Tomlin and Tomlin (Child support)

[2022] AATA 1175

Tomlin and Tomlin (Child support) [2022] AATA 1175 (5 April 2022)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2021/HC022339

APPLICANT:  Mr Tomlin

OTHER PARTIES:  Child Support Registrar

Ms Tomlin

TRIBUNAL:Member C Breheny

DECISION DATE:  05 April 2022

DECISION:

The decision under review is affirmed.

CATCHWORDS

CHILD SUPPORT – departure determination – income, property and financial resources of both parents – high cost of contact – no ground for departure established – 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

BACKGROUND

1. Ms Tomlin and Mr Tomlin are the separated parents of [Child 1], born July 2006 and [Child 2], born July 2008. A child support case has been registered with the (then) Department of Human Services – Child Support (Child Support) since July 2015 and registered for collection from 18 October 2019. Since 12 November 2020, child support has been payable on the basis that Ms Tomlin has 82% care and Mr Tomlin had 18% care of the children. Mr Tomlin is assessed as liable to pay child support to Ms Tomlin. Mr Tomlin resides in [Country] and the children live with Ms Tomlin in Australia. Mr Tomlin visits the children in Australia.

2. There have been other departure determinations in this case, but relevantly, Ms Tomlin lodged an application for  change of assessment on 12 June 2019. In a decision of 4 October 2019 Mr Tomlin’s adjusted taxable income was set at AUD147,681 per annum and the self-support amount increased to AUD31,351 per annum from 12 June 2019 until 11 June 2021. Mr Tomlin objected to that decision and on 4 November 2019 a Child Support objections officer determined that Mr Tomlin’s adjusted taxable income was set at AUD168,000 per annum and the self-support amount increased by AUD6,061 per annum from 18 July 2019 until 30 April 2022. The objections officer also determined that Ms Tomlin’s adjusted taxable income was set at AUD40,000 per annum from 18 July 2019 to 31 January 2020 and to AUD72,000 from 1 February 2020 to 30 April 2022.

3. On 12 November 2020, Mr Tomlin applied to Child Support for a change of assessment on the basis of both parents’ income, property and financial resources and on the high costs incurred in communicating or spending time with the children. On 15 February 2021, [the] decision maker decided that no reason to depart from the assessment currently in place had been made out and decided not to change the assessment,

4. On 20 April 2021, Mr Tomlin objected to the decision and on 23 August 2021, a Child Support objections officer decided to disallow the objection. The objections officer found that no reason to depart from the assessment had been established and thus Mr Tomlin’s application was refused.

5. On 17 September 2019, Mr Tomlin applied to the Social Services and Child Support Division of the Administrative Appeals Tribunal (the Tribunal) for an independent review of Child Support’s decision. A hearing into Mr Tomlin’s application for review was held on 5 April 2022. Both Ms Tomlin and Mr Tomlin attended the hearing by conference telephone and gave evidence on affirmation. 

6. I had before me the statement and documents provided by Child Support pursuant to subsection 37(1) and section 38AA of the Administrative Appeals Tribunal Act 1975, received on 18 October 2021 and 16 March 2022 respectively and numbered 1–422. I also considered additional documents provided by Mr Tomlin (marked A1–A224) and Ms Tomlin (marked B1–B330) as a result of written directions issued on 18 January 2022.

LEGISLATIVE FRAMEWORK AND ISSUES

1. The legislation relevant to this review is contained in the child support law, in particular the Child Support (Assessment) Act 1989 (the Act) and in the Child Support (Registration and Collection) Act 1988 (the Registration and Collection Act).

2. The rate of child support payable by a liable parent is usually based on an administrative assessment under Part 5 of the Act. This requires the application of a statutory formula, which takes into account factors such as the number of children, the level of care provided and the income of each parent. Either the liable parent or the carer entitled to child support may apply to the Registrar for a determination to depart from the child support administrative assessment under Part 6A of the Act (section 98B). Section 98C provides that the Registrar may make a determination to depart from the formula assessment and establishes a three-step process. The Registrar, and the Tribunal standing in place of the Registrar, must be satisfied that a ground for departure exists and that it is just and equitable and otherwise proper to make a departure determination.

