Ugarow and Ryabokon (Child support)

[2024] AATA 2766

Ugarow and Ryabokon (Child support) [2024] AATA 2766 (6 June 2024)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2024/SC027710

APPLICANT:  Mr Ugarow

OTHER PARTIES:  Child Support Registrar

Ms Ryabokon

TRIBUNAL:Member A Ryding

DECISION DATE:  06 June 2024

DECISION:

The Tribunal sets aside the decision under review and, in substitution, decides that Ms Ryabokon’s income estimate lodged on 17 July 2023 is refused pursuant to paragraph 63AA(1)(b) of the Child Support (Assessment) Act 1989.

CATCHWORDS

CHILD SUPPORT – income assessment – adjusted taxable income – income estimate – actual taxable income for the period 17 July 2023 to 30 June 2024 is likely to be higher than estimate – income estimate lodged on 17 July 2023 is refused – application for review set aside and substituted

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 theChild Support (Registration and Collection) Act 1988

REASONS FOR DECISION

BACKGROUND

1. This is an application to the Social Services and Child Support Division of the Administrative Appeals Tribunal (the Tribunal) for review of a decision of Services Australia – Child Support (Child Support) regarding the income used in assessing child support payable.

2. The applicant, Mr Ugarow, and one of the other parties to this application, Ms  Ryabokon, are the parents of two children, [Child 1] (born [date] 2007) and [Child 2] (born [date] 2009). For the period relevant to this application, the children were in Mr Ugarow’s 100% care.

3. On 5 June 2024, the Tribunal conducted a hearing in this matter by MS Teams audio. Mr Ugarow and Ms Ryabokon participated in the hearing. Child Support did not participate and instead relied upon its documents. 

4. Before the Tribunal were hearing papers supplied by Child Support numbered 1 to 93 and documents provided by Ms Ryabokon numbered B1 to B51 (together, the hearing papers). Mr Ugarow did not have the hearing pages papers numbered 1 to 93 and was not sure that he had received them. However, he confirmed to the Tribunal that he was happy to proceed without them.

5. Mr Ugarow provided evidence on affirmation and Ms Ryabokon provided evidence on oath at the hearing.

6. The Tribunal has had regard to all of the documents provided to it and the evidence provided by Mr Ugarow and Ms Ryabokon. Reference below is made only to the documents and evidence relevant to this decision.

7. Mr Ugarow and Ms Ryabokon have had a registered child support case in relation to the children since 29 September 2017.

8. On 17 July 2023, Ms Ryabokon informed Child Support of a reduction in her income as she had lost her job and provided an estimate of income for the 2023–2024 financial year from 17 July 2023 of $0 (folio 13).

9. Child Support determined to accept Ms Ryabokon’s estimate of $0 (annualised) (folio 13).

10. On 23 September 2023, Mr Ugarow objected to that decision (folio 58), on the basis that each year Ms Ryabokon submits an estimate which is well below her true income.

11. On 22 March 2024, Child Support provided its objection decision (the Objection Decision) (folio 4). It disallowed Mr Ugarow’s objection and accepted Ms Ryabokon’s estimate of $0 for the period 17 July 2023 to 30 June 2024. Child Support relied in this regard on a statement from Ms Ryabokon’s son, [Mr A].

12. On 27 March 2024, Mr Ugarow applied to the Tribunal for review of the Objection Decision. His grounds of appeal were as follows:

    The Applicant suspects that the other parent’s $0 income estimate is not genuine, and that her 24yo child’s statement that he is supporting her is also not correct.

13. On 15 May 2024, the Tribunal issued directions to Mr Ugarow and Ms Ryabokon pursuant to section 33 of the Administrative Appeals Tribunal Act 1975.

14. Ms Ryabokon provided the documents marked B1 to B51 in response.

ISSUES

1. The child support scheme is intended to assist separated parents to take responsibility for the financial support of their children. It recognises that parents have a primary duty to maintain their children.[1]

   [1] Section 3 of the Assessment Act.

2. How child support is assessed by Child Support and provided by parents is governed by the Child Support (Assessment) Act 1989 (the Assessment Act).

3. Part 5 of the Assessment Act sets out the way in which the annual rate of child support payable by a parent for a child for each day in a child support period is to be calculated. A critical element of that calculation is each parent’s income.

