Swift and Swift (Child support)

Case •

[2017] AATA 2908

•

22 August 2017

Swift and Swift (Child support) [2017] AATA 2908 (22 August 2017)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2017/SC011224

APPLICANT:  Mr Swift

OTHER PARTIES:  Child Support Registrar

Ms Swift

TRIBUNAL:Member M Douglas

DECISION DATE:  22 August 2017

DECISION:

The Tribunal sets aside the decision under review and:

  • varies the adjusted taxable income for Mr Swift to $46,500 for the period 1 March 2016 to 31 December 2016 and to $11,096 for the period 1 January 2017 to 7 August 2017;

  • varies the cost of the children such that for the period 24 March 2016 to 7 August 2017 it is worked out in accordance with section 55G of the Child Support (Assessment) Act 1989.

CATCHWORDS
Departure determination – Special talent of the child – Income and financial resources of parents – Earning capacity – Costs of the child – 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

The parties

  1. The parties to this proceeding are Mr Swift, Ms Swift and the Child Support Registrar.  Mr Swift and Ms Swift are the parents of [Child 1], in regards to whom the Registrar has made an administrative assessment of child support.  Mr Swift is assessed as liable to pay child support to Ms Swift for [Child 1] under the child support assessment.

  2. The Registrar acts through the Department of Human Services (the Department), and hereafter the Tribunal's reference to the Department is to be taken as a reference to the Registrar.      

The decision being reviewed

  1. On 31 August 2016, Mr Swift applied to the Child Support Registrar under section 98B of the Child Support (Assessment) Act1989 (the Act) for a departure from the administrative assessment.  The Department describes an application of the type Mr Swift made as a "change of assessment" application and the decision it makes on such an application as a "change of assessment" decision, and to avoid confusion the Tribunal shall adopt the same terminology.

  2. In support of his change of assessment application of 31 August 2016, Mr Swift relied on the grounds provided in subparagraphs 117(2)(b)(ii) and 117(2)(c)(ia) of the Act.  Ms Swift opposed Mr Swift's application and, indeed, made her own change of assessment application on 31 October 2016.  In support of her application, she relied on the ground provided in subparagraph 117(2)(b)(ia).  

  3. On 21 November 2016, the Department decided "it would not be just and equitable to change the assessment in either Mr Swift's application or the cross application by Ms Swift.   Mr Swift objected to that decision on 13 December 2016.  On 13 February 2017, the Department disallowed his objection.  Mr Swift then applied to the Tribunal on 21 February 2017 for a review of the objection decision.

The assessments the subject of the decision being reviewed

  1. Mr Swift specified in his change of assessment application that he sought the assessment of child support be departed from for the period 1 February 2015 to 31 August 2016.  The Tribunal observes that, by force of subsection 98S(3B) of the Act, the Department only had power to determine that there be a departure from the assessment for the period after 28 February 2015.  The Tribunal, standing in the place of the Department, is also so constrained by subsection 98S(3B). 

  2. The assessment of child support that was in force as at that date and those that have issued after, have required Mr Swift to pay child support for [Child 1] at the following annual rates:

Period

Annual rate

28 February 2015-7March 2015

$21,603

8 March 2015-31 August 2015

$26,914

1 September 2015-19 January 2016

$25,590

20 September 2016

$561,953

21 September 2016-23 March 2016

$25,590

24 March 2016-30 September 2016

$29,983

1 October 2016-19 January 2017

$29,871

20 January 2017

$566,234

21 January 2017-30 January 2017

$29,871

31 January 2017-7 August 2017

$29,710

8 August 2017 -31 December 2017

$1,373

  1. For all periods set out in [7], other than 8 August 2017 to 31 December 2017, Mr Swift's adjusted taxable income was $274,768.  That is the amount the Department determined his adjusted taxable income to be in a change of assessment decision the Department made on 25 June 2015 in response to an earlier change of assessment application Ms Swift had made.  In a subsequent change of assessment decision on 14 April 2016, which was made in response to applications of both Mr Swift and Ms Swift, the Department found that Mr Swift either had the capacity to earn that income or was earning that income.  Those findings were affirmed by the Department in a decision it made on 26 May 2016 in response to an objection Mr Swift lodged to the Department's decision of 14 April 2016.

