Thomas and Newhouse (Child support)

Thomas and Newhouse (Child support) [2024] AATA 2028 (19 April 2024)

DIVISION:Social Services & Child Support Division
REVIEW NUMBER:  2023/PC026813
APPLICANT:  Mr Thomas
OTHER PARTIES:  Child Support Registrar
Ms Newhouse

TRIBUNAL:Member S Hoffman
DECISION DATE: 19 April 2024
DECISION:

The Tribunal sets aside the decision under review and, in substitution, decides as follows:

Mr Thomas’s adjusted taxable income is varied to $53,000 for the period from 1 May 2022 to 30 April 2026.
Ms Newhouse’s adjusted taxable income is varied as follows:
oFrom 1 January 2023 to 31 March 2023                  to $43,000
oFrom 1 April 2023 to 31 August 2023  to $24,518
oFrom 1 September 2023 to 31 December 2023       to $43,000
oFrom 1 January 2024 to 12 March 2024                   to $24,518
oFrom 13 March 2024 to 30 April 2026  to $35,000

CATCHWORDS
CHILD SUPPORT – change of assessment – income, property and financial resources – earning capacity – adjusted taxable income is varied – decision under review set aside and substituted

Names used in all published decisions are pseudonyms. Any references appearing in square brackets indicate that information has been removed from this decision and replaced with generic information so as not to identify involved individuals as required by subsections 16(2AB)-16(2AC) of the Child Support (Registration and Collection) Act 1988

REASONS FOR DECISION

BACKGROUND

The first of the two child support cases relevant to this review was registered with Services Australia – Child Support (Child Support) on 22 September 2019. Child Support has been involved with the collection of child support since then. For most of the time the father was recorded as being the paying parent (case number 412290011) although there was a period when the mother was recorded as being the paying parent (case number 412290015).
Child support was payable for three children: [Child 1], [Child 2] and [Child 3]. [Child 1] turns 18 years old on [date] 2024. The other children are aged 15 and 11 years old, respectively.
On 4 April 2023, the father applied for a change of assessment (COA). At that time, he was assessed to pay child support of $9,315 a year, based on an adjusted taxable income for him of $91,000, the mother’s 2021-22 provisional income of $21,122 and the parents sharing the care of the children equally.

The father’s adjusted taxable income of $91,000 did not reflect his taxable income as recorded by the Australian Taxation Office (ATO) but was the adjusted taxable income as per an objection decision made on 1 December 2022. The father did not seek review of that decision with the AAT.
From 7 April 2023, the father’s annual child support liability reduced to $6,210 as there was a change in the care of [Child 1].

Following the COA application of 4 April 2023, an original decision was made on 17 July 2023. According to that, no change was made to the child support assessment then in place (the original decision).
On 30 July 2023, the father objected to the original decision. On 30 August 2023, an objections officer from Child Support decided as follows:
· For the period 1 August 2023 to 31 December 2024, the mother’s adjusted taxable income was varied to $60,000 (the objection decision).
The objection decision meant the father continued to be assessed for child support on an adjusted taxable income of $91,000.
On 22 September 2023, the father lodged an application for review of the objection decision with this Tribunal.
A directions hearing was held on 21 February 2024 via MS Teams audio (equivalent to conference telephone) and attended by both parents. The substantive hearing was held on 3 April 2024. Both parents attended via MS Teams Audio and gave sworn evidence.
Child Support had provided documents in two bundles numbered 1 to 373 and 374 to 431. Both parents had been directed to provide documents. The father submitted documents numbered A1 to A37 but did not fully comply with the directions. The mother did not submit any of the documents she had been directed to provide before the hearing. Copies of documents before the Tribunal were provided to the parents before the main hearing.
After the hearing the mother submitted documents, numbered B1 to B7. Because of the information provided in these documents, on 12 April 2024, the Tribunal issued post-hearing directions. The father responded to the second directions letter on 15 April 2024 but did not fully comply with the directions in that letter. The Tribunal made its decision on 19 April 2024.

