Tatnell and Tatnell (Child support)

[2019] AATA 1216

Tatnell and Tatnell (Child support) [2019] AATA 1216 (4 April 2019)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2019/PC015746

APPLICANT:  Mr Tatnell

OTHER PARTIES:  Child Support Registrar

Ms Tatnell

TRIBUNAL:Senior Member R Ellis

DECISION DATE:  04 April 2019

DECISION:

The Tribunal sets aside the decision under review and, in substitution, decides that the estimate of income lodged by Mr Tatnell on 11 November 2018 be accepted.

CATCHWORDS

CHILD SUPPORT – particulars of the administrative assessment – estimate of income - whether the estimate should have been refused - decision not to exercise the discretion to refuse - estimate of income accepted - 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

1. This review is about the acceptance of an estimate election used to assess child support in respect of the children [Child 1] and [Child 2].

2. Mr Tatnell and Ms Tatnell are the parents of [Child 1] (born July 2001) and [Child 2] (born February 2004) and Mr Tatnell is the parent liable to pay child support under the assessment.

3. On 7 December 2018 the Department of Human Services, Child Support (the Child Support Agency) made a decision to accept an income estimate from Mr Tatnell of $61,931 annualised to be used in the child support assessment from 11 November 2018 to 30 June 2019 (the original decision).

4. On 3 January 2019 Ms Tatnell objected to this decision and on 9 January 2019 the Child Support Agency allowed the objection and refused to accept the estimate of income lodged by Mr Tatnell.

5. On 10 January 2019 Mr Tatnell applied to the Administrative Appeals Tribunal (the Tribunal) for a review of the objection decision.

6. The Tribunal conducted a hearing into the application on 4 April 2019.  Mr Tatnell and Ms Tatnell gave evidence on affirmation by conference telephone.  The Child Support Agency provided the Tribunal and the parties with papers relevant to the matter (161 pages).  Mr Tatnell provided additional documents prior to the hearing and these were distributed to the parties (A1-A9).

ISSUES

1. The statutory provisions relevant to this review are contained in the Child Support (Assessment) Act 1989 (the Act).

2. The Child Support Agency makes child support assessments for a child support period using a formula outlined in Part 5 of the Act.  The variables in the formula include the adjusted taxable incomes of both parents and ordinarily this is equal to the taxable income and supplementary amounts for the financial year that ended before the start of the child support period.  Supplementary amounts include such things as reportable fringe benefits.

3. Section 60 of the Act allows a parent to elect to use an estimate of their adjusted taxable income to apply from the day of the election to the end of the financial year (estimate period).  The estimate is an annualised amount of their taxable income and supplementary amounts for the estimate period.  It must be no more than 85 per cent of the adjusted taxable income that applies when the parent makes the estimate election.

4. The parent making the estimate election must also estimate their adjusted taxable income from the start of the financial year to the beginning of the estimate period (year to date income).  This allows the Child Support Agency to reconcile the estimate when information is available from the Australian Taxation Office for the relevant financial year.

5. The Child Support Agency may refuse to accept an estimate election if satisfied the amount estimated for the partial year is less than the amount considered likely to be the actual adjusted taxable income for the partial year (section 63AA of the Act).

6. The issue which arises in this case is whether or not the Child Support Agency made the legally correct decision to refuse Mr Tatnell’s estimate of income made on 11 November 2018.

CONSIDERATION

1. Mr Tatnell told the Tribunal that he lodged his estimate online on 11 November 2018 after his employer told him that work was slowing down and there would be almost no overtime.

2. Mr Tatnell said he then contacted the Child Support Agency to explain his employment situation and provided payslips showing his income and the lower overtime he was receiving.  Mr Tatnell said he told the Child Support Agency that his overtime would drop from 22 November 2018.  Mr Tatnell said there had definitely been a decline in his income since he first advised the Child Support Agency.

