Stebbins and Kolberg (Child support)

[2021] AATA 4497

Stebbins and Kolberg (Child support) [2021] AATA 4497 (17 September 2021)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2021/MC021533

APPLICANT:  Mr Stebbins

OTHER PARTIES:  Child Support Registrar

Ms Kolberg

TRIBUNAL:Member S Brakespeare

DECISION DATE:  17 September 2021

DECISION:

The decision under review is varied so that there is a departure determination in the following terms:

• for the period 1 January 2021 to 31 December 2021 the annual child support otherwise payable by Mr Stebbins is increased by $1,456 (in recognition of [Child 1’s] special needs costs); and

• for the period 1 January 2021 to 31 December 2022 the annual child support otherwise payable by Mr Stebbins is increased by an amount of $1,694 per annum (in recognition of the children’s independent school tuition fees).

CATCHWORDS

CHILD SUPPORT – departure determination – costs of education – manner expected by both parents – special needs of the child – orthodontic treatment – costs of maintaining the children are significantly affected – decision under review varied

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

BACKGROUND

1. Mr Stebbins is the parent liable to pay child support to Ms Kolberg in respect of their children [Child 2] who is 10 and [Child 1] who is 9.

2. On 13 December 2020 Ms Kolberg lodged an application for a change assessment on grounds relating to the special needs of the children and extra costs of caring for, educating or training the children in a way that both parents intended.

3. On 10 February 2021 an officer of the Child Support Agency refused to make a departure determination (the original decision). Ms Kolberg lodged an objection to the original decision. On 18 May 2021 an objections officer allowed the objection and made a departure determination in the following terms (the objection decision):

   ·     for the period 1 January 2021 to 31 December 2021 annual child support otherwise payable by Mr Stebbins is increased by $885 in recognition of [Child 1’s] special needs costs; and

   ·     for the period 1 January 2021 to 31 December 2022 the annual child support otherwise payable by Mr Stebbins is increased by an amount of $1,694 per annum in recognition of the children’s independent school tuition fees.

1. Mr Stebbins lodged an application for review of the objection decision with the tribunal. A telephone directions hearing was convened on 13 August 2021. Both parties participated. A hearing was held on 17 September 2021. Mr Stebbins and Ms Kolberg gave evidence on affirmation to the tribunal via conference telephone. The Child Support Agency provided the tribunal and the parties with a bundle of papers relevant to the review (210 pages). The tribunal gathered extra papers from the parties and exchanged them prior to the hearing (folios A1 to A72 and B1 to B64).

2. Relevant aspects of the evidence and material before the tribunal will be referred to in the tribunal’s consideration of the issues which it has to decide.

ISSUES

1. The statutory provisions relevant to these reviews are contained in the Child Support (Assessment) Act 1989 (the Act).

2. The rate of child support payable by the liable parent is usually based on an administrative assessment under Part 5 of the Act.

3. 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).

4. 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.

5. The grounds for departure from an administrative assessment of child support are set out in subsection 117(2) of the Act.

6. 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 (1992) FLC 92-279 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.

7. Likewise, in Phillippe and Phillippe (1978) FLC 90-433 the Court held that “special circumstances” are “facts peculiar to the particular case which set it apart from other cases”.

8. 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.

9. 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?

1. A ground for departure exists where, in the special circumstances of the case, the costs of maintaining a child are significantly affected because of the special needs of the child (subparagraph 117(2)(b)(ia) of the Act). The term “special needs” is not defined in the legislation and the tribunal requires some evidence that the needs of the child relate to a condition or disability that is out of the ordinary.

2. From 1 January 2021 the costs of the child [Child 1], according to the administrative assessment, were $13,318 per annum. Mr Stebbins was liable to pay $9,456 of this amount to Ms Kolberg. His liability increased to $13,318 from 28 January 2021 due to changes in the care percentages.