ISSUES

The statutory provisions relevant to this review are contained in the Child Support (Assessment) Act1989 (the Act). The Act provides for an administrative assessment of child support to be paid. Pursuant to section 98C of the Act, a decision to depart from the administrative assessment may be made if the following three requirements are met:
i.A ground is established; and
ii.It would be just and equitable as regards the child, the liable parent and the carer entitled to child support to make a particular determination; and
iii.It would be otherwise proper to make a particular determination.

The grounds for departure from an administrative assessment of child support are set out in subsection 117(2) of the Act.
If the Tribunal is satisfied that the three requirements are met, it may make one of the determinations prescribed in section 98S of the Act, which include variations to the annual rate of child support payable, or to the adjusted taxable incomes of the parents and/or carer, or to other components of the statutory formula used to calculate child support.

CONSIDERATION

Issue 1 – Does a ground exist to depart from the administrative assessment?

Subparagraph 117(2)(c)(ia) of the Act provides a ground for departure exists where, in the special circumstances of the case, the administrative assessment of child support would result in an unjust and inequitable determination of the rate of child support because of the income, property and financial resources of either parent.

The father’s income

According to Child Support’s records, the father’s taxable income was $36,984 for 2018-19, $69,405 for 2019-20, $41,960 for 2020-21 and $49,479 for 2021-22. The father submitted his tax return for 2022-23, according to which his taxable income was $49,918.
The father is self-employed as a [Occupation 1]. He said that his income was higher in 2019-20 compared to other years as he was working for an employer during that year. He could not get [jobs] at the time and was employed during 2019-20 as a general labourer. He was paid penalty rates and for working overtime, which explained why his income was as high as it was. But his trade was [Occupation 1] and he went back to that, which he preferred. Plus, he had to travel further to get to work when he was employed as a general labourer, which was a negative for him.
The father operates his [business] both as a sole trader and through a company. He registered as a sole trader on 19 March 2017 and registered for goods and services tax from 10 December 2021. He registered his company, [Company 1] Pty Ltd, on 22 August 2022.
The father’s evidence, supported by his tax returns, was that he sometimes subcontracted to other workers. His main work was [deleted] and he worked mainly for one builder, which was his preference, but he had to get work from wherever he could.
The father’s evidence was that if, for example, he takes on work as a subcontractor subcontracted to another [Occupation 1] (rather than contracting to a builder), then he records that income as a sole trader. When he takes on work as a subcontractor, he does that work himself. Since he started his company, if he was contracting to a builder and hiring his own [Occupation 1]s and other tradespeople, the father would record the income and expenses for that job through the company. Prior to starting the company, costs associated with the father hiring subcontractors were recorded in his sole trader tax returns.
The father did not stop operating as a sole trader when his company started. He uses whichever option is better suited for the kind of work he has taken on. The Tribunal understands that he is essentially following his accountant’s advice in this regard.
The father said that he does not work full time. Until recently, the care arrangements for the children were generally a week about. He worked part time during the weeks the children were in his care, especially during school holidays. He did the school runs during term time. He said his partner has a similar arrangement for her children. The weeks his and his partner’s children are in their care, there are four of them, an 11-year-old and three teenagers.
The mother disputed the father’s claim that he sometimes worked part time, on the basis that there were other people to help the father out with caring for the children. The father disagreed with the mother on this point. The Tribunal considers it credible that a parent may reduce their working hours from time to time when their children are in their care.
The Child Support decision made in December 2022 used an adjusted taxable income for the father of $91,000. This was based on an analysis of his bank statements up to July 2022. At the time, the father was operating only as a sole trader and had not yet registered his company.
The father did inform Child Support that there were two people who subcontracted to him, but according to an original decision made on 18 August 2022, he did not provide supporting documentation. Child Support calculated his adjusted taxable income after applying the Australian Taxation Office (ATO) benchmark for the [specified] industry. According to the benchmark, reasonable business deductions for a [Occupation 1] would amount to 58% of turnover.
Based on bank statements, Child Support calculated the father’s annualised business turnover to be $242,469. Expenses were estimated according to the benchmark, resulting in a profit of $101,837.
For 2022-2023, according to tax returns, the company recorded a loss of $124. Its turnover was $158,995. In addition, as a sole trader, the father made sales of $102,379. The total turnover for 2022-23 was therefore $261,374 ($158,995 + $102,379). Payments to contractors recorded in the company’s tax return were $137,428 and in the sole trader tax return were $28,096. These two figures, which total $165,524, represent 63% of total turnover. That is, the payments made to people employed by the father exceeded the ATO benchmark of 58% of turnover for all expenses. Clearly the father’s business expenses were much higher than the ATO benchmark.
