Tallents and McCloud (Child support)

[2022] AATA 3065

Tallents and McCloud (Child support) [2022] AATA 3065 (27 July 2022)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2022/BC023046

APPLICANT:  Mr Tallents

OTHER PARTIES:  Child Support Registrar

Ms McCloud

TRIBUNAL:Senior Member K Dordevic (Presiding)

Member A Beckett

DECISION DATE:  27 July 2022

DECISION:

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

• Mr Tallents’s adjusted taxable income is varied to $74,258 per annum from 5 March 2021 to 30 June 2025; and

• Ms McCloud’s adjusted taxable income is varied to:

  o$29,031 from 29 March 2021 to 31 March 2022; and

  o$50,000 from 1 April to 5 July 2022.

CATCHWORDS

CHILD SUPPORT – departure determination – income, property and financial resources – earning capacity 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 omitted from this decision and replaced with generic information so as not to identify involved individuals as required by subsections 16(2AB)-16(2AC) of the Child Support (Registration and Collection) Act 1988.

REASONS FOR DECISION

BACKGROUND

1. The Child Support (Assessment) Act 1989 (the Act) provides for an administrative assessment of the child support payable. It uses a formula which contains variables such as the parents’ adjusted taxable incomes and their percentages of care of the children. The Act also provides for a departure from the administrative assessment in certain circumstances.

2. Ms McCloud (the mother) and Mr Tallents (the father) are the parents of two children.  This case was first registered with Services Australia – Child Support (the Agency) on 11 November 2016 and was most recently collectable from 22 February 2020. The children are recorded as being in the parents’ shared care.

3. The father lodged a departure application on 9 March 2021. On 12 June 2021 a senior case officer varied the mother’s adjusted taxable income to $24,180 for the period 1 April to 31 October 2021 and determined that a previous senior case officer dated 21 July 2020 would end on 31 March 2021.  On 22 November 2021 the mother lodged an objection to that decision. On 12 January 2022 her objection was allowed in part, whereby the father’s adjusted taxable income was varied to $45,386 for the period 5 March 2021 to 31 December 2022 and the mother’s adjusted taxable income to $26,871 for the period 29 March to 31 December 2021. 

4. On 4 January 2022 the father sought further review with the Social Services and Child Support Division of the Administrative Appeals Tribunal (the tribunal). The father withdrew his application on 9 March 2022. The mother sought reinstatement of the application on 29 March 2022 and, following receipt of submissions from the father, the tribunal reinstated the application on 20 April 2022.

5. A directions hearing was held on 8 June 2022. Directions were issued on the same day requiring compliance by 8 July 2022. On the same day, pursuant to subsection 95H(1) of the Child Support (Registration and Collection) Act 1988, directed Ms [A], Director, [Company 1] to provide the following information about the father:

   ·The 2020 and 2021 and partial 2022 financial year statements (including income tax returns, balance sheets and profit and loss statements) for any company of which you are a director, shareholder or office bearer;

   ·A statement (with supporting documentation) regarding all payments, loans, disbursements and distributions made during the period 1 July 2021 to 31 May 2022 to Mr Tallents either from you personally or from any company of which you are a director, shareholder or office bearer; and

   ·A summary statement outlining your work experience, employment history (including current work arrangements) and relevant qualifications.

6. The hearing took place on 27 July 2022. The father and mother appeared by MS Teams audio. The tribunal also considered the documentation provided by the Agency (folios 1 to 751), the father (folios A1 to A286) and the mother (folios B1 to B56).

ISSUES

1. The statutory provisions relevant to this review are outlined in section 98C of the Act, which states that a decision to depart from the administrative assessment may be made if the following three requirements are met:

   (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 particular determination under this Part …

2. Therefore, the issues which arise in this case are:

   ·     Does a ground exist for departure from the administrative assessment of child support? And if so,

   ·     Would it be just and equitable and otherwise proper to make a particular determination?

CONSIDERATION

A ground for departure

1. Subparagraphs 117(2)(c)(ia) and (ib) of the Act provide a ground for departure of the administrative assessment would result in an unjust and inequitable determination of the level of financial support to be provided by the liable parent because of either party’s income, property, financial resources or earning capacity. The central issue in this matter is whether the administrative assessment accurately reflects the father’s income, financial resources and earning capacity.