  2. Mr Swift's adjusted taxable income for the period 8 August 2017 to 31 December 2017 is $11,096 which is his taxable income for the 2015/16 financial year.  That financial year is the last relevant year of income relating to the child support period that commenced on 1 October 2016. 

  3. Ms Swift's adjusted taxable income is $23,369 for the period to 31 August 2015; $36,617 for the period 1 September 2015 to 30 September 2016; and $39,102 thereafter.  These amounts reflect her taxable incomes from the respective last relevant years of income.  The changes in her adjusted taxable income explain the variations in the annual rates of child support payable by Mr Swift, as set out in paragraph 7, that occurred on 1 September 2015 and 1 October 2015.

  4. The variation in the annual rate of child support payable by Mr Swift [in] March 2015 is due to [Child 1] attaining 13 years of age on that date, and hence the cost of [Child 1] for the purpose of the assessment increased in accordance with the Table in schedule 1 of the Act that is applied under section 55G of the Act.

  5. The variation in the annual rate of child support payable by Mr Swift on 24 March 2016 is due to the change of assessment decision the Department made on 14 April 2016 in which the Department determined that "for the period 24 March 2016 to 7 August 2017, the cost of children value is increased by $4,620".  

  6. The variation in the annual rate of child support payable by Mr Swift on 31 January 2017 is due to Mr Swift notifying the Department on that date that he has a dependent child born [in] September 2016 from his present marriage for whom he is a full time carer.

  7. The spike in the annual rate of child support payable by Mr Swift on 20 January 2016 and again 20 January 2017 is due to the Department giving effect, in accordance with section 119 of the Act, to an order Scarlett J of the Federal Circuit Court of Australia made 13 November 2014 with the consent of the parties that reads:

    15.3 That as and by way of departure from the administrative assessment of child support for [Child 1].... [Mr Swift] shall pay to [Ms Swift]...on 20 January each calendar year while the child attends [Private School 1], the additional sum of $1,500, with such sum not to be credited against [Mr Swift's] liability to pay periodic child support pursuant to Order 15.1 above.

  8. Order 15.1 of the order Scarlett J made provides essentially for Mr Swift to pay periodic child support in accordance with the assessments that the Department issues. 

  9. It is appropriate for the Tribunal to observe too, at this juncture, that there is a further order Scarlett J made with the consent of the parties relating to Mr Swift providing financial support for [Child 1], that is relevant to the Tribunal's review, and that is order 15.2 which requires Mr Swift to pay all the compulsory school fees and tuition costs for [Child 1] to attend [Private School 1].

The hearing and the evidence

  1. The Tribunal heard Mr Swift's application on 8 August 2017. Both parties participated in the hearing by telephone and gave oral evidence. Both also provided documents to the Tribunal which have been received into evidence. Mr Swift's documents are marked A1-217 and Ms Swift's documents B1-29. The Tribunal has also received into evidence documents the Department provided in accordance with subsection 37(1) of the Administrative Appeals Tribunal Act 1975, which are paginated 1-560. 

  2. The Tribunal has had regard to this evidence.

  3. The Tribunal notes that some of Mr Swift's documents that are evidence were not filed by him until the day preceding the hearing.  That caused delay in the Tribunal making its decision as it was necessary for a copy of those particular documents to be sent to Ms Swift.

RELEVANT LAW AND ISSUES

  1. Part 5 of the Act contains the provisions by which the Department assesses the annual rate at which a liable parent is to pay child support to the carer entitled to child support. A liable parent or the carer entitled to child support may, if they believe there are special circumstances, apply to the Department under section 98B of the Act for a determination to depart from the provisions relating to the assessment of child support. The Department, or the Tribunal in the Department's place, if satisfied that the criteria of subsection 98C(1) are met, can make one or more of the determinations listed in subsection 98S(1) so as to depart from the provision of the Act relating to an administrative assessment of child support. The criteria specified in subsection 98C(1) are:

    i. that one, or more than one, of the grounds for departure referred to in subsection 117(2) exists; and

    ii. that it would be:

    a. just and equitable as regards the child, the liable parent, and the carer entitled to child support; and

    b. otherwise proper;

    to make a determination [under subsection 98S(1)].

  2. In reviewing the Department's decision, the Tribunal must consider whether these criteria are met in this case, and if they are, the Tribunal must then consider what determination or determinations should be made under subsection 98S(1).

CONSIDERATION

Is there a ground to change the assessment?

