs Spiller agreed.
The Tribunal finds that in 2017 Mr Spiller had gross income from [Organisation 1] of [local currency] 74,321.
In response to directions issued by the Tribunal, Mr Spiller provided a number of monthly payslips from [Organisation 1] for 2018. The payslip dated 26 January 2018 shows a total gross wage of [local currency]7,262.45 comprising a fixed salary of [local currency] 7,017.75 and additional income of [local currency] 244.70 which Mr Spiller said was from [casual work]. The payslip dated 27 February 2018 shows a total gross wage of [local currency] 7,103.30 comprising a fixed salary of [local currency] 6,777 and additional [casual] income of [local currency] 326.30. The payslip dated 27 March 2018 shows a total gross wage of [local currency] 5,097.30 comprising a fixed salary of [local currency] 4,316.60, additional [casual] income of [local currency] 326.30 and a further payment of [local currency] 454.40. The payslips dated 27 April 2018, 28 May 2018 and 27 June 2018 all show a total gross wage of [local currency] 4,771.
Mr Spiller said the January 2018 and February 2018 payslips reflected his full-time position whereas from March onwards he had started working part time. Mr Spiller confirmed that [local currency] 4,771 was his regular, gross monthly salary for his part-time position. He said he may receive further [casual work] income, however, this would be balanced against his need to take leave to prepare for university exams.
Mrs Spiller told the Tribunal Mr Spiller was dishonest and the information provided could not be relied upon. Mrs Spiller raised a number of issues with the Tribunal which she said highlighted his lack of credibility, including a history of failing to properly disclose his income, omitting information from certified documents and discrepancies in various statements setting out his financial circumstances. Mrs Spiller also said that documents recently received under subpoena showed A$35,000 from an overseas account transferred into an Australian account by Mr Spiller, suggesting he had more funds than he was disclosing.
Mrs Spiller said in addition to his income from [Organisation 1], she believed that Mr Spiller was earning income [working in another role]. She said the club where he [worked in another role], [Organisation 2], may also be paying his health cover costs. Mrs Spiller acknowledged this would be difficult to prove as Mr Spiller had a close relationship with officials at the club. Mrs Spiller pointed out that an examination of Mr Spiller’s [Country 1] bank account statements showed not only his salary from [Organisation 1] but also other regular deposits of varying amounts. She said between 25 May 2017 and 16 February 2018 there were a number of deposits which may be income from [another role].
The Tribunal notes in evidence from the Child Support Agency an extract from a [Country 1] bank account in the name of M Spiller for the period from 29 March 2017 to 20 April 2018. This extract shows deposits from [Organisation 1] including deposits on 26 January 2018, 27 February 2018, and 28 March 2018 which correspond with the net salary in the payslips provided by Mr Spiller. The extract also shows eight additional deposits during this period ranging from [local currency] 250 to [local currency] 4,750 which amount to [local currency] 10,600 in total.
Mr Spiller responded by telling the Tribunal his only income was from his [work] at [Organisation 1] and he received no payment for his [role] at the [club]. Mr Spiller said this had been confirmed in correspondence from the club financial officer. He said he volunteered at the club simply because he loved [his hobby].
The Tribunal notes in evidence provided by Mr Spiller an email dated 3 September 2018 from the Head of Business Office at [Organisation 2], [a named person], to Mrs Spiller. The email confirms that Mr Spiller is a volunteer at the club and is only compensated for the expenses he incurs.
The Tribunal is satisfied that Mr Spiller receives no income from his [other role] at the [club] and will not consider this matter further.
In relation to the deposits in his [Country 1] bank account totalling [local currency] 10,600, Mr Spiller told the Tribunal this was money transferred from another [Country 1] bank account where he had accumulated some savings during the time he was earning a higher salary at [Organisation 1]. He said this was used for his living costs as well as paying child support and legal fees. He added that the A35,000 transferred to Australia had been borrowed from his mother and was also to pay legal costs.
There is no evidence to suggest the money Mr Spiller has transferred from one of his accounts to another is ongoing income from employment or another source. The Tribunal is satisfied this money does not constitute income for the purposes of child support.
Mr Spiller also provided the Tribunal with a completed Statement of Financial Circumstances received on 2 August 2018. Mr Spiller states the following:
·     his total average weekly income is A$1,420.15 comprising his salary of A$1,321.85 per week (based on an annual salary of [local currency] 51,553 at an exchange rate of 0.75) and rental income from a unit in [Country 1] of A$98.30 (his 50 per cent share);
·     his total weekly household expenditure is A$859 which includes A$154 per week for rent and A$200 per week for a holiday to visit the children in Australia every year;
·     his total weekly personal expenditure is A$1,228 which includes $A832 in spousal maintenance payments, mortgage payments in Australia and child support, A$120 in health insurance premiums and A$96 in income tax payments;
·     the total value of property he owns is A$706,000 including $A400,000 for his 50 per cent share of the family home in [Australian Suburb 1], [State 1], A$300,000 for his 50 per cent share in a unit in [Country 1]and A$2,000 in household contents;
·     he has total liabilities of A$423,833 including a mortgage on the [Australian Suburb 1] property of A$145,000 for his share, a mortgage on the [Country 1]property in [Country 1] of A$243,333, a HECS-HELP debt of A$14,000 and A$11,000 in yearly costs on the [Country 1] property; and
·     he has superannuation valued at A$23,900 held in two funds (one in Australia and one in [Country 1]).
Mr Spiller explained that the parents had yet to finalise property settlement in the Family Court. He said the unit in [Country 1] was an investment property which made a total annual net rental loss of approximately A$22,000 and his half share was an ongoing liability. Mr Spiller said as a result, neither parent made any actual income from this unit and the annual rental income of approximately A$5,000 listed in his Statement of Financial Circumstances was more for accounting purposes.
Mrs Spiller told the Tribunal she disputed some of the figures in the Statement of Financial Circumstances provided by Mr Spiller. Mrs Spiller said, for example, the A$5,500 listed by Mr Spiller as his income tax liability was only an estimate as he did not yet know how much tax he would be paying. She also said the figure of A$154 for his weekly rent differed from the amount he had provided in documents to the Family Court. Mrs Spiller said as Mr Spiller lived with his mother she did not believe he paid rent at all. Mrs Spiller also pointed out that Mr Spiller was in arrears and not paying his full child support.
Mr Spiller acknowledged that some of the figures in his Statement of Financial Circumstances were only estimates. He disputed that he did not pay rent and said this was untrue and reiterated the figure of A$154 was correct. Mr Spiller also said he was trying to address the outstanding amount of child support even though he disagreed with the assessment.