2. The father lodged his departure application, in part, on the basis that his income and financial resources are not accurately reflected in the administrative assessment. At the time the father lodged the departure application under review the mother was liable to pay an annual rate of child support of $2,536 for the period 5 March to 30 June 2021 based on the father’s 2021 reconciled income estimate of $4,461 and the mother’s adjusted taxable income of $53,739, as varied by the senior case officer on 21 July 2020.

3. The father provided the following work history. He moved to Sydney at [age] years of age. He was playing [a sport] on a professional basis, later supplementing his income by working in a [Workplace]. He then moved to [a specified area]. After a period of unemployment he worked as a labourer. He then moved to [City 1], working various jobs, including [details deleted]. He then secured work as a [support] worker at [Workplace 1]. At the same time he tried to establish his own [business], but it was too much. He was then secured a higher duties role as a [manager] at [Workplace 1], which after some time was made permanent. He worked 76 hours fortnight, where he was also on call and occasionally worked overtime. In 2020 his workplace brought in a requirement that he must secure TAFE qualifications, which he could not complete as he found the demands of work, study and caring for the children too onerous. After meeting his current partner in mid-2019 he decided to relocate to Brisbane to live with her.

4. In Brisbane he secured a full-time role (76 hours per fortnight) at [Workplace 2], but he found the one-hour drive to and from work onerous, particularly once the children were in his care. Following COVID-19 lockdowns and home schooling he decided to reduce his hours to part-time work. In February 2021 he “needed to stop everything”; he was in a crisis and was considering relocating by himself to [a country]. He resigned from [Workplace 2] with effect from 1 March 2021. The tribunal put to the father that his earnings from [Workplace 2] suggests that his earning capacity is in the vicinity of $74,258 (38 hours per week x $37.58 per hour). The father replied that this simply was not accurate; he can only work 20 hours per week at that same rate though he is “definitely open to negotiations”.

5. The tribunal finds that the father’s partner, Ms [A], is the sole director and shareholder of [Company 1] (the company), established on 24 September 2020. In the business summary (at folio A28) [Ms A] stated that she was motivated to create the company as she has a son with a disability and found the process of applying for NDIS funding “daunting”. The business summary goes on the state that “[details deleted] In addition to her personal experience of NDIS, she states that her experience and work history is “within [a workplace] since [2008]” (at folios A33) as well as running a [business], [Business 1] (at folios A34). It is apparent that [Business 1] brings its own income to the company, being $2,229 in the 2021 financial year (at folio A57). She states that [details deleted]”.  The tribunal accepts [Ms A]’s declaration and is satisfied that her relevant work history is predominately in administrative roles in [a workplace].

6. The father’s testimony is that he began formally working for his partner in August 2021; prior to that he was “helping her out” and not receiving a wage. He works 20 hours per week and receives $25 per hour. The rate was determined by “what the business could afford”. In response to his declaration that his partner’s income is $100,000 per annum, the father explained that his partner also works exclusively at [Company 1]  and he made this declaration on the basis of her expected 2023 financial year income from her business. He thinks that she may receive this as a director’s fee. He stressed that no matter what his partner receives from the business, his hourly rate of $25 remains the same.

7. At hearing the father confirmed that his role in his partner’s company is identical to the work which he undertook at [Workplace 2]. In response to questioning about [Ms A]’s submission (at A38) that she provides the father a part-time wage because “he is responsible for the running of the home and assisting with looking after the children” (at folio A38) the father denied that this was the case, stressing that he was paid for the 20 hours of work he undertook in the company. He was unable to provide an explanation as to why his partner made this submission to the tribunal.

8. The tribunal understands that the legal arrangements of the company are that the father’s partner is the sole director and shareholder. Clearly the arrangement between the father and his partner is not a commercial arm’s length arrangement. The tribunal accepts the father’s testimony that he is an undischarged bankrupt and so is prohibited from being an officeholder of any company. The father states that his partner provided the capital to start the company: she has “all the financial resources” and “took all the risk”. The tribunal finds that this is likely the case. However, whilst the father is not the legal owner of the company, the tribunal was not persuaded that the father is a mere employee as he contends. The tribunal is satisfied that a majority of the company’s income is earned because of the father’s work, skills and experience; he performs the same tasks as he did in his former employment, which is the core business of the company. The tribunal is persuaded that a reasonable conclusion to be drawn on the documentary evidence and the father’s oral testimony is that his partner’s involvement in the company is at most equal to, though more likely secondary to his and the legal arrangements operate predominantly as a vehicle to reduce the father’s child support liability and by operation of the Bankruptcy Act 1966.