  1. The first step is to decide if there is a ground for departing from the assessment.  As earlier mentioned, Mr Swift in the application he made to the Department under subsection 98B(1), relied on the grounds provided in subparagraphs 117(2)(b)(ii) and 117(2)(c)(ia) of the Act, and Ms Swift relied in her application on the ground provided in subparagraph 117(2)(b)(ia). 

  2. Those provisions of the Act read as follows:

    117(2)(b) that in the special circumstances of the case the costs of maintaining the child are significantly affected:

    .....

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

    .....

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

    117(2)(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.

Subparagraphs 117(2)(b)(ia) and (ii)

  1. The evidence clearly establishes that both these grounds exist and neither Mr Swift nor Ms Swift cavil with this. 

  2. The term "special needs" is not defined in the Act.  In Lightfoot and Hampson (1996) FLC 92-663 the Full Court of the Family Court stated that the phrase “special needs of the child”:

    encompasses a wide range of needs of a child which are seen as special in the sense of necessary or at least desirable for that child’s welfare but outside the “normal” needs of a child which could be catered within the formula.

  3. In Blamey and Blamey (1995) FLC 92-554 Kay J held that special needs may arise from the ability of a child, and are not limited to physical disability.

  4. [Child 1] is a gifted [athlete].  She competes in both national competitions and, as a representative of Australia, in international competitions.  The evidence of Ms Swift, which Mr Swift did not challenge or in any way contradict, and which the Tribunal accepts, was to the effect that the costs involved in ensuring [Child 1] is properly equipped, can train as [an athlete] and participate in national and international competitions are in excess of $14,000 a year. 

  5. The Tribunal is satisfied that [Child 1] has a special need.  This arises due to her particular skill as [an athlete].  The Tribunal is satisfied that because of [Child 1]'s particular skill, it is desirable for [Child 1]'s welfare that she be equipped for and trained in the sport so that she can compete at an elite level.  This, in the Tribunal's view, is something beyond what is normal in a child's upbringing, in terms of a child's participation in various sports and pastimes. The cost involved in [Child 1] participating in this sport, that is the cost arising from her special need, significantly increases the cost of maintaining her.

  6. It is implicit from Mr Swift and Ms Swift consenting to order 15.2 Scarlett J made on 13 that they both expect [Child 1] to complete her secondary education at [Private School 1].   The fees and tuition costs for her to attend that school amounted to $22,144.75 for the 2015 year, increasing to $23,717.75 for the 2016 year and to $24,627 in the current year (see A153, A173 and A195).  Given that, the costs of maintaining [Child 1] are significantly increased because of the way both Mr Swift and Ms Swift expect her to be educated.

  7. The Tribunal is of the view that the fact that [Child 1] has a particular skill as [an athlete] is a special circumstance, as is too the fact that she attends a private school.

Subparagraph 117(2)(c)(ia)

  1. Mr Swift's case, based on this ground, is in substance that since 29 February 2016, when he terminated his employment with   [Company 1] as [professional], his annual income has been far less than the amount of $274,768 that the Department determined his adjusted taxable income to be for the period 8 February 2015 to 7 August 2017 by way of its change of assessment decision of 25 June 2015.  In response, Ms Swift contends essentially, that since leaving his employment with [Company 1] Mr Swift either has worked and received income of the order of that which the Department determined for his adjusted taxable income or he has had the capacity to earn that income.

  2. Mr Swift had been employed with [Company 1] since 22 September 2011.  He notified [Company 1] by email of 19 January 2016 of his intention to terminate his employment on 29 February 2016.  In his email he specified his reasons for terminating his employment were to "focus on family and health" and also to look for "greater personal and work challenges" (A57). 

  3. His evidence to the Tribunal was that his employment with [Company 1] required him to have the responsibility for the clients and projects of his employer within 18 countries in the Asia Pacific region.  He was based in [Country 1], where he lived, but he was required to travel constantly, spending 25 days a month away from his home in [Country 1].  This necessitated his sleeping often in aircrafts or at airports.  He believed the lifestyle associated with his employment had a deleterious impact on his health causing him fatigue, hypertension, increased cholesterol levels, weight gain and irregular sleep.  He said he was consulting a doctor about these matters.  He said his doctor did not advise him that his health was such that it was necessary for him to cease his work, but his doctor did advise him to consider changing his lifestyle. 

