Trenholm and Avey (Child support)

[2023] AATA 2936

Trenholm and Avey (Child support) [2023] AATA 2936 (11 August 2023)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2023/BC025936

APPLICANT:  Mr Trenholm

OTHER PARTIES:  Child Support Registrar

Ms Avey

TRIBUNAL:Senior Member S Trotter

DECISION DATE:  11 August 2023

DECISION:

The decision under review is varied so that:

1. The decision to vary Mr Trenholm’s adjusted taxable income to $60,563 for the period 1 October 2022 to 31 October 2022 is affirmed; and

2. Mr Trenholm’s self-support amount is varied by increasing it by $6,700 per annum for the period 11 August 2023 to 10 August 2024.

CATCHWORDS

CHILD SUPPORT – departure determination – income, property and financial resources of the liable parent – a ground for departure established – decision to depart - decision under review varied

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. Mr Trenholm and Ms Avey are the parents of [the child] (born 2007). A child support case was registered with Services Australia – Child Support (Child Support) in relation to [the child] in 2010. [The child] is currently recorded as being in the sole care of Ms Avey and has previously been recorded as being in the care of Mr Trenholm at various times.

2. The Child Support (Assessment) Act 1989 (the Act) provides for an administrative assessment of child support payable. It uses a formula which contains variables such as the parents’ child support incomes and their percentages of care of the children. The Act also provides for a departure from the administrative assessment (commonly termed a change of assessment) in certain circumstances. Departure determinations can include varying components of the child support formula such as a parent’s child support income (which incorporates a parent’s adjusted taxable income) or varying the annual rate of child support.

3. By change of assessment application on 2 December 2022, Mr Trenholm sought a change to the administrative assessment of child support on the basis that he has out of the ordinary, necessary expenses to support himself and that the assessment does not correctly reflect one or both parents’ income, property, financial resources and/or earning capacity. Amongst other things, Mr Trenholm contended that he was penalised by having a lump sum income insurance payment paid to him in the 2021/2022 financial year (following a High Court decision in relation to the income insurance company) but referable to his employment several years earlier, assessed in the calculation of his child support. This resulted in an increased child support liability for Mr Trenholm in 2022, with his expected tax refunds then being garnisheed for the increased liability. Further, Mr Trenholm contended that he has out of the ordinary self-support costs.

4. On 20 January 2023, Child Support decided that there was no basis for there to be a change to the administrative assessment of child support.

5. Mr Trenholm objected to this decision and, on 4 April 2023, a Child Support objections officer allowed the objection in part finding that for the period 1 October 2022 to 31 October 2022, Mr Trenholm’s child support liability was assessed on Mr Trenholm’s 2021/2022 adjusted taxable income of $221,378, which included the lump sum income insurance payment received in May 2022, an amount that Mr Trenholm had already been assessed upon for the period 17 December 2021 to 30 June 2022, such that to utilise this amount for the period 1 October 2022 to 31 October 2022 amounts to assessing Mr Trenholm twice for this amount. Child Support noted that a later income estimate of $60,563 per annum was lodged by Mr Trenholm and applied from 1 November 2022. The objections officer therefore decided to set Mr Trenholm’s adjusted taxable income at $60,563 for the period 1 October 2022 to 31 October 2022.

6. Mr Trenholm applied to the Tribunal on 12 April 2023 seeking independent review of Child Support’s decision. As a party who may be affected by the Tribunal’s decision, Ms Avey was added as a party to the application. Ms Avey advised the Tribunal that she did not want to participate in the hearing process.

7. Mr Trenholm participated in a directions hearing on 5 July 2023 at which procedural directions were made in relation to the conduct of the matter and the provision of further documents from the parties.

8. Mr Trenholm attended a hearing before the Tribunal on 7 August 2023 and gave evidence on affirmation at the hearing. As previously advised to the Tribunal, Ms Avey did not participate in the hearing.

9. The Child Support Registrar did not seek leave to participate in the hearing and did not attend but provided relevant documents from the Child Support file.

10.  In considering the application, the Tribunal took into account the sworn oral evidence and submissions of Mr Trenholm and the following documents:

(a)the documentary material provided by Child Support (Exhibit 1, pages 1 to 433); and

(b)documents and written submissions received from Mr Trenholm (Exhibit A, pages A1 to A143).

