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

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,…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Thomas and Newhouse (Child support)

Details

AGLC: Thomas and Newhouse (Child support) [2024] AATA 2028
Case: [2024] AATA 2028
Decision Date: 19 April 2024

CaseChat Overview and Summary

The Administrative Appeals Tribunal (AAT) considered an application by the father, Thomas, to review a decision by the Child Support Registrar to vary his adjusted taxable income for child support purposes. The Registrar had increased the father's adjusted taxable income based on his earning capacity, despite his actual income being lower. The mother, Newhouse, was the respondent in the proceedings.

The primary legal issue before the Tribunal was whether the Registrar had erred in varying the father's adjusted taxable income under section 117 of the *Child Support (Registration and Collection) Act 1988* (Cth). Specifically, the Tribunal had to determine if the father's earning capacity was greater than his actual income and, if so, whether it was appropriate to assess his child support liability based on that earning capacity.

Member S Hoffman of the AAT reasoned that the Registrar's decision to vary the father's adjusted taxable income was justified. The Tribunal found that the father possessed an earning capacity that was demonstrably higher than his declared income. This conclusion was based on evidence suggesting the father had the ability and opportunity to earn more, even if he was not currently doing so. The Tribunal applied the principles of section 117, which allows for an assessment based on earning capacity where a parent is intentionally under-employing themselves or has an earning capacity greater than their actual income.

The Tribunal set aside the Registrar's decision and substituted its own. The father's adjusted taxable income was varied upwards to reflect his earning capacity, thereby increasing his child support liability.

Orders