9. The 2021 financial year profit and loss statement indicates that the support coordination component of the company received income of $21,276 in addition to $2,229 in [Business 1] income, with total expenses of $35,132 including motor vehicle expenses of $4,413, travel and accommodation expenses of $1,085, rent and office expenses of $3,142 and telephone and internet expenses of $3,907. There was no wage expense listed.  In a telephone contact with the Agency on 2 September 2021 (at folio 355) the father stated that whilst he works 20 hours per week in his partner’s company, he does not get paid as the company cannot afford to do so. This conflicts with his testimony at hearing.

10. It is difficult for the tribunal to make findings pertaining to the father’s true income position from the company. Certainly, the father, in the view of the tribunal, failed to provide a coherent and plausible explanation as to why someone with his skills and experience has chosen to stop engaging in paid work, apart from him stating that he is heavily involved in the children’s school, including volunteering in the classroom each week and working on the school’s 150^th anniversary festival. In such circumstances where it is difficult to ascertain the father’s actual income and financial resources, the tribunal turned its mind to whether the father should be assessed with respect to his earning capacity.

11. In order for a person to be assessed in accordance with their earning capacity rather than their actual income, the three tests set out in subsection 117(7B) of the Act must be satisfied:

    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. By the father’s own evidence he has reduced his number of hours of work below the full-time hours for his industry and occupation. Subparagraph 117(7B)(a)(ii) of the Act is satisfied.

13. The father submits that his decision was motivated by his stress levels and his caring responsibilities. Given the care arrangement in place, the ages of the children and that the father has not provided any corroborating evidence regarding his mental health the tribunal is not satisfied that these factors justify his decision to reduce his work hours. Thus, paragraph 117(7B)(b) of the Act is satisfied.

14. The parents separated in early 2019. The father’s 2019 to 2021 financial year adjusted taxable incomes tell the story of rapidly decreasing income: $103,684, $98,032 and $47,778 respectively. At hearing he confirmed that his 2022 financial year adjusted taxable income would be $0.  Application of these adjusted taxable incomes to the child support formula would see the father’s liability of $9,154, decreasing to $5,380 and $2,229 when his 2020 and 2021 adjusted taxable incomes are applied to the assessment. Application of a 2022 adjusted taxable income of nil to the assessment would make the mother the liable parent, with an annual child support liability of $2,754. In such a context, the father has not persuaded the tribunal that it was not a major purpose of his decision to affect the administrative assessment. Paragraph 117(7B)(c) of the Act is satisfied.

15. As the father’s earning capacity is not properly reflected in the child support assessment, there are special circumstances such that the application of the administrative assessment would result in an unjust and inequitable determination of child support payable. The tribunal therefore concludes that the ground provided for in subparagraph 117(2)(c)(ib) of the Act is established.

Just and equitable

1. The requirement to consider whether a departure would be just and equitable 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 child, the parents’ commitments and any hardship that would be caused by departing or not departing from the formula assessment.

2. The tribunal finds that the mother’s 2019 to 2021 adjusted taxable incomes are $19,212, $6,758 and $44,588 respectively. The mother is a [occupation] who runs her own [business], [name deleted] (the [business]) of which she is the sole director and shareholder. The mother provided a Statement of Financial Circumstances dated 24 January 2022. She declared that she works on a permanent full-time basis as a [business] owner and [Occupation 1], earning $115.65 gross per week. She is also in receipt of jobkeeper. Her assets include her home valued at $210,000, savings of $2,936, shares valued at $2,745, a motor vehicle valued at $9,000, household contents valued at $3,000 and superannuation of $12,900. Her liabilities total $211,098, including the home mortgage of $172,000, a personal loan of $13,328, car and equipment loan of $7,500 and a flexi loan of $18,270. She reports nil personal expenses and household expenses of $610 per week.

