Tooley and Hurrell (Child support)

[2024] AATA 2915

Tooley and Hurrell (Child support) [2024] AATA 2915 (27 June 2024)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2023/BC027265

APPLICANT:  Mr Tooley

OTHER PARTIES:  Child Support Registrar

Ms Hurrell

TRIBUNAL:Member M King

DECISION DATE:  27 June 2024

DECISION:

The decision under review is affirmed.

CATCHWORDS
CHILD SUPPORT – departure determination – ground for departure – income, property and financial resources – earning capacity – child’s medical conditions – decision under review affirmed

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

1. Mr Tooley and Ms Hurrell are the parents of [Child 1], born 2014, and [Child 2], born 2016 (the children). Each parent is recorded as having 50% care of the children.

2. The administrative assessment for the period 1 August 2022 to 30 October 2022 is based on an adjusted taxable income of $72,376 for Mr Tooley (based on his 2021/22 income) and an adjusted taxable income of $68,183 for Ms Hurrell (based on her 2021/22 income). Mr Tooley is assessed to pay child support at a rate of $1,314 per annum ($109.50 per month) for the period 1 August 2022 to 11 October 2022 and $924 per annum ($77 per month) for the period 12 October 2022 to 30 October 2022.

3. The administrative assessment for the period 31 October 2022 to 30 June 2023 is based on an adjusted taxable income of $72,376 for Mr Tooley (based on his 2021/22 income) and an adjusted taxable income of $31,881 for Ms Hurrell (a reconciled estimate of income). Mr Tooley is assessed to pay child support at a rate of $4,874 per annum ($406.17 per month).

4. The administrative assessment for the period 1 July 2023 to 31 July 2023 is based on an adjusted taxable income of $72,376 for Mr Tooley (based on his 2021/22 income) and an adjusted taxable income of $34,336 for Ms Hurrell (an estimate of income). Mr Tooley is assessed to pay child support at a rate of $4,602 per annum ($383.50 per month).

5. The administrative assessment for the period 1 August 2023 to 2 June 2024 is based on an adjusted taxable income of $88,635 for Mr Tooley (based on his 2022/23 income) and an adjusted taxable income of $34,336 for Ms Hurrell (an estimate of income). Mr Tooley is assessed to pay child support at rates of $6,484 per annum ($540.33 per month) for the period 1 August 2023 to 29 January 2024, $6,610 per annum ($550.83 per month) for the period 30 January 2024 to 23 April 2024 and $6,520 per annum ($543.33 per month) for the period 24 April 2024 to 2 June 2024.

6. The administrative assessment for the period 3 June 2024 to 30 June 2024 is based on an adjusted taxable income of $63,681 for Mr Tooley (an estimate of income) and an adjusted taxable income of $34,336 for Ms Hurrell (an estimate of income). Mr Tooley is assessed to pay child support at a rate of $3,630 per annum ($302.50 per month).

7. The administrative assessment for the period 1 July 2024 to 31 October 2024 is based on an adjusted taxable income of $63,681 for Mr Tooley (an estimate of income) and an adjusted taxable income of $35,298 for Ms Hurrell (based on her 2022/23 income). Mr Tooley is assessed to pay child support at a rate of $3,526 per annum ($293.83 per month).

8. On 28 April 2023, Mr Tooley applied for a departure from the administrative assessment of child support, under Part 6A of the Child Support (Assessment) Act 1989 (the Act).

9. On 28 August 2023, the Child Support Registrar (Child Support) made a decision not to depart from the administrative assessment.

10. Mr Tooley objected to that decision and, on 1 December 2023, a Child Support objections officer disallowed the objection.

11. On 28 December 2023, Mr Tooley applied for review by the Tribunal. The Tribunal hearing was conducted on 18 June 2024. Mr Tooley attended the hearing by telephone and gave sworn evidence. The Tribunal was unable to contact Ms Hurrell by telephone for the hearing. Being satisfied that Ms Hurrell had been properly notified of the hearing, the Tribunal proceeded with the hearing in her absence. The Tribunal deferred making a decision to obtain updated assessment information from Child Support.   

