Tuckey and Giles (Child support)

[2022] AATA 312

Tuckey and Giles (Child support) [2022] AATA 312 (1 February 2022)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2021/AC022911

APPLICANT:  Mrs Tuckey

OTHER PARTIES:  Child Support Registrar

Mr Giles

TRIBUNAL:Member P Jensen

DECISION DATE:  1 February 2022

DECISION:

The decision under review is affirmed.

CATCHWORDS

CHILD SUPPORT – particulars of the administrative assessment – whether a fixed annual rate of child support should not apply – income exceeds the allowable limit – the application for fixed annual rate not to apply should be refused – 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

1. Mrs Tuckey and Mr Giles are the parents of [Child 1]. A child support case is registered with what is commonly called the Child Support Agency or CSA. 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’ adjusted taxable incomes and their percentages of care for the child. From 1 September 2020 to 31 August 2021 the administrative assessment was based on Mrs Tuckey’s 2019-20 adjusted taxable income of $703, Mr Giles’s 2019-20 adjusted taxable income of $57,082 and Mrs Tuckey’s 26% care and Mr Giles’s 74% care of [Child 1]. The administratively assessed rate of child support payable was $0; neither parent was required to pay child support to the other parent.

2. In July 2021 the Australian Taxation Office assessed Mrs Tuckey’s 2020-21 adjusted taxable income to be $17,214. The child support administrative assessment was based on that adjusted taxable income from 1 September 2021. The CSA decided to assess Mrs Tuckey’s rate of child support at what is commonly called the fixed annual rate, which, given Mrs Tuckey’s circumstances, was $1,477 per annum. On 6 September 2021, she applied to have the fixed annual rate not apply. The CSA refused her application. She objected to that decision. An objections officer disallowed her objection. She applied to the Tribunal for further review. I heard the matter on 1 February 2022. Mrs Tuckey and Mr Giles gave sworn evidence by conference phone. The relevant facts are not in dispute.

3. The CSA’s decision to require Mrs Tuckey to pay the fixed annual rate was made pursuant to subsection 65A(1) of the Act which states:

   The Registrar must assess an annual rate of child support payable by a parent for a child for a day in a child support period as the [fixed annual rate] if: 

   (a)the parent did not receive an income support payment during the last relevant year of income; and 

   (b)the following amount is less than the pension PP (single) maximum basic amount: 

   (i)if subparagraph (ii) does not apply--the parent's adjusted taxable income determined in accordance with section 43 for the last relevant year of income for the child support period; 

(ii)if the day occurs in the application period for an income election made by the parent--the amount that applied under subsection 60(2) or (3), or that was worked out under subsection 62A(1); and 

(c)the parent does not have at least shared care of the child during the relevant care period.

1. The last relevant year of income was 2020-21. Mrs Tuckey did not receive an income support payment during 2020-21. Paragraph 65A(1)(a) was satisfied.

2. The “pension PP (single) maximum basic amount” is the maximum basic annual amount of parenting payment payable to a person who is not a member of a couple. In September 2021 it was $20,621. Subparagraph 65A(1)(b)(ii) concerns estimates of income. Mrs Tuckey had not provided an estimate of income. Mrs Tuckey’s adjusted taxable income for the last relevant year of income was $17,214, which was less than $20,621. Paragraph 65A(1)(b) was satisfied.

3. At least shared care means at least 35% care: section 5 of the Act. In September 2021, Mrs Tuckey did not have at least shared care of [Child 1]. Paragraph 65A(1)(c) was satisfied.

4. The requirements of subsection 65A(1) were satisfied and the CSA was required to assess Mrs Tuckey’s rate of child support payable as the fixed annual rate.

5. Mrs Tuckey’s application for the fixed annual rate to not apply was lodged pursuant to section 65B of the Act. It relevantly states:

   (2)The parent making the application must provide evidence to the Registrar concerning the parent's income (within the meaning of subsection 66A(4)) to demonstrate that his or her current income is:

   (a)less than the pension PP (single) maximum basic amount; and 

   (b)that it would be unjust and inequitable to expect him or her to pay the [fixed annual rate]. 

   …

(4)If the parent makes an application, the Registrar may determine in writing that the section not apply to the parent if the parent's current income (within the meaning of subsection 66A(4)) is less than the pension PP (single) maximum basic amount and it would be unjust and inequitable to expect him or her to pay the [fixed annual rate].