3. The grounds for departure from an administrative assessment of child support are those set out in subsection 117(2) of the Act. If satisfied that a ground or grounds exist, and that it would be just and equitable and otherwise proper to make a particular determination, the Tribunal may make one of the determinations prescribed in section 98S of the Act.

4. In the legislation, each ground for departure is prefaced by the words, “in the special circumstances of the case”. Therefore, when considering whether one (or more) ground exists, the Tribunal must be satisfied that there are “special circumstances” in the case. The phrase “special circumstances of the case” is not defined in the Act. The Full Family Court, in the case of Gyselman and Gyselman (1992) FLC 92-279 stated that:

   It is intended to emphasise that the facts of the case must establish something which is special or out of the ordinary. That is, the intention of the Legislature is that the court will not interfere with the administrative formula result in the ordinary run of cases.

5. Subsection 98C(3) of the Act provides that subsections 117(4) to (9) of the Act apply and the Tribunal must consider these when deciding whether it would be just and equitable or otherwise proper to make the departure decision.

6. On the day Mr Tomlin (12 November 2020) lodged his change of assessment application, child support liability was calculated on the basis of a departure determination ultimately made by an objections officer on 4 November 2019. At that time Mr Tomlin’s adjusted taxable income was set at AUD168,000 per annum, his self-support amount was increased by AUD6,061 per annum and Ms Tomlin’s adjusted taxable income was set at AUD72,000 until 30 April 2022 (folio 41). I note that when an administrative assessment is amended to give effect to a departure determination, it becomes “the administrative assessment”, for all purposes, including for the purposes of a subsequent application for a departure determination under Part 6A of the Act. The Family Court has confirmed this interpretation in the case of In the Marriage of J D and C A Perryman (1993).[1]

   [1] (1993) 17 Fam LR 200

7. Mr Tomlin’s child support liability based on the objection decision made on 4 November 2019 was initially calculated to be AUD29,276 per annum (folio 64) but later reduced to AUD19,858 per annum when a care determination was given effect from 12 November 2020 such that Mr Tomlin had 18% and Ms Tomlin had 82% care of the children. I am therefore considering whether or not there should be a departure from an administrative assessment of child support where that assessment required Mr Tomlin to pay child support in the amount of AUD19,858 per annum from 12 November 2020. From 30 July 2021 that amount increased to AUD22,002 per annum, as the youngest child turned 13 years of age (folio 404).

CONSIDERATION

Preliminary matter

1. A component of this case involves consideration of overseas income. The Child Support (Assessment) Regulations 1989 provide the following at regulation 7C for the purposes of using overseas income in administrative assessments of child support:

   7C  Overseas income — conversion of currency

   (1)For the purpose of determining, under Subdivision BA of Division 7 of Part 5 of the Act, an amount of income expressed in foreign currency to be a person’s overseas income, the Registrar must convert the amount into an equivalent amount in Australian currency.

   (2)The amount must be worked out in accordance with:

   (a)  the average exchange rate for the foreign currency for the financial year in which the income was derived, being the average of the telegraphic transfer rates published by the Commonwealth Bank of Australia for that currency for that financial year; or

   (b)  if no such rate is available for the foreign currency for that financial year — an exchange rate for the foreign currency that the Registrar considers appropriate.

2. I consider regulation 7C also provides guidance for the conversion of foreign income in the context of this review.

3. Mr Tomlin lives in [Country] and the information in relation to his income is in [Currency]. I have decided to use an average conversion rate using historical rate calculations from the website and I have indicated the average conversion rate where relevant.

A ground for departure

1. In this case, Mr Tomlin asked for a departure from the administrative assessment on the basis that it does not correctly reflect their respective income, property and financial resources (also known as “Reason 8A”) and on the basis of the high cost of communicating or spending time with the children (also known as “Reason 1”).

Income, property, financial resources and earning capacity of both parties

1. Subparagraph 117(2)(c)(ia) of the Act provides that, in the special circumstances of the case, a ground for departure may be established if application of the legislative provisions relating to an administrative assessment results in an “unjust and inequitable determination of the level of financial support to be provided by the liable parent” due to the income, property and financial resources of either parent.