12. In addition to Mr Tooley’s oral evidence and submissions at the hearing, the Tribunal took into account the relevant documents provided by Child Support: pages 1 to 346 (the hearing papers), additional evidence provided by Mr Tooley (marked A1 to A33), additional evidence provided by Ms Hurrell (marked B1 to B56) and a copy of Mr Tooley’s and Ms Hurrell’ full 2022/23 income tax returns, which were provided by Child Support.

CONSIDERATION

1. The rate of child support payable by a liable parent is usually based on an administrative assessment under Part 5 of the Act. A formula is used. It takes into account variables including each parent’s adjusted taxable income, the number of children, and the level of care provided by each parent.

2. Part 6A of the Act allows for a departure from an administrative assessment (a process commonly known as a “change of assessment”). Under subsection 98C(1) of the Act, the Registrar may make such a departure determination if three matters are established:

   ·      one, or more than one, of the grounds for departure referred to in subsection 98C(2) exists (subparagraph 98C(1)(b)(i));

   ·      a departure is just and equitable as regards the children and each parent (sub-subparagraph 98C(1)(b)(ii)(A)); and

   ·      it is otherwise proper to make a departure decision (sub-subparagraph 98C(1)(b)(ii)(B)).

3. Subsection 98C(2) provides that the grounds for departure are the same as the grounds set out in subsection 117(2).

4. 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. It permits a range of determinations, including varying the rate of child support payable, the adjusted taxable income or the cost percentage for a child.

Grounds for departure

Income, property and financial resources

1. Subparagraphs 117(2)(c)(ia) and (ib) – commonly referred to as Reason 8 – provide as grounds for departure:

   (c)  that, in the special circumstances of the case, application in relation to the child of the provisions of this Act relating to administrative assessment of child support would result in an unjust and inequitable determination of the level of financial support to be provided by the liable parent for the child: …

   (ia) because of the income, property and financial resources of either parent; or

   (ib) because of the earning capacity of either parent; …

2. The words “in the special circumstances of the case” are not defined in the legislation.  Whilst it is not possible to define with precision the meaning of that term, 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 Tribunal will not interfere with the administrative formula result in the ordinary run of cases. In Gyselman and Gyselman (1992) FLC 92-279, it was held that “special circumstances” were “facts peculiar to the particular case which set it apart from other cases”. The Tribunal’s approach to the interpretation and application of the particular grounds in subsection 117(2) must be guided by that qualification.

Ms Hurrell

1. Ms Hurrell’ adjusted taxable incomes have been $71,419 for 2020/21, $68,183 for 2021/22 and $35,298 for 2022/23.

2. Ms Hurrell’ 2022/23 income tax return records $20,770 salary and wage income and $15,528 from Centrelink income support payments. She claimed deductions of $1,000.   

3. Ms Hurrell lodged an estimate of income for the period 31 October 2022 to 30 June 2023, which has been reconciled with her actual income for that period. She has also lodged an estimate of income for the period 1 July 2023 to 30 June 2024. That estimate of income will be reconciled with her actual income for that period when Ms Hurrell lodges her 2023/24 income tax return.

4. A Centrelink income statement, dated 13 May 2024, at page B29, states that Ms Hurrell has been in receipt of parenting payment since 15 March 2023. She has been in receipt of carer allowance since 2 March 2023 and family tax benefit (FTB) since 30 August 2020. Those payments reflect the income sources recorded by Ms Hurrell in her Statement of Financial Circumstances form provided to the Tribunal.

5. Ms Hurrell’ bank statements, from page B12, do not disclose any other source of income for her.

6. Mr Tooley submitted it is not fair that Ms Hurrell’ Centrelink payments are not included in her income in calculating child support.

7. Parenting payment amounts are included in a parent’s income for child support purposes as it is an income support payment.

