Swizer and Swizer (Child support)

Swizer and Swizer (Child support) [2018] AATA 3069 (9 July 2018)

DIVISION:Social Services & Child Support Division
REVIEW NUMBER:  2018/PC013408
APPLICANT:  Mr Swizer
OTHER PARTIES:  Child Support Registrar
Ms Swizer

TRIBUNAL:Senior Member R Ellis
DECISION DATE: 9 July 2018
DECISION:

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

· for the period from 1 June 2017 to 31 December 2017 Mr Swizer’ annual child support liability is increased by $4,170; and
· for the period from 1 January 2018 to 31 December 2018 Mr Swizer’ annual child support liability is increased by $4,350.

CATCHWORDS
Child support - Departure determination - Cost of education of the children - Mutual intention exists - Special needs of the children - Ground for departure established - Decision to increase the annual rate in relation to the costs of education and special needs - Decision under review varied

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 Swizer and Ms Swizer are the parents of [Child 1] (born June 2006) and [Child 2] (born December 2010). There has been a child support assessment in place since 15 June 2015 and Mr Swizer is the liable parent under the assessment.
For the period 24 January 2017 to 26 February 2017 Mr Swizer was assessed to pay an annual rate of child support of $8,048 based on his 2015-16 taxable income of $68,242 and a 2016-17 estimated income of $7,149 for Ms Swizer.
For the period 27 February 2017 to 30 June 2017 Mr Swizer was assessed to pay child support at an annual rate of $8,048 based on his 2015-16 taxable income of $68,242 and a 2016-17 estimated income of $23,546 for Ms Swizer.
For the period 1 July 2017 to 31 August 2017 Mr Swizer was assessed to pay an annual rate of child support of $7,106 based on his 2015-16 taxable income of $68,242 and Ms Swizer’s 2015-16 taxable income of $39,166.
For the period 1 September 2017 to 30 November 2018 Mr Swizer was assessed to pay an annual rate of child support of $9,292 based on his 2016-17 taxable income of $81,157 and a 2016-17 provisional income of $39,832 for Ms Swizer.
On 23 February 2017 Ms Swizer applied for a change to the assessment and on 27 October 2017 the Child Support Agency changed the assessment so that Mr Swizer’ annual child support liability was increased by $4,170 from 1 June 2017 to 31 December 2017 and by $4,422 from 1 January 2018 to 31 December 2018 (the original decision).
This was done on the basis that the costs of maintaining the children were significantly affected by their special needs (the ground commonly known Reason 2) and the costs of maintaining the children were significantly affected by the high costs of caring for, educating or training them (the ground commonly known as Reason 3).
On 30 November 2017 Mr Swizer objected to this decision and on 19 January 2018 the Child Support Agency disallowed the objection and there was no change to the assessment.
On 31 January 2018 Mr Swizer applied for a review of the objection decision by the Administrative Appeals Tribunal (the Tribunal).
A telephone directions hearing was held on 19 April 2018. Both Mr Swizer and Ms Swizer 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 (420 pages).
Mr Swizer and Ms Swizer were directed to provide further information to the Tribunal and both complied.
A hearing was held on 26 June 2018. Mr Swizer appeared before the Tribunal and gave evidence under oath while Ms Swizer gave evidence on affirmation by conference telephone. The Tribunal received documents folioed A1 to A45 from Mr Swizer and B1 to B22 from Ms Swizer. Supplementary documents were also received from the Child Support Agency. These were distributed to the parties prior to the hearing.
At hearing the Tribunal agreed to allow Ms Swizer to provide additional evidence in relation to the matter. This evidence was to be provided by close of business on 26 June 2018 and was received by the Tribunal on the stipulated date (B24-B28). A copy was sent to Mr Swizer for comment. Mr Swizer responded on 3 July 2018 (A46-A47).
At the telephone directions hearing and at the commencement of the hearing the Tribunal clarified with Mr Swizer and Ms Swizer the reasons for their applications. Mr Swizer said he had never agreed to private schooling for the children when the family moved to [City 1] and did not sign the enrolment forms. He said he did not dispute the findings of the Child Support Agency in relation to the special needs of the children and confirmed he wanted the Tribunal to focus only on the issue of private schooling. Ms Swizer said she wanted the Tribunal to make a decision based on the facts.

