Volkmann and Drake (Child support) - [2018] AATA 2292

Volkmann and Drake (Child support) [2018] AATA 2292 (1 May 2018)

DIVISION:Social Services & Child Support Division
REVIEW NUMBER:  2016/SC009778
APPLICANT:  Mr Volkmann
OTHER PARTIES:  Child Support Registrar
Ms Drake

TRIBUNAL:Member K Timbs
DECISION DATE: 1 May 2018
DECISION:

The Tribunal sets aside the decision under review and substitutes the decision that the annual rate of child support is to be 20% of the maximum costs for the children in the Costs of the Children Table from 4 December 2015 until a child support terminating event happens for [Child 2].

CATCHWORDS
Child Support – Departure determination – Income and financial resources of parents – Income from self-managed superannuation fund – Costs and proper needs of the children – Decision under 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 the Child Support (Registration and Collection) Act 1988.

REASONS FOR DECISION

BACKGROUND

Child support assessments

Mr Volkmann and Ms Drake are the parents of [Child 1] (born 2002) and [Child 2] (born 2004). At relevant times, the Department of Human Services made child support assessments for the children for the Child Support Registrar. Mr Volkmann is the parent liable to pay child support under those assessments.
From 1 December 2015, the Department used an adjusted taxable income of $22,837 equal to his 2015 taxable income for Mr Volkmann. The notional minimum annual rate of child support applied. Ms Drake’ adjusted taxable income was equal to her 2015 taxable income of $131,776, which did not affect the assessment.

Change of assessment decision

On 4 December 2015, Ms Drake applied for a departure from the administrative assessment of child support (change of assessment). On 19 March 2016, an officer authorised by the Registrar determined that from 4 December 2015 to 31 March 2018:
· the combined child support income is to be $256,986; and
· Mr Volkmann and Ms Drake both have an income percentage of 50%.
On 15 June 2016, an objections officer of the Department disallowed Mr Volkmann’s objection to that decision.

Application for review

On 13 July 2016, Mr Volkmann applied for review of that decision. The Tribunal heard the application for review on 13 March 2017.

RELEVANT LAW AND ISSUES

In the usual case, the Registrar assesses the annual rate of child support for a child support period using a formula in the Child Support (Assessment) Act 1989 (the Act). However, a fixed or minimum annual rate may apply if, among other things, a formula assessment results in an annual rate that is less than the nominal minimum annual rate.
Either parent may apply to change the formula assessment (section 98B). The Registrar may change the assessment if the case meets the following three criteria (section 98C):

There is a ground for changing the assessment. (Subsection 117(2) of the Act lists the…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Volkmann and Drake (Child support)

Details

AGLC: Volkmann and Drake (Child support) [2018] AATA 2292
Case: [2018] AATA 2292
Decision Date: 1 May 2018

CaseChat Overview and Summary

This matter concerned an application for review by Mr Volkmann of a decision by an objections officer of the Department of Child Support. The dispute centred on the appropriate annual rate of child support payable for the parties' children, with Mr Volkmann seeking to have the assessment changed from a formula assessment to a minimum annual rate. The review was heard by the Administrative Appeals Tribunal.

The primary legal issue before the Tribunal was whether the case met the criteria for changing a child support assessment under section 98C of the Child Support (Assessment) Act 1989. Specifically, the Tribunal had to consider whether the existing assessment was unfair, having regard to the objects of the Act, which include ensuring children receive proper financial support from parents according to their capacity to provide it, and that parents' duty of support for their children has priority over other commitments except their own needs.

The Tribunal considered Mr Volkmann's financial circumstances, including his substantial income and capital return from his former firm, and his investment of a significant portion of this in his self-managed superannuation fund. It noted that Mr Volkmann had not arranged his financial affairs to ensure he could continue to make a similar contribution to child support after his retirement, stating he believed he had no future obligation beyond a modest amount due to Ms Drake's considerable wealth. The Tribunal also considered the objects of the Act, particularly the principle that parents with a like capacity to provide financial support should provide like amounts, and that the duty of support takes priority over other commitments. The Tribunal viewed the minimum annual rate as an insufficient level of support unless a parent genuinely needed to use all their resources for their own needs.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

On 15 June 2016, an objections officer of the Department disallowed Mr Volkmann’s objection to that decision. On 13 July 2016, Mr Volkmann applied for review of that decision. The Tribunal heard the application for review on 13 March 2017. In the usual case, the Registrar assesses the annual rate of child support for a child support period using a formula in the Child Support (Assessment) Act 1989 (the Act). However, a fixed or minimum annual rate may apply if, among other things, a formula assessment results in an annual rate that is less than the nominal minimum annual rate. Either parent may apply to change the formula assessment (section 98B). The Registrar may change the assessment if the case meets the following three criteria (section 98C): To make a decision on Mr Volkmann’s application for review, the Tribunal considered whether this case meets these criteria. The Tribunal considered documents relevant to the decision under review provided by the Department and by the parties. It heard evidence at hearing from Mr Volkmann and Ms Drake. It reviewed the recording of that evidence before making its decision. When considering whether the outcome of the assessment (the annual rate) is unfair, the Tribunal has regard to the objects of the Act in section 4. The principal object of the Act is to ensure that children receive a proper amount of financial support from their parents and it is a particular object of the Act to ensure that financial support to be provided by parents is determined according to their capacity to provide financial support. In particular, parents with a like capacity to provide financial support for their children are to provide like amounts of financial support. The Tribunal also takes into account that section 4 provides that parents have a duty of support for their children that has priority over all other commitments except those they must meet to support themselves. The minimum annual rate of child support is a nominal amount of child support that applies to parents who receive Centrelink benefits or similar incomes. In the Tribunal’s view, it is not a proper level of financial support unless the parent needs to use all their resources to meet their own needs. Mr Volkmann has taxable income of approximately $270,000 in 2010 as a partner at the [service] firm, [Business 1]. He turned 60 in 2011 and retired in accordance with the provisions of his contract. [Business 1] paid him $1,700,000 as a return on his capital investment. He said he paid tax of approximately $500,000 and invested $400,000 in his self-managed superannuation fund. He said he used the rest to pay outstanding legal costs and living expenses. (He incurred approximately $1,000,000 on legal fees in disputes with Ms Drake since their separation.) The Tribunal noted the annual rate of child support was approximately $17,000 before Mr Volkmann retired. He said he did not arrange his financial affairs to ensure that he could continue to make a similar contribution to the support of the children. He said there was no need “to put anything aside” because he had no obligation in the future to pay anything other than a modest amount of child support because Ms Drake has “massive wealth”. His submission is that it is not legally appropriate that he pay more than the minimum rate of child support in that case and that it is fair to calculate the annual rate taking account his taxable income only.

Ratio Decidendi

Legal Principle Established

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