3. Mr Tatnell pointed out that he was paying more child support now for his two children than he was a couple of years ago when paying child support for three children and earning more.  Mr Tatnell said he felt this was unfair and he was now struggling financially.

4. The Tribunal notes that on 7 December 2018 during a conversation with a child support officer Mr Tatnell stated his average income was now approximately $1,271 per week gross and his regular overtime ceased from 22 November 2018.  Mr Tatnell confirmed to the Tribunal this was still the case.

5. Ms Tatnell told the Tribunal she did not believe it was relevant what Mr Tatnell was paying in child support previously.  Ms Tatnell said she was only concerned with the estimate of income provided by Mr Tatnell as she believed his income would be higher.  Ms Tatnell said she had no further comments to make.

6. The Tribunal also notes in evidence provided by the Child Support Agency a number of weekly payslips from Mr Tatnell for the pay period ending 14 November 2018 to the pay period ending 19 December 2018.  These show his annual salary is $63,232 and a decline in overtime paid during this period.  The payslips show the following gross earnings:

• Pay period ending 14 November 2018 - $1,687.04

• Pay period ending 21 November 2018 - $1,720.96

• Pay period ending 28 November 2018 - $1,257.92

• Pay period ending 5 December 2018 - $1,285.12

• Pay period ending 12 December 2018 - $1,290.24

• Pay period ending 19 December 2018 - $1,271.36

1. An income estimate can be made if, in the case of a first election for a year of income, the estimate is 85 per cent or less than the parent’s adjusted taxable income for the last relevant year of income (subsection 60(1)(b) of the Act).  A parent may not make an income estimate if an income amount order is in force in relation to the parent and any part of the period to which the election would apply if made (subsection 60(6) of the Assessment Act).

2. The last relevant year of income for the new child support period which commenced on 1 September 2018 is Mr Tatnell’s 2017-18 income of $76,149.  The Tribunal is satisfied the annualised estimate of income of $61,931 meets the 85 per cent test.  The Tribunal is also satisfied there was no income amount order in place at the time Mr Tatnell elected to lodge his estimate.

3. The Tribunal also considered the discretion used by the Child Support Agency, under section 63AA of the Act, to refuse the estimate election made by Mr Tatnell.  This discretion may be exercised in circumstances where evidence suggests a parent’s estimated income is less than their likely actual adjusted taxable income for the election period.

4. Although Mr Tatnell lodged his income estimate online on 11 November 2018 he later advised the Child Support Agency his regular overtime would drop from 22 November 2018.  The Tribunal examined the gross salary received by Mr Tatnell from the date his regular overtime dropped to the date the Child Support Agency made the original decision on 7 December 2018.  His payslip for the pay period ending 28 November 2018 shows a gross income of $1,257.92.  His payslip for the period ending 5 December 2018 shows a gross income of $1,285.12.  His payslip for the pay period ending 12 December 2018, which is the period during which the Child Support Agency made the original decision, shows a gross income of $1,290.24.

5. The average gross wages over the three relevant pay periods is $1,277.76 per week.  The estimate of income lodged by Mr Tatnell is $61,931 for the estimate period from 11 November 2018 to 30 June 2019 which is $1,187.72 per week ($61,931 divided by 365 x 7).  This means Mr Tatnell’s estimate of income for the period is slightly less, approximately 7 per cent less, than his actual income.

6. The Tribunal does not consider this significant enough to warrant exercise of the discretion available under section 63AA to refuse the estimate election made by Mr Tatnell.

7. The Tribunal notes that when Mr Tatnell’s 2018-19 taxable income becomes available his estimate of income made on 11 November 2018 will be compared with his actual income for that year (known as an estimate reconciliation).  If his actual income is more than his estimated income, the child support assessment will be amended using his actual income.

DECISION

The Tribunal sets aside the decision under review and, in substitution, decides that the estimate of income lodged by Mr Tatnell on 11 November 2018 be accepted.