Stebbins and Stebbins (Child support)

[2024] AATA 786

Stebbins and Stebbins (Child support) [2024] AATA 786 (1 February 2024)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2023/SC026732

APPLICANT:  Ms Stebbins

OTHER PARTIES:  Child Support Registrar

Mr Stebbins

TRIBUNAL:Member S Letch

DECISION DATE:  1 February 2024

DECISION:

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

(a)from 2 February 2023 to 31 December 2025, Mr Stebbins’ adjusted taxable income is varied to $180,000,

(b)from 1 January 2023 to 30 June 2023, Mr Stebbins’ annual child support liability is increased by $6,438 (a contribution for [Child 3]’s orthodontic treatment),

(c)from 1 January 2023 to 31 December 2023, Mr Stebbins’ annual child support liability is increased by $5,029 (a contribution to school fees),

(d)from 1 January 2024 to 31 December 2024, Mr Stebbins’ annual child support liability is increased by $3,243 (a contribution to school fees),

(e)from 1 January 2025 to 31 December 2025, Mr Stebbins’ annual child support liability is increased by $3,405 (a contribution to school fees).

CATCHWORDS

CHILD SUPPORT – departure determination – income, property and financial resources of the parents – costs of the child’s orthodontic treatment – school fees of the child - ground for departure established – decision to depart - 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

1. Ms Stebbins and Mr Stebbins are the parents of [Child 1] (born October 2007), [Child 2] (born October 2007), [Child 3] (born December 2009) and [Child 4] (born March 2014). Ms Stebbins seeks a review of an objection decision by Child Support which “partly allowed” her objection to a “change of assessment” decision of 12 April 2023. 

2. By way of background, it is convenient to set out some extracts from the objections officer’s decision dated 17 August 2023:

   …

   The assessment

   Assessments subject to this objection required Mr Stebbins to pay child support for [Child 1], [Child 2], [Child 3] and [Child 4] as follows:
   -From 2 February 2023 to 30 June 2023, an annual rate of $23,417 based on a 2022-23 estimate of income of $118,193 for Mr Stebbins and a 2021-22 ATI of $23,899 for Ms Stebbins. The decision subject to this objection was the second CoA application to proceed for the parents. On 15 June 2020, DM Kim Thompson established Reason 2, Reason 3 and Reason 8A in Ms Stebbins’ CoA application, however did not establish Reason 8A or Reason 8B in Mr Stebbins’ cross application. DM Thompson made the following decision:
   -That for the period 1 February 2020 to 31 December 2021 Mr Stebbins’ ATI is set at $219,996 and the annual rate payable by Mr Stebbins is further increased by $16,656. Ms Stebbins lodged an objection to the above decision and on 16 October 2020, the objection was allowed in part by objections DM Heather Mills. As a result, the CoA decision by DM Thompson was set aside and replaced as follows:
   -For the period 1 January 2020 to 30 April 2022, ATI of Mr Stebbins is set at $213,202.
   -For the period 1 January 2020 to 31 December 2022, the annual rate of child support payable by Mr Stebbins will be increased by $4,570 being the tuition fees of the children.
   -For the period 1 January 2020 to 31 December 2021, the annual rate of child support payable by Mr Stebbins will be increased by $8,975 being his contribution towards the orthodontic costs of [Child 2], the specialist costs of the children and the medication costs for the children. Ms Stebbins lodged an appeal to DM Mills’ decision to the Administrative Appeals Tribunal (AAT) and on 18 March 2021, the AAT set aside the decision under review and in substitution decided that:
   -From 1 January 2020 to 31 December 2020, the ATI of Mr Stebbins is varied to $164,955 per annum.
   -From 1 January 2021 to 31 December 2022, the ATI of Mr Stebbins is varied to $265,000 per annum.
   -From 1 January 2020 to 31 December 2021, the annual rate of child support payable by Mr Stebbins is increased by $6,990 in relation to orthodontic costs for [Child 2] and [Child 1] and an autism assessment for [Child 3].
   -From 1 January 2020 to 31 December 2022, the annual rate of child support payable by Mr Stebbins is increased by $4,666 in relation to medical costs and pharmaceuticals for [Child 3] and private health insurance for the children.
   -From 1 January 2020 to 31 December 2022, the annual rate of child support payable by Mr Stebbins is increased by $4,400 in relation to school tuition fees and building levy. This case was registered with Services Australia - Child Support (the agency) on 20 July 2017. The agency collect child support on Ms Stebbins’ behalf. As at the date of this decision Mr Stebbins is up-to-date with his payments.