8. Subparagraph 117(7A)(b)(ii) of the Act provides that the Tribunal must disregard “any entitlement of the child or the carer entitled to child support to an income tested pension, allowance or benefit.” Therefore, Ms Hurrell’ receipt of FTB must be disregarded in considering her income for child support purposes.

9. Carer allowance is also an income tested allowance which is designed to assist with meeting extra costs related to caring for a person. It is not an income support payment and cannot be considered as part of Ms Hurrell’ income for child support purposes.

10. In her Statement of Financial Circumstances form, Ms Hurrell records that she has two bank accounts, with balances of $38,000 and about $1,000. She notes that the $38,000 is proceeds from the sale of property in 2019 as part of her separation from Mr Tooley. The funds are in a high interest savings account. She accesses the funds when she needs to.

11. Ms Hurrell lists few assets, other than her superannuation. She lists expenses of $1,017 per week. That includes rent of $100 per week and education expenses of $55 per week. None of the expenses seem special in nature or amount.

12. Mr Tooley submitted that Ms Hurrell received a much larger cash proportion of the parents’ property settlement than he received. He said Ms Hurrell has invested the funds she received and is receiving income from the investment. The Tribunal notes that any interest income earned on Ms Hurrell’ invested funds is taxable income which should be recorded in her income tax returns.

13. The respective assets and liabilities each parent received or retained from their property settlement do not of themselves make the administrative assessment unfair. The property settlement terms represent what has been determined to be a fair distribution of the parents’ property between them.

14. Unless specific provision has been made in the property settlement terms to the contrary, the property settlement is a separate legal consideration from the assessment of child support, which is intended to meet the day-to-day financial needs of the children.

15. Mr Tooley told the Tribunal he believes Ms Hurrell was living rent-free in her partner’s house for a number of years. The Tribunal noted that Ms Hurrell’ bank statements record her paying rent of $100 per week from the start of the bank statement records on                1 January 2024. Mr Tooley said, even if that is so, his rent is significantly higher.

16. Mr Tooley believes Ms Hurrell is still living as a couple with her partner, despite claiming they are separated. He noted that Ms Hurrell said she and her partner separated after their child, [Child 3], was born. However, they have just had another child together. He said the children tell him Ms Hurrell and her partner are living together. 

17. Mr Tooley said he understands that Ms Hurrell’ partner is in a wheelchair and is in receipt of a Centrelink pension. Ms Hurrell was previously receiving a carer pension for caring for her partner. [Child 3] was born with cerebral palsy and hydrocephalus.

18. The Tribunal is not satisfied the administrative assessments are unfair because of Ms Hurrell’ income, property and financial resources. The incomes used for her in the assessments have approximated her actual incomes to be used for child support purposes. She has no assets or financial resources which make the assessments unfair.

19. Whilst Ms Hurrell is only paying rent of $100 per week (and may have not paid rent for a period), the Tribunal is not satisfied that, of itself, makes the assessments unfair. Each parent’s living expenses will differ, depending on their living arrangements and choices they make based on their financial circumstances.

20. Similarly, if Ms Hurrell is living as a couple with her partner, that of itself does not make the assessments unfair. The Tribunal cannot deem any income or financial resources of Ms Hurrell’ partner as her income or financial resources in assessing child support for the children of this assessment.      

Mr Tooley

1. Mr Tooley’s adjusted taxable incomes have been $75,417 for 2020/21, $72,376 for 2021/22 and $88,635 for 2022/23.

2. Mr Tooley’s 2022/23 income tax return records $86,157 salary and wage income from three different employers. He claimed deductions of $1,888.

3. Mr Tooley lodged an estimate of income for the period 3 June 2024 to 30 June 2024 and a further estimate of income for the period 1 July 2024 to 30 June 2025. Those estimates of income will be reconciled with his actual incomes for those periods when Mr Tooley lodges his 2023/24 and 2024/25 income tax returns respectively.

