Thomas and Newhouse (Child support)

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.