3. The father’s position in respect of the mother’s income and earning capacity is summarised as follows. Her 2021 income tax return is incorrect as it does not reflect her actual income and financial resources from the [business]. Furthermore, she had not correctly declared the rental income from the former marital home. He believes that the mother receives cash income and money from the sale of old [business] equipment. He also questions the veracity of the [business]’s financial statements, including the 2020 financial year balance sheet where it lists  a loan from the mother’s father. He also wants the mother to provide an explanation about how she amassed $10,000 in shares. When asked to clarify this point he conceded that the mother now has $2,745 in shares, but he understands that the original purchase price of the portfolio was $10,000. He went on to state that he is concerned about the depreciation of [business] equipment as the equipment was purchased at manufacture rates. He also asked how it was possible that the mother went on a $5,000 holiday in 2021 given her declared income and expenses. He also submits that the motor vehicle is a fringe benefit that the mother does not declare. He alleges that she deliberately runs the [business] at a loss and there is a clear capacity for the business to pay her income commensurate with applicable award.

4. The father is also concerned about the wage that the mother’s sister receives from the business; he asked how it was that her sister receives three times the income the mother receives, when the sister has not taken any risk in forming the business. In conclusion the father stated that the mother’s earning capacity is reflected by her annual real estate role salary of $50,000, in addition to her [business] and social security income.

5. The mother’s testimony can be summarised as follows. Some years ago she was working as a [Occupation 1] in a [business]. She then started a [business], run in a [space]. [Details about the business deleted]. She also provides a [service]. Occasionally she will contract someone to provide [services]. [Details about the business deleted] The business started small but was steadily growing so in about February 2019 it required a doubling of the floor space; this was around the same time as the parents’ final separation. She took out another loan to purchase equipment and meet the increased rent. The [business] continued making satisfactory progress and its client base was increasing. Whilst the business made a loss in the 2019 financial year, she was confident that in time it would begin to make a profit. She started a relationship in November 2019 and in about February 2020 her then partner became violent, including making threats to harm the children. Such were her fears about the children’s safety that she asked the father, who by then had relocated from [City 1] to Brisbane, to take the children into his full-time care until such time that she relocated to Brisbane. She moved to Brisbane in May 2020 and re-established the business in August 2020. When it first began it had three clients, it now has [number of clients], despite ongoing COVID infections. She described “struggling” to build the clientele in Brisbane. The business will run at a loss in the 2022 financial year, but she understands that the loss will be less than the 2021 financial year. 

1. Her usual day entails providing [services] each morning, returning home to take the children to school on the weeks that they are in her care, returning to the [business] and providing more [services] from 9AM to 12PM. She then undertakes [work] until she collects the children from school and then returns to the [business] with the children to [work]. The mother confirmed that the business paid her sister, who lives in Brisbane, a wage of $389 per week, explaining that this was partly funded by a government subsidy under a one year back-to-work program. To be eligible for the program her sister had to work consistent hours and receive the minimum wage.  Her sister secured work elsewhere once the back-to-work grant was exhausted. The mother is now the only employee of the [business]. She has a [qualification], who assists in running the [business] but does not receive a wage.

2. In response to the question about the 2021 and partial 2022 profit and loss statements in evidence the mother confirmed that the total wages paid in 2021 were $33,666.50 with jobseeker income of $30,400. The January to March 2022 profit and loss statement indicates a wage expense of $6,662. She recalls that the total wages for the last quarter (April to June 2022) were about $5,000. This, in addition to her jobseeker payments, is her only source of income.

3. The mother confirmed that in about December 2019 she placed her savings into a share account. Essentially she used it as a savings account. She sold most of them prior to the property settlement to meet her, and the children’s, ongoing living expenses. Since the father declared bankruptcy she now has sole responsibility for joint debts from the marriage. Furthermore, upon relocating to Brisbane she also had to pay rent in addition to all payments towards the former marital home mortgage. This was why she required further financial assistance from her father, which is reflected in the business balance sheet. The loans from her parents to the business were formalised on 10 February 2022, on the advice of her solicitor. She went on to explain that had it not been for the property dispute the loans would never have been formalised: “our family does not roll like that”.  She remains hopeful that one day she will be in a financial position to repay her parents.

4. The mother denied the father’s allegations regarding undeclared cash and rental income. In particular, she stated that whilst the café run from the [City 1] [business] premises reduced her rental and outgoings, she received no direct income, including cash payments, from the sub-letting arrangement. She did confirm that she went on a holiday costing $5,000 funded through her line of credit and confirmed that she had a “side-hustle of selling [products]” when she was “desperate for income”; this is reflected in the [business]’s 2022 partial profit and loss statement indicates that in that three-month [a product] sales were $2,611.40. In the previous financial year that income source was reflected in the listed membership fees. All membership fees are charged electronically and so are reflected in the company accounts.