  4. Mr Swift said that many of the major contracts with which he was involved in his employment with [Company 1], had "wrapped up" by January 2016 and that he had initially been told, around mid 2015, that he may be required to change his base from [Country 1] to the [Country 2] in order to be able to continue his employment with [Company 1]. He said there were ongoing discussions after that regarding the possibility of his relocating away from [Country 1] at some stage in 2016.  He said these discussions occurred orally and were not done by way of exchange of correspondence. 

  5. Mr Swift married his present wife, who is a [Country 1] citizen, in late 2014.  Mr Swift said that by January 2016 they were planning to start a family, and indeed his wife gave birth to their son [in] September 2016.  He said that the potential for his having to relocate his home base away from [Country 1], at a time that was likely to coincide with he and his wife starting a family, was a factor that motivated his decision to leave his employment.  He also said that his wife was also encouraging him to leave his employment because she too perceived it was having a deleterious impact on his health.

  6. Mr Swift's evidence is that after leaving his employment with [Company 1], he did not obtain further work until May 2016, when he was contracted by  [Company 2] to provide consultancy services with respect to a project in which [Company 2] was engaged with[Company 3].  There is in evidence a copy of a "Master Consultancy Agreement" made on 30 May 2016 that Mr Swift and a senior director of [Company 2] signed and which provides at clause 8.1 for [Company 2] to pay Mr Swift fees of 110,000,000[Country 1 currency] "in accordance with and subject to the terms and conditions set forth in the relevant twelve (12) month Work Statement on completion of such work".  Clause 2.1 of the agreement provides for [Company 2] to order Mr Swift's services from time to time by entering into a "Work Statement" which was defined to be a statement of work from [Company 2] that is accepted by Mr Swift.  Mr Swift said that he drafted this agreement based on a template that his former employer [Company 1] had used to contract its consultants.

  7. Mr Swift said that no work statement was ever issued by [Company 2] to him.  He said it eventuated that he did not do much work for [Company 2] because of "something" that had occurred between [Company 2] and [Company 3].  He said that [Company 2] informed him around September or October 2016 that it no longer required his services and he did not work for this company after that.  He said that his earnings from [Company 2] were well less than 110,000,000[Country 1 currency]. 

  8. Mr Swift holds an account with [Bank 1], a [Country 1] Bank.  The statements this bank issued Mr Swift relating to Mr Swift's account for the period 14 January 2015 to 17 April 2017 are in evidence (A144-150).  They reveal that [Company 2] made deposits into Mr Swift's account on 4 occasions being 16 July, 16 August, 17 September and 28 December 2016, totalling 26,976,311[Country 1 currency].  Based on the exchange rates between the [Country 1 currency] and Australian dollars applicable on the dates on which [Company 2] deposited these amounts into Mr Swift's account, as published by the Reserve Bank of Australia at the Tribunal calculates that the total payments [Company 2] made to Mr Swift convert to AUD$30,611.08.

  9. Mr Swift's bank statements also reveal that [Company 1] deposited 6,823,516 [Country 1 currency] into his account on 18 March 2016, which is the equivalent of AUD$7,684.40.

  10. Mr Swift said the only work from which he has received income since terminating his employment with [Company 1] was the work he did for [Company 2] between May and September or October 2016.  His statements from [Bank 1] support this in that they reveal the only deposits made into his account subsequent to the termination of his employment from [Company 1] are those described in paragraph 38 and very modest deposits of no more than 8417[Country 1 currency], which converts to approximately AUD$10.00.  Copies of Mr Swift's statements his Australian Bank [issued] him for the period 1 January 2015 to 30 June 2017 for an account he holds with it are also in evidence, and they reveal no deposits from any employer into this account. 

  1. Ms Swift disputed that Mr Swift's only remunerative work since terminating his employment with [Company 1] has been with [Company 2].  She referred to Mr Swift having represented himself on his LinkedIn profile and in [a] Magazine as being an employee of [Company 4] and to his having attended networking events in [Country 3] in June 2016, in [Country 1] in October 2016 and in [Country 4] in February 2017.  In response to that, Mr Swift did not dispute that he had done these things, but said, with respect to [Company 4], that he had only ever acted in the capacity as a liaison for [Company 4] so as to introduce its chief executive officer to the [Country 1] Business Leaders Alliance.  With respect to attending networking events, his evidence was to the effect that he does this so as to continue to maintain a profile within his industry and so as to be introduced to companies or their personnel who operate within his industry.