The Tribunal also considered the income, property and financial resources of Mrs Spiller.
Mrs Spiller told the Tribunal she was [an occupation] and [worked] at both [Organisation 3] and [Organisation 4]in [Australian suburb 2]. Mrs Spiller said she invoiced [clients] direct through her business called [Business 1]. Mrs Spiller said she also [worked] at home.
Mrs Spiller said she also received income from a studio at her home which she rented through Airbnb. Mrs Spiller explained she had never considered this to be a longer term source of income as it had only served the purpose of providing additional funds when she needed it following separation from Mr Spiller. Mrs Spiller said having the studio rented was disruptive to the family, however, she might continue with this during holidays but on weekends only. Mrs Spiller said the studio was last rented in July 2018 at $150 per night but accepted she could still receive income through Airbnb in the future. She estimated this income at approximately A$1,800 a year for a minimum of six weekends going forward.
The Tribunal notes in evidence provided by Mrs Spiller, letters explaining her employment status from [her workplaces]. The letter from[Organisation 3], dated 21 August 2018, confirms that Mrs Spiller is subcontracted as [an occupation] for 5½ hours on a Thursday and invoices [clients] direct. The letter from [Organisation 4], dated 22 August 2018, states that Mrs Spiller is contracted to teach singing lessons for five hours on a Wednesday and invoices parents direct.
Mrs Spiller told the Tribunal the Child Support Agency had incorrectly assessed her income in the objection decision at A$52,676 based on figures taken from documents provided to the Family Court. She said the court had determined her income was A$1,013 per week which included income from [Business 1], Airbnb and the unit in [Country 1] as well as her family tax benefit and child support payments. Mrs Spiller said she did not think it was right to include the latter two payments as income for child support purposes.
Mrs Spiller said the Child Support Agency had failed to include the rent received from the unit in [Country 1] in Mr Spiller’s income but had included it in hers which was unfair. Mrs Spiller said, in any case, she agreed with the analysis provided by Mr Spiller that the unit ran at a net rental loss and neither of them received any actual income from the property. Mrs Spiller said she would be happy for the rent and the net property loss to be excluded from her income and Mr Spiller’s income. Mr Spiller agreed with this approach.
In response to directions issued by the Tribunal, Mrs Spiller provided a copy of her 2017-18 individual tax return. It shows a taxable income of A$21,817 comprising A$18,392 in net income from [Business 1], A$10,096 in newstart allowance, A$5,010 in net rent from the studio and A$20 in gross interest, minus the net foreign rental loss on the unit in [Country 1] of A$11,701.
Mrs Spiller pointed out to the Tribunal that she had stopped receiving the newstart allowance in March 2018.
Mrs Spiller is a sole trader and runs her own business. The Tribunal acknowledges there are certain advantages in being self-employed which are not generally available to salary and wage earners. Such advantages may include being able to write off personal expenses against the business, reducing personal tax liability as a result of the way the business is structured and being able to claim business expenses which offer a parent some personal gain. In such cases, assessing child support on the basis of taxable income only can result in an unjust and inequitable level of child support.
The Tribunal carefully examined the business worksheet for [Business 1] and the rental property schedule in the individual tax return provided by Mrs Spiller and is satisfied the expenses outlined are for legitimate business purposes. The Tribunal therefore finds Mrs Spiller has a taxable income in 2017-18 of A$21,817.
Mrs Spiller also provided the Tribunal with a Statement of Financial Circumstances dated 10 August 2018. Mrs Spiller states the following:
·     her total average weekly income is A$1,335 comprising an estimated A$549 per week from teaching singing, A$300 per week in spousal maintenance, A$148 per week in court ordered mortgage payments, A$138 per week in child support, A$115 per week in family tax benefit payments and $85 per week in rental income from the property in [Country 1];
·     her total weekly household expenditure is A$1,554 of which A$1,107 is for the children;
·     her total weekly personal expenditure is A$472 which includes $A228 as a weekly cost of the investment unit in [Country 1], $A154 in business outgoings and A$48 in income tax payments;
·     the total value of property she owns is A$775,046 including $A345,000 for her 50 per cent share of the family home in [Australian Suburb 1], A$360,500 for her 50 per cent share of the unit in [Country 1] and A$43,060 in a bank account in her name. Mrs Spiller also has a motor vehicle with an estimated value of A$17,000, a boat with an estimated value of A$2,000 and A$5,000 in household contents;
·     she has total liabilities of A$388,506 including a mortgage on [Australian Suburb 1] property of A$143,706 for her share and a mortgage on the [Country 1] property in [Country 1] of A$244,800 for her share; and
·     she has superannuation valued at A$847.
Mrs Spiller notes in her Statement of Financial Circumstances that the parents are in the process of getting independent valuations of the Australian and [Country 1] properties. Mrs Spiller also notes she was solely paying the mortgage on the family home in [Australian Suburb 1] from December 2016 until June 2018. As property settlement has yet to be finalised, the Tribunal is of the view such matters are more appropriately considered in the Family Court.
Mr Spiller told the Tribunal that Mrs Spiller had not included cash income from ][occasional additional jobs]. He said Mrs Spiller could start her Airbnb rental again at any time. He also felt the amounts set out in her weekly expenses were too high particularly in relation to food costs. Mrs Spiller responded and said she declared all her income including income from [her clients] who sometimes pay cash.
In making a determination in relation to the income, property and financial resources of Mr Spiller and Mrs Spiller, the Tribunal considered all the relevant evidence available.