3. Ms Kolberg is claiming 50% of the out-of-pocket costs relating to dental and orthodontic costs for [Child 1].

4. At the time the objection decision was made Mr Stebbins agreed to pay half of the cost of [Child 1’s] treatment but only after the health fund rebate has been claimed. At hearing Mr Stebbins said he no longer agreed that he should contribute to the orthodontic costs as he was not satisfied that the orthodontic treatment for [Child 1] constituted special needs. He said that he has been advised the type of treatment required by [Child 1] is quite common treatment for children. Furthermore Ms Kolberg paid too much for the treatment, choosing a specialist that she was familiar with. She did not give him the opportunity to get another quote. He said that he has recently had a quote from a Community Clinic putting the cost of the procedure at $400.

5. The tribunal does not accept Mr Stebbins’ contention that [Child 1’s] orthodontic treatment is common, and therefore does not constitute a special need. The tribunal is satisfied from the specialist advice provided that the orthodontic and associated dental treatment was necessary for the child’s health and constitutes special needs. Ms Kolberg has provided evidence that the out of pocket orthodontic costs for treatment undertaken by [Doctor A] totalled $1,910 and the out of pocket cost of dental work undertaken by [Doctor B] totalled $1,007. The total amount of $2,917 is significant when compared to the costs of the child. 

6. The tribunal is satisfied that there is a ground for departure.

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

1. As the tribunal is satisfied that 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 children, 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[1], which are as set out in subsection 117(4) of the Act:

   [1] The tribunal is required to give “overt consideration” to relevant factors listed in section 117(4) of the Act re Tyagi & Meares (SSAT Appeal) [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)  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)  to any resident child of the parent (see subsection (10)) by the making of, or the refusal to make, the order.

2. In having regard 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).

3. The children are attending [specified] studies as per Family Court Orders made by consent and dated [in] August 2016. Mr Stebbins claims that it was Ms Kolberg’s choice for the children to receive a religious education and that he always maintained that he would not contribute to the costs. The tribunal finds that the children are being educated in the manner intended by the parents, as per the Order which was made by consent. The tribunal notes that the Order does not specify who is, or who is not, responsible for the cost of the religious education costs.  Therefore the tribunal does not accept Mr Stebbins’ contention that he should not contribute to the costs of the children’s [specified] studies.

4. The objections officer calculated that the cost of the religious education was $3,388 per annum; an amount that was not contested by the parties.

5. Mr Stebbins claims that Ms Kolberg could reduce the costs of the education by applying for subsidies and/or scholarships. Ms Kolberg said that she already receives a subsidy and the costs that she is claiming is after the subsidy has been applied. In her view Mr Stebbins should be liable for 50% of the costs. The tribunal finds that there are extra costs to be taken into account in respect of the children’s needs beyond the costs of their needs calculated by reference to the Costs of the Children Table.[2] The tribunal finds that there are extra costs to be taken into account in respect of the children’s needs beyond the costs of their needs calculated by reference to the Costs of the Children Table.  The extra costs arise from [Child 1’s] orthodontic and associated dental costs and from the children’s religious education.

   [2] Provided for in section 155 of the Act.

6. The tribunal is satisfied that the children do not have any income, property, earning capacity or financial resources that should be taken into account for the purpose of the child support assessment.

7. Mr Stebbins’ current gross income from employment, as per his Statement of Financial Circumstances, is $2,788 per week. He declared a small amount of investment income ($13 per week). His other assets include the home in which he lives (which is mortgaged), investments valued at $60,000, a self managed superannuation fund and a vehicle and household items. Mr Stebbins disputed Ms Kolberg’s claim that he is involved in business enterprises. He said that all the companies he was previously involved in are no longer operating and one of those companies owes $170,000.

8. Mr Stebbins advised that he pays weekly income tax of $1,115 and mortgage payments of $875 per week. Mr Stebbins said that he also has to make extra payment to his superannuation fund to ensure that the costs on the property held in the fund are covered. He said that the amount might be approximately $2,000 per year.  Mr Stebbins claims that he has incurred, and will incur, significant legal costs, in respect of ongoing magistrates court and family court proceedings. A letter from [a legal firm] confirms that he has incurred legal fees of $104,802.10 since January 2020. Mr Stebbins said that he has borrowed money to pay about $70,000 in legal fees. He provided emails from a number for people confirming that they had lent him money to pay legal fees.  Ms Kolberg said that she did not believe that Mr Stebbins’ legal fees should take precedence over his obligation to support his children. She also did not believe that Mr Stebbins had been loaned the amounts he stated.