Mr Tomlin – income, property and financial resources

1. Mr Tomlin works full-time as [Occupation 1] for a multinational company providing [products] for [Work sector] professionals. Mr Tomlin is currently working from the company’s office in [part of Country].

2. Mr Tomlin’s payslips for 2020 (e.g. folios 120-123) show fortnightly wages of [Currency]4,421.38 or [Currency]114,955.88 per annum, however he also received a bonus payment of [Currency]4,071 as of October 2020 (folio 120).

3. Mr Tomlin submitted a [form] from his employer indicating that his final gross pay was [Currency]122,198 (or AUD177,067[2]) in the 2020 [Country] financial year (folio A135). The form also shows several pre-tax deductions[3], resulting in an annual income for [Country] taxation purposes of [Currency]111,313 (or about AUD161,295).

   [2] Average exchange rate January 2020 to December 2020 [Currency]1 = AUD1.44902

   [3] These are similar to salary packaging options in Australia, i.e. benefits for medical/dental insurance and life insurance.

4. Mr Tomlin’s income tax return for 2020 (folios A55) indicates that that the [Country] taxation system allows for standard tax deductions (being [Currency amount] for a single person), rather than submitting itemised deductions. Mr Tomlin’s taxable income for the 2020 [Country] tax year was [Currency]98,611 (or about AUD142,889).

5. Evidence provided for the 2021 [Country] tax year shows similar arrangements. Payslips for 2021 (e.g. folios A130-A132) show fortnightly wages of [Currency]4,478.85 or [Currency]116,392.88 per annum, and he received a bonus payment of [Currency]9,001.05 and [Currency]3,721.57 in “non-cash payments” in that year (folio A130). This results in an annual income of [Currency]129,115.50.

6. The [form] (folio A133) indicates gross pay of [Currency]129,115 (or about AUD171,949[4]), reduced to [Currency]119,122 (or about AUD158,640) for [Country] taxation purposes. Mr Tomlin has not yet submitted the tax return for the 2021 [Country] financial year, but it appears reasonable to assume a similar taxable income of approximately [Currency]100,000 (or about AUD133,175).

   [4] Average exchange rate January 2021 to December 2021 [Currency]1 = AUD1.33175

7. The current objections officer noted that the 2019 change of assessment determination (made on 4 November 2019) was based on Mr Tomlin’s 2019 income, as evidenced in his payslips. At the time his payslips indicated a fortnightly income of about [Currency]4,292.60 or [Currency]111,607.60 per annum. The decision-maker assumed a bonus payment of [Currency]5,022 (folio 44), resulting in an annual income of about [Currency]116,629. Using an average exchange rate for 2019 of 1.4587 they arrived at an annual income amount of AUD170,127. This was reduced to AUD168,000 to allow for tax deductions. I note the 2019 [form] from Mr Tomlin’s employer indicates gross pay of [Currency]115,655 for the 2019 [Country] tax year (folio 108).

8. Using a similar calculation (fortnightly salary, plus bonus payments) I find that Mr Tomlin’s 2020 income is [Currency]122,198 (or AUD177,067) and his 2021 income is [Currency]129,115 (or about AUD171,949).

9. In view of the evidence before me I am satisfied that annual income tax returns, payslips and the employer’s [Form] adequately represent Mr Tomlin’s income, property and financial resources. There is no evidence that Mr Tomlin has any additional financial resources.

Ms Tomlin – income, property and financial resources

1. Ms Tomlin is a trained [Occupation 2] and [Occupation 3]. She completed her [Occupation 2] studies in late 2019 and has been working full-time for [Employer] ([Workplace]) since the beginning of 2020. Whilst she was studying, she held part-time employment as a [Type of occupation 3].

2. Ms Tomlin’s 2020/21 income tax return indicates a taxable income of AUD60,100, comprising of wages from her employer and rental losses from her investment property.

3. The 2020/21 “Income Statement” from Ms Tomlin’s employer (folios B156-158) shows that Ms Tomlin’s remuneration includes reportable employer super contributions and reportable fringe benefits. These (as well as rental losses) are added back to arrive at Ms Tomlin’s adjusted taxable income for child support purposes and I note a 2020/21 adjusted taxable income of AUD80,895 will be used in the administrative assessment from 1 May 2022 (folio 410).