The Tribunal notes its role in examining this matter is to pursue the objective of providing a mechanism of review that is fair, just, economical, informal, quick and proportionate to the importance and complexity of the matter. The Tribunal is not required to undertake a forensic audit or major investigation of the financial circumstances of the parties. Rather, the Tribunal must be satisfied on the balance of probabilities as to each party’s income, property and financial resources (section 2A of the Administrative Appeals Tribunal Act 1975 and Tanner & Dalton (SSAT Appeal) [2012] FMCAfam 732).
The Tribunal has found that Mr Spiller earned gross income of [local currency] 74,321 in 2017. For the purpose of determining, under subdivision BA of Division 7 of Part 5 of the Act, an amount of income expressed in foreign currency to be a parent’s overseas income, the Tribunal is required to convert this amount into an equivalent amount in Australian currency. To do so, the Tribunal considered subsection 12(2) of the Child Support (Assessment) Regulations 2018, which states:
The equivalent amount in Australian currency must be worked out using:
(a) the average exchange rate for the foreign currency for the financial year which the income was derived, being the average of the international money transfer buying rates published by the Commonwealth Bank of Australia for that currency for that financial year; or
(b) if no such rate is available for the foreign currency for that financial year – an exchange rate for the foreign currency that the Registrar considers appropriate.
The Tribunal calculated an Australian dollar value for Mr Spiller’s [Country 1] income using an exchange rate based on historical data published by the Reserve Bank of Australia. The average exchange rate for 2017 was 0.7559 [local currency] to 1 Australian dollar. Based on this exchange rate, which the Tribunal considers appropriate, the Tribunal is satisfied Mr Spiller’s income in 2017 for the purposes of child support was A$98,321.
The Tribunal finds Mr Spiller’s income to be [local currency] 62,712 in 2018. The Tribunal has calculated this as follows:
·     total gross wages of [local currency] 19,463.05 for January, February and March 2018 as per his payslips;
·     total gross wages of [local currency] 19,084 for April, May, June and July 2018 (based on his regular, gross monthly salary of [local currency] 4,771); and
·     estimated total gross wages of [local currency] 24,165 for August, September, October, November and December 2019 (based on a gross monthly salary of [local currency] 4,833 which is a 1.3 per cent increase to account for the change in teaching levels[2] from level 7 to level 8 in August 2018).
[2] Although the [occupational] salaries in the salary table provided in evidence do not exactly correspond with the gross salary received by Mr Spiller as set out in his payslips, the Tribunal notes the increase in salary from level 7 to level 8 is approximately 1.3 per cent.
The Tribunal again calculated an Australian dollar value for Mr Spiller’s [Country 1] income in 2018 using an exchange rate based on historical data published by the Reserve Bank of Australia. The average exchange rate to November 2018 was 0.7301 [local currency] to 1 Australian dollar. Based on this exchange rate, the Tribunal is satisfied Mr Spiller’s income in 2018 for the purposes of child support is A$85,895.
The Tribunal has found that Mrs Spiller has a taxable income in 2017-18 of A$21,817. Mrs Spiller has received the benefit, however, of a reduced taxable income arising from the net rental loss on the property she owns in [Country 1] with Mr Spiller while Mr Spiller has not. As both parents have agreed they should be treated similarly in relation to the financial impact of the unit in [Country 1], the Tribunal will add back the A$11,701 net rental loss to Mrs Spiller’s income. This brings her income to A$33,518 for 2017-18.
The Tribunal must also consider the matter of the additional payments made by Mr Spiller to Mrs Spiller under a court order. The Tribunal notes in evidence provided by Mrs Spiller a court order dated [June] 2018 which states that Mr Spiller should pay:
· spousal maintenance of $300 per week with the first payment on 8 June 2018; and
· one third of the mortgage instalments, rates and taxes for [Australian Suburb 1] property payable in a weekly amount of A$148 also commencing on 8 June 2018.
These payments are to continue until a further order of the Family Court.
The Tribunal is satisfied the court ordered payments made by Mr Spiller are a financial resource available to Mrs Spiller for the purposes of child support. Not to do so would mean Mrs Spiller would be treated differently to Mr Spiller in terms of her income, property and financial resources.
To ensure Mrs Spiller’s income, property and financial resources are fairly represented in the assessment, the Tribunal will include an additional A$23,296 as income available to her for the purposes of child support from 8 June 2018. This would bring her income for the purposes of child support to A$56,814. The Tribunal notes, however, that Mrs Spiller stopped receiving the newstart allowance in March 2018 which will reduce her income by approximately $A10,096 from 1 July 2018 (as this is the amount included in her 2017-18 individual tax return).
Even if the Tribunal were to take an alternate approach to the court ordered payments received by Mrs Spiller and instead reduce her self-support amount by A$23,296, the Tribunal is satisfied the impact in terms of her annual rate of child support would be of little difference.
When Mr Spiller’s and Mrs Spiller’s respective incomes as determined by the Tribunal are applied in the child support formula, Mr Spiller’s annual rate of child support increases to approximately A$17,050. The Tribunal notes this amount will reduce going forward as the respective incomes of both parents have changed in 2018.
The Tribunal finds this to be significantly more than his liability under the administrative assessment and determines there are special circumstances and application of the administrative assessment of child support would result in an unjust and inequitable determination of child support to be provided by Mr Spiller in respect of the children.
On this basis the Tribunal finds there is a ground for departure from the administrative assessment.