9. Mr Stebbins said that the legal fees are being incurred for the benefit of the children’s welfare and are therefore in respect of the children’s proper needs. Mr Stebbins also claimed that he was paying $330 per week for supervised visits for the children. However he conceded that these visits were suspended after three weeks. There were also receipts for the children and Mr Stebbins to visit a psychologist for a short period in July and August 2021. The tribunal finds that amount of out-of-pocket costs paid by Mr Stebbins, as per the documentation he provided, was not significant.

10. The tribunal finds that Ms Kolberg receives all of her income through income support payments, family assistance payments and child support. She therefore has limited capacity to support the children. Her only asset of significance is the home in which she lives; and which is mortgaged. She said that she owes her father $172,000 which will need to be paid when she sells the family home. She expects that this will happen in the next five years. Ms Kolberg declared a small amount of savings which totalled less than her credit card debts.  She also provided a letter from [a named] solicitor, noting outstanding legal fees of $14,853.76.

11. Mr Stebbins claims that Ms Kolberg’s home has a much higher value than the amount declared on her Statement of Financial Circumstances. The tribunal takes the view that the family home is not property that will affect the child support assessment; particularly when it is subject to mortgage, as it is in this case.

12. The tribunal is of the view that the legal fees of either parent are not necessary expenses for their self support and do not take precedence over the proper needs of the children.

13. The tribunal is satisfied that the earning capacity provisions do not apply in this case.

14. The tribunal proposes to make a departure determination in the following terms:

• for the period 1 January 2021 to 31 December 2021 the annual child support otherwise payable by Mr Stebbins is increased by $1,456 (in recognition of [Child 1’s] special needs costs); and

• for the period 1 January 2021 to 31 December 2022 the annual child support otherwise payable by Mr Stebbins is increased by an amount of $1,694 per annum ( in recognition of the children’s independent school tuition fees).

1. The proposed determination attributes Mr Stebbins with 50% of [Child 1’s] special needs costs and 50% of the cost of the children’s religious education. It will increase Mr Stebbins’ child support liability by approximately $60 per week from approximately $512 per week to approximately $562 per week.

2. The tribunal is satisfied that Mr Stebbins has the capacity to pay the increased amount of child support. He earns a significant income and has a substantial amount in investments. Whilst he also has a number of debts the tribunal finds that, apart from the mortgage on the home in which he lives, those debts are not commitments necessary for his self support and therefore do not take precedence over the proper needs of the children.  The tribunal is satisfied that the proposed determination is just and equitable.

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

1. 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 the 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.

2. Ms Kolberg is in receipt of family assistance in respect of the children. An increase in the child support payable to her is likely to decrease her entitlement to family assistance payments. This means that some of the cost of supporting the children moves from the taxpayer to the parents. The tribunal finds the proposed determination to be otherwise proper.

3. The tribunal makes the following departure determination:

• for the period 1 January 2021 to 31 December 2021 the annual child support otherwise payable by Mr Stebbins is increased by $1,456 (in recognition of [Child 1’s] special needs costs); and

• for the period 1 January 2021 to 31 December 2022 the annual child support otherwise payable by Mr Stebbins is increased by an amount of $1,694 per annum ( in recognition of the children’s independent school tuition fees).

DECISION

The decision under review is varied so that there is a departure determination in the following terms:

• for the period 1 January 2021 to 31 December 2021 the annual child support otherwise payable by Mr Stebbins is increased by $1,456 (in recognition of [Child 1’s] special needs costs); and

• for the period 1 January 2021 to 31 December 2022 the annual child support otherwise payable by Mr Stebbins is increased by an amount of $1,694 per annum (in recognition of the children’s independent school tuition fees).