4. Evidence provided by Ms Tomlin indicates that her income from employment (from various employers) in the 2019/20 financial year amounted to AUD53,116.28 (folio 255). I note that Ms Tomlin’s adjusted taxable income for child support purposes for the 2019/20 financial year was calculated to be AUD65,523 (folio 415).

5. Mr Tomlin expressed concern that not all of Ms Tomlin’s income would be taken into account in a child support assessment, in particular rental incomes and benefits provided by the employer. Based on the evidence before me I am satisfied, however, that these amounts are being considered in determining Ms Tomlin’s adjusted taxable income for child support purposes.

6. Other than reportable fringe benefits from her employer and income from her rental property I have no evidence that Ms Tomlin has any other financial resources. I am therefore satisfied that Ms Tomlin’s income, property and financial resources are adequately represented by her annual income tax returns.

Conclusion – income, property and financial resources of both parties

1. When Mr Tomlin lodged his departure application on 12 November 2020, the rate of child support was based on incomes set by a previous departure determination of AUD168,000 for Mr Tomlin and AUD72,000 for Ms Tomlin resulting in a child support liability of AUD19,858 per annum. As noted previously this rate takes into account Mr Tomlin’s care percentage for the children (18% from 12 November 2020 and an increase of AUD6,061 in the self-support amount for Mr Tomlin).

2. Mr Tomlin was concerned that the exchange rate for the [Currency] had changed significantly since the initial decision was made and his income amount would probably be lower if a current exchange rate was used.

3. I have found that Mr Tomlin’s 2020 income was actually higher, [Currency]122,198 or AUD177,067 and using this income in the assessment I have estimated that Mr Tomlin’s child support liability would increase to about AUD20,866 per annum (an increase of less than AUD20 per week).

4. Mr Tomlin was also concerned that Ms Tomlin’s actual income was higher than the amount of AUD72,000 used in the assessment. I have found that Ms Tomlin’s adjusted taxable income was AUD80,895 at the time Mr Tomlin applied for the change of assessment. Using this income amount only (i.e. retaining an adjusted taxable income of AUD168,000 for Mr Tomlin), would reduce his annual child support liability by about AUD17 per week.

5. Using both Mr Tomlin’s and Ms Tomlin’s actual incomes in the assessment would reduce Mr Tomlin’s annual child support liability by about AUD6 per week.

6. I have carefully considered all the evidence before me and whilst I have found that both Mr Tomlin’s and Ms Tomlin’s actual incomes were higher than the incomes used in the assessment, I am not satisfied that there are special circumstances in this case such that the assessment at the time of Mr Tomlin’s change of assessment application was unjust and inequitable. I am not persuaded that the relevant increases and decreases in Mr Tomlin’s child support liability are of such significance as to amount to special circumstances. I thus find that the ground for departure in relation to the parties’ income, property, and financial resources has not been established.

High cost of contact

1. Subparagraph 117(2)(b)(i) of the Act provides that, in the special circumstances of the case, a ground for departure may be established if the costs of maintaining the child are significantly affected because of high costs involved in enabling a parent to spend time with, or communicate with, the child.

2. I also considered the Child Support Guide, which provides in this regard:

Who can apply under this reason?

The payer and the payee are both entitled to apply under this reason in relation to the costs incurred in enabling a parent to spend time with, or communicate with, the child.

From 1 July 2008, if a parent has at least regular care of a child, then the only costs in relation to that parent that can be taken into account under this reason are costs related to travel to enable the parent to spend time with or communicate with the child (CSA Act section 117(2C)).

[emphasis added]

1. Mr Tomlin submitted that he was paying for airfares and accommodation to visit the children in Australia. He indicated that he was paying for flights from [City 1] to Sydney and flights from Sydney to Brisbane to see the children. He stated that he had car rental and accommodation costs whilst in Australia and he needed to pay for mandatory quarantine in Australia in 2020 (due to COVID-19).

2. Ms Tomlin disputed that Mr Tomlin actually paid for some of the costs himself. She noted that flights from [Country] to Australia were billed to Mr Tomlin’s employer. She noted that Mr Tomlin’s employer has offices in Australia and he would be able to claim at least part of the costs as business travel. It was therefore highly likely that Mr Tomlin’s employer paid for some of the travel costs.