The father said he did not necessarily work at the same location as his subcontractors. They might be working when he was not, but he has to pay them.
The father said that generally the builders he worked for purchased materials, such as the [materials]. But he had to get tools and if they ran out of something on site, [it] could be quicker for him to purchase it than arrange for the builder to do so. He said he provided the tools used by the people subcontracted to him.
The business tax return recorded other expenses. The most significant, apart from payments to subcontractors, were for motor vehicle expenses of $8,742, and replacements of $7,117. The father said he thought ‘replacements’ referred to replacing tools. Motor vehicle and replacement costs recorded in the sole trader tax return were $12,656 and $3,819 respectively. According to a notation in the sole trader tax return, the motor vehicle costs were calculated according to the log book of the vehicle’s mileage.
The father said he had two utes used for work, a [vehicle] and a [vehicle]. He said his partner has the use of a vehicle supplied by her employer and also owns a [vehicle]. The [vehicle] is available to him for personal use.
In his Statement of Financial Circumstances (SFC) submitted to the Tribunal, the father recorded a loan of $60,000 to [a] Financial Services, which provides car loans. The father said he paid $1,000 a month for his work vehicle. This would account for some of the motor vehicle costs recorded in the company tax return.
The personal tax return recorded a depreciation expense of $2,500 relating to a trailer. The father said that he had purchased a trailer for about $5,000. The depreciation expense of $2,500 recorded for 2022-23 suggests that the trailer was purchased prior to 2022-23, in which case $2,500 was not expended during that year. On that basis, the Tribunal considers $2,500 was an additional financial resource available to the father and is to be added back to his 2022-23 taxable income of $49,918 for child support purposes, giving a figure of $52,418. The Tribunal will round this up to $53,000. (This rounding up will have a negligible effect on the rate of child suppprt.)
The Tribunal notes that according to seek.com.au, the average salary for a [Occupation 1] in Australia is between $30,000 and $50,000. For Western Australia, it is $35,000 and for New South Wales, it is $70,000.[1]
[1] Seek (2024) [deleted]
There is no record of the father owning property in Australia. He said he currently rents his home for $650 a week.
The mother said that she and the father came to Australia from [Country 1] in 2017 and separated soon after. She claimed that he still owned property in [Country 1], which was the home they lived in for four years before moving to Australia. The father said his father (Mr [name]) had taken on the finance for the property. He said he had signed the property over to his father. It used to be rented out and lost money. The mother said she believes the property has not been sold and is being rented out.
After the hearing the mother sent in copies of records from [Country 1]’s [Land] Registry, according to which [address] is owned by the father as at 3 April 2024.
The Tribunal issued directions to the father asking him to provide a statement regarding the property. If he was still the owner of the property, he was to provide relevant information including the estimated value of the property, the value of any mortgage held over it, advice as to whether the property was rented, and if so, for how much and to whom the rent was paid; and if it was not rented, who lives there.
If the father’s position was that he did not own the property, he was directed to provide a statement setting out details such as when the property was sold and for how much.
In addition, the Tribunal asked for documents corroborating the information the father provided in his statement. The directions letter stated that failure to comply with the directions may result in the Tribunal drawing adverse inferences against a party.
The father’s response was as follows:
The property is run and owned by [his father’s name]. He receives any money from it and he also puts all the work and money into it if and when needed. I no longer have anything to do with the property.
The father’s written response was not satisfactory. It would have been in his interests to respond fully to the directions. The Tribunal notes that the father’s tax return did not record income from overseas or that he owns a property overseas.
It may well be that the father does not benefit on an ongoing basis from owning [Country 1] property. The fact of owning an investment property does not of itself mean that a parent’s adjusted taxable income should be increased to reflect that; it depends on the particular circumstances in each case and whether owning the property results in an unjust and inequitable determination of the rate of child support. Without full details, the Tribunal cannot properly assess if that is the case.
However, the father’s evidence at and after the hearing was that he does not receive rent from [Country 1] property. The Tribunal has decided to give the father the benefit of any doubt on this point and finds he does not currently get a benefit from [Country 1] property.[2]
[2] See paragraphs 90 and 91 of these Reasons for further comment on this point.
In light of the foregoing, the Tribunal considers that $53,000 adequately reflects the father’s income, property and financial resources for the period from 1 July 2022.