11.  There are a number of background circumstances of understandable importance to Mr Trenholm, which were raised on the evidence which are not relevant to the issues before the Tribunal. Some of these matters were discussed at hearing, however the Tribunal has confined the evidence addressed in these Reasons to only the evidence relevant to the issues before the Tribunal.

ISSUES

12.  As already noted, a parent can apply to the Child Support Registrar for a determination to depart from the administrative assessment of child support (a process known as a change of assessment). Such an application is made under Part 6A of the Act. Pursuant to section 98C of the Act, a decision‑maker can make a change of assessment only if satisfied that:

(a)a ground for a change of assessment has been established;

(b)a change of assessment would be just and equitable as regards the children and each parent; and

(c)a change of assessment would be otherwise proper.

CONSIDERATION

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

13.  There are 10 possible grounds for a change of assessment set out in subsection 117(2) of the Act. Each ground for departure is prefaced by the words ‘in the special circumstances of the case’. The meaning of this expression is not defined in the Act but the Family Court in Gyselman and Gyselman (1992) FLC 92-279 (Gyselman) held that:

as a generality 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 formula in the ordinary run of cases.

14.  The Tribunal’s approach to the interpretation and application of the particular grounds in subsection 117(2) of the Act must be guided by that qualification.

15.  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.

16.  Subparagraph 117(2)(c)(ia) of the Act – commonly referred to as “Reason 8A” – provides as a ground 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

17.  Failing a change of assessment, the administrative assessment of child support, which includes the lump sum income insurance payment as part of Mr Trenholm’s 2021/2022 adjusted taxable income, is as set out at pages 421 to 430 of the hearing papers.

18.  Mr Trenholm submitted that his circumstances are unique because of a one-off ruling based on a High Court ruling and that the evidence shows that none of the systems, namely, the Australian Taxation Office (ATO) and Child Support systems, allow for the one-off position he was faced with – there is no law to address what has happened.

1. The Tribunal initially discussed with Mr Trenholm that paragraph 98S(3B)(a) of the Act prohibits a departure determination being made for a day that is more than 18 months before an application seeking departure from the administrative assessment was lodged unless a court has granted leave, in which case a departure determination can be made for a period up to seven years prior to the date of application. Mr Trenholm lodged his application on 2 December 2022. The Tribunal is therefore prohibited from backdating the effect of any departure determination prior to 2 June 2021.

2. Mr Trenholm submitted that without taking into account the lump sum insurance payment his income for the 2021/2022 financial year was only about $40,000. The Tribunal and Mr Trenholm discussed that Mr Trenholm nonetheless received the insurance payment in the 2021/2022 year. Mr Trenholm’s evidence was that he only received about half of the payment in his hand because it was taxed so much. He received about $60,000 and was expecting a good tax refund but those monies were then garnisheed; $602.42 was then also garnisheed by Child Support.

3. It is not in dispute that Mr Trenholm’s 2021/2022 adjusted taxable income includes a lump sum payment from [Employer] referable to the period 23 May 2014 to 15 October 2017 but paid in one lump sum of $149,241 in the 2021/2022 financial year. The payments relate to a claim for total and permanent disablement under an income protection policy, referable to years during which Mr Trenholm had 100% care of [the child]. Mr Trenholm seeks to have his child support assessed based on 2021/2022 income of $44,848. He told the Tribunal that on account of the increased child support liability, tax refunds of $6,209.41, $7,602.42 and $991.16 were garnisheed on 12 November 2022, 2 February 2023 and 11 July 2023 respectively and that he needed those monies to seek treatment for the impact of mental health conditions upon him. Mr Trenholm said that his application for an amended tax return to the ATO resulted in him getting an additional $7,602.42 tax refund and that was also garnisheed for child support.

4. Mr Trenholm’s evidence was that from the insurance monies he spent about $6,000 on a new bed and bedding, gave $2,500 to his son, [the child], paid a number of months’ rent in advance and also took the opportunity to take some time off work. He also bought his other family members some things out of the money, including his mother. Mr Trenholm says that because of the impact of mental health conditions upon him, following 11 years’ service in [Employer], he now never lasts in a job and goes from employer to employer (he works in [Work sector]). This is because he has to have so many days off because of his mental health. This is consistent with the several employers shown on Mr Trenholm’s 2021/2022 payment summary (Exhibit A, page 74).