   DECISION UNDER REVIEW

   On 24 November 2022 Ms Stebbins applied for a CoA under Reason 2, Reason 3, Reason 8A and Reason 8B. She was seeking an unspecified change to the assessment from an unspecified date.

   …

   On 12 April 2023 DM Katrina Jefferson found Reason 2, Reason 3 and Reason 8A established in Ms Stebbins’ application and changed the assessment as follows:

   -For the period 2 February 2023 to 31 December 2024, the adjusted taxable income of Mr Stebbins is set at $180,000 per annum.
   -For the period 1 January 2023 to 30 June 2023 the annual rate of child support is increased by $6,438 for [Child 3]’s orthodontic work and private health insurance.
   -For the period 1 January 2023 to 31 December 2023 the annual rate of child support is increased by $2,380 for the children’s private school fees.
   -For the period 1 January 2024 to 31 December 2024 the annual rate of child support is increased by $6,232 for the children’s private school fees in 2024.

   …

   The costs of [Child 3] in the assessment subject to this objection was $7,139. However, I am satisfied [Child 3]’s share of Ms Stebbins’ private health insurance premiums of $907 as well as Ms Stebbins’ out of pocket costs of [Child 3]’s orthodontic treatment of $5,530 ($6,437) significantly affect the costs of maintaining [Child 3]. On the basis of the above information, I am satisfied special circumstances exist. I am satisfied [Child 3] has special needs that significantly affect the costs of maintaining [Child 3] when compared to the assessed costs in the current child support assessment.

   Reason 2 is established.

   …

   The evidence provided by Ms Stebbins at attachment A in her letter of objection shows that the
   costs for 2023 are as follows:

   [Child 1]          $941
   [Child 2]          $941
   [Child 3]          $941
   [Child 4]          $688.50.

   Levies:           $1,517
   Total:             $5,029 (rounded up).

   The total costs of children amount in the assessment subject to this objection was $28,556. An amount of $5,029 represents approximately 17.6% of the costs of children which is a significant proportionate amount. Therefore, I am satisfied that the costs of maintaining the children overall are significantly affected.

   Reason 3 is established.

   …

   I am satisfied that Mr Stebbins’ income from all sources is at least $180,000 and he has provided nothing in this objection process to sway me from this view. I also note that Ms Stebbins has not challenged his income in her objection.

   I am satisfied that an income of $118,193 is not an accurate reflection of Mr Stebbins’ actual capacity to provide financial support for the children. I find an ATI of $180,000 is more accurate. I also believe this to be a conservative amount to apply to the assessment.

   I am satisfied special circumstances exist and that the assessment using an income of $118,193 is unfair to Ms Stebbins and the children.

   Reason 8A is established.

   …

   I note that Mr Stebbins has remained up-to-date with his child support payments. I am satisfied he has rebutted the presumption to my satisfaction. As a result, I find this criterion is not established. Having been unable to satisfy the third criterion, the law does not allow me to proceed to consider an unexercised earning capacity for Mr Stebbins.

   Reason 8B is not established.

   …

   I also read the AAT decision where the Tribunal came to a similar conclusion in that Ms Stebbins’ income and financial resources do not make the assessment unfair. I intend to follow the Tribunal’s lead in this regard.

   I do not find Ms Stebbins' current income and financial resources are significantly higher than stated, and I am not satisfied the child support assessment is unfair.

   Reason 8A is not established.

   …

   Having been unable to satisfy the first criterion, the law does not allow me to proceed to consider an unexercised earning capacity for Ms Stebbins.

   Reason 8B is not established.

