Tancoch and Tancoch (Child support)
[2025] ARTA 505
•27 February 2025
Tancoch and Tancoch (Child support) [2025] ARTA 505 (27 February 2025)
Applicant/s: Mr Tancoch
Respondent: Child Support Registrar
Other Parties: Ms Tancoch
Tribunal Number: 2024/MC028190
Tribunal: General Member M Martellotta
Place:Perth
Date:27 February 2025
Decision:The Tribunal affirms the decision under review.
CATCHWORDS
CHILD SUPPORT – departure determination – mother’s earning capacity – change of employment – costs of maintaining children – education of two oldest children in manner expected by parents – father paying full cost and children’s health insurance – higher income and proportionately lower expenses – unresolved family law negotiations and binding child support agreement – decision under review affirmed
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 pursuant to subsection 16(2AB) of the Child Support (Registration and Collection) Act 1988.
Statement of Reasons
BACKGROUND
Mr Tancoch and Ms Tancoch are the parents of three children.[1] According to Services Australia (Child Support) the child support assessment case was registered on 6 March 2022 and is collected by Child Support as from 6 April 2023. Other particulars include that Mr Tancoch is determined to have 39% care and Ms Tancoch 61% care of the children. Mr Tancoch is assessed as the parent liable to pay child support.
[1] Born 21 July 2009 (15 years at date of hearing) 16 February 2011 (13 years at date of hearing) and 30 September 2013 (11 years at date of hearing).
This application for review concerns a change of assessment decision. According to Child Support there have been previous change of assessment applications applied to this case. A previous departure from the administrative assessment was decided on objection on 21 September 2023 whereby the assessment was varied so that for the period 1 May 2023 to 30 November 2023 Ms Tancoch’s adjusted taxable income (ATI) was varied to $79,000.[2] The Tribunal observes that Mr Tancoch did not seek further review of that objection decision.
[2] Hearing papers (HP) at page 118
On 30 November 2023 Mr Tancoch applied for a change of assessment. His grounds being Reasons 8A and 8B – namely the assessment did not correctly reflect Ms Tancoch’s income, property and financial resources or her earning capacity.[3] His application also referenced Reason 3 (costs in caring, education or training the children in a manner intended by both parents). Mr Tancoch’s application to Child Support raised the following issues:
a)Ms Tancoch has a greater earning capacity as she was previously (in February 2021) engaged in full-time employment, but her hours were reduced following January 2022 when she was stood down for not complying with the COVID-19 vaccination policy of her employer.
b)Ms Tancoch failed to disclose new employment commenced after 30 June 2022 and the previous change of assessment utilised an incorrect ATI from her new employment.
c)He meets all the education costs both private and public for all children as well as their medical costs which is in addition to his child support liability.
[3] HP p137
At the time Mr Tancoch made his change of assessment application (30 November 2023) the child support assessment in place was as follows:
| CS Period | Mr Tancoch ATI $ | Ms Tancoch ATI $ | CS Annual Liability $ |
| 1May23-30 Nov 23 | 21/22 Australian Taxation Office (ATO) 273,351 | Change of assessment 79,000 | 26,853 |
| 1 Dec 23-31 Jul 24 | 21/22 ATO 273,351 | 21/22 ATO 65,969 | 29,985 |
A Child Support decision maker decided on 23 February 2024 that Reason 8A was established and varied the assessment so that for the period 1 December 2023 to 31 December 2025 Ms Tancoch’s ATI was varied to $84,659 per annum.
Mr Tancoch objected to the decision on 10 April 2024.[4] His reason for objection focused on education costs (Reason 3). However he also took issue with previous non-agency decisions made by Child Support (10 May 2023) and also with a separate care decision made by the Administrative Appeals Tribunal.[5] In relation to these other aspects, the Tribunal notes that each of those decisions are separate decisions with their own review rights and as such do not fall within the matters to be considered as part of this application for review.
[4] Child Support granted Mr Tancoch an extension of time as his objection was outside 28 days.
[5] HP p 223
On 3 July 2024 an objections officer decided to disallow the objection. The Tribunal notes that according to supplementary papers provided by Child Support for the assessment period 1 August 2024 to 31 October 2025 the particulars reflect Mr Tancoch’s 2023/24 ATI of $284,150 and Ms Tancoch’s change of assessment ATI of $84,659 resulting in an annual child support liability of $27,393 for Mr Tancoch.
Mr Tancoch lodged his application for review with the Tribunal on 4 July 2024. He stated in that application that Child Support have failed to take into consideration school fees he has paid since 2021.
From 14 October 2024, the Administrative Appeals Tribunal (AAT) became the Administrative Review Tribunal (the Tribunal). Under the transitional provisions in the Administrative Review Tribunal (Consequential and Transitional Provisions No. 1) Act 2024 (the Transitional Act), applications for review to the AAT that were not finalised before 14 October 2024 are taken to be an application for review to the Tribunal. The Transitional Act gives the Tribunal the authority to continue and finalise any aspect of the review not already completed by the AAT. This decision and statement of reasons is made by the Tribunal.
