Walton and Cannon (Child support)

Walton and Cannon (Child support) [2019] AATA 2529 (18 July 2019)

DIVISION:Social Services & Child Support Division
REVIEW NUMBER:  2019/PC016293
APPLICANT:  Mr Walton
OTHER PARTIES:  Child Support Registrar
Ms Cannon

TRIBUNAL:Senior Member R Ellis
DECISION DATE: 18 July 2019
DECISION:

The Tribunal sets aside the decision under review and, in substitution, decides that the payment of $300.00 for orthodontics and the two payments for school books totalling $371.80 should be credited under section 71C of the Child Support (Registration and Collection) Act 1988 against Mr Walton’s child support liability.

CATCHWORDS

CHILD SUPPORT – non-agency payments - prescribed payments for orthodontics and school books – whether the amounts ought not to be credited in the circumstances of the case - 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

Mr Walton and Ms Cannon are the parents of [Child 1] (born [date]) and [Child 2] (born [date]).
There has been a child support assessment in place since 9 August 2007 with collection by the Department of Human Services, Child Support (the Child Support Agency) from 27 January 2016. Mr Walton is the liable parent under the assessment.
From 27 October 2015 the child support assessment reflected that Mr Walton provides 28 per cent care and Ms Cannon provides 72 per cent care of [Child 1] and [Child 2]. From 6 February 2016 the child support assessment reflected that Mr Walton provides 3 per cent care and Ms Cannon provides 97 per cent care of [Child 1] and [Child 2].
On 19 January 2017 Mr Walton applied to the Child Support Agency for credit of the following four non-agency payments totalling $1,324.80:
·     19 January 2017 - $300.00 (direct payment to Ms Cannon for orthodontics)
·     19 January 2017 - $310.00 (direct payment to Ms Cannon for school books)
·     19 January 2017 - $653.00 (direct payment to Ms Cannon for [Child 1’s] cello)
·     19 January 2017 - $61.80 (direct payment to Ms Cannon for school books)
On 7 February 2017 the Child Support Agency made the decision to credit $1,324.80 as non-agency payments.
On 21 February 2017 Ms Cannon objected to this decision and on 29 March 2019 the Child Support Agency allowed the objection and made the decision to refuse to credit the payments totalling $1,324.80 as non-agency payments (the objection decision).
On 9 April 2019 Mr Walton applied to the Administrative Appeals Tribunal (the Tribunal) for a review of the objection decision.
The Tribunal conducted a hearing into the application on 27 June 2019. Both Mr Walton and Ms Cannon appeared before the Tribunal. Mr Walton gave sworn evidence and Ms Cannon gave evidence on affirmation. The Child Support Agency provided the Tribunal and the parties with a bundle of documents relevant to the review (598 pages). Mr Walton advised the Tribunal he had not received these documents but was familiar with the evidence and wished to proceed with the hearing. Additional documents were received from Ms Cannon prior to the hearing (B1-B90) and copies were provided to the parties.
At hearing the Tribunal advised Mr Walton and Ms Cannon that additional documents potentially relevant to this particular review had been requested of the Child Support Agency. These were received by the Tribunal on 27 June 2019 (pages 599-611) and sent direct to Mr Walton and Ms Cannon by the Child Support Agency. The Tribunal provided Mr Walton and Ms Cannon with further time to comment on this additional information. Mr Walton advised the Tribunal on 4 July 2019 he did not wish to comment further. Written comments were received from Ms Cannon on 8 July 2019 (B91-B92).

ISSUES

The statutory provisions relevant to this review are contained in the Child Support (Registration and Collection) Act 1988 (the Act).
When a child support liability is registered under the Act for collection, the amount payable is a debt due to the Commonwealth and must be paid to the Child Support Agency not the payee. In some circumstances the Child Support Agency may credit payments made directly to a payee or to a third party against a child support liability that is registered for collection (sections 71, 71A or 71C of the Act). The Child Support Agency refers to the credits under sections 71 and 71A as ‘non-agency payments’. Credits under section 71C are known as ‘prescribed non-agency payments’ as this section applies to payments of the kind specified in regulation 5D of the Child Support (Registration and Collection) Regulations 1988 (as in force at that time).
Section 71C of the Act provides a mechanism whereby payments made by a liable parent for items specified in regulation 5D may be taken into account in partial satisfaction of the liable parent’s child support liability. A number of specific criteria must be satisfied for this provision to apply. Even where all the criteria are met, there is still a discretion in section 71D of the Act to refuse to credit amounts that would otherwise be able to be credited against the liability.
The issue which arises in this case is whether or not any of the four payments made by Mr Walton can be credited against his child support liability.

