Tebbutt and Tebbutt (Child support)

[2021] AATA 695

Tebbutt and Tebbutt (Child support) [2021] AATA 695 (19 January 2021)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2020/BC020237

APPLICANT:  Ms Tebbutt

OTHER PARTIES:  Child Support Registrar

Mr Tebbutt

TRIBUNAL:Member M Douglas

DECISION DATE:  19 January 2021

DECISION:

The decision under review is affirmed.

CATCHWORDS

CHILD SUPPORT – particulars of the administrative assessment – estimate of income – whether the estimate was correctly reconciled – 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 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

1. Ms Tebbutt and Mr Tebbutt are the parents of [Child 1] and [Child 2].  With effect from 12 March 2017, the Child Support Registrar has issued administrative assessments of child support for those children that obligate Mr Tebbutt to pay child support to Ms Tebbutt for them.

2. The Child Support Registrar acts through staff employed within the Government department known as Services Australia – Child Support and hereafter a reference by the Tribunal to Services Australia is to be read as a reference to the Child Support Registrar or the delegates of the Registrar employed by Services Australia through which the Registrar acts.

3. The child support assessment issued for the period commencing 1 August 2019 used an adjusted taxable income for Mr Tebbutt of $51,008. That amount was computed in accordance with subsection 43(1) of the Child Support (Assessment) Act 1989 (the Act), and it consisted entirely, as the Tribunal understands it, of Mr Tebbutt’s taxable income for the 2019 financial year.

4. On 29 April 2020, Mr Tebbutt made an election under subsection 60(1) of the Act for his adjusted taxable income for the period 29 April 2020 to 30 June 2020 to be $26,749.  In accordance with subsection 60(3), Mr Tebbutt was also required to estimate what his yearly income was for the financial year to 28 April 2020.  He advised Services Australia that amount was $14,594.64.

5. On 6 July 2020, Services Australia ascertained that Mr Tebbutt’s actual adjusted taxable income for the 2019/2020 financial year was $41,887.  It is not entirely clear from the documents that Services Australia provided the Tribunal, pursuant to subsections 37(1) and 38AA of the Administrative Appeals Tribunal Act 1975 (the hearing papers), how Services Australia ascertained that, but it would seem it did so from the Australian Taxation Office (ATO). 

6. Thereupon, consistent with subsection 64(3) of the Act, Mr Tebbutt’s adjusted taxable income for the period 29 April 2020 to 30 June 2020 became the amount calculated in accordance with subsection 64(4) of the Act, which was $158,122, and in accordance with section 64AA of the Act, Services Australia then amended the assessment of child support for the period 29 April to 30 June 2020 such that it was calculated on an adjusted taxable income for Mr Tebbutt of $158,122.

7. On 28 August 2020, Services Australia ascertained from the ATO that Mr Tebbutt had “a new taxable income” for the 2019/2020 financial year of $49,192 (hearing papers page 91).  Services Australia then recalculated under subsection 64(4) that Mr Tebbutt’s adjusted taxable income for the period 29 April to 30 June 2020 was $200,445 and upon doing so amended the assessment again under section 64AA such that for the period 29 April to 30 June 2020 Mr Tebbutt’s child support liability was calculated on that amount.

8. In a discussion that Services Australia had with Mr Tebbutt on 23 September 2020, Services Australia ascertained that the year to date income amount Mr Tebbutt had provided Services Australia on 29 April 2020 for the period 1 July 2019 to 28 April 2020 was “potentially incorrect”.  Services Australia requested Mr Tebbutt to provide evidence regarding the income he had earned in that period, which Mr Tebbutt subsequently did (hearing papers pages 112–116).  That evidence established that Mr Tebbutt’s year to date income for the period 1 July 2019 to 28 April 2020 was $42,328 and not the amount of $14,594.64 that Mr Tebbutt had initially informed Services Australia on 29 April 2020. 

9. On 11 November 2020, Services Australia “through the objection process” then determined under subsection 63AE(1) of the Act to replace the year to date income that Mr Tebbutt had provided it on 29 April 2020 with the amount of $42,328.

10. Services Australia also “part allowed” the objection that Mr Tebbutt lodged with it on 15 August 2020 relating to the decision of Services Australia to amend the assessment under section 64AA of the Act so that it was calculated on the adjusted taxable income that Services Australia had calculated for Mr Tebbutt under subsection 64(4) of the Act.  The decision of Services Australia in response to Mr Tebbutt’s objection was to “re-reconcile his estimate for the period 9 March [sic: 29 April] 2020 to 30 June 2020 and compare this with an amended adjusted taxable income for the financial year 2019/2020 of $49,192”. 

11. Services Australia expressed its objection decision very poorly. In substance, by the words Services Australia used, it merely advised Mr Tebbutt and Ms Tebbutt what was required under subsections 64(3) and (4) of the Act in terms of reconciling Mr Tebbutt’s actual taxable income with his estimate of income.  The notices of assessment that Services Australia posted to Mr Tebbutt and Ms Tebbutt on 11 November 2020 (hearing papers pages 7–9) reveal that the actual decision it made in response to Mr Tebbutt’s objection was to amend the assessment for the period 29 April to 30 June 2020 such that it was based on an adjusted taxable income for Mr Tebbutt that Services Australia had obviously recalculated under subsection 64(4) as $39,767.  

12. On 13 November 2020, Ms Tebbutt applied to the Tribunal for review of that decision.  The Tribunal heard her application on 19 January 2021.  She and Mr Tebbutt participated in the hearing by use of the software package Microsoft Teams.  The Tribunal had regard to their evidence provided orally at that hearing and also to the documents that Services Australia provided in accordance with its obligations under subsections 37(1) and 38AA of the Administrative Appeals Tribunal Act 1975.  The Tribunal has been referring to those documents as “the hearing papers”.

13. There has been no challenge to the decision of Services Australia under subsection 63AE(1) of the Act to substitute the amount of $14,594.64 that Mr Tebbutt advised Services Australia on 29 April 2020 for his year to date income with the amount of $42,328.  By virtue of Item 11B of the Table in section 80 of the Child Support (Registration & Collection) Act 1988, Mr Tebbutt is the only party who can object to that decision.  He has not.

14. That being the case, the decision of Services Australia to “re-reconcile” Mr Tebbutt’s estimate of income for the period 29 April 2020 to 30 June 2020 and amend the assessment for that period using an adjusted taxable income for Mr Tebbutt of $39,767 was correct.  The difference between Mr Tebbutt’s actual adjusted taxable income of $49,192 and his amended year to date income of $42,328 is $6,864 (the difference), which is greater than the amount $4,617 that Mr Tebbutt estimated on 29 April 2020 his income would be for the remainder of the financial year.  Hence, consistent with subsection 64(3) of the Act a reconciliation between the amount that he elected on 29 April 2020 as his adjusted taxable income for that remaining part of the financial year and his actual taxable income was required.  Consistent with subsection 64(4), his reconciled adjusted taxable income was correctly calculated by Services Australia by dividing the difference by the 63 days that comprised the remaining part of the financial year and multiplying that product by 365.  The result of that equation is $39,767.

DECISION

The decision under review is affirmed.