   …

   Under Reason 2, I found Ms Stebbins’ out-of-pocket costs for [Child 3]’s portion of private health insurance and orthodontic treatment total $6,438. Ms Stebbins claimed she had to pay for [Child 3]’s treatment upfront so as not to disadvantage [Child 3]. Ms Stebbins asked that a change be made to Mr Stebbins’ reimbursement, requiring this be repaid in full, as she had to use her savings from the parent’s property settlement to pay for the treatment. Ms Stebbins claims she already utilises her property settlement funds to meet ongoing children’s expenses and has spent around $80,000 of these funds since 2019. I also find it fair to increase the assessment by $6,438 for a six month period from 1 January 2023 to 30 June 2023. I note that as at the date of this decision this period has passed, with Mr Stebbins having made the requisite payments.

   …

   The combined school fees to be considered for 2023 for all four children are therefore $5,029 (rounded up) as opposed to $5,718 found by DM Jefferson. I intend to change the assessment for Mr Stebbins to meet these costs. I am also mindful the school fees established in the AAT decision of $4,400 per annum for 2021 and 2022 was more than the school fees actually charged. The evidence provided by Ms Stebbins shows the total Tuition Fees and compulsory levies after discounts charged in 2021 were $2,215 for [Child 1] and [Child 2] in Year 8 (not including sports fees, technology fees, resource fees and subject fees). This is a difference of $2,185 which Mr Stebbins overpaid for school fees in 2021. In 2022 total Tuition Fees and compulsory levies after discounts charged were $3,247 for [Child 1] and [Child 2] in Year 9 (not including sports fees, technology fees, resource fees and subject fees). This is a difference of $1,153 which Mr Stebbins overpaid for school fees in 2022. On the basis of the above information, Mr Stebbins essentially paid too much child support of $3,338 over 2021 and 2022. I find it fair to take these amounts into consideration in my decision by reducing Mr Stebbins’ contribution of $5,029 for the children’s 2023 school fees. Therefore, the adjusted change to Mr Stebbins’ annual rate to reflect school fees is an increase of $1,691 rather than $5,029 for the period 1 January 2023 to 31 December 2023. I also accept that there will be ongoing costs for [Child 1]’s, [Child 2]’s, [Child 3]’s and [Child 4]’s education beyond the 2023 academic year and that they will potentially continue to attend school until the end of their secondary education as each completes Year 12.

   …

   The changes will commence from 2 February 2023 in relation to Mr Stebbins’ ATI. The ATI will be set in place until 31 December 2024.

   The costs for [Child 3]’s orthodontic treatment will commence on 1 January 2023 and end on 30 June 2023.

   The annual rate will be increased by $1,691 in recognition of Mr Stebbins’ contributions to the school fees for the 2023 academic year (reflecting the fact he had previously overpaid in this regard).

   From 1 January 2024 the annual rate will be increased by the fees for the children’s education as set out above and in the decision itself until a terminating event occurs for each child … A terminating event would normally occur when a child of the assessment turns 18.

   …

   Outcome: The objection is partly allowed.

   I have made the decision to change the assessment as follows:

   -From 2 February 2023 to 31 December 2024, the Adjusted Taxable Income (ATI) for Mr Stebbins is to be set at $180,000.
   -From 1 January 2023 to 30 June 2023 the annual rate of child support payable is to be increased by $6,438 in recognition of Mr Stebbins’ contribution to [Child 3]’s orthodontic treatment.
   -From 1 January 2023 to 31 December 2023 the annual rate of child support payable is to be increased by $1,691 in recognition of Mr Stebbins’ contribution to school fees.
   -From 1 January 2024 until a terminating event occurs for each of the children the annual rate of child support payable will be increased by 100% of the education costs as per the following clause:

   Either parent can notify the agency when these costs have been advised by the school and then the assessment will be adjusted to bring them into account.

   Both parents should note that the annual change as determined by my decision will take effect from 1 January each year regardless of when the agency is advised about the new fees. It is therefore important that they keep the agency up to date about the fee payments to avoid significant arrears added to the case in one lump sum.

   …

   Impact on assessment: From 2 February 2023 to 30 June 2023 the annual rate payable becomes $46,496. From 1 July 2023 the annual rate becomes $40,747. There will be an overpayment created for Ms Stebbins of approximately $397.28 which I find is unavoidable and not unfair in the circumstances.