Mr Tancoch and Ms Tancoch participated in a telephone direction hearing on 6 November 2024. The Tribunal issued a direction requiring the parties to provide further financial information and information pertaining to payment of education costs. On 9 December 2024 Mr Tancoch requested the hearing date be rescheduled and further time provided for him to comply with the Tribunal’s direction due to personal circumstances arising from his father passing away. The request was granted and the hearing was rescheduled, and Mr Tancoch was provided further time to comply. An updated direction was issued on 12 December 2024. Mr Tancoch subsequently requested a further reschedule of the hearing. The Tribunal declined the application having already granted a previous reschedule and extension of time.
On 7 March 2025 Mr Tancoch and Ms Tancoch participated in a hearing conducted by telephone. They each presented evidence and made submissions. Other materials considered by the Tribunal included documents prepared and distributed by Child Support (319 pages), documents provided by Mr Tancoch (A1–A49) and documents provided by Ms Tancoch (B1–B37). Post hearing Mr Tancoch provided further information and submissions in response to matters raised at the hearing and providing further information about his financial circumstances. The Tribunal has also taken those matters into consideration. (A50 -A 57).[6]
ISSUES
[6] The Tribunal did not require further submissions from Ms Tancoch in response.
The statutory provisions relevant to this review are contained in the Child Support (Assessment) Act 1989 (the Act).
Child support legislation is interpreted by Child Support with the aid of the Child Support Guide (the Guide). The Tribunal may be guided by policy but is not bound to follow it.[7] The Federal Court[8] has observed that in the absence of any contrary statutory indication, lawful executive policy enacted to guide the exercise of a statutory power is a relevant factor for the Tribunal to take into account in performing its review task. A lawful approach allows the adoption of appropriate policy as a guide but not so as to control the making of the decision and the Tribunal adopts that approach.
[7] Re Drake and Minister for Immigration and Ethnic Affairs(No 2) (1979) 2 ALD 634
[8] G v MIBP [2018] FCA 1229
The issues for the Tribunal to determine in this case are:
· Does a ground for departure exist? If so,
· Would it be just and equitable as regards the child, the liable parent, and the carer entitled to child support to depart from the administrative assessment of child support?
· Is it otherwise proper to make a particular departure determination?
Issue 1 – Does a ground to depart exist?
The rate of child support payable by a liable parent is usually based on an administrative assessment calculated using the relevant formula under Part 5 of the Act. This involves the application of a statutory formula, which considers factors such as the number of children, the age of each child, the level of care provided and the income of each parent. Income used in the calculation has a number of components to arrive at the adjusted taxable income, which is worked out using section 43 of the Act. The general approach is that the Child Support Registrar (the Registrar) will utilise a parent’s ATI as assessed by the ATO for the last relevant year of income.
The liable parent or a carer may apply to the Registrar for a determination to depart from the child support administrative assessment under Part 6A of the Act (section 98B of the Act) – a process commonly known as a change of assessment.
Section 98C of the Act provides that the Registrar may make a determination to depart from the formula assessment if satisfied that:
(a) a ground for a change of assessment has been established;
(b) a change of assessment would be just and equitable as regards the children and each parent; and
(c) a change of assessment would be otherwise proper.
The grounds for departure from the administrative assessment are set out in subsection 117(2) of the Act. Only one ground is required in the special circumstances of the case to depart from the administrative assessment and thereby satisfy the requirements of subsection 117(2) of the Act.[9] If satisfied that a ground is established 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. That provision allows for a range of determinations including varying the rate of child support payable, the adjusted taxable income or the cost percentage for a child.
Reason 3 – costs of caring, education or training
[9] The phrase ‘special circumstances of the case’ is not defined in the Act. However, the Family Court has held that ‘it is intended to emphasise that the facts of the case must establish something special or out of the ordinary’ (Gyselman and Gyselman (1992) FLC 92–279). Likewise, 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’.
A ground for departure exists if, in the special circumstances of the case, the costs of maintaining the children are significantly affected because the children are being cared for, educated or trained in the manner that was expected by their parents (subparagraph 117(2)(b)(ii)).
Mr Tancoch submits that the administrative assessment does not take into consideration his payment of education costs particularly as they pertain to the private education of the two eldest children.
The parents agree that two of the children attend a private school, [College]. Their youngest child attends a public school, and it is intended she will also transfer to [College]. The eldest child commenced at the college in 2022 and is currently in year 10. The second child commenced in 2023 and is currently year 9. The youngest child is in year six attending a local public primary school and will commence at the private school in 2026. The Tribunal accepts this evidence and so finds.
Are the children being educated in a manner expected by the parents?