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 Full Court of 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 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’.
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?

In circumstances where multiple grounds for departure are put forward, the Tribunal need only be satisfied that one ground is established before going on to determine whether or not a particular determination is just and equitable and otherwise proper.
A ground for departure exists where, in the special circumstances of the case, the costs of maintaining the child are significantly affected because the child is being cared for, educated or trained in the manner expected by the parents (subparagraph117(2)(b)(ii) of the Act). The most common costs that arise under this reason are private school fees.
The Tribunal finds that at the time Ms Swizer made her application for a departure from the administrative assessment, [Child 1] and [Child 2] were being educated at [School 1] (a private Christian school).
Mr Swizer told the Tribunal he had never agreed to the children attending a private school in [City 1] when the family relocated to [State 1] from [State 2] at the beginning of 2015. He said he did not sign the school enrolment forms, there was no intent on his part that the children be privately educated and he had never made any payments towards the school fees.
Mr Swizer explained that he resigned his employment in [City 2] in February 2015 ahead of moving to [City 1] in March 2015. Ms Swizer and the children were already in [City 1] as he was required to give notice of four weeks. He said as he did not have a job to go to he felt the family could not afford to educate the children at a private school in [State 1].
Mr Swizer said given the uncertainty about his future, he was not comfortable with the children attending a private school but Ms Swizer went ahead anyway and enrolled both children at [School 1] without his agreement.
Ms Swizer said [Child 1] was enrolled at a private school in [State 2] and there had always been agreement that both children would attend a private school when the family relocated to [City 1]. Ms Swizer said both she and Mr Swizer had wanted the children to have a Christian education. She said Mr Swizer had agreed to sign the enrolment forms for [Child 1] and [Child 2] to attend [School 1] in [City 1] but was unable to do so as he was interstate at the time. Ms Swizer said there was never any disagreement about the children attending a private school when the parents were together.
Ms Swizer told the Tribunal she enrolled both children at [School 1] with the support of Mr Swizer. She said [Child 1] started at the beginning of the 2015 school year while [Child 2] started kindergarten in term four of the same year. She said [Child 2] did not start sooner because there was no place available at that time.
Ms Swizer said Mr Swizer had regularly paid half the school fees for both children until the end of term one in 2016. She said details of fee payments made by Mr Swizer to the school appeared on a joint Visa debit card account statement. She said Mr Swizer had also signed the application form for the family rate of payment at [School 1] and she had an email from the school bursar showing he had agreed to pay school fees. She said the only reason Mr Swizer now objected to the children attending [School 1] was because she had applied for the Child Support Agency to start collection of child support payments in mid-2015.
The Tribunal notes in evidence provided by Ms Swizer a copy of an email from the bursar of [School 1] dated 22 October 2015. The email states, ‘Mr Swizer, thanks for letting us know that you wish to pay your fees over the next three months. You can pay direct into our bank account…’. The Tribunal also notes an application for a family rate form (a discount for another child) from [School 1] dated 4 March 2016 which is signed by both parents.
Mr Swizer agreed that he wanted [Child 1] to have a private school education when the family was in [State 2] and he had attended [School 2]. He said circumstances had changed when he moved to [City 1] as he had no money at that time. He said by the time he found work in [City 1] he and Ms Swizer were not communicating so it was not possible for them to discuss [Child 2]’s schooling. He said sending [Child 2] to a private school was also a choice made by Ms Swizer which had nothing to do with him.
In response his signing of the application for a family rate of payment, Mr Swizer said he did this in good faith only because he knew Ms Swizer was dealing with financial difficulties at the time. He said he forwarded the email to Ms Swizer which only confirmed the school was allowing the fees to be paid by her over a three month period.
In relation to the school fees, Mr Swizer said he had never paid any fees for the children and had never received a fee statement from the school. As evidence he drew the attention of the Tribunal to a letter from the school principal dated 2 June 2017. The letter states (unedited):