Issue 2 – is it just or equitable to make a particular determination?

As the Tribunal finds there is a ground to depart from the administrative assessment of child support, the next step is to consider whether it is just and equitable as regards the child, the liable parent, and the carer entitled to child support to make a particular determination in accordance with sub-subparagraph 98C(1)(b)(ii)(A) of the Act. This in turn requires the Tribunal to consider the matters discussed below,[3] which are as set out in subsection 117(4) of the Act:
[3] The Tribunal is required to give “overt consideration” to relevant factors listed in subsection 117(4) of the Act: Tyagi & Meares [2008] FMCAfam 886.
(4)In determining whether it would be just and equitable as regards the child, the carer entitled to child support and the liable parent to make a particular order under this Division, the court must have regard to:
(a)     the nature of the duty of a parent to maintain a child (as stated in section 3); and
(b)     the proper needs of the child; and
(c)     the income, earning capacity, property and financial resources of the child; and
(d)     the income, property and financial resources of each parent who is a party to the proceeding; and
(da) the earning capacity of each parent who is a party to the proceeding; and
(e)     the commitments of each parent who is a party to the proceeding that are necessary to enable the parent to support:
(i)himself or herself; or
(ii)any other child or another person that the person has a duty to maintain; and
(f)   the direct and indirect costs incurred by the carer entitled to child support in providing care for the child; and
(g)     any hardship that would be caused:
(i)to:
(A)the child; or
(B)the carer entitled to child support;
by the making of, or the refusal to make, the order; and
(ii)(ii) to:
(A)the liable parent; or
(B)any other child or another person that the liable parent has a duty to support;
by the making of, or the refusal to make, the order; and
(iii)(iii) to any resident child of the parent (see subsection (10)) by the making of, or the refusal to make, the order.