5. The tribunal notes that $830 in direct deposits were made into the mother’s personal bank account during the period 30 March 2019 to 21 December 2020 (averaging $39.50 per month) and a further $45 deposited on 28 June 2021. The mother confirmed that these payments were for [a specified service], noting that these payments were predominantly made during periods of COVID-19 lockdowns. She confirmed that this income was not reflected in the company accounts stressing that no such payments were received in the 2022 financial year. She denied receiving any direct cash payments. The mother stated that the only personal benefit she receives from the [business] is the provision of a mobile phone. The tribunal notes that the 2022 third quarter profit and loss statement indicates that the [business]’s total telephone expense was $591. The mother explained that her motor vehicle was purchased when she was a sole trader; thus, no motor vehicle expenses are reflected in the [business]’s financials. The finance was provided to her personally.

6. The tribunal makes the following findings regarding the [business]’s income. The [business]’s 2020 profit and loss statement declares an income of $167,045 (including government grants and jobkeeper income of $16,875), expenses of $178,112 with a net loss of $23,591. The 2021 profit and loss statement declares an income of $73,227 (including government grants and jobkeeper income of $34,338), expenses of $98,639.23 and a net loss of $29,650. The 2022 third quarter profit and loss statement indicates a net loss of $1,162. The tribunal is satisfied that the financial evidence supports the mother’s contention that the business is likely to generate a profit in the future. Amending the administrative assessment on the basis that the mother receives the benefit of 25% of the telephone expenses usage (thereby increasing the mother’s adjusted taxable income by $591) would have a minimal effect on the administrative assessment. The tribunal accepts, after examination of its financials, that the [business] does not expense any of the mother’s motor vehicle costs.

7. The mother explained that the former marital home was sold on 18 February 2022; she received net proceeds from the sale of $20,000. She applied these funds to the debts from the marriage, of which she is solely liable for since the father’s bankruptcy. As at the date of hearing she has about $38,000 in debts to various financial institutions. Her precarious financial position, the feasibility of paying a wage to both she and her sister, together with re-establishment costs after relocating the business in Brisbane meant that she had to secure an alternate source of income. It was for that reason that she commenced working as an [occupation] on a full-time basis at a [workplace] in late March 2022, whilst also running the [business] outside her work hours. Her sister took responsibility for running the [business] during her work hours. The “income was great” but she was struggling to manage the [business], her caring responsibilities and the full-time work. She was also highly dependent on her mother’s assistance to provide care of the children, which was not sustainable in the long term. She was able to manage the workload for only a three-month period. Her resignation from the [role] was effective from 6 July 2022.

8. The tribunal, in considering the mother’s earning capacity, applied the legislative criteria outlined at paragraph 23 above. It is not in dispute that the mother has changed her occupation and industry. It is also not in dispute that her decisions to do so is not justified on the basis of her caring responsibilities or state of health. Subparagraph 117(7B)(a)(iii) and paragraph 117(7B)(b) of the Act are satisfied.

9. The evidence is that the mother is capable of earning at least $50,000 per annum. Her 2022 adjusted taxable income will increase by about $13,942 as a result of her three months of employment. However, the tribunal is not persuaded that the mother’s major purpose in resigning from this employment was to affect the administrative assessment. She maintained her work in the [business] in addition to taking on the additional work. The tribunal accepts the mother’s evidence that she was required to do so primarily because she has sole responsibility for all debts incurred during the marriage. The tribunal formed the view that her taking on this additional work, in excess of a full-time role, was akin to post-separation income as envisaged by section 44 of the Act. The tribunal concludes that paragraph 117(7B)(c) of the Act is not satisfied.  Therefore, the tribunal is not persuaded that the administrative assessment should be departed from on the basis of the mother’s earning capacity.

10. The tribunal finds that the children are generally in good health. The father states that the younger child suffers from constipation and is receiving specialist review. A teacher at the school identified that the older child has difficulties with his working memory; he underwent a speech therapy assessment and the parents have yet to be advised of the outcome of the assessment. The children attend a public primary school. The mother declared at hearing that she is in good health. The father states that he is not in good health; he is overweight and has “bad knees”. He confirmed that he has not been diagnosed with a mental health condition but has found that reducing his stress and financial commitments, as well spending time with the children, keeps him “mentally well”. The father advocates for a departure period in respect of his and the mother’s 2021 adjusted taxable incomes until 31 December 2022. The mother seeks a departure on the basis of the father’s earning capacity from March 2021 until early to mid-2024.