   …

3. Ms Stebbins and Mr Stebbins participated in the Tribunal’s hearing by conference telephone.  In making its decision, the Tribunal took into account the sworn evidence of both parties, the Child Support materials, and the additional materials submitted by both parties.

CONSIDERATION

The legislative framework

1. The rate of child support payable by a liable parent is usually based on an administrative assessment under Part 5 of the Child Support (Assessment) Act 1989 (the Act). A formula is used. It takes into account variables including each parent’s adjusted taxable income for the last relevant year of income, the number of children and the level of care provided by each parent.

2. Part 6A of the Act allows for a departure from an administrative assessment (a process commonly known as a “change of assessment”). Under subsection 98C(1), the Registrar may make such a departure determination if three matters are established:

   ·     one, or more than one, of the grounds for departure referred to in subsection 98C(2) exists (subparagraph 98C(1)(b)(i));

   ·     a departure is just and equitable as regards the children and each parent (sub-subparagraph 98C(1)(b)(ii)(A)); and

   ·     it is otherwise proper to make a departure decision (sub-subparagraph 98C(1)(b)(ii)(B)). 

3. Subsection 98C(2) provides that the grounds for departure are the same as the grounds set out in subsection 117(2).

4. If satisfied that a ground or grounds exist 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. It permits a range of determinations, including varying the rate of child support payable, the adjusted taxable income or the cost percentage for a child.

Issue 1 – Is there a ground to depart?

1. Subparagraph 117(2)(b)(ia) of the Act – commonly referred to as Reason 2 by Child Support – provides as a ground for departure:

   (b)that, in the special circumstances of the case, the costs of maintaining the child are significantly affected:

   ….

   (ia)   because of special needs of the child; …

2. Subparagraph 117(2)(b)(ii) of the Act, commonly referred to as Reason 3, provides as a ground for departure:

   (b)that, in the special circumstances of the case, the costs of maintaining the child are significantly affected:

   …   

   (ii)    because the child is being cared for, educated or trained in the manner that was expected by his or her parents; …

10.Subparagraph 117(2)(c)(ia) of the Act, commonly referred to as reason 8A, provides as a ground for departure:

(c)that, in the special circumstances of the case, application in relation to the child of the provisions of this Act relating to administrative assessment of child support would result in an unjust and inequitable determination of the level of financial support to be provided by the liable parent for the child:

…

(ia)   because of the income, property and financial resources of either parent; or

(ib)  because of the earning capacity of either parent; …

11.The matters which must be taken into account when assessing a person’s earning capacity are contained in subsection 117(7B) of the Act, which provides the following:

(7B)In having regard to the earning capacity of a parent of the child, the court may determine that the parent’s earning capacity is greater than is reflected in his or her income for the purposes of this Act only if the court is satisfied that:

(a)   one or more of the following applies:

(i)the parent does not work despite ample opportunity to do so;

(ii)the parent has reduced the number of hours per week of his or her employment or other work below the normal number of hours per week that constitutes full-time work for the occupation or industry in which the parent is employed or otherwise engaged;

(iii)the parent has changed his or her occupation, industry or working pattern; and

(b)   the parent’s decision not to work, to reduce the number of hours, or to change his or her occupation, industry or working pattern, is not justified on the basis of:

(i)the parent’s caring responsibilities; or

(ii)the parent’s state of health; and

(c)   the parent has not demonstrated that it was not a major purpose of that decision to affect the administrative assessment of child support in relation to the child.

12.The starting proposition is that the child support formula should apply. Only in special circumstances should a departure be made. The words “in the special circumstances of the case” are not defined in the legislation. While it is not possible to define with precision the meaning of that term, 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 Tribunal will not interfere with the administrative formula result in the ordinary run of cases. In Gyselman v Gyselman (1992) FLC 92-279, it was held that “special circumstances” were “facts peculiar to the particular case which set it apart from other cases”.

The hearing

13.Ms Stebbins told the Tribunal she takes issue about the school fees. There were adjustments made to 2021, 2022 and 2023 – Ms Stebbins says they are not correct. Ms Stebbins also seeks a decision regarding medical conditions – two of the children in particular have high needs. She has private medical insurance but is still “out of pocket”. She seeks a determination about provision for medical fees going forward. Ms Stebbins told the Tribunal that she considers that Mr Stebbins has “unexercised earning capacity”.