The nature of the duty of a parent to maintain a child (as stated in section 3 of the Act)

Section 3 of the Act states that it is the primary duty of a parent to maintain the child and this has priority over nearly all other commitments.
In this case the Tribunal is not aware that either parent has a responsibility to any other child or person.

The proper needs of the child

In relation to the proper needs of the child, regard must be had to the manner in which the child is being, and in which the parents expected the child to be, cared for, educated or trained, and any special needs of the child (subsection 117(6) of the Act).
At hearing Mrs Spiller told the Tribunal that [Child 1] and [Child 2] were being educated at [School 1]. She said both parents made the decision for the children to receive a private school education and Mr Spiller was paying half the fees.
Mrs Spiller said in addition to the fees there were significant extracurricular costs and additional education costs that she had paid through most of 2017 as Mr Spiller had only met his half of these extra costs since October 2017. She said he had subsequently stopped paying these extra costs again. She said the extracurricular costs included such items as club tennis fees, tennis shoes and club football registration for [Child 1] and club tennis fees, soccer registration and singing lessons for [Child 2]. The additional education costs included uniforms, school shoes, books and excursion costs for both children.
Mrs Spiller said she was also seeking to have Mr Spiller pay all the school fees or at least have the school fees apportioned on the basis of each parent’s income.
Mr Spiller told the Tribunal he had agreed to pay for half the school fees for [Child 1] and [Child 2] and was also paying for half the extracurricular and additional costs. Mr Spiller admitted there may be some payments for additional costs that he had missed because he had not been advised by Mrs Spiller. Mr Spiller provided invoices from [School 1] showing he is paying for half the school fees.
It is not in contention, and the Tribunal finds, that both parents made the decision for the children to receive a private school education. Each parent is also paying half the cost of school fees and both appear committed to continuing in this manner. This is a choice the parents have made. The Tribunal is not satisfied that it is fair to attribute all the school fees or even a higher level to Mr Spiller.
In relation to extracurricular costs and additional education costs, the Tribunal is of the view that costs for such things as books, camps, excursions and uniforms are ordinary costs across all schools and not unique to a private school education. These costs are allowed for in the normal child support assessment. The extracurricular costs arising from sporting and other activities for the children are a choice of the parents and the payment of these should be resolved between the parents. The Tribunal is also mindful the level of care Mrs Spiller has of the children and the additional expenses arising from this will be reflected in the child support she receives. The Tribunal will not consider these costs further.
The Tribunal was not made aware that the parents expected [Child 1] and [Child 2] to be cared for in a particular way or that the children had any special needs.
In her Statement of Financial Circumstances the Tribunal notes Mrs Spiller did apportion a number of household expenses, such as food and mortgage costs, to the children.
The Tribunal finds it reasonable to calculate the costs of their needs by reference to the Costs of the Children Table (provided for in section 155 of the Act) in the circumstances of this case.

