Talfourd and Blanton (Child support)

Talfourd and Blanton (Child support) [2022] AATA 1560 (11 April 2022)

DIVISION:Social Services & Child Support Division
REVIEW NUMBER: 2021/AC022951
APPLICANT: Ms Talfourd ([Alias 1])

OTHER PARTIES: Mr Blanton

Child Support Registrar

TRIBUNAL: Member S Cullimore

DECISION DATE: 11 April 2022

DECISION:

The decision under review is set aside and the Tribunal substitutes a new decision that:

·     for the period from 17 March 2021 to 6 May 2022 the adjusted taxable income of Mr Blanton is fixed at $148,000;
·     for the period from 17 March 2021 to 30 June 2021 the adjusted taxable income of Ms Talfourd is fixed at $57,399;
·     for the period from 1 July 2021 to 6 May 2022 the adjusted taxable income of Ms Talfourd is fixed at $50,000;
·     the delegate decision of 30 July 2020, is varied, so that the reduction is now $125pcm for the period 17 March 2021 to 6 May 2022; and
·     the matter reverts to the normal administrative assessment from 7 May 2022.

CATCHWORDS

CHILD SUPPORT – departure determination – income, property and financial resources of the liable parent – a 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

The following background matters are drawn from the files of the Child Support Agency (“the CSA”) and are not in dispute. The Tribunal finds each matter as a fact.
The case in which Mr Blanton is payer was registered on 2 August 2019 and has been Registrar Collect since that date.[1]
[1] C409
The case in which Ms Talfourd is payer was registered on 17 March 2021 and has been Registrar Collect since that date.[2]
[2] C409
The parents have two children now aged 10 and 8.
There have been two previous change of assessment (“COA”) matters.
In this matter, Ms Talfourd lodged an application for a COA on 17 June 2021 based on Reasons 8A and 8B.[3]
[3] C169
On 24 August 2021 a delegate of the CSA made a departure determination (i) ending the previous COA decision of 31 July 2020 (see below) at 17 March 2021; (ii) that neither parent has any child support liability to the other for the period 17 March 2021 to 30 June 2023.[4]
[4] C248
On 17 September 2021 Mr Blanton objected to that departure determination.[5]
[5] C274
On 18 November 2021 an objections officer “allowed in part” his objection and made a different departure determination (i) also ending the previous COA decision of 31 July 2020 at 17 March 2021; but (ii) fixing the adjusted taxable income (“ATI”) of Mr Blanton at $122,621 from 17 March 2021 to 16 March 2022.
The resulting annual rate of child support payable by Mr Blanton was initially $8,102pa and, after 1 September 2021, it was $7,184pa.[6]
[6] C32 onwards
On 16 December 2021 Ms Talfourd applied for further review by this Tribunal of the objection decision.
On March 2022 she lodged a new COA application based on Reason 8B.[7]
[7] C479

DOCUMENTARY EVIDENCE AND HEARING

The Tribunal had before it the original bundle of documents provided by the CSA. These documents are referred to as C1 to C427.
Supplementary documents were C428 onwards.
Directions were made by the Tribunal for production of further documents by the parents.
Documents received from Ms Talfourd were marked A1 to A19 and documents received from Mr Blanton were marked B1 to B82.
The hearing was on 11 April 2022 by teleconference. Both parents gave evidence.

CONSIDERATION

The relevant law

Child support is usually based upon “administrative assessments”. These normally use the ATIs of the parents for the financial year ending before the start of the relevant child support period.
In some circumstances the CSA will use an estimate of a parent’s current income.
Part 6A of the Child Support (Assessment) Act 1989 (“the Act”) sets out certain circumstances in which the Registrar, on application by a parent, may depart from or “change” the administrative assessment, or in other words, change in some way the manner of working out the child support liability of the payer.
The central issues for a decision maker to determine in any COA matter mirror the three steps in the process which are set out in section 98B of the Act.
They are:
(i) whether one, or more of the grounds for departure referred to in subsection 117(2) of the Assessment Act exists; and if so
(ii) whether 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 particular determination to depart from the administrative assessment of child support.
Where a COA decision is already in place a parent can apply for a further change to the assessment.
Under subsection 117(2) of the Act, a decision maker is required to consider whether, “in the special circumstances of the case”, the normal administrative assessment of child support is unjust or inequitable because of various factual scenarios (the so-called “grounds for departure”).
These factual matters (grounds) cover such matters as “the income, property and financial resources of either parent” (this is called “Reason 8A”: see below).
The “special circumstances” which must be present in the case of each Reason must tend to justify or support a departure determination being made. Those circumstances must also be separate and discrete matters from the factual matters which make up the “grounds” for departure. Decision makers often confuse this issue by stating that the grounds themselves constitute the special circumstances. The Tribunal considers that that approach does not reflect the law, or pronouncements by courts having supervisory jurisdiction in this area.
For the second step, subsections 117(4) to (9) (inclusive) of the Act then require the decision maker to consider the “just and equitable factors” before making a particular departure determination.
These factors include the income, property and financial resources of each parent; the earning capacity of the parents; the costs of providing care to the children; the necessary living expenses of the parents; and any hardship that would be caused to either parent or the children by the making of any particular COA decision.
If satisfied that it is appropriate to do so, the Registrar may then make any of the forms of departure determination allowed by section 98S of the Act.
These include but are not limited to fixing a parent’s ATI at a figure in excess of that used in an administrative assessment, as has happened to date in this matter, or fixing an annual rate of child support.