The legislation does not provide a definition of the term ‘manner expected’. The Full Court of the Family Court[10] has considered a similar provision that appears in the Family Law Act 1975 stating:
40. … 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.
…
78. Where the non-custodian has agreed to the child attending such a school that person is liable to contribute to the fees involved so long as and to the extent that he or she has a reasonable financial capacity to continue to do so.
[10] Mee v Ferguson [1986] FamCA 3
Mr Tancoch stated that he and the Ms Tancoch had always intended that their children would have a private education during their secondary years, and they maintained this intention following their separation. Ms Tancoch stated that following separation she had concerns about the affordability of private education and on that basis certain agreements were reached. She said on that basis she agreed that the children should continue to attend private education upon completion of their primary school education.
The Tribunal is satisfied that the children are being educated in the manner expected by the parents.
Do the costs significantly affect the costs of maintaining the children?
The next question that arises is the costs relating to the education. The Guide notes:
the Registrar will consider whether the additional amount is significant in relation to the assessed costs of the child. If the additional amount is small in comparison with the assessed costs, the Registrar may find that the costs of maintaining the child are not significantly affected and that there is no reason to change the assessment (CSA Act section 117(2)(b)(ii)).[11]
[11] At 2.6.9
It was agreed at hearing that Mr Tancoch is the parent paying for the compulsory education costs. Mr Tancoch provided annual statements[12] showing payments he has made in relation to the children’s education. According to his evidence he has met the compulsory tuition fees and levies as follows: 2022 – $7,958; 2023 – $15,664 and 2024 – $16,026. At hearing he estimated in 2025 the cost to be in the vicinity of $17,000. Mr Tancoch stated that these amounts took into consideration sibling discounts and an early payment discount. Ms Tancoch did not take issue with Mr Tancoch’s evidence on this aspect. Post hearing Mr Tancoch provided an update that he had now paid the 2025 school fees of $17,396.
[12] A23–A31
Mr Tancoch stated that he also meets other education-related costs which he itemised as: school uniforms $2,500 per annum; previous one-off purchase of two computers $2,600 per child; purchase of two calculators $250 per child; book lists for the eldest child about $400–$500 per annum and for the second child about $150 per annum. Ms Tancoch said that she disagreed that the uniform costs are an annual cost, she stated that the purchase is an initial one-off and may be supplemented on an annual basis at a cost of about $100. Mr Tancoch did not contest that submission.
The youngest child attends a public primary school. Mr Tancoch stated he pays about $300–$400 per annum for their education costs. Ms Tancoch did not take issue with that evidence.
The Tribunal finds that Mr Tancoch has incurred the following compulsory education costs relevant to the children’s private education; 2022 – $7,958; 2023 – $15,664; 2024 – $16,026 and 2025 $17, 396. The Tribunal also finds that Mr Tancoch has met the cost of school uniforms, book lists, and equipment such as computers and calculators.
According to the assessment the relevant combined costs of the children at the relevant time was $17,726. The Tribunal is satisfied that in the special circumstances of the case, the costs of maintaining the children are significantly affected because the children are being educated in the manner expected by the parents. The Tribunal concludes that a ground to depart is established.
Child Support legislation does not require both parents to be liable for these costs. The question of whether such education costs should be reflected in a departure from the assessment will next be considered by the Tribunal when considering whether it is just and equitable to make a particular determination.
As noted only one ground to depart is required to be established. Issues pertaining to the parents’ incomes, property and financial resources are considered under the issue of whether a particular departure is just and equitable.
Issue 2 – Is it just and equitable to make a particular departure determination?
As the Tribunal is satisfied that there is a ground to depart from the assessment of child support as set out above, the next step for the Tribunal is to consider whether it is just and equitable as regards the children and the parents 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 set out in subsection 117(4) of the Act, which are discussed in the following paragraphs.[13]
Duty to maintain the children
[13] The Tribunal notes the Federal Magistrates Court case of Tyagi & Meares (SSAT Appeal) [2008] FMCAfam 886 which directs that in considering the matters set out in subsection 117(4) “the section need not be slavishly followed, each of the relevant factors listed in s.177(4) should be considered”.
Both parents have a duty to maintain the children as is stated in the Act: “parents of a child have a primary duty to maintain the child. The duty has a priority over all commitments of the parent other than commitments necessary for self-support”.[14] This is a relevant consideration in any proposed departure.
Proper needs of the children
[14] Section 3 of the Act.
In determining the proper needs of the children, it is necessary to have regard at a broad level to the manner in which the children are being, and in which the parents expect the children to be, cared for, educated or trained, and also any special needs of the children.
The Tribunal has already made findings regarding the costs of educating the children and does not repeat those findings.