This letter is to confirm that Mr Swizer’s signature does not appear on the school enrolment forms for his children [Child 1] and [Child 2]. To the best of my knowledge, [School 1], received an application for enrolment for Mr and Mrs Swizer's children, [Child 1] and [Child 2] dated 14/01/2015. In the absence of Mr Swizer away in the eastern states, we agreed that when Mr Swizer arrived in [City 1], he would sign the forms for enrolment. Following Mr Swizer’s arrival in [City 1], the school failed to ask him to sign the forms. Mr Swizer has indicated many times to the staff and myself that he was happy with the school and we had his support in the education of his children.
Mr Swizer said he may have been happy with the school but this was not an indication of intent on his behalf that the children should have a private education.
Mr Swizer said the payments Ms Swizer believed he made for school fees were from a joint account which both parents had access to. He said he and Ms Swizer had separate cards on the joint account and the financial institution had confirmed the payments had not been made using his card. He said the payments had come from Ms Swizer’s card but Ms Swizer denied this and told the Tribunal there was no such debit card number in her name.
The Tribunal discussed with Ms Swizer the costs associated with the children’s education at [School 1]. She said in 2016 tuition fees were $2,320 for [Child 1] and $2,320 for [Child 2] with a $580 family discount for [Child 2]. A school fee statement provided by Ms Swizer confirms the tuition fees in 2017 for [Child 1] were $2,520 ($630 per term) and were $2,520 ($630 per term) for [Child 2]. There was an additional cost of $90 per child for swimming fees. A school fee statement also shows the tuition fees in 2018 for [Child 1] are $675 per term (total $2,700) and the same for [Child 2]. There are additional costs for [Child 1] in 2018 for school camp of $440 and swimming fees of $100.
The Tribunal is of the view that costs for such things as excursions or camps, swimming lessons 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 and so the Tribunal will not consider these further. The Tribunal therefore considers the total education costs for [Child 1] and [Child 2] to be $2,520 each in 2017 and $2,700 each in 2018.
Having carefully examined the evidence provided by both parents and the Child Support Agency, the Tribunal is unable to conclude with any certainty whether or not Mr Swizer has made any payments towards the children’s education at [School 1]. There is also no evidence showing Mr Swizer signed the enrolment forms for either child, although the school states this was the original intent and Mr Swizer was happy with the school. Mr Swizer did sign an application allowing Ms Swizer to receive a discount for [Child 2] in 2016. There is no evidence such a discount, which required an annual application, was granted by the school in the 2017 or 2018 school years.
The term 'manner expected' in relation to the education of a child is not defined in the legislation. In Mee and Ferguson [1986] FamCA 3, the Full Court of the Family Court considering a similar provision in the Family Law Act 1975 said:
‘It refers to the manner in which the child ‘is being’, and which the parties to the marriage ‘expected’ the child to be educated. That provision appears to have direct relevance to the issue of private school education, particularly its reference to the manner in which the parties ‘expected’ the child to be educated. The word ‘expected’ in the past tense presumably relates to some expectation of the parties at a point in time earlier than the hearing.’ (at [37])
Mr Swizer has agreed that it was the intent of both parents prior to separation that [Child 1] have a Christian education at a private school. [Child 1] was enrolled at such a school in [City 2] and so it is not unreasonable to expect that he would attend a similar school when the family moved to [City 1]. Likewise it is not unreasonable to expect that [Child 2] would also receive the same sort of Christian education. While Mr Swizer has told the Tribunal his financial circumstances at the time did not allow for the children to attend a private school in [City 1], he has also said he found work quickly.
The Tribunal is satisfied, based on the evidence provided, there was an expectation both [Child 1] and [Child 2] would receive a private education at a Christian school when the family moved to [City 1]. The cost in respect of the children’s education is $5,400 in 2018 and the Tribunal finds this cost is significant and constitutes special circumstances. This means the ground for departure is established.
The Tribunal notes Mr Swizer submits that he cannot afford to contribute to these education costs. The Tribunal will consider this matter when determining a just and equitable determination.