23.  Mr Trenholm told the Tribunal that past treatment for the mental health conditions impacting upon him includes attending a post-traumatic stress disorder (PTSD) program at a cost of over $20,000. He told the Tribunal that he previously saw a psychiatrist and a psychologist once per week. His PTSD has worsened since receiving the payment and his general practitioner has placed him on a mental health plan recommending that he again see a psychiatrist and psychologist. He expects that he will need treatment for the rest of his life. He had intended to pay for the treatment when he received his tax refunds but then his tax refunds were seized for child support. Further, his accountant at the time, incorrectly as it transpires, told him that there would be no impact upon his child support.

24.  Mr Trenholm’s recent ATO-issued notices of assessment are as follows:

Date issued               Financial year ended       Original or Amended        Taxable income
15 July 2021              30 June 2021                 Original  $60,443
18 Nov 2022              30 June 2022                 Original  $194,106
18 Nov 2022              30 June 2022                 Amended  $192,873

8 Feb 2023                30 June 2022                 Amended  $192,873

1. Mr Trenholm submitted that the ATO had resolved his complaint as can be seen by a letter to him from the ATO dated 7 February 2023 (Exhibit A, page 140). Mr Trenholm said that he asked them to assess the payout figure across the earlier years. He said the ATO couldn’t update it in the system because their systems won’t allow it. Mr Trenholm said that he was under the impression that the Child Support decision was going to be waived because the ATO wrote to him on 7 February 2023 (Exhibit A, page 140). He said that he was told that he was going to be given another $7,000 dollars or so because they had gone back over the years. He thought this meant that the ATO had ‘fixed the problem’ and that would mean it was fixed for Child Support’s purposes too but then the additional $7,602.42 tax refund was also garnisheed. The Tribunal discussed with Mr Trenholm that the outcome letter from the ATO refers to the 2015, 2016, 2017 and 2020 tax returns and there is no evidence that his 2021/2022 tax return has been further amended after the amended Notice of Assessment dated 8 February 2023 (Exhibit A, page 123) and it is that amended taxable income that must be taken into account for 2021/2022 for child support purposes.

2. Mr Trenholm also discussed that his 2021/2022 Amended Notice of Assessment shows adjusted taxable income of $192,873 (Exhibit A, page 119) and yet Child Support have used an adjusted taxable income of $221,378. The Tribunal discussed with Mr Trenholm that it would clarify this discrepancy. This can be explained because a person’s adjusted taxable income ‘adds back’ certain amounts for child support purposes. Exhibit A, page 111 shows that Mr Trenholm had exempt fringe benefits for tax purposes of $28,505 in the 2021/2022 financial year. Pursuant to the child support legislation that fringe benefit amount is added to his 2021/2022 taxable income to arrive at the adjusted taxable income amount for child support purposes resulting in the adjusted taxable income used of $221,378 ($192,873 + $28,505).

3. Mr Trenholm seeks to have the lump sum income insurance payment assessed for child support purposes in the earlier years to which the payment relates. At that time he had 100% care of his son so he would not have had to have paid extra child support if he had received the money at the right time. The Tribunal discussed with Mr Trenholm that if that had actually occurred, he may have been entitled to less child support than what he may have received from Ms Avey at the time based upon his 100% care but that such a calculation was not within the remit of the Tribunal now and it was unclear what the difference might have been in hindsight without a forensic accounting exercise being undertaken. The Tribunal again noted that paragraph 98S(3B)(a) of the Act prohibits a departure determination being made by the Tribunal prior to 2 June 2021.

28.  In any event, even though the lump sum payment relates to an earlier period, Mr Trenholm actually received the payment in the 2021/2022 financial year. It is that year that he was in receipt of the monies (albeit heavily taxed). Children are entitled to share in the income, property and financial resources of their parents, when they actually have the income, property and financial resources.

29.  Alternatively, Mr Trenholm discussed with the Tribunal that he understands that it is reasonable that some of the monies from the lump sum payment be for [the child], noting that he had given [the child] $2,500. He says he thinks he should have been entitled to at least half of the tax refunds that were garnisheed for child support. The Tribunal acknowledges Mr Trenholm’s submissions, including as to unique circumstances in which he finds himself, but the Tribunal is not satisfied that there are special circumstances such that the lump sum payment should not be taken into account when received.