The relevant “administrative assessments” in this case

The “administrative assessment” from 17 December 2019 onwards was the first COA matter, namely the delegate decision of 4 December 2019.[8]
[8] C55
That decision fixed the ATI of Mr Blanton at $142,000 for the period 2 August 2019 (start of the case) to 1 November 2020. For Ms Talfourd, her ATI was fixed at $42,000 for the period 2 August 2019 to 31 January 2020 and then at $35,000 from 1 February 2020 to 1 November 2020.
This meant that for the period up to 31 January 2020 Mr Blanton was liable to pay Ms Talfourd child support of just over $18,000pa.[9]
[9] See B67 onwards
Neither parent objected to that decision.
Care then changed to 50/50 equal shared care from 1 February 2020.
From that date to 31 May 2020 Mr Blanton’s child support liability reduced to $11,668pa.[10]
[10] C91
From 1 June 2020 to 31 October 2020 the “administrative assessment” was based on the above ATIs, as modified by the second COA matter, namely the delegate decision of 31 July 2020.[11]
[11] C78. An objection to that decision by Mr Blanton was not successful: C99.
The delegate decision of 31 July 2020 reduced or discounted the child support liability of Mr Blanton by various amounts from 1 June 2020 to 31 July 2022. This was on account of his payment of Reason 2 expenses (see below).
Mr Blanton was initially assessed in this period to pay $8,773pa.[12]
[12] C95
From 2 November 2020 the first COA matter ceased to have effect, and from that date to 16 March 2021 the “administrative assessment” was based on Mr Blanton’s 2019/20 ATI of $149,581 and Ms Talfourd’s 2019/20 ATI of $49,379, as modified by the delegate decision of 31 July 2020.
Mr Blanton was initially assessed in this period to pay $7,795pa.[13]
[13] C112
After 1 January 2021 this became $9,310pa.[14]
[14] C116
Mr Blanton was made redundant and lodged a nil income estimate, which was accepted on 17 March 2021.
This effectively ended the delegate decision of 31 July 2020, because it “reversed” the case and Ms Talfourd became the payer.
Since 17 March 2021 Ms Talfourd has been liable, under the formula, to pay Mr Blanton various amounts of child support from $2,858pa to $3,730pa.
These amounts are based on nil income estimates for Mr Blanton since 17 March 2021 and the 2019/20 ATI and then the 2020/21 ATI of Ms Talfourd.
The Tribunal must consider whether there should be any “change of assessment” in this matter from the above administrative assessments.

Is there a ground for departure?