Issue 2 – Is it just and 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 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: 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)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.

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).
The Tribunal finds there are extra costs to be taken into account in respect of the children’s education.
Ms Swizer told the Tribunal that [Child 1] and [Child 2] also had special needs that incurred additional costs. According to evidence provided by the Child Support Agency [Child 1] has been diagnosed with [Condition 1] and [Child 2] has been diagnosed with [a condition] as well as [a second condition]. [Child 1] is required to participate in swimming and martial arts as a result of his diagnosis. [Child 2] has daily medication as well as [other] necessary procedures as a result of her diagnosis. It was also suggested by a medical professional that [Child 2] take part in strengthening exercise such as gymnastics, ballet and swimming.
In both the original decision and the objection decision the Child Support Agency found that [Child 2] had special needs. The Child Support Agency found an approximate annual cost associated with medical treatments relating to her special needs of $3,300. In relation to [Child 1], the Child Support Agency found that any treatment or therapy associated with his [Condition 1] was met through the school. The Child Support Agency also found that costs associated with activities for [Child 2] like gymnastics and activities for [Child 1] like swimming were similar to those for most children.
Mr Swizer said he did not dispute the findings of the Child Support Agency in relation to the special needs of the children. He wished the Tribunal to note, however, that NDIS funding had recently been approved and the level of this funding would be pursued separately through the appropriate channels.
The Tribunal carefully reviewed the evidence provided by the Child Support Agency in relation to the special needs of both [Child 1] and [Child 2] and has reached the same conclusion.
The Tribunal will consider the cost of meeting these special needs when determining a just and equitable outcome.

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

The Tribunal is satisfied that the children do not have any income, earning capacity, property and financial resources that should be taken into account for child support.