Ms Tancoch stated that she paid $10,000 out of pocket in orthodontic costs for one of the children. She said apart from that event there are no ongoing expenses other than she has recently been making payments towards non-compulsory education expenses. These were not quantified by Ms Tancoch. She stated that Mr Tancoch previously met those costs but has since ceased doing so. Mr Tancoch told the Tribunal that the orthodontic costs were incurred prior to the registration of the assessment, he was not made aware of the treatment and that these were not ongoing costs as was the case with the education expenses he met.
Mr Tancoch submitted in post hearing materials that he also meets the children’s private health insurance costs to the value of $4,597.44 per annum. He refers to monthly costs of $383 per month for family cover. Whilst those submissions do not specify whether a proportion of that costs includes his own health insurance costs, the Tribunal accepts that Mr Tancoch is meeting the children’s private health insurance costs. These are matters which the Tribunal will take into consideration in any proposed departure.
Income, earning capacity, property and financial resources of the children
In having regard to the income, earning capacity, property and financial resources of the children, the Tribunal must disregard any entitlement of the children or the carer entitled to child support to an income-tested pension, allowance or benefit. Ms Tancoch stated that none of children had access to income, property or financial resources. The Tribunal concluded that there was no basis to vary the assessment on this ground.
Other party receiving money, goods and property for the benefit of the children
No evidence or submissions were received in this regard and the Tribunal concluded that there was no basis to vary the assessment on this basis.
The income, property and financial resources of each parent who is a party to the proceeding
Mr Tancoch
Mr Tancoch derives his income as an employee. He is [an occupation]. He has been in the same employment for nearly eight years. His evidence is that his employment is his sole source of income. The administrative assessment currently utilises Mr Tancoch’s last relevant year of income as assessed by the ATO which is his 2023/24 taxable income of $284,150. This is consistent with a copy of Mr Tancoch’s 2023/24 individual tax return.[15] Mr Tancoch’s 2022/23 taxable income was $266,536.[16]
[15] A8
[16] A3
Mr Tancoch’s evidence was his assets include the former matrimonial home (valued at $850,000) which is registered in the joint names of himself and Ms Tancoch, savings of about $85,000 and two motor cars with a combined value of about $34,000. He stated that since providing a Statement of Financial Circumstances (SOFC) his superannuation balance of about $325,000 has increased but he could not be specific regarding the current balance. Post hearing Mr Tancoch advised since paying the school fees his savings balance had decreased and was approaching $63,000.
Ms Tancoch stated that Mr Tancoch had failed to disclose ownership of other assets which included three motor bikes and had also underestimated the value of the motor vehicles. Mr Tancoch agreed that by oversight he had not included the motor bikes which he estimated to have a total value of about $14,000. He said that the value of the vehicles was not significantly different from values he had allocated in the 2023 proceedings and he utilised the red book as a guide.
Ms Tancoch
Ms Tancoch provided a copy of her 2023/24 individual taxation return which has assessed a taxable income of $89,566.[17] A copy of her 2022/23 individual taxation return shows a taxable income of $70,617.[18]Ms Tancoch confirmed that her employment is her only source of income. She receives family assistance payments.
[17] B4
[18] B3
Ms Tancoch said that she changed employment in about October 2023 but apart from that there has not been an interruption to her work pattern.
Consistent with Mr Tancoch’s disclosure, Ms Tancoch confirmed she and Mr Tancoch are joint owners of the former matrimonial home, to which she assigned a value of $850,000. She notes financial settlement in that regard is yet to be finalised. Other assets including savings of about $15,000 and a motor car valued at about $13,000 which she said was an overestimation. Her superannuation balance is about $129,000.
Mr Tancoch stated that Ms Tancoch had failed to disclose ownership of property located overseas and funds held in an overseas bank account. Ms Tancoch denied that she held any assets offshore. There was no evidence before the Tribunal to substantiate a finding that Ms Tancoch holds offshore assets.
The Tribunal finds that Mr Tancoch:
a)derives his income as an employee
b)had a 2022/23 taxable income of $266,536
c)had a 2023/24 taxable income of $284,150
d)is the joint registered owner of the former matrimonial home valued at about $850,000
e)holds other assets include personal property valued in the vicinity of $44,000 and savings of about $63,000
f)has a superannuation balance of about $355,524.
The Tribunal finds that Ms Tancoch:
a) derives her income as an employee
b) had a 2022/23 taxable income of $70,617
c) had a 2023/24 taxable income of $89,566
d) is the joint registered owner of the former matrimonial home valued at about $850,000
e) holds other assets include personal property valued in the vicinity of $10,000 and savings of about $15,000
f) has a superannuation balance of about $129,000.
As noted, the general approach is that that the Registrar will utilise a parent’s ATI as assessed by the ATO for the last relevant year of income. This is particularly the case where (such as is the situation in this matter) both parents are employees. However, there may be circumstances where these may not be utilised in the administrative assessment (such as the timing of the child support period and/or the unavailability of the last relevant year of income tax return). The Tribunal observes that this seems to have occurred in this case where at the time of the change of assessment application, the parents’ 2021/22 ATO assessed incomes were used as opposed to their 2022/23 taxable incomes.