4. At page A29, a payslip records that Mr Tooley had been paid $67,319.56 year-to-date up until 5 May 2024. That equates to an annualised income of about $80,000.

5. Remittances from WorkCover Queensland, from page A31, recorded that Mr Tooley is currently receiving payments of $1,298.08 per week.   

6. Mr Tooley told the Tribunal that his concern is that he has recently lodged an estimate of income with Child Support. He had surgery three months ago, and he has been on WorkCover, so his wages have dropped dramatically.

7. He said he has 50% care of the children and he pays for 50% of everything for the children including private school fees. He is a single father.

8. Mr Tooley said the assessment is nearly $600 per month and he cannot afford that. He has to service his car and care for his children. He submitted that he cannot afford to pay for Ms Hurrell’ younger children as well. He said what Child Support are expecting him to pay is unrealistic for him. He cannot save money and he cannot move forward in life.

9. Mr Tooley said he sustained an injury four years ago when he was working for [Employer 1]. He has been in disagreement with WorkCover about the injury. He was finally referred to an independent orthopaedic surgeon for assessment, who determined his shoulder was unstable. He had to have surgery on his right shoulder and bicep. He had been working with pain for the last four years. He had the surgery on 15 March 2024.   

10. Mr Tooley said his last wage payment was in March 2024 and he then started receiving WorkCover payments. He has now returned to work on light duties doing administrative work and working limited hours. He will be receiving some wages and WorkCover will make up the rest.

11. He has been told his recovery could take up to six months, and it has been three months so far. Hopefully he will then be back to full-time work.

12. Mr Tooley said last year he worked as a casual so his income was higher. Since then, he has moved to permanent part-time employment, so his usual income is about $81,000 per annum with [Employer 2]. He said he no longer works at [Employer 3] and [Employer 4] as he did last year.

13. Mr Tooley said he only has one income and he does not have any investments or own a property. He pays $350 per week rent. He is paying off a loan on his boat. He owns a car.

14. The Tribunal is satisfied Mr Tooley’s estimated income from 3 June 2024 approximates the income he is receiving from WorkCover Queensland. The Tribunal notes that, as Mr Tooley’s income increases with his return to work, he will need to update his estimate of income with Child Support.

15. From 1 August 2022 to 31 July 2023, Mr Tooley is assessed on an income of $72,376. His actual income for 2022/23 was $88,635. If that income had been used for the 12-month period, Mr Tooley’s child support liability would have been about $1,700 more.

16. From 1 August 2023 to 2 June 2024, Mr Tooley is assessed on an income of $88,635. His actual income during that time was about $80,000 per annum. If that income had been used for the period, Mr Tooley’s child support liability would have been about $800 less.  

17. Whilst using Mr Tooley’s actual incomes would result in him being assessed to pay more in one period and less in another period, the Tribunal is not satisfied that makes the assessments unfair. The child support formula has applied as intended, with Mr Tooley’s income for the last financial year being used for the next period. He was then able to lodge an estimate of income when his income reduced significantly.

18. In his Statement of Financial Circumstances form, Mr Tooley records that he has few assets, other than his boat and his superannuation.

19. He lists expenses of $890 per week, as well as child support payments. His expenses include rent of $350 per week. None of the expenses seem special in nature or amount.

20. The Tribunal is not satisfied the administrative assessments are unfair because of Mr Tooley’s income, property and financial resources.