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

Mr Swizer told the Tribunal he was employed as [an occupation] at [a company] and started in this role a few weeks after arriving in [City 1] in March 2015. He said he is currently earning $90,500 per annum which included a car allowance of $15,000.
Mr Swizer provided the Tribunal with a copy of his Australian Taxation Office notice of assessment for the year ended 30 June 2017 showing a taxable income of $76,920. He said the difference between this figure and his current salary was the car allowance. Mr Swizer told the Tribunal he did not expect his salary to change.
The Tribunal finds that for the purposes of child support Mr Swizer earns $90,500 per annum. The Tribunal notes that the administrative assessment in place prior to the change of assessment relied on an income for Mr Swizer of $68,242 (his 2015-16 taxable income).
The Statement of Financial Circumstances provided to the Tribunal by Mr Swizer dated 19 February 2018 shows total average weekly income of $1,740 and total weekly household expenditure of $2,365. Of total weekly household expenditure, $1,159 is personal and $190 for the children. Mr Swizer lives with his current partner and contributes towards the home mortgage. Mr Swizer lists liabilities of $9,254 which includes a credit card debt of $3,651, of which half is his debt. Mr Swizer has superannuation of $200,000 and a motor vehicle valued at approximately $6,000. He has no other assets of significance.
Mr Swizer told the Tribunal the family home was sold in November 2016 with the proceeds of approximately $176,000 currently in a NAB account awaiting property settlement between the parents. He said an investment property had also been sold in 2017 but at a loss of $100,000.
Mr Swizer also wished the Tribunal to be aware he had recently received correspondence from Centrelink advising he had a debt of approximately $13,400. He said this arose because a carer allowance and other payments registered in his name were deposited into a joint account and then accessed by Ms Swizer. Mr Swizer said the money was used by Ms Swizer for the benefit of [Child 2] but he was now being asked to repay these funds. The Tribunal notes that both parents have received legal advice in relation to this matter and while it has yet to be resolved, Ms Swizer has agreed to contact Centrelink to advise that the payments were used for the benefit of [Child 2].
Ms Swizer said she was currently employed [in] [State 1]and was [an occupation]. She started this role in October 2017 and was now earning $103,000 per annum. Ms Swizer provided the Tribunal with three recent payslips [which] confirm her salary details.
Ms Swizer said that around the time of separation she was on long-service leave and receiving half pay only. She then did relief work for a short period before filling in for six months full-time on a maternity leave [position]. This was followed by a further six months working one day a week [as] well as relief work whenever possible. Ms Swizer said she started [on] a contract [in] 23 August 2017 before taking on her current role.
The Tribunal is satisfied that from October 2017 Ms Swizer is earning $103,000 per annum.
The Statement of Financial Circumstances provided by Ms Swizer dated 20 February 2018 shows total average weekly income of $2,244 and total weekly household expenditure of $1,852. Ms Swizer lists her total personal weekly expenditure as approximately $776. Ms Swizer has superannuation of approximately $54,762 in three accounts. Household contents are valued at approximately $15,000 and Ms Swizer said she recently purchased a car valued at $2,500. Ms Swizer states she has an unpaid tax liability of $32,591. Ms Swizer said she was receiving family tax benefits until she commenced full-time work.
The Tribunal is satisfied that the earning capacity criteria (set out in subsection 117(7B) of the Act) are not met in this case.

Any hardship that would be caused

The Tribunal has found that Mr Swizer has an income of $90,500 per annum and Ms Swizer has an income of $103,000 per annum.
Mr Swizer told the Tribunal he led a humble lifestyle but did not state he could not afford to contribute to the children’s private education costs other than immediately after the move to [City 1] when he was not working.
The Tribunal proposes to make a determination in the following terms:
· for the period from 1 June 2017 to 31 December 2017 Mr Swizer’s annual child support liability is increased by $4,170; and
· for the period from 1 January 2018 to 31 December 2018 Mr Swizer’s annual child support liability is increased by $4,350.
In doing so, the Tribunal follows the reasoning of the Child Support Agency officers in both the original and the objection decisions to increase Mr Swizer’s liability by half the costs incurred in respect of [Child 2]’s special needs and half the costs incurred for the children’s private education.
Neither parent raised the issue of backdating the assessment during the hearing process. The Tribunal, like the Child Support Agency, also finds the appropriate start date for the determination should be 1 June 2017 as this date is a reasonable balance between the competing interests of the parents. The Tribunal notes that backdating the decision to an earlier date would create additional arrears for Mr Swizer and potentially impact on his capacity to meet the ongoing child support liability.
The Tribunal is conscious its decision will require a further change of assessment application at the end of 2018, however, in light of the costs associated with [Child 2]’s special needs and the uncertainty over NDIS funding the Tribunal considers this appropriate.
The Tribunal is satisfied that the proposed determination will not cause hardship to Mr Swizer, Ms Swizer or the children and is just and equitable.

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

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.
The Tribunal finds that Ms Swizer is no longer in receipt of family assistance in respect of the children. The Tribunal is satisfied that its determination would be otherwise proper.

DECISION

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

for the period from 1 June 2017 to 31 December 2017 Mr Swizer’s annual child support liability is increased by $4,170; and
for the period from 1 January 2018 to 31 December 2018 Mr Swizer’s annual child support liability is increased by $4,350.

[2018] AATA 3069

9 July 2018

Key Legal Topics

Areas of Law

Family Law

Legal Concepts

Costs

Intention

Remedies