14.Mr Stebbins told the Tribunal he agrees with Ms Stebbins about the school fees in 2023. He tried to explain to Child Support that he agreed with Ms Stebbins. In relation to medical expenses and insurance premiums, Mr Stebbins said there “needs to be something fair”. He also suggested that Ms Stebbins has previously had an “unexercised earning capacity”. 

15.Mr Stebbins told the Tribunal that he does not think his income should be recorded as $180,000. He said it is very difficult to assess his income as it is a “challenge”. He said his income used to “hover around $160,000”. At the beginning of COVID-19, he secured a Sydney position that he could manage from home in [City 1]. It was a very high executive-level position. There was a dispute with Ms Stebbins about the care of the children – Mr Stebbins said he could no longer “deliver for the role”. He decided to buy a business which he had hoped would derive a good income. He finished work late 2022, and by March 2023, it had become apparent that the business purchase had “fallen through”. He was in a position where he had no business, and no job. He decided to start his own business (“[Business 1]”) – he did not do so with a view to avoiding child support. The “driving factor” was to make sure he would be able to see and care for the children; he said there was “no way” to deliver his obligations under the care agreement while he continued in the high-level executive role.

16.This financial year, Mr Stebbins is not predicting he will derive any income given the business is in the very early stages. However, he told the Tribunal that he recognises that an income for child support purposes nevertheless should be reflected. He said that apart from high wages when in Sydney for two years (including years inflated by share sales) his income was usually in the range of $160,000 per annum. Mr Stebbins said he is “going backwards at a rate of knots at present” – in order to meet expenses, including his child support obligations, he is depleting savings and selling shares. He said he did not know about “post separation income” and missed an opportunity to obtain that benefit in the three years following separation. Mr Stebbins said he is renting a house in [City 1] for $800 per week to facilitate seeing the children; he said the home is vacant most of the time.

17.Ms Stebbins told the Tribunal that prior to his Sydney role, Mr Stebbins was earning a high income with his former employer. He was travelling at that time; she said that “didn’t seem to be an issue”. Ms Stebbins suggested it was more Mr Stebbins’ new relationship that was a factor in his decision-making. She said Mr Stebbins’ income was over $200,000 during their marriage. She said she does not believe Mr Stebbins resigned to “see more of the children” as he continues to see them for the same amount of time. She said his decision was more “lifestyle based”. In past years, she has received child support to meet expenses; she said she does the “majority of parenting”. Despite Mr Stebbins’ new business, Ms Stebbins said there had been no major changes to Mr Stebbins’ lifestyle. She said if she does not receive adequate support, she will have to make adjustments to extra-curricular activities due to insufficient resources.

18.Mr Stebbins said he rejected the suggestion his income in prior years was much higher. His employer prior to his last position had an office in [City 1] so travel demands were much less. Mr Stebbins said he has never lodged any objection to Child Support decisions in the past as he chose to accept decisions rather than devote the time and resources to challenging them.  

19.In relation to [Business 1], Mr Stebbins said “no-one is employed by the business”. It commenced on 1 October 2023. He works full-time and is not drawing a wage or salary as there is no “profit”; however, it may be that in discussions with his accountant that a figure of $120,000 (or some other figure) might be attributed to him as a salary. Mr Stebbins’ partner is employed separately; however, she helps out with packaging and other things when she has capacity.  Although difficult to predict, he expects the business with incur a loss this financial year; if he pays himself a wage, that will be a “roaring loss”.  

20.Ms Stebbins told the Tribunal that Mr Stebbins has set up a business in an area in which he has no experience. She said that “makes no sense” when they have four children to support, with the youngest being in Year 4.

21.Ms Stebbins said she was “out of pocket” for some $5,000 in the 2023 year, and she disagreed with the adjustment made by Child Support for the purported “overpayment” in prior years. Mr Stebbins said he agreed with Ms Stebbins’ submission in that respect. Ms Stebbins said that she gave 2024 figures to Child Support in around early December 2023; however, they have not acted on that, presumably because of the present application to the Tribunal. Her “out of pocket” figure for 2024 is $6,487.