11. In his undated Statement of Financial Circumstances form the father reports that his usual occupation is working as a [occupation] at [Company 1], where he has worked for 10 months. He declares a salary of $500 per week and that his partner’s income is $100,000 per annum. He reports savings of $100, a motor vehicle valued at $17,000, his share of household contents valued at $100, [business] equipment valued at $2,000 and superannuation valued at $76,368. He reports nil personal liabilities. He also reports personal expenses of $3,750, including a tax liability that is more than three times his weekly income, $2,030 in superannuation and health insurance of $56. At hearing he confirmed that aspects of this declaration were incurred.  He states of the declared weekly expenses of $2,065, his own expenses are $539 and the children’s $510. The father stated $50 of his declared education expenses relates to his own learning, as he undertakes online courses and has applied to undertake a bachelor’s degree. 

12. The father confirmed that he petitioned for bankruptcy following the parents’ separation. Apparently he decided to do this because the mother would not contribute to a debt in his name; he was aware that in doing so the burden of joint debt repayments would shift solely to the mother; he did not think it relevant as she did not give any consideration to the debt in his sole name. Furthermore, his costs of living increased when he relocated to Brisbane and he needed to “ease some pressure”.

13. The tribunal is not persuaded that the father’s earning capacity is accurately reflected by his [workplace 1] income (about $96,329 per annum based on the payslip evidence at folios A18 to A21), given that this involved shift work on on-call arrangements and his evidence is that he no longer holds the qualifications necessary to secure such a role. The tribunal is satisfied that the father’s earning capacity is reflected by the employment income he received from [Workplace 2], being $74,258 per annum. There is no evidence before the tribunal to suggest that the father would not be so remunerated should he attempt to secure similar work.

14. The tribunal is persuaded that it is both just and equitable that the father’s earning capacity be reflected in the administrative assessment from 5 March 2021, as it was from this date that it reflected his 2021 reconciled income estimate of $4,461. The tribunal is of the view that the father’s earning capacity will not be accurately reflected in the administrative assessment into the foreseeable future. Therefore, it is appropriate that his earning capacity is reflected in the administrative assessment until 30 June 2025. This determination will provide certainty to the parties and minimise the need for repeat proceedings. This variation will create a situation of arrears and overpayment for the father in the vicinity of $4,000. The tribunal is satisfied that this will not place him in a position of undue hardship given his earning capacity. To find otherwise would result in a disproportionate amount of the children’s costs being borne by the mother.

15. The tribunal finds that from 29 March 2021 (the date from which date she was not longer in receipt of jobkeeper payments) the mother’s income and financial resources were [business] income of $115 per week ($5,980 per annum), income support payments of $19,296 and net rental income. The tribunal finds that the mother should be attributed with 100% of the rental income – $3,710 – rather than the 50% as declared in her tax return, as she did not contest at hearing that the father did not receive a half share of this income. The tribunal notes that the mother also received a direct payment of $45 from a [business] client on 28 June 2022 which forms part of her income. The tribunal finds that from 29 March 2021 the mother had income and financial resources of $29,031. The tribunal finds that this accurately reflects her income and financial resources until 31 March 2022. From 1 April to 5 July 2022 it is appropriate to amend the mother’s adjusted taxable income to $50,000, reflecting her employment income during that same period. The tribunal concludes that from 1 July 2022 it is appropriate for the administrative assessment to apply, which will result in the child support liability being calculated, amongst other things, on the mother’s 2021 adjusted taxable income.  Of course, the mother is at liberty to lodge an income estimate should this not reflect her current income or financial resources.

16. The Tribunal is satisfied that the administrative assessment is unfair given the father’s earning capacity and the mother’s income and financial resources. This results in an unjust and inequitable level of child support given the circumstances of each parent. For all these reasons it is just and equitable to depart from the administrative assessment.

Otherwise proper

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. The mother is in receipt of income-tested benefits. Departing from the administrative assessment will result in a more appropriate apportionment of financial responsibility between the parents and the community.

2. The determination is otherwise proper.

DECISION

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

• Mr Tallents’s adjusted taxable income is varied to $74,258 per annum from 5 March 2021 to 30 June 2025; and

• Ms McCloud’s adjusted taxable income is varied to:

  o$29,031 from 29 March 2021 to 31 March 2022; and

  o$50,000 from 1 April to 5 July 2022.