The mother’s income

The mother has not lodged tax returns in recent years. According to Child Support, she has been receiving income support from at least 2018. The mother said her youngest daughter (not a child of this case) is two years old.
The mother told Child Support on 3 August 2023 that she had recently started working on a self-employed basis for about 20 hours a week. She estimated her income for the-then current year was about $40,000, including Centrelink income. The objections officer decided that the mother should be assessed on $60,000 a year “to take into account additional benefits and financial resources being self-employed”.
The Tribunal could not locate any detail as to how the figure of $60,000 was reached. The mother said it was heavily overestimated. She said it was put to her and she agreed to it as she thought $60,000 would cover all of her income. The Tribunal is not satisfied that the amount of $60,000 a year is appropriate for reasons that follow.
The mother said at the hearing that she worked from January 2023 to January 2024, with a gap from March 2023 to September 2023, during which she was unemployed. When she was employed, she was [doing specified work]. She was homeless for about seven months and lived in a caravan with no running water or electricity. It was parked on the property where she worked.
That property was then sold, and it was too stressful trying to live in a caravan with four children. She stopped work in January 2024 and needed to find somewhere to live. She said she started a new job about three weeks before the hearing. As the hearing was held on 3 April 2024, the Tribunal finds that she started work again on 13 March 2024.
The mother said she rents accommodation located on the property where she now works. She does not have a regular income but estimates she has earned about $200 a week over the last three weeks. This is equivalent to $10,400 a year.
The mother said that she thought she earned about $35,000 during the period from January 2023 to January 2024. She was working part time and was paid as a sole trader. She worked variable hours. She said she averaged about $350 a week from employment. This is equivalent to $18,200 a year, rather than $35,000 a year. It also assumes she worked all throughout the year which was not the case.
The mother was paid parenting payment and family tax benefit (FTB). She said she got about $1,700 every two weeks from Centrelink, which is $44,200 a year. Based on her bank statements, on 17 June 2023, when she was not working, she was paid $553 in FTB, $943 in parenting payment and $168 in rent assistance.[3] Of the three payments, only parenting payment is taken into account when working out a person’s adjusted taxable income for child support purposes.
[3] Page 245 of the Child Support documents.
The mother said that she told Centrelink about her income from employment. Based on her figures and information from the bank statements, the mother’s income was about $18,200 from employment plus $24,518 in Centrelink income support payments, totalling $42,718, which rounded up is $43,000. It is likely that her Centrelink payments reduced during periods when she was working but she has not provided the documentary evidence on this point. The Tribunal considers that it is appropriate for the mother to be assessed on an income of $43,000 for the periods during 2023 when she was employed.
The Tribunal observes that if the FTB and rent assistance paid to the mother are added to $42,718, then that figure increases to $61,464.[4] As noted, a person’s adjusted taxable income for child support purposes does not include FTB or rent assistance. The Tribunal is satisfied that $60,000 is an overestimation of the mother’s adjusted taxable income during the relevant period.
[4] $553 + $168 = $721. 26 fortnights x $721 = $18,746. Then $18,746 plus $42,718 gives $61,464.