22.Ms Stebbins said that the previous AAT decision had made allowance for a contribution from Mr Stebbins in relation to private health insurance premiums. Ms Stebbins said she still incurs “out of pocket expenses”, such as hospital expenses for [Child 1]. Ms Stebbins said she understood Mr Stebbins should not be liable to contribute towards her proportion of the health insurance premiums, but acknowledged that is difficult to assess as she pays one premium with herself and all the children as beneficiaries. However, Ms Stebbins said she considers it important that there be certainty going forward for Mr Stebbins’ future contributions.  

23.Ms Stebbins said she resumed part-time employment in August 2023. Her income before tax is almost $1,000 per week. She receives a part carer payment, and a carer allowance, as well as family tax benefit (which she had inadvertently omitted from her Statement of Financial Circumstances). She said it is very important she maintain a health care card as that provides a considerable financial benefit. Her partner does not live in the same household. She said she pays for mobile phone plans; she said “she does a lot of driving the children around”, and her fuel bill is high. She has incurred costs for computers and setting up study areas for the children. There are ongoing maintenance costs for the house.

24.Mr Stebbins told the Tribunal that Ms Stebbins had in the past worked 20 hours per week, and had been working up to this when COVID-19 started. He suggests she has always had a capacity to work up to 20 hours. On his calculation, Ms Stebbins has over $60,000 (without his child support of some $40,000), and has no mortgage – in that sense, she is in a better “cashflow position” than he would be if he was earning $150,000.   

25.In terms of the assessment going forward, both parties suggested a longer, rather than shorter, period would be preferable in order to avoid transactional fatigue with Child Support.   

Consideration

26.The costs of educating the children privately are significant in terms of the overall assessment. That cost, if borne solely by Ms Stebbins, would render the assessment unfair. In the special circumstances of the case, there is a ground to depart from the formula.

Issue 2 – Is it just and equitable to depart from the administrative assessment?

27.The next relevant consideration for the Tribunal is whether a departure from the administrative assessment is just and equitable. This enquiry directs attention to what is fair to the parents and their children. Regard must be had to a variety of factors such as the needs of the children, the parents’ commitments and any hardship that would be caused by departing or not departing from the formula.

28.The Tribunal is obliged to conduct reviews in a way that is informal, quick and proportionate: section 2A of the Administrative Appeals Tribunal Act 1975.

29.I accept Mr Stebbins’ evidence that after he stopped work at the end of 2022, he had a proposal to purchase a business which “fell through” by March 2023. He decided to start his own business, which has been operating since 1 October 2023. I accept Mr Stebbins’ evidence that at this early stage, the business is running at a loss; at best, it may derive a small profit in the current financial year, but only without Mr Stebbins paying himself a wage for 2023/24. I am satisfied that at present, he is supporting himself from savings and by selling shares; he is meeting his child support liability from those reserves.

1. I consider that it was not a “major purpose” of Mr Stebbins’ decision-making to affect the child support assessment. I accept his high-level executive position, and associated travel, was not compatible with his responsibility for shared care of the children. I accept that he anticipated he would earn from the business he was proposing to buy a level of income commensurate with his usual level of earnings. I accept that in the past, he had a couple of unusual years where his income was higher than his usual income.

2. However, here, Mr Stebbins, to his credit, is not shirking his responsibility to support his children. He contends that he ought to be assessed upon a level of income more in the range of $150,000, not $180,000, which he says would be “fairer”.

3. The Child Support hearing papers hold records of Mr Stebbins’ adjusted taxable income from 2020/21. His 2020/21 adjusted taxable income amounted to $256,600. A decision of this Tribunal (differently constituted) dated 18 March 2021 records his 2018/19 adjusted taxable income as $261,178. Mr Stebbins’ adjusted taxable incomes have consistently been in excess of $200,000 per annum.

4. If Mr Stebbins’ adjusted taxable income was varied to $180,000 (from 2 February 2023, when an estimated income took effect), and Ms Stebbins’ income assessed as $23,899, Mr Stebbins’s “base” annual liability (without adjustment for school fees or medical costs) in 2023 would be just over $38,000. Mr Stebbins’s income reflected as $160,000 would reduce that liability by around $4,500.