At hearing the parties confirmed in their evidence that there had been a change in Ms Tancoch’s employment circumstances. As noted, the decision currently before the parents departed from the administrative assessment so that for the period 1 December 2023 to 31 December 2025 Ms Tancoch’s ATI was varied to $84,659 per annum. The Tribunal invited the parties to make submissions regarding this aspect. Mr Tancoch stated that the departure in that respect correctly reflects a change in Ms Tancoch’s income which at the time was not reflected by her ATI being utilised in the assessment. Ms Tancoch stated that her current level of income is commensurate to that as varied by the change of assessment. Neither party made submissions that this particular departure as it currently stands should be changed by the Tribunal.
The Tribunal is satisfied that Mr Tancoch and Ms Tancoch derive their income as employees. The Tribunal is also satisfied that in each case neither parent has access to additional financial resources or property relevant to determining their ATI.
Earning capacity
A ground for departure exists if, in the special circumstances of the case, the 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 because of the earning capacity of either parent. To succeed on this basis the Tribunal must be satisfied that all three compulsory criteria in subsection 117(7B) are satisfied before it determines that a parent’s earning capacity is greater than is reflected in his or her income for the purposes of the Act. Those criteria are:
a) change in a pattern of work demonstrated by:
·the parent does not work despite ample opportunity to do so
·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
·the parent has changed his or her occupation, industry or working pattern
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:
·the parent’s caring responsibilities
·the parent’s state of health
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.
The Tribunal is satisfied that neither parent’s earning capacity is a consideration in any proposed departure.
The commitments of each parent who is a party to the proceeding that are necessary to enable the parent to support himself or herself, or any other child or another person that the person has a duty to maintain
Mr Tancoch provided an update on his financial circumstances at hearing. He clarified that the property jointly owned by himself and Ms Tancoch is unencumbered. His reference to a $600,000 mortgage in his SOFC was his indication of the loan that would be required to buy out Ms Tancoch in any financial settlement of the matrimonial assets but this was not an existing liability. Mr Tancoch stated that other liabilities of $44,125 referenced in the SOFC have been paid and he has no liabilities.
Mr Tancoch otherwise confirmed that his personal expenditure is comprised of income tax and his child support liability and private health fund premiums. He stated the cost of his private health premiums has increased from the $85 per week. As noted, post hearing Mr Tancoch advised he pays a family insurance policy of $383 per month which is about $95 per week. As noted, a proportion of that coverage would include himself.
In terms of his household expenses, post hearing Mr Tancoch submitted that he had underestimated his weekly total expenses as expressed at hearing by about 20%. He now states that his total household expenses inclusive of himself and the children as stated to be about is estimated to be about $4,811. The Tribunal notes that included in this total are costs such as legal expenses, his weekly child support payments, and education costs for the children expressed as a weekly amount. The Tribunal notes that Mr Tancoch’s higher total weekly expenses in part reflects his inclusion of these amounts and also it includes rent.
In relation to the inclusion of education expenses, Mr Tancoch has estimated $543 per week which annualised is about $28,236. This is a figure in excess of the compulsory school fees (utilising the 2025 compulsory costs of $17,396) which as noted have already been paid in full of savings. Factoring in other recurrent costs (such as book lists and stationery an amount of about $5,500 per annum, the Tribunal considers a reasonable reflection of education costs as expressed in Mr Tancoch’s regular weekly expenses to be in the vicinity of about $105. Mr Tancoch as noted provided an updated SOFC this further estimates that his personal weekly expenses to be in the vicinity of $2,140 per week which as noted also includes his legal expenses of $962 per week.
Ms Tancoch’s evidence also is that she has no liabilities. Her personal expenses are comprised of income tax and superannuation contributions. In terms of her household expenses Ms Tancoch agreed that she had incorrectly annualised some of the total household expenses and on that basis the total amount of $2,787 should be adjusted. Ms Tancoch stated that she has not included her own legal costs which would be a similar amount to that claimed by Mr Tancoch. In making the relevant adjustments the Tribunal concludes that Ms Tancoch’s total household weekly expenses are in the vicinity of $2,000.
In terms of the proportion that relates to her own expenses she estimates this to be in the vicinity of about $750 per week. The Tribunal notes however that Ms Tancoch has allocated a proportion of utility costs and motor vehicle costs to the children. If the Tribunal were to apply the same approach taken by Mr Tancoch in his SOFC and allocate those costs solely to Ms Tancoch then her weekly expenses would be in the vicinity of about $1,070 per week.