The income, earning capacity, property and financial resources of the child

The Tribunal finds the children have no income, earning capacity, property and financial resources which are to be taken into account for the purpose of child support.

The income property, financial resources and earning capacity of each parent

The Tribunal has already considered in detail the income, property and financial resources of both parents.
Mrs Spiller told the Tribunal she was not receiving the full amount of child support from Mr Spiller and he was significantly in arrears. Mrs Spiller said she was currently drawing down on an inheritance received from her mother’s estate in 2016 to help meet her expenses and this had dwindled considerably.
Mr Spiller was primarily concerned with the way his income had been assessed.
Mrs Spiller also raised the matter of Mr Spiller’s earning capacity. She said Mr Spiller should be assessed at his full-time income from [Organisation 1] rather than his part-time income as she believed he had the capacity to undertake more work. Mrs Spiller said there were other opportunities at [Organisation 1] and Mr Spiller also had the ability to work in banking where his income would be much higher. Mrs Spiller noted that unemployment rates in [Country 1] were very low at present.

Mr Spiller said he did not choose to work part time but this was instead a decision made by his employer when the [staff member] he replaced returned from maternity leave. Mr Spiller reiterated his [work] licence was only provisional and this did not allow him to [work] in public schools. As a result his employment prospects were restricted to [work] in private schools which amounted to only 5 per cent of all schools in [Country 1]. He acknowledged this would change once he had completed his studies and received his full [work] licence.
Although Mr Spiller is no longer working full time and this decision cannot be justified on the basis of his state of health or a caring responsibility, the Tribunal accepts the reduction in his hours of employment was outside his control.
The Tribunal is satisfied that the earning capacity criteria (set out in subsection 117(7B) of the Act) are not met in this case.

The necessary commitments of self-support or to support any other child or person

The Tribunal was not made aware that either parent had commitments to any other child.
Mr Spiller does have a duty to maintain Mrs Spiller as set out in the court order dated 5 June 2018. The Tribunal is satisfied it has properly taken this into consideration by including spousal maintenance as a financial resource available to Mrs Spiller for the purposes of child support.

Any hardship that would be caused

The Tribunal is satisfied Mr Spiller currently has access to income of approximately $A85,895. This may increase in the future if Mr Spiller undertakes further [work], however, he has stated this should be balanced against his need to take study leave.
Mr Spiller lists total personal expenditure, including spousal maintenance, child support and other payments, of A$63,856 per annum and total household expenditure of A$44,668 per annum which includes $10,400 per annum for an annual holiday in Australia to visit the children. The Tribunal notes his personal expenditure includes child support at the annual rate of A$19,972 as set by the Child Support Agency in the objection decision.
Mr Spiller told the Tribunal that with only a part-time income he was struggling to meet his financial commitments. Mr Spiller said he would be on the verge of bankruptcy if his mother had not lent him some money. He added that he was paying Mrs Spiller more through child support, spousal maintenance and property payments than he could actually earn as [in the same occupation]in Australia.

100.The Tribunal is satisfied Mrs Spiller currently has access to income of approximately A$23,422 which is her income as determined in 2017-18 less the newstart allowance. In addition she receives court ordered payments from Mr Spiller of A$23,296. The Tribunal is mindful that while Mrs Spiller may not currently be receiving rental income through Airbnb, she has estimated she will receive at least A$1,800 per annum and can readily increase this should she choose to do so.
101.Mrs Spiller said her income did not cover her outgoings and there was a shortfall every month. She said the only reason she was able to meet her monthly outgoings was due to an inheritance received in 2016. She said without this she could not manage and was hoping for a decision that would lessen her financial burden.
102.After considering all the circumstances of this case, the Tribunal proposes to make the following determination:
·     for the period from 1 August 2017 to 31 December 2017, Mr Spiller’s adjusted taxable income is set at A$98,321;
·     for the period from 1 January 2018 to 31 December 2019, Mr Spiller’s adjusted taxable income is set at A$85,895;
·     for the period from 1 August 2017 to 30 June 2018, Mrs Spiller’s adjusted taxable income is set at A$33,518; and
·     for the period from 1 July 2018 to 31 December 2019, Mrs Spiller’s adjusted taxable income is set at A$46,718.