The Tribunal has concluded that the evidence and the submissions of the parents raises principally what is known as “Reason 8A”.
Reason 8A is contained in subparagraph 117(2)(c)(ia) of the Act as follows:
…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;…
The test requires the Tribunal to consider the level of child support as determined by the “administrative assessments” set out above, on the one hand, and the “income, property and financial resources” of either parent on the other hand, and decide whether the result is in common parlance “unfair” (strictly, “unjust and inequitable”).
The level of child support can be “unfairly” low or “unfairly” high, in a particular case.
From all of the evidence before it, the Tribunal finds the following material facts concerning the income, property and financial resources of Mr Blanton:
·He lives in a house which he owns, in his sole name, at [Suburb 1];
·He owes $250,000 on a mortgage;[15]
[15] C432
·In 2019/20 his taxable income was $149,581;
·Before 31 March 2021 he worked for [Company 1];
·From 1 July 2020 to termination he earned $112,163 gross;
·For those 39 weeks (1/7/20 to 31/3/21) that equals an average of $2,876pw gross and $149,550pa gross;
·He was made redundant and received a redundancy payout consisting of:
o$56,672.25 taxable component (AL and LSL);
o$65,949 tax free component (Lump Sum D);
oA further eligible termination payment (“ETP”) of $54,465.20;
·Total redundancy payment received (gross) was $177,086.45;
·Based upon a gross weekly income of $2,876, the redundancy payment was equal to 61 weeks of pay;
·Centrelink has decided that he has to serve an “income maintenance period” (a kind of waiting period) until 14 May 2022, before he can receive Centrelink income support payments;[16]
·That period, under social security law, reflects exactly how many weeks of pay his redundancy payment represented (plus an extra week);
·In 2020/21 his taxable income was $225,363, and he had $2,400 of personal deductions;[17]
·Currently, he receives family tax benefit (FTB) of about $250pf;[18]
·He has about $30,000 left in savings.[19]
[16] B15
[17] B11
[18] B17
[19] C431 onwards
From the evidence before it, the Tribunal finds the following material facts concerning the income, property and financial resources of Ms Talfourd:
·She re-partnered in early 2020 and lives in a house which they jointly own;
·She receives a very small amount of FTB;
·Her 2019/20 ATI was $49,379;
·Her 2020/21 ATI was $57,399;
·She works in a care home and her YTD income indicates a current annual income including salary sacrifice of about $50,000.
The Tribunal needs then to consider the child support liability of Mr Blanton since a date 18 months before this COA matter was lodged, and the fact of Ms Talfourd becoming the payer since 17 March 2021, under the recent administrative assessments, as against the income, property and financial resources of the parents, as set out above.
The Tribunal noted that the formula outcomes since December 2019 have varied greatly, from Mr Blanton paying about $18,000pa to Ms Talfourd to Ms Talfourd paying him some $3,500pa.
For the period from 17 December 2019 to 1 June 2020, the Tribunal does have legal power to make a further departure determination, as the initial date is in fact exactly 18 months before this application was lodged (17 June 2021).
However, neither parent objected to that decision, and the Tribunal does not think that it should, after this lapse of time, now change that decision.
For the period from 1 June 2020 onwards, the delegate decision of 30 July 2020 gave Mr Blanton some form of “discount” for what were found to be unequal payments by him for speech therapy costs for one child. Under a Court Order dated 23 October 2019 each parent was to pay 50% of these costs.
This credit was from various amounts of child support, calculated in different ways, as set out above.
Between 1 July 2020 and 31 March 2021 he had employment income from [Company 1] of an average of $2,876pw gross. That equals $149,550pa. He had some modest personal deductions while he was employed.
Mr Blanton was made redundant in March 2021, and then immediately lodged a nil estimate.
His redundancy payments totalled $177,086.45, which was equivalent to 61 weeks of pay at his pre - termination level of income, and the Tribunal effectively adopts the Centrelink decision that the 61-week period runs out on 6 May 2022.
The Tribunal is satisfied that Ms Talfourd’s ATIs for 2019/20 and 2020/21 and her 2021/22 YTD income are easily worked out from objective data, and that she has no other relevant income, property or financial resources for Reason 8A purposes.
The Tribunal finds that the level of child support payable under the “administrative assessments” by Mr Blanton from the 17 December 2019 to 16 March 2021 were not “unfairly low” (or unfairly high) because of the income, property and financial resources of either parent.
Those assessments will therefore be left in place.
The redundancy package is the central Reason 8A issue.
The Tribunal finds that the fact of Ms Talfourd becoming the payer of child support, after 17 March 2021, was an “unfair” outcome because of the true level of the income and financial resources of Mr Blanton, arising out of the redundancy package. He should have remained, and should still be, the payer, of a significant amount of child support to Ms Talfourd.
There are special circumstances in this matter because Mr Blanton received a substantial redundancy package, some of which was tax free, which has not been reflected in the assessment of child support because he immediately lodged a nil income estimate.
Reason 8A is therefore made out for the period from 17 March 2021 onwards.
The courts have made clear that once one Reason is established, then no other Reason needs to be considered.

The just and equitable factors

The Tribunal must consider whether it is “just and equitable” to both parents and the children to depart from the administrative assessment in any particular way.
The factors to be taken into account are set out in subsection 117(4) of the Act, as follows:
(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.
Subsection 117(9) of the Act states that the subsection 117(4) factors “do not limit other matters to which the [Tribunal] may have regard”.
In determining whether it would be just and equitable to make a departure determination, the Tribunal “must have regard to” the factors specified in subsection 117(4). Whilst the section need not be slavishly followed, each of the factors listed in subsection 117(4) relevant to this matter should be considered.

Income of the mother

The Tribunal considers the income of Ms Talfourd currently to be somewhere in the region of $50,000pa, including the value of salary sacrificing.
She receives about $48pf FTB, less a debt repayment. This figure indicates that her partner has income, but the partner income has to be disregarded in this matter.

Costs of providing care

Both parents put the expenses of caring for the children (care being 50/50) at excessive levels. The Tribunal is satisfied however, given their ages, and schooling, that the costs of equal shared care would be at least $400 per week for each parent.
Mr Blanton is also meeting about 75% of the speech therapy expenses.