  2. As indicated earlier, Mr Swift's bank statements confirm his evidence that since terminating his employment with [Company 1] he has not received any remuneration other than from [Company 2].  The Tribunal accepts his evidence that the only work from which he has received income since terminating his employment with [Company 1] was the work he did for [Company 2].  Since his work with [Company 2] came to an end, he has been without remunerative work, although his final payment for the work he did for [Company 2] was received by him on 28 December 2016.

  3. The Tribunal finds that Mr Swift's income in the period 1 March 2016 to 31 December 2016 was $38,295.48, which comprises the payment he received from [Company 1] on 18 March 2016 and the payments he received from [Company 2].  This figure, when annualised, converts to $46,500 when rounded to the nearest $500.  That is far less than his adjusted taxable income, but in terms of determining whether that discrepancy results in an unjust and inequitable determination of the level of financial support to be provided by Mr Swift for [Child 1] it is also appropriate for the Tribunal to consider what income Mr Swift has had the capacity to earn, given that the Department held in its change of assessment decision of 14 April 2016 and its objection decision of 26 May 2016 that Mr Swift had the capacity to earn $274,768 a year.

  4. By virtue of subsection 117(7B) of the Act, the Tribunal can only find that Mr Swift has a capacity to earn more than his actual income if it is satisfied that:

    (a) one or more of the following applies: 

    (i) [he] does not work despite ample opportunity to do so; or

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

    (iii) [he] has changed his occupation, industry or working pattern;

    and

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

    (i) [his] caring responsibilities; or

(ii) [his] state of health;

and

(c) [he] has not demonstrated that it was not a major purpose of that decision to affect the administrative assessment of child support in relation to [[Child 1]].

  1. The Tribunal is satisfied that the criteria set out in (a) and (b) are established in this case, but not that in (c), and hence, since all three criteria are not satisfied, the Tribunal cannot find that Mr Swift has had the capacity to earn income above what he actually has earned. 

  2. With respect to the first two criteria, the Tribunal observes, briefly, that the evidence establishes Mr Swift terminated his employment with [Company 1].  He therefore reduced the hours he was working below that which was normal for his occupation.  At the time he did so, he had no responsibility to care for another person.  Whilst at the time he did so, he was concerned about the effect his work was having on his health, he did not provide the Tribunal with any clinical evidence to substantiate that it was necessary or even appropriate for his health that he leave his employment with [Company 1].  Essentially, Mr Swift believed it was, but he has no clinical expertise, and absent persuasive evidence from a clinician on the issue, the Tribunal cannot be satisfied, based only on Mr Swift's belief, that his decision to leave his employment with [Company 1] was justified by his state of health.

  3. The Tribunal considers however that Mr Swift has demonstrated that his major purpose in leaving his employment with [Company 1] was not to affect the child support assessment for [Child 1].  The Tribunal accepts his evidence that he and his wife were planning to start a family, and the Tribunal is satisfied that his employment with [Company 1], which required him to be away from his home for 25 days a month and where potentially he faced the prospect of having to relocate from [Country 1] to the [Country 2], were not propitious for his and his wife to start a family. 

  4. The Tribunal also observes that the evidence establishes that Mr Swift sought remunerative work subsequent to terminating his employment with [Company 1], and indeed, he worked for [Company 2] between May and September or October 2016. His evidence was that he has actively been seeking employment but he will only accept a job if it will allow him to be home with his family each evening.  The evidence establishes he made an enquiry for a job around October 2016 through an employment agency [which] yielded a potential job with [a Country 5] Government agency that would be based in [Country 3] (A98-101).  Mr Swift's evidence was that because this position was based in [Country 3], he was not interested in it.    He was also approached by another employment agency [regarding] a major [position] with a leading [company] (A106).  He told [the second employment agency] that he was looking for a more senior position and that his base salary would have to be $200,000 plus bonus and incentives.  His evidence to the Tribunal was that the position was based in [another country], and because of that he was not interested in it. 