1. Mrs Tuckey’s pro forma application included questions about various categories of income. In response to those questions, she stated that her income consisted of:

   Salary or wage:              $351 per week

   Government payments:    $460 per fortnight

   Business income:           $150 per month

2. That income equates to approximately $32,012 per annum. If that income constitutes income “within the meaning of subsection 66A(4)” of the Act, then Mrs Tuckey’s income was not less than the pension PP (single) maximum basic amount of $20,621 and her application for the fixed annual rate to not apply could not be granted.

3. Mrs Tuckey’s government payments were family tax benefit. She stated:

   FTB is not my income, it is to cover the costs of my and my husband’s 3 other children that live with us full time. FTB is based on our joint household income. I am in a defacto [sic] relationship and I cannot receive a Centrelink benefit as he has a full time income. I cannot afford fixed annual rate to be applied …

4. Mrs Tuckey also noted that family tax benefit is not a taxable income.

5. Subsection 66A(4) of the Act states:

   In this section: 

   "income", in relation to a person, means: 

   (a)any money earned, derived or received by the parent for his or her own use or benefit, other than money earned, derived or received in a manner, or from a source, prescribed by the regulations for the purposes of this paragraph; or 

   (b)a periodical payment by way of a gift or allowance, other than a payment of a kind prescribed by the regulations for the purposes of this paragraph.

6. According to departmental policy:[1]

   Family Tax Benefit Part A is a supplementary payment to assist low and middle income families with the direct cost of raising dependent children.

   …

   Family Tax Benefit Part B is a supplementary payment that recognises some parents and non-parent carers may have differing abilities to engage with the workforce based on their particular circumstances and the age of their youngest child.

   [1]>

   However, family tax benefit is paid to Mrs Tuckey in her personal capacity. It is not paid to the children directly and it is not paid to Mrs Tuckey to be held on trust for the children. It is available for Mrs Tuckey’s “own use or benefit”.

7. The regulation to which subsection 66A(4) refers is regulation 13 of the Child Support (Assessment) Regulations 2018.[2] Various types of payments are prescribed, including “disability support pension paid to a person under the social security law”. Family tax benefit is not prescribed, either specifically or via a category of income.

   [2]>

   It is worth noting that the Act does require decision-makers to disregard family tax benefit in other circumstances. Departure decisions are made pursuant to Part 6A of the Act. Subparagraph 117(7A)(b)(ii), which is contained in Part 6A, states:

   In having regard to the income, property and financial resources of a parent of the child, the court must:

   …

   (b)disregard:

   …

   (ii)any entitlement of the child or the carer entitled to child support of an income tested pension, allowance or benefit.

8. The case of Chamberlain & Slade (SSAT appeal) [2012] FMCAfam 658,[3] while not directly on point, also supports the view that family tax benefit is income for the purpose of subsection 66A(4) of the Act. Mr Chamberlain received carer allowance. Departmental policy stated:[4]

   Carer Allowance is a supplementary payment that may be available to you if you are a parent or carer who provides additional daily care and attention for an adult or child with a disability or medical condition, or for an adult who is frail aged. Carer Allowance is free of the income and assets test, is not taxable and can be paid in addition to wages, Carer payment or any other Centrelink payment.

   [3] at paragraph 7.

9. Mr Chamberlain submitted that carer allowance was not income as defined by subsection 66A(4) of the Act. At the time, the relevant regulation was regulation 7D of the Child Support (Assessment) Regulations 1989. Carer allowance was not a prescribed payment under that regulation.[5] The Social Security Appeals Tribunal (“the SSAT”) accepted that “the entirety of the carer’s allowance received by Mr Chamberlain, at relevant times, was used up by the costs incurred in caring for his mother, particularly petrol costs.”[6] Nevertheless, the SSAT concluded that carer payment was income as defined by subsection 66A(4) of the Act. On appeal, the Federal Magistrates Court noted that its role was confined to deciding whether the SSAT had correctly applied the law. As an aside, the Court noted that “[s]ome may view [the SSAT’s conclusion as] controversial, given the nature and purpose of a carer’s allowance”. However, the Court concluded that the SSAT had correctly applied the law.

   [5]Chamberlain at paragraph 43.

   [6]Chamberlain at paragraph 45.

10. Finally, I note that regulation 13 of the Child Support (Assessment) Regulations 2018, which effectively replaced regulation 7D of the Child Support (Assessment) Regulations 1989, was made after Chamberlain was decided.

11. For those reasons, I find that family tax benefit is income as defined by subsection 66A(4) of the Act. It follows that Mrs Tuckey’s income was not less than the pension PP (single) maximum basic amount and the CSA could not grant her application for the fixed annual rate to not apply; there was no residual discretion to do otherwise. The CSA’s decision to refuse her application was correct according to law.

DECISION

The decision under review is affirmed.