As already noted, the mother said she was unemployed between March 2023 and September 2023. It is not appropriate that she is assessed on an income of $43,000 a year in relation to a period during which she was unemployed.
At the hearing the mother checked her bank account online and said that the last payment she received in March 2023 was $200 and the next time she was paid for employment was in September 2023 in the amount of $500. The mother then worked until January 2024. As noted earlier, she started earning about $200 a week ($10,400 a year) about three weeks before the hearing from, say, 13 March 2024. The Tribunal will use an income for child support purposes of $35,000 from 13 March 2024, which is based on the mother’s parenting payment of $24,518 plus $10,400.
The Tribunal notes that the mother works part time and cares for a two-year-old as well as the other children. [The specified job] are not particularly well-paid. Given the information available to it as set out above, the Tribunal considers that the following amounts adequately reflect the mother’s income, property and financial resources for child support purposes at different times.
·     From 1 January 2023 to 31 March 2023  $43,000
·     From 1 April 2023 to 31 August 2023  $24,518
·     From 1 September 2023 to 31 December 2023             $43,000
·     From 1 January 2024 to 12 March 2024  $24,518
·     From 13 March 2024  $35,000

How does the administrative assessment compare with an assessment of child support using the Tribunal’s income figures for the parents?

The figures that follow should be regarded as estimates, due to the complexity of the child support formula.
On 4 April 2023, the father applied for a COA. At that time, he was assessed to pay child support of $9,315 a year, based on an adjusted taxable income for him of $91,000 and the mother’s 2021-22 provisional income of $21,122.[5] That assessment was based on the parents sharing the care of the children equally.
[5] Page 151 of the Child Support documents.
Using the Tribunal’s income figures of $53,000 for the father and $24,518 for the mother, the father’s annual child support liability would be $3,825. (If $43,000 was used for the mother, the father’s annual liability would reduce to about $1,400.)
From 7 April 2023, there was a change in [Child 1]’s care such that the father provided 79% of his care and the mother provided 21% of his care. On that basis, using incomes of $91,000 and $24,518 for the parents, the father’s annual rate of child support was $6,210.
Using the Tribunal’s income figures results in the father having an annual child support liability of $2,550 from 7 April 2023. (If $43,000 was used for the mother, the father’s annual liability would reduce to about $400.)
Given the difference between the father having an annual child support liability of about $3,825 then $2,550, rather than $9,315 then $6,210, the Tribunal is satisfied that in the special circumstances of this case, the administrative assessment does result in an unjust and inequitable rate of child support, and that a ground for departure from the administrative assessment has been established pursuant to subparagraph 117(2)(c)(ia) of the Act.

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 an administrative assessment of child support, the next step is to consider whether it is just and equitable as regards the children, the father and the mother 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 a variety of factors, as set out in subsection 117(4) of the Act.[6]
[6] The Tribunal is required to give “overt consideration” to relevant factors listed in subsection 117(4) of the Act: Tyagi and Meares (SSAT Appeal) [2008] FMCAfam 886.
Section 3 of the Act makes it clear that parents have the primary duty to maintain their children, and that this duty has priority over all commitments of the parents other than commitments necessary for self-support or the support of another person the parent has a duty to maintain. In this case the father and the mother have the primary duty to financially support the children of this case.

Income, property and financial resources – the father

The father submitted only three pages of the nine-page SFC, so the Tribunal has limited information about other details of his finances. He said it was difficult for him to estimate his weekly income as it was so variable. If it rained for two weeks, he had no work.
The father is paid FTB of about $175 to $195 a week. He wrote in the form that it was $195 a week and said at the hearing that it was $350 a fortnight. This difference has no bearing on the Tribunal’s decision. As noted earlier, FTB is not included in a person’s adjusted taxable income for child support purposes.
Also noted earlier, the father lives in a rental property, which costs $650 a week. He said his partner works full time in [a] sector. They split the household costs in half. He does not have any savings or superannuation. The Tribunal referred earlier to the $60,000 loan taken out to finance the purchase of one of the utes he uses for work. Otherwise (and apart from arrears of child support), he has no debts. He does not owe anything on credit cards.

Income, property and financial resources – the mother

The mother did not submit an SFC so the Tribunal also has limited information about her financial situation. In addition to what has already been set out, the mother said that there was a time when she had $1,500 in her bank account but she has since used these savings. She owns a [vehicle] from 2011. She also owns a [animal], [and] she pays $120 a fortnight.
The mother said that where she is currently working is [a] centre. The woman who owns that business asked the mother to run it, which involves [details deleted], as needed. The mother said that the business owner rents the 43 acres for $1,500 a week and the mother lives in a house on the property for which she pays $500 a week in rent.