1. However, given how the child support legislation addresses the lodgment of estimates and subsequent reconciliation of estimates, and based upon the estimates lodged by Mr Trenholm from time to time, and his subsequently assessed taxable income, the liabilities set out at pages 421 to 430 of Exhibit 1 have resulted from the application of the usual administrative assessment of child support. However, as recognised by the Child Support objections officer, this resulted in utilising a taxable income for Mr Trenholm for the period 1 to 31 October 2022 that had already been assessed in the period to 30 June 2022, essentially assessing Mr Trenholm twice. Use of an adjusted taxable income of $60,563 instead of $221,378, results in a decrease in Mr Trenholm’s child support liability of approximately $1,200.[1]for Mr Trenholm for that month.

   [1] Approximately $1,800 (see Exhibit A, page 249 for reference – approximate) less the liability for October of approximately $556 if assessed based on an adjusted taxable income of $60,563 for Mr Trenholm.

2. The Tribunal is satisfied that there are special circumstances in that the administrative assessment of child support utilising $221,378 rather than $60,563 as Mr Trenholm’s adjusted taxable income for the period 1 to 31 October 2022, with a decreased liability of $1,200, would result in an unjust and inequitable determination of the level of financial support to be provided by Mr Trenholm, in the context of his income and circumstances.

32.  It follows that the Tribunal considers there is a ground for a departure from the administrative assessment of child support pursuant to subparagraph 117(2)(c)(ia) of the Act as regards Mr Trenholm’s income, property and financial resources.

Issue 2 – Would it be just and equitable as regards the children and each parent to depart from the administrative assessment of child support?

33.  The Tribunal has found that a ground has to be established to depart from the administrative assessment of child support. It does not necessarily follow that a change will result. Firstly at issue before the Tribunal is whether it would be just and equitable for there to be a change.

34.  The Tribunal must consider, pursuant to subsection 117(4) of the Act, whether it would be just and equitable to make a particular determination pursuant to sub‑subparagraph 98C(1)(b)(ii)(A) of the Act as follows:

(a)      the nature of the duty of a parent to maintain a child (as stated in section 3); and

(b)      the proper needs of the child; and

(c)      the income, earning capacity, property and financial resources of the child; and

(d)the income, property and financial resources of each parent who is a party to the proceeding; and

(da)    the earning capacity of each parent who is a party to the proceeding; and

(e)the commitments of each parent who is a party to the proceeding that are necessary to enable the parent to support:

(i)     himself or herself; or

(ii)    any other child or another person that the person has a duty to maintain; and

(f)the direct and indirect costs incurred by the carer entitled to child support in providing care for the child; and

(g)      any hardship that would be caused:

(i)        to:

(A)      the child; or
(B)      the carer entitled to child support;

by the making of, or the refusal to make, the order; and

(ii)       to:

(A)      the liable parent; or

(B)any other child or another person that the liable parent has a duty to support;

by the making of, or the refusal to make, the order.

35.  The Tribunal is not limited by the matters listed in subsection 117(4) of the Act and may consider any other relevant matters (subsection 117(9) of the Act).

36.  The Full Family Court, in the case of Gyselman, stated that:

However, some of the matters listed in sub-section (4) may overlap with matters already considered under sub‑section [117](2) and some of the paragraphs in sub-section (4) may be more significant in one case than they would be in another or of little relevance in a particular case. It is an essential part of the s.117 exercise to carry out the obligation under sub-section (4). However, that does not mean that it is necessary in each case to slavishly go through each of the paragraphs. The extent to which it is necessary to do so will depend upon the facts and conduct of the individual case and the analysis already performed under sub-section (2).

37.  The Tribunal does not propose to explore every matter in detail, but will discuss those it regards as pertinent in this application.

1. As regards paragraph 117(4)(a) of the Act, the Tribunal recognises that Mr Trenholm and Ms Avey have a duty to maintain [the child]. Further, the Tribunal notes the statements contained in sections 3 and 4 of the Act to the following effect:

(a)The duty of a parent to maintain his or her child has priority over all commitments of the parent other than commitments necessary to enable the parent to support himself or herself and any other child or person that the parent has a duty to maintain.

(b)The level of support should be determined in accordance with the costs of children, and according to the parents’ capacity to provide financial support.