3. Mr Tomlin agreed that he has a company credit card (in his name) which he uses to pay for some of his expenses. He contended, however, that he had to reimburse private expenses charged to the credit card from his personal bank account and denied that his employer was paying for his travel expenses to Australia.

4. Mr Tomlin provided evidence that he travelled to Australia twice in 2020, from 21 February 2020 to 8 March 2020 (folio A190) and from 30 September 2020 to 30 November 2020 (folio A207). Costs for these visits included:

   ·February 2020 flight: [Currency]2,128.96 ([Country] to Australia), folio 86;

   ·September 2020 flight: [Currency]3,446.85, folio 95;

   ·Accommodation costs in October/November 2020: AUD1,677.96 and AUD3,367.98, folios 96/97;

   ·Flight from [City 1] to [City 2] on 30 September 2020: [Currency]133.55, folio 105;

   ·Flight from Sydney to Brisbane on 16 October 2020: AUD200.53, folio 99.

1. Mr Tomlin submitted that he would also needed to pay AUD3,000 for mandatory quarantine and that he would have additional accommodation costs (folio 107). He did not provide evidence that he made these payments in 2020 and I have thus not considered these expenses further.

2. The travel costs indicated above amount to [Currency]5,709.36 and AUD5,246.47 Using the average exchange rate for 2020, Mr Tomlin’s 2020 travel costs amounted to AUD13,519.44 (8,272.97 + 5,246.47).

3. In 2021 Mr Tomlin travelled to Australia once from 25 September 2021 to 27 December 2021. He submitted evidence that his travel costs for this trip amounted to [Currency]7,241.79 and AUD9,516.39. These costs included (folios A151-A187):

   ·Flight ([Country] to Australia): [Currency]7,241.79;

   ·Flight (Sydney to Brisbane): AUD170.72;

   ·Car rental and transport in Australia: AUD1,006.18;

   ·Accommodation in Australia: AUD8,339.49.

4. Using the average exchange rate for 2021, Mr Tomlin’s flight costs (from [Country]) amounted to AUD9,644.25. As stated before, Mr Tomlin has above regular care of the children (applied to the assessment since 12 November 2020), I have thus not taken into account accommodation costs for the 2021 visit. This means total travel costs for 2021 amounted to AUD10,821.15.

5. Subsection 117(3B) of the Act provides that costs are considered high, if they amount to more than 5% of a parent’s adjusted taxable income over the child support period. In this case the relevant child support period is 1 February 2020 to 30 April 2021. There are 455 days in the child support period. The relevant income is the income for the last financial year that ended before the start of the child support period. In this case that would be Mr Tomlin’s income in 2019, as set by the previous change of assessment determination, being AUD168,000 (folio 13). In the child support period, that would amount to an income of AUD209,424.66.[5] To be considered significant Mr Tomlin’s costs must therefore exceed 5% of that income amount, being AUD10,471.

   [5] AUD168,000/365x455 (days in child support period)

6. Mr Tomlin’s evidence is that he spent AUD13,519 in the child support period. This amount exceeds the 5% threshold by AUD3,048. I note the original decision made on 4 November 2019 considered excess travel costs of AUD4,546 and, as a result the self-support amount used in the assessment was increased by AUD6,061 to assist with travel costs.

7. I have considered the current evidence before me. Travel costs may be considered as a ground for departure if a parent needs to spend significant amounts to enable them to communicate with or spend time with their children. I appreciate that Mr Tomlin has incurred further travel costs in 2020 and 2021, but I am not persuaded that these are significantly different from the costs already considered in the assessment. Under the circumstances, I am not persuaded that the ground provided for in subparagraph 117(2)(b)(i) of the Act has been made out.

Conclusion

1. Based on the evidence before me I find that no ground for departure has been made out in this case and I am therefore unable to depart from the assessment of child support currently in place, which is based on the previous departure determination made on 4 November 2019. I have reached the same conclusion as the objections officer and I therefore affirm their decision.

DECISION

The decision under review is affirmed.