Hardship
Mr Tancoch stated that he has been bearing the full cost of education expenses in addition to the periodic child support assessed by Child Support. He stated that this has caused him financial hardship and will not be sustainable once he takes out a mortgage to buy out the other parent in any final family law proceedings. He says that Ms Tancoch should make either a direct 50% contribution to the school or the assessment should be varied to accommodate such an outcome. Mr Tancoch also submits he meets other expenses such as the children’s private health insurance. He says that his overall financial position due to meeting those financial aspects has reduced his liquid funds to about $63,000.
Ms Tancoch stated she cannot afford to contribute to the private school fees. It would result in financial hardship to her and the children. She stated that Mr Tancoch was the person who put forward the arrangement that he meet the school fees and she made it clear in family law negotiations that she would not have otherwise agreed to the children continuing onto private education if she were expected to make an equal contribution.
Other considerations
The main issue at hearing was whether Mr Tancoch has agreed to meet the full costs of the children’s compulsory education costs in addition to meeting periodic child support as assessed by Child Support. In the context of this aspect, it is helpful to first set out Ms Tancoch’s position.
Ms Tancoch’s evidence is that post separation as part of family law related negotiations Mr Tancoch agreed that he would meet 100% of the compulsory education costs for the children in addition to any periodic child support amounts as assessed by Child Support. Ms Tancoch said that this was the reason why she did not oppose the children continuing onto private education as she has made it clear that she could not afford to contribute to private school fees post-separation.
Ms Tancoch stated that Mr Tancoch has continued to maintain this as his position as reflected in the terms of his proposed Binding Child Support Agreement (BCSA) and evidenced in a Heads of Agreement signed by herself and Mr Tancoch following mediation in March 2023. She said that Mr Tancoch’s undertaking to meet the education costs was not contingent upon herself and Mr Tancoch reaching agreement on outstanding family law issues such as financial settlement and parenting orders which to date are unresolved and regarding which negotiations are ongoing. Ms Tancoch says that Mr Tancoch’s agreement to pay the school fees in addition to periodic child support is evidenced by his actions in assuming sole responsibility for the education costs in arrangements he has entered into with [College].
Mr Tancoch’s position is that there is no existing agreement between the parents regarding his payment of education costs and there should be a departure in terms which reflects this and requires Ms Tancoch to contribute 50% of the private education expenses.
Mr Tancoch stated the position he has put forward as part of family law negotiations was on a without prejudice basis and contingent upon Ms Tancoch agreeing to other aspects such as 50/50 parenting and financial settlement on certain terms. Mr Tancoch said that the signed Heads of Agreement needs to be viewed in that context and simply reflects a position that the parties will at some point in the future implement should agreement be reached on those other aspects. He says that Ms Tancoch cannot in effect ‘cherry pick’ the child support aspect from the parenting and financial settlement aspects.
In response to questions asked by the Tribunal, Mr Tancoch said that he put forward the proposal that he meet the education costs in addition to any periodic child support assessment because he was motivated to quickly resolve and reach settlement of all financial and parenting issues. He said that his father (who has recently passed away) resided in the property located to the rear of the former matrimonial home and he (Mr Tancoch) wanted to be able to resolve matters so he could move back into the home so as to be close to his father.
Mr Tancoch stated that his other motivation was that it was very important to him that there be no disruption to the children’s education. He wanted to ensure that their eldest child’s transition into private education following the marital separation was not impacted and that having commenced schooling at [College] that there was no change which would have an adverse impact on the children.
Mr Tancoch agrees that he has made arrangements with the college to ensure that financial responsibility for the fees reverted to his sole name and that he has on that basis been meeting the education costs since separation.
In response, Ms Tancoch stated this was the first time that Mr Tancoch has interpreted the school fee arrangement as contingent upon the parents’ reaching agreement on other aspects. She said that in any event she has recently agreed to the parenting arrangements being pressed by Mr Tancoch in those negotiations. Mr Tancoch confirmed this to be the case but stated that Ms Tancoch has made that offer contingent upon other financial aspects.
In effect Mr Tancoch submits that Ms Tancoch is leveraging unresolved financial and parenting issues in their family law negotiations to benefit her position in the child support assessments, whilst Ms Tancoch submits that Mr Tancoch is only now raising the school fees as an issue in the child support assessment so as to leverage his negotiations in family law matters. It is apparent to the Tribunal that the parents are engaged in ongoing and concurrent family law negotiations.
Materials provided to Child Support and the Tribunal
Ms Tancoch provided evidence to Child Support that she and Mr Tancoch had reach agreement regarding non periodic support by Mr Tancoch. This included correspondence from Mr Tancoch’s solicitors dated 2 December 2021[19] which states that with regard to schooling Mr Tancoch’s position is that:
·In relation to the eldest child’s attendance at [College] he will pay enrolment fees, tuition fees and compulsory levies, cost of prescribed uniforms, shoes, books, stationery and equipment including sport, computer and compulsory camps and excursions and any other compulsory expenses and optional expenses and extra-curricular activities as agreed. For the avoidance of doubt he will also pay child support as assessed.