  5. Mr Swift also told the Tribunal that his visa to work in [Country 1] expired in November 2016.  He said that for him now to obtain work in [Country 1] he either has to return to Australia and apply from there to the [Country 1] Government for a visa or he has to obtain work with company whose headquarters are based outside of [Country 1] but who would offer him a position based in [Country 1] and sponsor him with respect to that position.  In terms of the former, Mr Swift said that the Department has now made an order prohibiting his departure from Australia.  He said his child support debt for [Child 1] is presently in excess of $46,000.00.  The Tribunal observes that as at 28 February 2017 it was $26,156.46 (pages 556 and 560 of the Department's papers).  He said that given the size of his debt, he does not have the means to discharge it, and were he to return to Australia so as to obtain a visa to work in [Country 1], he would effectively be prevented from returning to his family in [Country 1].  He is thereby hampered in his ability currently to obtain employment and income.

  6. In short, the Tribunal is persuaded by Mr Swift's evidence that the purpose behind his decision to cease his employment with [Company 1] was to change his lifestyle so as to facilitate him and his wife starting a family and it was not a purpose of his decision, let alone a major purpose, to manipulate the child support he is required to pay for [Child 1].  The Tribunal is persuaded by his evidence that, in terms of the efforts he has made since terminating his employment with [Company 1], he has not been motivated to manipulate his child support obligation for [Child 1], but rather his efforts have been guided to preserve his having a family life in [Country 1].

  7. The discrepancy over the period 1 March 2016 to 7 August 2017 between Mr Swift's income and his adjusted taxable income is such that, in the Tribunal's view, it resulted in an unjust and inequitable determination of the level of financial support to be provided by him for [Child 1], and hence the Tribunal is satisfied that the ground for departure provided in subparagraph 117(2)(c)(ia) of the Act exists.

Would it be just and equitable to make a determination?

  1. The next step is to consider whether it is just and equitable to make a particular determination under subsection 98S(1).  The matters the Tribunal must consider when doing this are listed in subsection 117(4) of the Act. Rather than dealing with each matter separately, it is convenient for the Tribunal to group the matters and consider them by reference to the following headings.

Mr Swift's circumstances

  1. Mr Swift is presently unemployed, and has been so since his work with [Company 2] finished.  He has no assets of any worth.  He has accumulated superannuation of $163,484, but is unable to draw upon this to defray any expenditure.  He has a debt to his father of $10,000, but he is not at present making any payments to reduce this.  He has all the normal living expenses, and his evidence was that his wife and her family meet these for him.  His wife has been working full time since May 2107, after taking a period of maternity leave following the birth of their son in September 2016. 

  2. The Tribunal has regard to the fact that Mr Swift paid the school fees for [Child 1] for the 2015, 2016 and 2017 years, which were respectively $22,144.75, $23,717.75 and $24,627. 

  3. Mr Swift's duty to support [Child 1] has priority over all his commitments other than those necessary for his self support and the support of his son born from his present marriage.  It seems to the Tribunal that the child support assessment for the period 1 March 2016 to 7 August 2017, calculated as it is on an adjusted taxable income far in excess of what Mr Swift actually earned, has resulted in an obligation on Mr Swift that, if fully discharged, would require him to apply his income in priority to [Child 1]'s needs over Mr Swift's necessary commitments for self support and the support of his son.

  4. The Tribunal is of the view, based on the circumstances set out, that were there not to be a departure from the provisions of the Act relating the assessment of child support for [Child 1] for the period 1 March 2016 to 7 August 2017, so as to reduce Mr Swift's child support liability, undue hardship would be caused to Mr Swift and his son.

Ms Swift's circumstances

  1. Ms Swift is in full-time employment.  Indeed, her evidence, which the Tribunal accepts, was that she works up to 50 hours a week so as to be able to provide for herself and [Child 1], including the costs of [Child 1] participating at an elite level in her [sport].  Her annual salary before tax is $60,320.  She also receives family tax benefits.

  2. Ms Swift’s assets consist of a motor vehicle of modest value, household assets of modest value, a credit balance in her bank account of $10,000 and her home of which she estimates the value to be $450,000.  She has liabilities of the order of $165,000.  She has accumulated superannuation of $189,357.17, but she is unable to draw on this so as to meet [Child 1]'s needs. 

  3. Ms Swift's evidence, which the Tribunal accepts, was that to make ends meet, including the payment of the costs associated with [Child 1]'s [sporting activities], she has had to draw on money she received from her property settlement with Mr Swift. 