Earning capacity

1. Subsection 117(7B) of the Act outlines three criteria that must be satisfied before a parent’s earning capacity can be determined to be greater than is reflected by his or her income for the purposes of child support. That subsection states:

   In having regard to the earning capacity of a parent of the child, the court may determine that the parent’s earning capacity is greater than is reflected in his or her income for the purposes of this Act only if the court is satisfied that:

   (a)   One or more of the following applies:

   (i)the parent does not work despite ample opportunity to do so;

   (ii) the parent has reduced the number of hours per week of his or her employment or other work below the normal number of hours per week that constitutes full-time work for the occupation or industry in which the parent is employed or otherwise engaged;

   (iii) the parent has changed his or her occupation, industry or working pattern; and

   (b)   the parent’s decision not to work, to reduce the number of hours, or to change his or her occupation, industry or working pattern, is not justified on the basis of:

   (i)the parent’s caring responsibilities; or

   (ii)   the parent’s state of health; and

   (c) the parent has not demonstrated that it was not a major purpose of that decision to affect the administrative assessment of child support in relation to the child.

2. In her Statement of Financial Circumstances form, Ms Hurrell stated that she was employed as a [Occupation 1]. After the birth of [Child 3], she had to give her employer notice as it would be a couple of years before she knew if she could return to the workforce. [Child 3] was born with a brain bleed to both sides of her brain which caused hydrocephalus. This has caused brain damage and she now has cerebral palsy. As she is still young, it is not known if [Child 3] will be able to walk or talk.

3. Ms Hurrell stated she has a busy schedule with weekly physiotherapy, hydrotherapy, occupational therapy, early intervention programs and paediatric appointments. She is therefore unable to return to work.

4. At pages 225 and B31 are letters from [Hospital 1] which confirm [Child 3]’s medical conditions and treatment.  

5. Mr Tooley said he accepts that Ms Hurrell has a responsibility to care for [Child 3], but he understands that many childcare centres and kindergartens will accept children with cerebral palsy. He said childcare centres are open from 6am to 6pm so there is ample time to have [Child 3] in care and for Ms Hurrell to get some work done.

1. He believes Ms Hurrell could work from home. He said Ms Hurrell used to work from home doing [specified tasks] for a [company]. He believes she could perform that work from home currently. He said he works weekends and Sunday nights so Ms Hurrell would not just have to work Mondays to Fridays.

2. Mr Tooley submitted that Ms Hurrell’ partner also has a responsibility to care for [Child 3]. He drives a vehicle, and he can stand. He believes Ms Hurrell’ partner is quite capable of taking [Child 3] to some of her appointments.

3. He submitted that Ms Hurrell has the capacity to earn the same income he earns, of about $80,000 per annum.

4. Ms Hurrell told Child Support she ceased employment in late February 2023. Ms Hurrell’ Centrelink income statement records that she has been in receipt of parenting payment since 15 March 2023. [Child 3] was born in July 2022.

5. The Tribunal accepts that Ms Hurrell continued to be paid by her employer until February 2023. Since that time, she has been in receipt of parenting payment.

6. Ms Hurrell therefore changed her work arrangements at that time and has not been employed since that time.

7. However, it is quite clear to the Tribunal that the reason Ms Hurrell resigned her employment and has not been employed since that time is to care for [Child 3]. Medical evidence supports that [Child 3] was born with very serious medical conditions which require intensive treatment and intervention.

8. There is no evidence before the Tribunal as to whether [Child 3]’s father also actively cares for her and takes her to appointments. However, even if he does so, given the extensive needs of [Child 3], who is less than two years old, the Tribunal is satisfied that Ms Hurrell’ decision to cease employment and not work since that time is justified by her caring responsibilities for [Child 3].

9. The Tribunal notes Mr Tooley’s advice that Ms Hurrell also has a child who is about three months old. This adds to Ms Hurrell’ caring responsibilities.

10. The Tribunal is also satisfied that it was not a major purpose of Ms Hurrell, in deciding not to work, to affect the administrative assessment. The major purpose was to care for [Child 3] and now her younger child as well.

11. Therefore, the Tribunal finds that the requirements of subsection 117(7B) of the Act are not established. Consequently, Ms Hurrell cannot be assessed on an earning capacity.

Other

1. There are no other grounds for departure which are relevant to the issues raised in this matter.

2. As no grounds for departure have been established, there can be no departure from the administrative assessments of child support.  

DECISION

The decision under review is affirmed.