Other issues pertaining to the parents’ incomes, property and financial resources

Should a parent’s earning capacity be taken into account in the child support assessment?

Subsection 117(7B) of the Act prescribes the circumstances in which a parent’s earning capacity may be taken into account; certain criteria have to be met.
These include that the parent has failed to demonstrate that decisions made about their work arrangements were not substantially motivated by the effect they would have on the rate of child support.
The decision maker is required to consider whether, for example, changes to a person’s work arrangements are justified on the basis of their caring responsibilities and/or their state of health. If those do not apply, the decision maker is then required to consider whether the parent has demonstrated that affecting the rate of child support was not a major purpose of decisions the parent made about their work arrangements.

The Tribunal will first consider the father. As noted earlier, the father’s taxable income in 2019-20 was $69,405 but more recently it has been about $50,000 a year. The father explained that his 2019-20 income was higher because he took on general labouring work when he could not get [jobs], the latter being his trade and his preferred employment. The father also has caring responsibilities.
The mother too has caring responsibilities. She has recently started a new job. She was homeless and living in a caravan without running water or electricity for about seven months of the period relevant to this review. As with the father, there was no evidence of her making decisions about her employment to affect the rate of child support.
The Tribunal is satisfied that there is no basis for adjusting either parent’s income for child support purposes in relation to their earning capacity. The Tribunal concluded that it need not consider the application of subsection 117(7B) of the Act in relation to either parent any further.

Commitments of each parent to support him or herself

The Tribunal is required to have regard to the commitments of each parent 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 (paragraph 117(4)(e) of the Act). In addition to the children of this case, the mother has a two-year old daughter. She has been taken into account in the calculation of the rate of child support.
The father’s partner has children. The father has no legal responsibility for those children and, consistent with the legislation, costs associated with them have not been taken into account in the child support assessment.
The Tribunal is satisfied that it need not consider paragraph 117(4)(e) of the Act any further.