39.  Mr Trenholm provided the Tribunal with a Statement of Financial Circumstances dated 19 April 2023. The Tribunal discussed some inconsistencies in the statement with Mr Trenholm at hearing and clarified his circumstances. Based on all the evidence before the Tribunal, Mr Trenholm’s circumstances, including financial circumstances, include as follows:

(a)Mr Trenholm was forcefully admitted to hospital many years ago – in approximately 2010. He was seeing a psychiatrist and psychologist weekly. He was hospitalised for three to four weeks. Initially it was an involuntarily admission but he then agreed to be hospitalised. He continued to see the psychiatrist and psychologist for a few months afterwards. He then went off medication. He wanted to put all of the issues associated with serving with [Employer] behind him and in continuing to see the psychiatrist and psychologist at the time it was just rehashing things.

(b)He then continued without being on medication but under just the care of a general practitioner.

(c)He moved to Queensland and was on and off medication again. He commenced seeing his current general practitioner, [Dr A], and was put back on medication. [Dr A] spoke to him about seeing a psychiatrist again but he did not want to rehash everything.

(d)He moved back to Newcastle, remaining on medication but subsequently moved back to Queensland just over a year ago when all the business about the lump sum payment started. He feels like he is now in a worse situation than before receiving the lump sum.

(e)Referencing his Statement of Financial Circumstances, he currently has a few pay day loans, including a $350 and $500 loan. He said he gets to a position where he just has no money left and he has to obtain high interest pay day loans just to buy groceries. He also has credit card debts of over $25,000 (approximately). He is behind in payments and gets phone calls about that all the time. He no longer has any credit that he can use.

(f)His usual net fortnightly income, based upon his last payslip, is $1,304. He salary sacrifices $650 but then it comes back to him for rent as $645.92, therefore he nets $1,945 per fortnight. Mr Trenholm’s disclosed estimated expenses are slightly more than his income thus his need to access pay day loans.

(g)He has no savings. He cannot afford a car. He uses public transport but sometimes has the use of a work car. He bought a car from the insurance monies but sold it when he came back to Queensland because of the transfer duties coming to Queensland from New South Wales.

(h)He has been with his current employer for approximately six months. He has used most if not all of his personal (sick) leave and has used up all his current RDOs (rostered days off).

1. He is taking some medication at present but his doctor wants him to increase the dose in case he has side effects and has to take time off work. He currently pays $30 per month for the medication and to increase the dose would be another $30 per month.

1. The Tribunal made directions on 5 July 2023 for Mr Trenholm to provide medical reports or other documentation evidencing medical conditions that impact upon him, recommended treatment in relation to those conditions and anticipated costs of that treatment. Relevant documents provided by Mr Trenholm were as follows:

(a)Letter dated 14 July 2023 from [Dr A], general practitioner, stating as follows:

Mr Trenholm is suffering from depression and anxiety and has been on medication since 2019 under my care.

(b)Prescriptions for medication.

(c)Referral from [Dr A] dated 31 January 2023 including as follows:

For diagnostic clarification and further management advice under item 291.

He is suffering from Mixed depression and anxiety symptoms on a background of complex PTSD relate to previous work in [Employer]. Undergoing some complex financial issues, which is affecting his mental health. Poor response to Cymbalta 60mg for > 2 months. He is not keen to go to medication at this stage. He had retired from [Employer] > 10 yrs ago.

He was admitted to Mental health hospital in NSW following a suicidal attempt with OD.

He is currently working as [an Occupation] and living alone. He has a 15 yr old son, lives with his mother in Brisbane. I have referred him to see psychologist, would appreciate your kind review and further management advice please.

(d)Mental health care plan from [Dr A] dated 31 January 2023 (valid for initial six sessions).

41.  Mr Trenholm’s evidence to the Tribunal was that he estimates the cost of weekly sessions with a psychologist and psychiatrist as being $200 to $400 per week but notes that he requires $800 weekly to pay for the appointments upfront pending reimbursement.

42.  Mr Trenholm told the Tribunal that [Dr A] had referred him for six sessions each to see a psychologist and psychiatrist (pursuant to a mental health plan) as seen in the reports and referrals of [Dr A] appearing in Exhibit A, pages 23 to 34.