·In relation to their second child in the absence of a signed binding child support agreement (BCSA) he is seeking confirmation from [College] that he can be solely liable to the school and that this child’s education be resolved immediately.
·To that end he is prepared to enter into a BSCA that he will pay periodic child support as assessed.
·With respect to the secondary education of the children at [College] he will pay education expenses of enrolment fees, tuition fees and compulsory levies, cost of prescribed uniforms, shoes, books, stationery and equipment including sport, computer and compulsory camps and excursions and any other compulsory expenses.
[19] P246
A copy of an unsigned and undated BCSA in those terms was provided to Child Support. [20] Paragraph 3 provides that the parties agree the agreement will operate in conjunction with any administrative assessment of child support. Paragraph 4 provides that Mr Tancoch will pay periodic support as assessed. The document further provides that Mr Tancoch will in addition pay non-periodic support including:
[20] P 253
5.During the Period of this Agreement, Mr Tancoch shall pay by way of non-periodic child support for each of the Children, as and when they fall due, the following expenses:
5.1 in respect of [the child], education expenses at [Primary School] or such other primary school(s) as may be agreed between the Parties in writing, including but not limited compulsory fees and levies; prescribed uniforms, books, stationery and equipment, including for compulsory sport and compulsory music; prescribed computer requirements; and compulsory and agreed elective camps and excursions;
5.2 education expenses at [College] for each of the Children as and from year 7or such other secondary school(s) as may be agreed between the Parties in writing, including but not limited to tuition fees and compulsory levies; prescribed uniforms, books, stationery and equipment, including for compulsory sport and compulsory music; prescribed computer requirements; and compulsory and agreed elective camps and excursions;
5.3 one half (50%) of all medical, dental, optical, physiotherapy, chiropractic and allied health expenses as have been agreed in writing between the Parties in advance of such expenses being incurred;
5.4 one half (50%) of all extracurricular activities undertaken by the children as having been agreed in writing between the Parties in advance of such expenses being incurred; and
5.5 private health insurance at the current level of cover.
6. During the Period of this Agreement, Ms Tancoch shall pay by way of non-periodic child support for each of the Children, as and when they fall due, the following expenses:
6.1 one half (50%) of all medical, dental, optical, physiotherapy, chiropractic and allied health expenses as have been agreed in writing between the Parties in advance of such expenses being incurred; and
6.2 one half (50%) of all extracurricular activities undertaken by the children as have been agreed in writing between the Parties in advance of such expenses being incurred.
Also included in the Child Support materials is a Heads of Agreement document dated 27 March 2023 and signed by Mr Tancoch and Ms Tancoch[21] which provides:
[21] P261
The parties agree to formalise property and child support matters on a final basis and parenting matters on an interim basis in the following terms:
Parenting
1. In the event the parties have not reached agreement as to final parenting orders by 30 November 2023 the parties and the children shall attend upon [Ms A] for the purpose of an Updated Family Report at the parties equal expense.
2. The parties agree that the children shall remain at their existing schools, unless otherwise agreed, namely [College] and [Primary School].
3. The parties otherwise agree that the existing parenting arrangements shall remain in place unless otherwise agreed, pending preparation of the Family Report.
Child Support
4. Contemporaneously with signing an Application for Consent Orders, the parties shall execute a Binding Child Support Agreement in the following terms:
a. The Husband shall pay periodic child support as assessed by Services Australia.
b. The Husband shall pay non-periodic child support for the benefit of the children as follows:
i.100% of the children’s educational and associated expenses
ii.100% of the children’s private health insurance at the current level of cover
iii.50% of the children’s agreed extracurricular activities; and
iv.50% of the children’s out of pocket medical and or dental expenses
Ms Tancoch provided a copy of correspondence from Mr Tancoch’s lawyers dated 9 August 2024[22] confirming their client’s desire to resolve ongoing negotiations and implement the terms of the Heads of Agreement dated 27 March 2023 attaching a without prejudice offer of settlement that in relation to child support replicates the child support terms set out in the unsigned BCSA.
[22] B12
As noted, Mr Tancoch’s submission is that the Heads of Agreement is not a binding agreement that requires him to meet the education costs. He says that it is expressed in conditional terms, namely that the parties agree to formalise property and child support matters on a final basis and parenting matters on an interim basis in certain terms. Specifically in relation to the Child Support provisions the document simply reflects that contemporaneous to the parties signing an application for consent orders the parties shall execute a BSCA in those terms. Mr Tancoch says that none of those conditions have transpired. The Tribunal accepts that interpretation. At hearing it was confirmed that a BCSA has not been executed and the parties are yet to make an application for consent orders.[23]
[23] Negri Developments Pty Ltd v Vella [2021] NSWCA 131 which considered whether a heads of agreement entered into following mediation provided a binding pathway.