The father’s income, expenses and capacity to pay

Calculated as set out above, and allowing modest deductible expenses for when he was working, his “income” comes to about $148,000pa. This income is continuing in the sense explained above.
He currently has about $30,000 in savings and arrears of about $7,500.
The Tribunal is satisfied that he has the capacity to pay a rate of child support which fairly reflects that income for the period up to when the redundancy payment “runs out” – which in fact is very soon. He should then become the payee of child support.

Hardship

With regard to hardship (paragraph 117(4)(g)) the Tribunal must consider this factor with reference to both of the parties and the children.
The requirement is to “weigh or balance the hardship” that the making of, or refusal to make, the determination would cause to the carer entitled to child support, and to the payer, and to the children.
Each have significant costs of care including meeting 50% of the school fees which are about $280pcm for both children. Mr Blanton also meets most of the speech therapy expenses.
There is now only a few weeks to go for this decision to run (see below). The matter will then revert to the normal formula and Ms Talfourd will become the payer.
On balancing the hardship, the Tribunal finds that the proposed departure determination will cause no more than minor hardship to Mr Blanton, by slightly increasing his arrears, from 17 March 2021 onwards, and will not cause hardship to either the mother or the children.

Proposed departure determination

The Tribunal considered that any departure determination should take specific account of all of the above, and also, specifically, the various matters set out below.

The Tribunal believes that Mr Blanton was not significantly over assessed or under assessed by the administrative assessments in the period up to 16 March 2021, however he should have remained the payer of child support after 17 March 2021, and to date.
The departure period should start on 17 March 2021 and end when the redundancy payment “runs out”, which is 6 May 2022 (strictly, midnight on that day),[20] and the Tribunal proposes, for simplicity, to fix one ATI for Mr Blanton, namely $148,000pa, for the whole period.
[20] Centrelink added an extra week of “normal” waiting period to arrive at 14 May 2022.
Similarly, the Tribunal will, for transparency, fix for Ms Talfourd the incomes which she actually earnt for the periods she actually earnt those incomes.
Using incomes of $148,000 for Mr Blanton and say $57,000 for Ms Talfourd, as a guide, for two children under 13, with 50/50 care, the formula amount of child support is about $12,000pa. The Tribunal adopts that figure as a useful starting point.
A reduction will be applied as per the second COA matter as the Tribunal is satisfied that one child does have special needs in the form of serious developmental and learning difficulties. This is well documented by her school and by her speech therapist and psychologist: see B37 onwards.
The costs of treatment (speech therapy and hearing tests) come to about $3,000pa, which is reduced to about $2,200pa after the private health fund rebate, and since 1 January 2020, Ms Talfourd has paid $935 of these expenses while Mr Blanton has paid $3,730 (see B79 and B80). He should be “compensated” in some way for his unequal contribution to these important and necessary expenses for that child.
The delegate decision of 30 July 2020 is therefore now varied, so that the reduction in Mr Blanton’s child support is $125pcm for the period 17 March 2021 to 6 May 2022.
Whether Reason 8B (the earning capacity of Mr Blanton) applies after 7 May 2022 is a matter to be determined in the new COA proceedings, and the Tribunal will express no opinions on that issue.

Is it otherwise proper to depart from the administrative assessment?

The final step for the Tribunal to undertake is usually to determine whether it is “otherwise proper” to make the particular determination to depart from the administrative assessment.
Subsection 117(5) of the Act requires the Tribunal to take into consideration the effect that the making of the order would have on any entitlement of a parent to an “income tested pension, allowance or benefit” – such as FTB – or the rate of any such payment.
Ms Talfourd and Mr Blanton both receive FTB. Under this decision, Mr Blanton is and remains the payer of child support after 17 March 2021. Centrelink will need to be informed of this decision and will need to calculate their new FTB entitlements post 17 March 2021. Ms Talfourd will probably have a small FTB debt as she will now be the recipient of child support for this period, not the payer. She needs to take this issue up with Centrelink.
Nevertheless, the Tribunal believes that it is otherwise proper to make this decision.

DECISION

The decision under review is set aside and the Tribunal substitutes a new decision that:

·      for the period from 17 March 2021 to 6 May 2022 the adjusted taxable income of Mr Blanton is fixed at $148,000;
·      for the period from 17 March 2021 to 30 June 2021 the adjusted taxable income of Ms Talfourd is fixed at $57,399;
·      for the period from 1 July 2021 to 13 May 2022 the adjusted taxable income of Ms Talfourd is fixed at $50,000;
·      the delegate decision of 30 July 2020 is varied, so that the reduction is now $125pcm for the period 17 March 2021 to 13 May 2022; and
·      the matter reverts to the normal administrative assessment from 7 May 2022.

[2022] AATA 1560

11 April 2022

Key Legal Topics

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Family Law

Administrative Law

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Judicial Review

Statutory Construction

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