43.  Based upon the medical evidence, and Mr Trenholm’s evidence, the Tribunal is satisfied that Mr Trenholm should be accessing treatment for the mental health conditions impacting upon him, as recommended by his general practitioner but at this point is not able to access it because of a lack of finances, including because of the unexpected garnishee of his tax refunds for child support. In those circumstances the Tribunal is satisfied that Mr Trenholm properly has commitments that include out-of-pocket medical expenses to treat the mental health conditions impacting upon him, as supported and referred by his general practitioner. Mr Trenholm said that there can be a ‘vicious circle’ element to seeking treatment because of ‘rehashing’ things. Nonetheless his doctor has recommended treatment and he knows he currently needs help but it is the lack of finances that is preventing him seeking treatment at present. Without obtaining the referred treatment, he is concerned about his continuing inability to work.

44.  Mr Trenholm provided information from and [Psychological Services] estimating the out-of-pocket costs for psychiatrist and psychologist appointments consistent with Mr Trenholm’s estimates. Mr Trenholm said based upon his research, his best estimate of the out-of-pocket costs of seeing a psychologist and psychiatrist would be $200 to $400 per week, which he cannot afford. The material provided by Mr Trenholm to the Tribunal supporting his best estimate of expected out-of-pocket costs included as follows:

(a)$109 (30-minute consultation), $152 (45-minute consultation) and $167 (initial consultation) out-of-pocket costs to see a psychiatrist (Exhibit A, page 37);

(b)$106 out-of-pocket cost to see the psychologist recommended by his general practitioner (Exhibit A, page 40) or $146 (initial session)/ $126 (subsequent session) out-of-pocket at another psychologist (Exhibit A, page 42).

45.  Ms Avey has not participated in the Tribunal proceedings and there is no current evidence before the Tribunal as regards her circumstances other than her recent taxable income amounts obtained from the ATO. The evidence is that Ms Avey currently has 100% care of [the child] and in the absence of evidence as to any additional expenses of having care of [the child], the Tribunal anticipates that Ms Avey incurs the usual costs of caring for a child of his age.

46.  As discussed with Mr Trenholm at hearing, Medicare provides for a mental health treatment plan allowing a person to claim for up to 10 individual and 10 group sessions with a mental health professional each year,[2] with initial referral for six sessions at a time by a doctor or psychiatrist. Mr Trenholm said that in addition to the out-of-pocket costs he would likely have to take a day off work for each appointment, thereby foregoing income, because he has no more sick leave left.

[2] Mental health care and Medicare - Medicare - Services Australia

47.  There is limited medical evidence before the Tribunal as to the extent of treatment needed by Mr Trenholm. However, the Tribunal is satisfied that as referred by his doctor, Mr Trenholm does need treatment for the mental health conditions impacting upon him. Whilst Mr Trenholm has suggested he has previously had weekly appointments and expects he might need the same for a year, Mr Trenholm said he considers it would be fair and reasonable that he would need weekly treatment from both medical specialists for three months.

48.  The Tribunal considers a calculation based on 10 sessions for each (as would be possible under a Medicare mental health plan) to be a reasonable estimate absent any more detailed medical evidence. As to the anticipated cost of that treatment, the Tribunal estimates the costs of those yearly sessions as follows:

$167 (initial psychiatrist session)

$152 x 9 (follow-up psychiatrist sessions)

$146 (initial psychologist session)

$126 x 9 (follow-up psychologist sessions),

for a total of approximately $4,000 per year. The Tribunal is further satisfied that Mr Trenholm is prescribed medication costing approximately $60 per month, meaning total treatment cost on this basis can be estimated at $4,500 per annum. It is notable that this cost is directly referable to mental health conditions related to the reason for the receipt of his lump sum insurance payment.

49.  The Tribunal acknowledges Mr Trenholm’s evidence that he also anticipates having to forgo a day’s pay for each appointment given his lack of further personal leave. Mr Trenholm anticipates that having to, for example, take leave one day per week for medical treatment would mean approximately $200 less in his hand each week. The Tribunal accepts this may be necessary but absent evidence as to whether appointments may be available at flexible times or outside work hours, the Tribunal considers it too speculative to include the cost of unpaid leave to attend every appointment. The Tribunal considers it realistic to conclude that Mr Trenholm may well have to take unpaid leave for 10 days per year to access the needed treatment. If this transpires, this will be reflected in Mr Trenholm having a decreased adjusted taxable income.