103.The Tribunal is limited to making a determination in respect of a day in a period that is not more than 18 months prior to the date the change of assessment application was made (paragraph 98S(3B)(a) of the Act). As the child support assessment has been in place since 12 July 2017 this would be the earliest date open to the Tribunal from which to make a determination.
104.On balance the Tribunal is of the broad view that retrospectively changing entitlements should be avoided without compelling reasons. Mrs Spiller applied for a change to the administrative assessment on 1 December 2017 but seeks to have the assessment backdated to 12 July 2017. Mrs Spiller said she did not apply for a change sooner because she was pursuing legal avenues for child support in the first instance. Mr Spiller is opposed to backdating the assessment.
105.In this case the Tribunal notes, however, that the Child Support Agency backdated the assessment to 1 August 2017 and Mr Spiller has been paying an increased level of child support since that date. The Child Support Agency did this on the basis that 1 August 2017 was the date Mr Spiller’s contract with [Organisation 1] came into effect. This is not correct, as the Tribunal has established Mr Spiller received his first contract on 1 March 2017 and was working as a [casual worker] for a short period prior to this date.
106.On balance, in the circumstances of this case, the Tribunal finds it just and equitable to commence the departure determination from 1 August 2017 and not from an earlier date.
107.In making its decision, the Tribunal decided there was a balance needed between providing both parents some certainty in their child support obligations and not extending child support too far into the future given that Mr Spiller may secure full-time employment when he receives his full [work] licence. The Tribunal has also taken account of the court ordered payments received by Mrs Spiller when considering her income, property and financial resources. Although these payments commenced on 8 June 2018 and the Tribunal included them for the purposes of child support from 1 July 2018, the Tribunal is satisfied this is a fair approach. In the event there is a change to these payments arising from a subsequent decision of the court, the Tribunal notes that either parent can submit a further change of assessment application should they believe this is necessary.
108.The Tribunal is satisfied that the proposed determination will not cause hardship to Mr Spiller, Mrs Spiller or the children and is just and equitable.

Other relevant matters

109.Mrs Spiller also raised with the Tribunal the matter of orthodontic costs for [Child 1]. She said following an initial assessment, the orthodontist had provided a treatment plan estimated at A$7,202. The full cost under a payment plan would be A$7,496.
110.The Tribunal explained that as these costs had yet to be incurred they could not be considered further.
111.At the start of the hearing Mr Spiller asked the Tribunal if it could also take into account the costs he had incurred for spending time with the children. He said this had not been properly considered in either the original decision or the objection decision and he had since submitted a change of assessment application in August 2018 with the Child Support Agency.
112.As these costs are being considered as part of a subsequent application made by Mr Spiller which is currently before the Child Support Agency, the Tribunal is satisfied it did not need to consider the matter further.

Issue 3 – is it otherwise proper to make a particular determination?

113.The third step is to consider whether it would be otherwise proper to make a particular departure determination in accordance with sub-subparagraph 98C(1)(b)(ii)(B) of the Act. Subsection 117(5) sets out the matters that must be considered when deciding whether it would be “otherwise proper” to make a departure determination. It focuses on the balance of support carried between the parents on one hand and the taxpayer on the other. It is appropriate for children to be primarily supported by their parents rather than by government assistance. The Tribunal must consider whether the level of a benefit, in particular family tax benefit, received by the party caring for the children may be affected by the level of child support.
114.The Tribunal finds that Mrs Spiller receives family assistance in respect of the children. The Tribunal is satisfied that its determination will result in an appropriate apportionment of financial responsibility between the parents and the community and would be otherwise proper.
DECISION

The Tribunal sets aside the decision under review and, in substitution, decides that:

for the period from 1 August 2017 to 31 December 2017, Mr Spiller’s adjusted taxable income is set at A$98,321;
for the period from 1 January 2018 to 31 December 2019, Mr Spiller’s adjusted taxable income is set at A$85,895;
for the period from 1 August 2017 to 30 June 2018, Mrs Spiller’s adjusted taxable income is set at A$33,518; and
for the period from 1 July 2018 to 31 December 2019, Mrs Spiller’s adjusted taxable income is set at A$46,718.