4. Child Support uses each parent’s adjusted taxable income to assess the rate of child support payable. “Adjusted taxable income” includes each parent’s taxable income for the last relevant year of income in relation to the child support period.[2] The “last year of relevant income” means the year of income that ended before the start of the relevant child support period.[3]

   [2] Pursuant to section 43 of the Assessment Act. It also includes reportable fringe benefits, target foreign income, total net investment loss, tax free pensions or benefits received, reportable superannuation contributions, all in that year of income.

   [3] Subsection 5(1) of the Assessment Act.

5. However, a parent can apply to use an estimate of current income for the financial year instead of the last year of relevant adjusted taxable income.[4]

   [4] Pursuant to section 60 of the Assessment Act.

6. Child Support is not bound to accept that estimate and may refuse to accept it on certain grounds.[5] In particular Child Support may refuse to accept the estimate if it considers that the parent’s actual taxable income for the period is likely to be higher than their estimate. If Child Support refuses to accept an estimate, then the election to use an estimate is taken never to have been made (subsection 63AA(5) of the Assessment Act). This means that Child Support will instead use the previous year’s income figure.

   [5] Section 63AA of the Assessment Act.

7. The issue for consideration in this application is therefore whether Ms Ryabokon’s election to use an estimate of income of $0 should be accepted.

CONSIDERATION

1. Mr Ugarow was (not unsurprisingly) unable to provide any documents in support of his belief that Ms Ryabokon’s income for the period 17 July 2023 to 30 June 2024 was not $0.

2. Mr Ugarow told the Tribunal that every year for the last three years, Ms Ryabokon had either provided a nil estimate or a low estimate. For at least the last three financial years, however, he believed that Ms Ryabokon had earned income. He considered it extremely unlikely that she would be living on nil income and cast doubt on the handwritten note from her son who he noted was only [age] years old.

3. Ms Ryabokon provided Child Support with a handwritten statement from her adult son (by another father), Mr [Mr A], dated 4 March 2024 (folio 74) that states:

   This is to say that I have financially supported my mum from the 17th July 2023 to current

   I have had savings and a business and I’m happy to help my mom out whenever she needs it. I will continue to do so.

4. In response to the directions issued by the Tribunal on 15 May 2024, Ms Ryabokon provided:

• Bank statements for the period 27 June 2023 to 15 May 2024 on what Ms Ryabokon told the Tribunal was her only bank account (folios B4 to B26).

• A further statement from [Mr A] dated 24 May 2024 (folio B50) that states:

  As previously stated I will support my mum with whatever she needs. She did not work during the time Mr Ugarow stated or earn an income.  I was happy to give mum cash to put in her account to help her out during this time off or transfer her money from my savings or business account .

• A statement from Mr [B] dated 27 May 2024 (folio B51) that reads:

  I [B] has [sic] been a good friend of Ryabokon for many years and was happy to help her out [INDECIPHERABLE] during the time that she had off work during 2023–2024. She was not working during this time and or earning an income .

1. The bank statements evidence:

• The opening credit was $1,630.86. Regular bank transfers from Mr  [B], of amounts between $105 to $900.

• More frequent transfers from an account number ending in 4083 and an account number ending in 0875, which Ms Ryabokon told the Tribunal were her son, [Mr A]’s, accounts. These transfers were in a range of amounts but were usually rounded amounts rather than amounts apparently paid to her for specific expenditure. Whilst there was a transfer of $40 on 13 July 2023, the transfers began with regularity from 20 July 2023. Sometimes there were a number of transfers from that account to Ms Ryabokon’s account on the same day (see, for example, folio B41, three transfers totalling $400 on the same day).

• The Tribunal notes the transfer from [Mr A]’s account of $100 on 13 August 2023, described as “business dinner”.

• A significant number of cash deposits paid into, it appears, the same [Bank] ATM each time. Miss Ryabokon told the Tribunal that sometimes [Mr A] would give her  cash and that sometimes she was gambling on the poker machines and was successful. The Tribunal notes in this regard occasional debit entries for [a company] (see, for example, folio B40). Some of the amounts of the cash deposits are significant, for example, a deposit of $840 on 1 December 2023 (folio B9) and of $1,200 on 12 December 2023 (folio B10). There is no regularity or pattern to the cash deposits that the Tribunal can discern.

• A number of transfers from Ms Ryabokon to Mr [B] and [Mr A] but not, on the Tribunal’s review, in the same amounts as Ms Ryabokon received from them.