50.  Taking all of these matters into account, the Tribunal is satisfied that on balance Mr Trenholm’s proper commitments to support himself should include an additional $4,500. $4,500 grossed up to a pre-tax figure (based on Mr Trenholm’s usual top marginal tax rates) equates to approximately $6,700.

51.  One of the range of determinations that may be made if there is to be a departure from the administrative assessment of child support is to make a determination varying a parent’s self-support amount; that is, to vary the formula-specified amount that would otherwise be used as a parent’s self-support amount to calculate the child support liability. Given the Tribunal’s conclusion that the Tribunal is satisfied, on balance, that Mr Trenholm’s proper commitments to support himself should include an additional $6,700, the Tribunal proposes to increase Mr Trenholm’s self-support amount utilised in the calculation of child support by $6,700. By way of example, the usual amount allowed for self-support in the formula for a child support period commencing in the 2023 year would be $27,508 (gross). The increase proposed by the Tribunal would mean that an amount of $34,208 would instead be utilised in the formula as Mr Trenholm’s self-support amount. This would have the consequential effect of decreasing Mr Trenholm’s annual child support liability. For example, based upon current income figures of the parents ($60,563 for Mr Trenholm and $106,209 for Ms Avey) and the current care level (100% to Ms Avey), this change would likely result in an annual decrease in Mr Trenholm’s child support liability of approximately $1,100 per year. As can be seen, and as discussed with Mr Trenholm at hearing, the reduction in child support liability is not dollar for dollar.

52.  As regards the proposed departure period, as already noted the Tribunal cannot make a departure determination commencing prior to 2 June 2021. Notably, however, the additional self-support costs have not yet been incurred. In the circumstances, the Tribunal considers that Mr Trenholm’s self-support amount should be increased from the date of the Tribunal’s decision for a period of 12 months. It would be expected that by the end of that 12-month period, Mr Trenholm may have further medical evidence available as to the then future expected treatment required. At that point, depending upon what the position is, Mr Trenholm is at liberty to make a further departure application if it is still anticipated that his self-support amount will continue to be higher than usual because of necessary medical treatment.

53.  Given the expected decrease in child support liability (approximately $1,100 per year) and that it will only commence from the date of the Tribunal’s decision, the proposed determination will not result in the tax refunds, or part thereof, being repaid to Mr Trenholm as is his preferred outcome, so that he has money in hand to fund his treatment, including to fund the appointments upfront prior to receiving the Medicare rebate. However, there will be a reduced overall child support liability for Mr Trenholm nonetheless, referable to the best evidence before the Tribunal of Mr Trenholm’s increased self-support costs based on medical treatment he is required to access as soon as possible.

1. The Tribunal is satisfied that continuing hardship will be occasioned to Mr Trenholm if his increased self-support costs are not recognised. Further, in the absence of evidence other than as to Ms Avey’s most recent taxable income being $106,209, the Tribunal is satisfied that no hardship will result to Ms Avey or [the child] on account of the proposed departure.

55.  Having had regard to the relevant subsection 117(4) matters, the Tribunal is satisfied that this proposed departure is just and equitable.

Issue 3 – Would it be otherwise proper to make a particular departure determination?

56.  The Tribunal considered whether it would be otherwise proper to make the proposed departure determination in accordance with sub‑subparagraph 98C(1)(b)(ii)(B) of the Act. Subsection 117(5) of the Act sets out the matters that must be considered when deciding whether it would be ‘otherwise proper’ to make a departure determination. Subsection 117(5) focuses on the balance of support between parents on the one hand and the taxpayer on the other. It is appropriate for the 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 family tax benefit, received by the party caring for a child may be affected by the level of child support.

57.  There is no evidence before the Tribunal as to whether Ms Avey is in receipt of government benefits such as family tax benefit.

58.  The Tribunal considers that it is otherwise proper to make the particular departure determination proposed.

DECISION

The decision under review is varied so that:

1. The decision to vary Mr Trenholm’s adjusted taxable income to $60,563 for the period 1 October 2022 to 31 October 2022 is affirmed; and

1. Mr Trenholm’s self-support amount is varied by increasing it by $6,700 per annum for the period 11 August 2023 to 10 August 2024.