Costs related to the children

In determining the proper needs of the children, it is necessary to have regard to the manner in which they are being, and in which the parents expected them to be, cared for, educated or trained, and any special needs they may have (subsection 117(6) of the Act).
As mentioned in the objection decision. the father had raised with Child Support costs associated with [Child 1]’s [condition]. The father advised the Tribunal these costs were not ongoing, and he did not want to pursue this issue.
As neither parent completed the relevant schedule in an SFC, the Tribunal cannot ascertain the total costs of the children in this case. That being the case, the Tribunal considers it appropriate to rely on the Costs of the Children Table available from Child Support’s website.[7]
[7] For the parents’ information, a Costs of the Children Table is available at the Services Australia website which can be found at align="left">Hardship
1. The Tribunal is required to consider any hardship its determination might cause and is guided by Gyselman and Gyselman[8] in this respect:
  This requires the Court to balance the “hardship” which the parents or the children may suffer as a result of either making or refusing to make the order. It is a recognition of the circumstance that in this area there is likely to be hardship both ways and the Court is required to take into account the balance of that hardship and give it the weight which is appropriate to the circumstances of the individual case.
  [8] [1991] FamCA 93.
2. It is apparent that both parents have modest incomes and have to manage their finances carefully. It may be that of the two, the father is better positioned financially as he shares his home with a partner who brings in an income. However, this is hard to ascertain given the limited information the Tribunal has regarding each parent’s ongoing expenses.
3. The father said that the mother was living with a partner in the caravan and the mother said that was not the case. As this will not affect the Tribunal’s determination, it will not consider it any further.
4. This decision will significantly reduce the father’s child support arrears which were $14,378 as of 10 March 2024.
Any other relevant matters
1. The Tribunal may take into account any other matters it considers relevant in making a particular departure determination (subsection 117(9) of the Act).
2. The Tribunal observes that both parents failed to respond satisfactorily to directions issued to them. Should they seek review by the AAT in the future, it is in their interests to fully respond to directions issued to them. If they do not, then an adverse inference may be drawn, which will not assist them.
3. The Tribunal has largely accepted both parents’ oral evidence even when there are no documents to support such evidence; for example, the father’s evidence about [Country 1] property and the mother’s evidence about her employment and living arrangements. The Tribunal considers this approach is just and equitable to both parents.
4. The father wanted the decision backdated to 1 May 2022, which was the date from which his adjusted taxable income was varied to $91,000. This was as a result of a previous COA objection decision made on 1 December 2022, and not the decision under review by this Tribunal.
5. The Tribunal asked the father why he had not lodged an application for review of the December 2022 decision with the AAT. He said that he tried to do that but was out of time. He said that at the time he was fed up with Child Support. They did not believe what he told them, and he was really stressed out about it.
6. The Tribunal observes that on 31 May 2022, Child Support wrote to the father requesting him to provide bank statements for his personal and business accounts for the period 1 December 2021 to 31 May 2022, and that financial statements for the previous and current financial years were also requested. There was a follow-up phone discussion on 16 June 2022, during which the father advised he had most of the information ready to go. He asked for additional time to provide the requested information and was given to 24 June 2022. Child Support recorded that as at 18 August 2022, the information had not been received.[9]
  [9] Page 71 of the Child Support documents.
7. The father objected to that decision. As part of the objection process, he was requested to provide certain information and failed to do so. Child Support obtained information from the ATO as well as bank statements. The objection decision of 1 December 2022 was based on those records. The objections officer noted in their decision that the father had provided some evidence but not sufficient to vary his adjusted taxable income from $91,000.
8. The Tribunal is of the view that an adjusted taxable income of $91,000 for the father is far too high. However, it is also of the view that by not providing the information as requested by the due dates, the father has contributed to the situation he has found himself in.
9. The Tribunal also formed the view during the hearing process that the father, who is a [Occupation 1] by trade, did not really understand what kinds of financial documents the Tribunal needed to see. He relied on his accountants to provide the financial documents. The Tribunal also acknowledges that the child support system is difficult for parents to navigate.
10. The father has not paid child support since July 2022, he said that this was because he believes the assessments have been unfair. The Tribunal sought the mother’s views on backdating its determination to 1 May 2022, rather than what is usually the practice, which is to start a determination from around the date a person lodged a COA application: in this case, 4 April 2023.
11. The mother said that as she has not received any child support for such a long time, it does not make a lot of difference to her. The Tribunal also notes the care provided by the father for the children. This is not a case of a parent trying to avoid their parental responsibilities, at least in relation to providing care.
100.The Tribunal is of the view that on balance it is appropriate for its determination to start from 1 May 2022. This will mean the amount of arrears will be significantly reduced.
101.The end date of this decision is 30 April 2026 to give both parents some certainty into the future as regards child support. Of course, changes in care percentages and the fact that [Child 1] turns 18 later this year will affect the child support assessment.
102.It remains open to either parent to apply for a change of assessment between now and 30 April 2026 if their circumstances change.
Issue 3 – Is it otherwise proper to make a particular departure determination?
103.The requirement to consider whether a departure determination would be otherwise proper is concerned with what is fair to the community; it is preferable for a child or children to be primarily supported by their parents rather than by government assistance. Paragraph 117(5)(b) of the Act means that the Tribunal must consider whether the level of a benefit, in particular FTB, received by the party caring for a child or children, may be affected by the level of child support.
104.During the period relevant to this review, both parents were paid FTB. The Tribunal is satisfied that its determination will result in an appropriate apportionment of financial responsibility between the parents and the community and would be otherwise proper.
DECISION
The Tribunal sets aside the decision under review and, in substitution, decides as follows:
- Mr Thomas’s adjusted taxable income is varied to $53,000 for the period from 1 May 2022 to 30 April 2026.
- Ms Newhouse’s adjusted taxable income is varied as follows:
  oFrom 1 January 2023 to 31 March 2023                  to $43,000
  oFrom 1 April 2023 to 31 August 2023  to $24,518
  oFrom 1 September 2023 to 31 December 2023       to $43,000
  oFrom 1 January 2024 to 12 March 2024                   to $24,518
  oFrom 13 March 2024 to 30 April 2026  to $35,000

[2024] AATA 2028

19 April 2024

Key Legal Topics

Areas of Law

Family Law

Administrative Law

Legal Concepts

Statutory Construction

Judicial Review

Remedies

Jurisdiction