Notwithstanding the above, the relevant question for the Tribunal is what is just and equitable in the circumstances of the particular matter which takes into account the factors in subsection 117(4) of the Act. As noted, the Tribunal is not limited to the matters listed in that subsection and may consider any other relevant matters which are consistent with the objects of the Act.
In the Tribunal’s assessment, notwithstanding that the parents have not reached final agreement either in the terms of final orders or a signed BCSA, it is a relevant consideration that Mr Tancoch has maintained as his position as part of the ongoing family law negotiations that he will continue to meet the full amount of compulsory education costs for the children in addition to periodic support as assessed by Child Support. He has given effect to that position by making payment arrangements with the College and also by his actions in meeting the full costs of the children’s education in addition to the periodic child support. Ms Tancoch has relied upon that as being his position. Information provided to the Tribunal indicates that Mr Tancoch continues to maintain this as his position in negotiations. Those materials also include a provision that Mr Tancoch would continue to meet the private health insurance costs at the current level.[24]
[24] B27
The Tribunal observes Child Support policy provides guidance that a relevant consideration may be that where court proceedings are likely to affect child support (such as property settlement proceedings) the Registrar may consider it not fair to change the assessment when such proceedings are in progress.[25]
Conclusions as to whether a departure in particular terms is just and equitable
[25] 2.6.17
In this matter the Tribunal, having considered the factors in subsection 117(4) of the Act as well as other factors as discussed, comes to the conclusion that a departure to the assessment such as to require Ms Tancoch to contribute towards the children’s private costs of education would not be just and equitable.
In arriving at this conclusion, the Tribunal is satisfied that on balance the evidence demonstrates that Mr Tancoch has the financial capacity to meet the costs of education in addition to the periodic child support as assessed. Mr Tancoch’s income is significantly higher than Ms Tancoch’s. Whilst his personal weekly expenses are higher, as a proportion of income his expenses are lower in comparison to Ms Tancoch. The Tribunal observes that Mr Tancoch has been able to take advantage of the College’s early payment discount which applies if the fees are paid in full by the end of February of the academic year. The Tribunal further observes that even taking into consideration the current rate of child support, the upfront education costs and factoring in his total personal weekly expenses Mr Tancoch is meeting these expenses. Mr Tancoch’s evidence at hearing was that he has also been able to payback liabilities of about $44,000 which again indicates a level of financial capacity.
The Tribunal observes that whilst on the one hand Mr Tancoch submits that his payment of school fees, meeting private insurance costs in addition to the assessed amount of child support causes hardship in the context of the assessment, his position in family law negotiations appears to be that he has capacity and will continue to meet periodic child support in addition to sole responsibility for the costs of education and to continue meeting the health insurance costs.
Also relevant in the Tribunal’s view is that Mr Tancoch has undertaken a course of conduct since separation consistent with that stated position and notwithstanding that property settlement and parenting negotiations are ongoing. Ms Tancoch has relied upon Mr Tancoch’s position and actions. In that regard the Tribunal also takes into account relevant Child Support policy where parents are actively engaged in related family law negotiations which may have an impact.
Conclusions as to a particular departure
In this matter the Tribunal has concluded that a departure in terms which requires Ms Tancoch to contribute towards the costs of education would not be just and equitable. The Tribunal however otherwise concludes that a departure which reflects the changes to Ms Tancoch’s employment income which was not captured by the ATI being utilised in the assessment at the time Mr Tancoch made his change of assessment application is just and equitable. As noted, this aspect was not contested at hearing and the parties were in agreement that the departure captured a relevant change in Ms Tancoch’s income.
The Tribunal concludes that a departure in terms as currently expressed remains undisturbed, namely that for period 1 December 2023 to 31 December 2025 Ms Tancoch’s ATI is varied to $84,659 per annum. In the Tribunal’s view, such a departure also makes some allowance for the additional costs Mr Tancoch has undertaken to meet as part of family law negotiations.[26]
[26] The Tribunal notes that if both parties 23/24 ATI were to be utilised in the assessment the annual rate would be slightly higher than it is under the existing departure.
Issue 3 – Would it otherwise be proper to make a particular departure determination?
The final step is for the Tribunal to determine whether it is “otherwise proper” to make a particular departure determination. Subsection 117(5) of the Act requires the Tribunal to take into account whether the proposed departure is proper in the context of public interest and welfare expenditure of the community. A prime objective of the legislation is that parents are obliged to support their own children to the extent of their real capacity and such obligation should not be unnecessarily abrogated to the public welfare system.
Ms Tancoch is in receipt of family assistance payments. As a departure in these terms may result in a change in the level of welfare expenditure of the community, the Tribunal is satisfied that it is otherwise proper to depart from the administrative assessment.
DECISION
The Tribunal affirms the decision under review.
| Date(s) of hearing: | Friday, 7 February 2025 |
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