  4. Other than [Child 1], there is no other person whom Ms Swift has a duty to support.  She does not have a resident child. 

  5. Any reduction in the child support she is entitled to receive from Mr Swift for [Child 1] will cause her hardship.

[Child 1]

  1. [Child 1] has casual employment, [earning] modest income and which Ms Swift said she uses to meet some of the costs associated with her participation in [her sport]. 

  2. [Child 1] has all the usual needs of a child her age.  The cost of [Child 1]'s care is increased as a consequence of her attending [Private School 1] and as a consequence of her participation at an elite level in her [sport].   Mr Swift alone pays the fees for [Child 1] to attend her current school.  Ms Swift meets the costs associated with [Child 1]'s sport with some modest assistance from the modest income [Child 1] receives from her casual employment.

  3. The level at which and the manner in which Ms Swift is able to provide for [Child 1] is dependent on the level of child support she receives from Mr Swift.  Hence, any determination made to depart from the provisions of the Act relating to the assessment of child support for [Child 1], so as to decrease the annual rate at which Mr Swift has been obligated to pay child support to Ms Swift for [Child 1], would result in hardship to [Child 1], given Ms Swift would have less funds to meet the costs associated with [Child 1]'s needs. 

Conclusion

  1. The Tribunal is of the view that the balance of hardship is such that it would be just and equitable to make a determination to depart from the provisions of the Act relating to the assessment of child support that would have the effect of reducing the rate at which Mr Swift is required to pay Ms Swift child support for [Child 1].  The particular determinations under subsection 98S(1) the Tribunal will make will be discussed further below.

Would it be otherwise proper to change the assessment?

  1. The final step is to decide whether it is otherwise proper to depart from the administrative assessment. In doing this the Tribunal must have regard to the fact that the primary obligation to support [Child 1] rests with Mr Swift and Ms Swift and also have regard to whether, and if so how, any determination it makes would effect the entitlement of either [Child 1] or Ms Swift to an income tested pension, allowance or benefit. 

  2. The Tribunal understands that [Child 1] does not now receive an income tested pension, allowance or benefit and  that irrespective of whatever determination the Tribunal makes, [Child 1] will not become entitled to an income tested pension, allowance or benefit. 

  3. Ms Swift receives family tax benefits.  The Tribunal understands that were it to make a determination retrospectively departing from the provision of the Act relating to the assessment of child support, such that Mr Swift's liability for the period 1 March 2016 to 7 August 2017 is reduced, then there may be an increase in the family tax benefits Ms Swift was entitled to receive.  Given the circumstances outlined, the Tribunal considers that would be a proper outcome so long as the reduction in Mr Swift's child support obligation is only to a level that accords with his primary obligation to support of [Child 1]. 

What would be a just and equitable and otherwise proper determination to make?

  1. In the circumstances, the Tribunal considers that it would be just, equitable and otherwise proper to make determinations

    ·    varying Mr Swift's adjusted taxable income to $46,500 for the period 1 March 2016 to 31 December 2016 and to $11,096 for the period 1 January 2017 to 7 August 2017; and

    · varying the "costs of the children" for [Child 1] such that it is worked in accordance with section 55G of the Act for the period 24 March 2016 to 7 August 2017.

  2. These determinations mean that Mr Swift’s child support liability will be assessed in accordance with his actual income and that he makes no additional contribution to the costs associated with [Child 1]'s participation in [her sport].  In terms of the latter, having regard to the fact that Mr Swift alone meets the additional costs associated with [Child 1]'s attendance at a private school, and to the fact that this particular contribution to [Child 1]'s needs causes him hardship, it would not be just and equitable as regards him and his son from his present marriage to require him to contribute to the further particular expense associated with [Child 1]'s care arising from her participating at an elite level in her sport. 

DECISION

The Tribunal sets aside the decision under review and:

  • varies the adjusted taxable income for Mr Swift to $46,500 for the period 1 March 2016 to 31 December 2016 and to $11,096 for the period 1 January 2017 to 7 August 2017;

  • varies the cost of the children such that for the period 24 March 2016 to 7 August 2017 it is worked out in accordance with section 55G of the Child Support (Assessment) Act 1989.

Key Legal Topics

Areas of Law

  • Family Law

  • Administrative Law

Legal Concepts

  • Judicial Review

  • Jurisdiction

  • Statutory Construction

  • Remedies

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