5. I note that were Ms Stebbins’ income assessed at a hypothetical level of $50,000 (consistent with her recently acquired part-time work), Mr Stebbins’ liability (in 2023, with his income recorded as $180,000) would only reduce by approximately $2,000 per annum.

6. I do not consider Ms Stebbins’ circumstances give rise to an “earnings capacity” assessment. She was working part-time during the marriage; she was working part-time when COVID-19 struck which involved among other things her taking responsibility for home schooling. She resumed part-time work in August 2023; it was not suggested that Ms Stebbins ought to be working more hours than she is currently engaged for. Even if I concluded she ought to be assessed on a notional income of $50,000, for example, the effect on the overall assessment would not be significant in the context of the overall assessment. Consequently, I do not intend to make any adjustment for Ms Stebbins; her adjusted taxable income should fall to be determined under the rolling formula arrangements.

7. Mr Stebbins has been assessed to meet 100% of Ms Stebbins’ “out of pocket” tuition costs in 2023. Both agreed to a change in the figure; I consider it fair that I add a sum of $5,029 for the 2023 calendar year.

8. However, I accept that for the time being, Mr Stebbins is not deriving an income from his new business. He is supporting himself (and meeting his significant ongoing child support liability) from his capital reserves. He has not derived an income since the beginning of 2023. In light of that, I consider it just and equitable that he contribute only 50% of the out of pocket school-related costs for 2024, or a sum of $3,243.

9. I am conscious of limiting the need for the parents to engage with Child Support if that can be avoided. To that end, I consider it appropriate to add a component for school fees for 2025. I will add an “uplift” of 5% to the fees and add an amount of $3,405 to Mr Stebbins’ liability in 2025 for school fees. I consider the risk that that figure will be somewhat inaccurate is outweighed by the benefit of possibly limiting the need for further interaction with Child Support until the end of 2025.

10. I will not disturb the decision so far as it relates to the contribution for [Child 3]’s orthodontic treatment. However, I consider that given Mr Stebbins’ current financial situation is likely to produce no, or a low, income for the foreseeable future, this warrants not making any adjustment for any further and/or future medical related expenses, including a notional contribution towards insurance premiums. Mr Stebbins is drawing on his capital reserves to stay up-to-date with his child support obligations; I also note that I am making no adjustment to Ms Stebbins’ income from August 2023 when she commenced work, instead leaving her income to be reflected under the rolling formula arrangements – this results in a benefit to Ms Stebbins. Ms Stebbins and Mr Stebbins will of course be at liberty outside of child support arrangements to reach their own agreements in respect of medical-related expenses for the children.  

11. Neither party raised any other noteworthy expenses which, in the Tribunal’s assessment, warrant any further adjustment. I am satisfied that Mr Stebbins will be placed to meet his assessed liability. 

12. I consider it just and equitable to make a departure in the same terms set out above.

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

1. The requirement to consider whether a departure would be otherwise proper directs attention to what is fair to the community. It is necessary to consider the effect of any departure from the administrative assessment on entitlements to income-tested pensions, allowances and benefits. Parents rather than the community have the primary duty to maintain a child.

2. The rate of child support should reflect the obligation of both parents to take financial responsibility for the children and, where increased, may decrease any income-tested benefits payable. A departure is therefore proper.

3. As the Tribunal has reached a different conclusion to the objections officer, the decision under review will be set aside.

DECISION

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

(a)from 2 February 2023 to 31 December 2025, Mr Stebbins’ adjusted taxable income is varied to $180,000,

(b)from 1 January 2023 to 30 June 2023, Mr Stebbins’ annual child support liability is increased by $6,438 (a contribution for [Child 3]’s orthodontic treatment),

(c)from 1 January 2023 to 31 December 2023, Mr Stebbins’ annual child support liability is increased by $5,029 (a contribution to school fees),

(d)from 1 January 2024 to 31 December 2024, Mr Stebbins’ annual child support liability is increased by $3,243 (a contribution to school fees),

(e)from 1 January 2025 to 31 December 2025, Mr Stebbins’ annual child support liability is increased by $3,405 (a contribution to school fees).