Vanderpool and Vanderpool (Child support)

[2024] AATA 2540

Vanderpool and Vanderpool (Child support) [2024] AATA 2540 (12 June 2024)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2024/SC027673

APPLICANT:  Ms Vanderpool

OTHER PARTIES:  Child Support Registrar

Mr Vanderpool

TRIBUNAL:Member S Letch

DECISION DATE:  12 June 2024

DECISION:

The decision under review is affirmed.

CATCHWORDS
CHILD SUPPORT – particulars of the administrative assessment – income election – estimated income – workers’ compensation payments – income protection benefits – exercise of discretion – 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

1. This matter concerns an application by Ms Vanderpool to a disallowed objection in respect of an original decision by Child Support on 9 March 2024 to accept an income estimate election by Mr Vanderpool for 2023/24 in the (annualised) sum of $41,740 from 3 August 2023 to 30 June 2024.[1]

   [1] I note a new estimate was made by Mr Vanderpool from 13 October 2023, resulting in this application being concerned with a closed period from 3 August 2023 to 12 October 2023.

2. It is convenient by way of background to set out some extracts from the objections officer’s decision dated 9 March 2024:

   …

   DECISION UNDER REVIEW

   Type of decision being objected to: estimate

   Decision being objected to:
   Accept [Mr Vanderpool]'s 2023/2024 estimate of adjusted taxable income of $41,740 (annualised) for the period 3 August 2023 to 30 June 2024.

   [Ms Vanderpool] has objected to this decision because [Ms Vanderpool] states that [Mr Vanderpool] is receiving payments as part of the process of a medical discharge from [his employer]. [Ms Vanderpool] states that his income would be higher than what he has advised in his estimate.

   …

   Based on the letter provided by [Mr Vanderpool] from [the insurer] advising from 21 July
   2023, [Mr Vanderpool] s weekly payments will be made at a rate of $800.80 gross per week ($800.80 x 52 =
   $41,641 annualised), we are satisfied that [Mr Vanderpool]’ s estimate of income was a reasonable estimate of his income at the time the estimate election was made.

   We have made the decision to accept [Mr Vanderpool]'s 2023/2024 estimate of adjusted taxable income of

   $41,740 (annualised) for the period 3 August 2023 to 30 June 2024.

   The objection is disallowed.

   …

3. In short, Ms Vanderpool submits that the income protection benefits of over $8,000 per month (see folio 37 of the Child Support hearing papers) result in over $106,000 per annum. Mr Vanderpool’s estimated income, which only included the “workers’ compensation” sum of $800 per week, should not have been accepted. She said that the higher payments Mr Vanderpool began to receive in October 2023 (with effect from 15 September 2023) “automatically’ start after being on “[insurance] payments” (the workers’ compensation payments).

4. Mr Vanderpool did not agree that the higher payments were to start “automatically”. He had made a claim before 3 August 2023; however, although he expected it likely he would receive the higher payments, he did not “know for certain” and he did not know exactly when payment would start (Mr Vanderpool said he had seen many doctors during the assessment process, which “took ages”). He told this to Child Support on 3 August 2023; he was advised that he should estimate his current (actual) income on the basis of his workers’ compensation payments of some $800 per week, and then update his estimate if and when the higher payments started. He did so in October 2023 when he received his first income protection benefit payment.

5. Ms Vanderpool suggested that the reported $800 gross figure was not “gross” and that Mr Vanderpool was salary sacrificing a car and this amount was being deducted. Mr Vanderpool rejected that suggestion – he said the gross sum was $800 per week, and that whilst he had been salary sacrificing a vehicle, that contract terminated when he started to receive the workers’ compensation payments and had been “medically retired”. Ms Vanderpool said she had spoken to someone at “[the insurer]” who told her it was not the case that salary sacrificing contracts “terminated instantly” upon medical retirement.

Application of the law

1. The pivotal provision in this case is section 63AA of the Child Support (Assessment) Act 1989:

   Registrar may refuse to accept an income election

   (1)  If:

   (a)  a parent makes an income election to which subsection 60(2) applies; and

   (b)  the Registrar is satisfied that the amount worked out under that subsection is less than the amount that the Registrar considers is likely to be the parent's actual adjusted taxable income for the year of income to which the income election relates;

   the Registrar may refuse to accept the income election.

   (2)  The Registrar may refuse to accept a parent's income election to which subsection 60(3) applies if the Registrar is satisfied that:

   (a)  the partial year income amount for the income election is less than the amount that the Registrar considers is likely to be the parent's actual adjusted taxable income for the remaining period in relation to the income election; or

   (b)  the total of the income component amounts estimated by the parent under paragraph 60(3)(b) for the period referred to in that paragraph is more than the amount that the Registrar considers is likely to be the total of the actual income component amounts for the parent for that period.

   (3)  If:

   (a)  a parent makes an election under subsection 62A(1); and

   (b)  the Registrar is satisfied that the partial year income amount for the income election is less than the amount that the Registrar considers is likely to be the parent's actual adjusted taxable income for the remaining period in relation to the income election;

the Registrar may refuse to accept the income election.

(4)  In making the decision as to whether to refuse to accept the income election, the Registrar:

(a)  may act on the basis of information that the Registrar has received or obtained as to the financial circumstances of the parent; and

(b)  may, but is not required to, conduct an inquiry into the matter.

(5)  Except for the purposes of Parts VII, VIIA and VIII of the Registration and Collection Act (dealing with objections and appeals), if the Registrar refuses to accept the income election, the election is taken never to have been made.

1. Importantly, the provision provides that an estimate election MAY be refused; a discretion exists even where the elements of the provision are satisfied in the circumstances of a particular case.

2. Here, I consider that, at the time Mr Vanderpool made his first estimate election on 3 August 2023, it was likely his adjusted taxable income for the balance of the financial year until 30 June 2024 would include the higher payments he expected it was likely he would receive (and which, indeed, started to be paid in October 2023); accordingly, I consider the Registrar could be satisfied in the circumstances of this case that the amount would be less than the amount the Registrar would consider likely to be Mr Vanderpool’s adjusted taxable income for the balance of the year.

3. However, I do not consider the discretion to refuse should be exercised here. I am satisfied that at the time of Mr Vanderpool’s election on 3 August 2023, his only source of income was the regular payment of some $800 (gross) per week (in the absence of other documentary evidence, I accept Mr Vanderpool’s evidence that there was not a “salary sacrifice amount” being deducted, and that the best evidence of his total gross income is contained in the correspondence at folio 10 of the Child Support hearing papers). In broad terms, for the balance of the financial year from 3 August 2023, Mr Vanderpool’s estimates will be reconciled with his total (annualised) adjusted taxable income for the period 3 August 2023 to 30 June 2024. In other words, his likely higher adjusted taxable income will be applied to the assessment for the period his annualised estimate of $41,740 was applied to the assessment from 3 August 2023 to 12 October 2023 – the consequence will be that he will have underpaid child support for that period, and a reassessment of his liability will occur.

4. In other words, I consider that the estimate regime will operate in this case as it was intended to operate. Accordingly, I do not consider that the discretion in section 63AA to refuse the estimate of 3 August 2023 should apply in this case.

5. As I have reached the same conclusion as the objections officer in this case, the decision under review will be affirmed.

DECISION

The decision under review is affirmed.