• From 3 April 2024 there are regular deposits for wages. Ms Ryabokon told the Tribunal that she started working again in early April.

1. Ms Ryabokon told the Tribunal that she was employed up until 17 July 2023 [with] a company called [COMPANY 1] helping to run its depot. The work was too quiet and work was not available,  and so she was let go. She said that she received no redundancy payment, that it was a short time role, that she maybe worked a year, that it wasn’t working out and that they both decided [to bring the role to an end].

2. Ms Ryabokon said she that began working again on 2 April 2024. Ms Ryabokon said that she has informed Child Support of this.

3. Ms Ryabokon told the Tribunal that [Mr A] is [age] and lives with her together with his girlfriend. She said that he runs his own business [and] has run it for about a year. He used to also work for [COMPANY 1] and operate his business alongside that. He runs interstate trucks for companies such as [deleted], moving different trucks around; a system like a broker system. He has two business accounts (the account ending in 4083 and the account ending in 0875) and would transfer money to Ms Ryabokon from those accounts. He would also give her cash: “whatever’s easiest”.

4. Ms Ryabokon told the Tribunal that the payment of $1,400 cash on 13 February 2024 (folio B8) was because it was her birthday on 17 February and she went to [City 1] for her birthday.

5. Ms Ryabokon told the Tribunal that Mr [B] is a good friend who lives in a different state and is almost like a brother to her.

6. A couple of other entries were discussed: a transfer from Miss [C] of $2,300 on 29 February 2024 (folio B20) was a transfer from [Mr A]’s girlfriend for the rent. The transfer from Mr [D] on 13 April 2024 of $500 (folio B23) was a transfer from a good friend.

7. Ms Ryabokon said to the Tribunal, it is just a support system and there is nothing underlying about it. The Tribunal takes Ms Ryabokon to have meant that there was nothing underhanded about it.

8. Ms Ryabokon told the Tribunal that she had not been working at all in this period and also said, in answer to a specific question to this effect, that she had not been working and receiving payments in cash.

9. Ms Ryabokon’s evidence and the documents she provided raise issues of concern to the Tribunal:

• For nearly nine months, Ms Ryabokon, on her account, existed entirely on money given to her by her [age]-year-old son and a friend, as well as money that she won gambling. From the bank statements, it does not appear that Ms Ryabokon led a particularly frugal life. Ms Ryabokon told the Tribunal that she travelled to [City 1] which cannot have been cheap in terms of airfares or holiday expenses, noting exchange rates

• It is unusual for a [age]-year-old to have a company operating for a year that is so successful that he can afford to support both himself and his mother (leaving aside the issue of paying his mother money directly from his company accounts).

• It is unclear why [Mr A] would sometimes transfer money to his mother and sometimes give her cash, noting that sometimes bank transfers and cash deposits occurred on the same day.

1. The Tribunal did not find credible Ms Ryabokon’s explanation, that her friends and [age]-year-old son supported her for around nine months. The Tribunal also considers it unusual that Ms Ryabokon did not receive a termination payout or a payout of annual leave entitlements. The Tribunal notes that Ms Ryabokon did not seek any support from Centrelink.

2. The Tribunal gives little weight to the statements of her son, [Mr A], given their relationship.  

3. The Tribunal also notes that Ms Ryabokon and [Mr A] work in the same industry [and] had previously been employed by the same company ([COMPANY 1]). Those facts and the fact that [Mr A] paid Ms Ryabokon from his business accounts (and the transaction on 13 August) suggest to the Tribunal that Ms Ryabokon may in fact have been working for her son or assisting him in some way with his business.

4. Under section 63AA of the Assessment Act, it is not necessary for the Tribunal to determine what Ms Ryabokon’s income is or might be. All the Tribunal needs to be satisfied of is that Ms Ryabokon’s actual taxable income for the period 17 July 2023 to 30 June 2024 is likely to be higher than her estimate of $0.

5. The Tribunal therefore finds that that there are grounds to refuse Ms Ryabokon’s income election made on 17 July 2023 of $0 under paragraph 63AA(1)(b) of the Assessment Act.

DECISION

The Tribunal sets aside the decision under review and, in substitution, decides that Ms Ryabokon’s income estimate lodged on 17 July 2023 is refused pursuant to paragraph 63AA(1)(b) of the Child Support (Assessment) Act 1989.