CONSIDERATION

Mr Walton told the Tribunal he made the payments for [Child 1’s] orthodontics, cello and school books direct to Ms Cannon after she sent him invoices for these items. Mr Walton said there was little communication between the parents at the time and he was unaware of the total cost for these items or who was responsible for final payment.
Mr Walton said there was no agreement or understanding with Ms Cannon regarding such costs and he paid them to show that he still wanted to be part of the children’s lives.
Mr Walton explained the $300.00 for [Child 1’s] orthodontics was a one-off contribution and he would not agree to pay more as the parents had still been negotiating property settlement. He said Ms Cannon had met the remaining cost under a payment plan and he had subsequently paid for [Child 2’s] orthodontics. Mr Walton said the $653.00 for [Child 1’s] cello was also the only payment he made and he was uncertain what other costs there were for her music as Ms Cannon did not inform him. He said, similarly, there was no discussion about the cost of school books and he had just paid Ms Cannon direct.
Ms Cannon did not dispute that Mr Walton had made the payments under consideration but said there was no agreement they were in lieu of child support.
Ms Cannon said she had sent Mr Walton the invoices in the hope he would make a greater contribution towards the children’s costs but in the end she stopped doing so as she did not get a positive response from him. She said, as much as anything else, this was for her own wellbeing as Mr Walton would often become verbally abusive about such costs.
Ms Cannon said the children were under orthodontic care before the parents separated and she believed both parents were liable for the expense, however, Mr Walton had refused to pay anything more for [Child 1’s] costs. She said she was left to pay the remaining fee of $8,030.00. Ms Cannon said the two payments made by Mr Walton for school books and the one payment for the cello were minimal in comparison to the amounts she had outlaid towards the children’s medical, dental, orthodontic, sporting and educational expenses.
Section 71 of the Act provides for a payment received by the payee of an enforceable maintenance liability direct from the payer to be credited against the amount payable under the liability. The amount received must be intended by both the payer and the payee to be paid in complete or partial satisfaction of an amount payable under the liability. Section 71A of the Act provides for payments made by the payer of an enforceable maintenance liability to a third party to be credited against the amount payable under the child support liability. The amount paid by the payer to the third party must partially or completely satisfy a debt owed by the payee, the payer or both the payer and the payee. It must be the intention of both parties that the payments, or part of the payments, be credited against the payer’s child support liability.
It is not in contention and the Tribunal finds that Mr Walton made four payments totalling $1,324.80 direct to Ms Cannon for [Child 1’s] orthodontics, cello and school books. The Tribunal is satisfied these payments were made during an enforceable maintenance period as the Child Support Agency was collecting child support at that time.
Mr Walton has told the Tribunal there were no agreement between the parents at the time the payments were made that they should be credited against the child support liability. He said the parents were not communicating. Ms Cannon has also stated the payments were not intended to be in lieu of child support
The Tribunal finds that the four payments totalling $1,324.80 cannot, therefore, be considered as non-agency payments under section 71 or 71A of the Act.
Where such payments cannot be credited under section 71 or 71A, they may be credited under section 71C even if there is no mutual intention between the parents. Section 71C was introduced to give payers more choice regarding the form in which child support is paid. It provides, subject to section 71D, for an amount to be credited against a payer’s child support liability regardless of the intention of the parents at the time the payment was made provided that it does not exceed 30 per cent of the amount payable and the balance of child support is paid as it becomes due and payable. Section 71C also requires that at the time payment was made, or at the time the payment is to be credited, the payer must not have at least regular care (14 per cent) of any of the children to whom the assessment applies.
The payment to be credited must also be a payment of the kind specified in regulation 5D of the Child Support (Registration and Collection) Regulations 1988. Regulation 5D states that for paragraph 71C(1)(b) of the Act, specified payments are payments of the following kinds:
a)child care costs for the child who is the subject of the enforceable maintenance liability;
b)fees charged by a school or pre-school for that child;
ba) amounts payable for uniforms and books prescribed by a school or pre-school for that child;
c)fees for essential medical and dental services for that child;
d)the payee's share of amounts payable for rent or a security bond for the payee's home;
e)the payee's share of amounts payable for utilities, rates or body corporate charges for the payee's home;
f)the payee's share of repayments on a loan that financed the payee's home;
g)costs to the payee of obtaining and running a motor vehicle, including repairs and standing costs.
In this case the Tribunal finds that the three payments for orthodontics and school books made by Mr Walton are prescribed non-agency payments of the kind specified in regulation 5D. The Tribunal also finds that at the time the payments were made, Mr Walton did not have at least regular care of [Child 1] and [Child 2].
As all the conditions are satisfied the Tribunal finds the three payments should be credited under section 71C.
Section 71D of the Act states that the Child Support Agency “may refuse to credit an amount under section 71, 71A or 71C if satisfied that, in the circumstances of the particular case, the amount ought not to be credited”. After taking into account the circumstances of this case, the Tribunal decided not to exercise the discretion available under section 71D to refuse to credit the amount.

DECISION

[2019] AATA 2529

18 July 2019

Key Legal Topics

Areas of Law

Family Law

Administrative Law

Legal Concepts

Judicial Review

Statutory Construction

Remedies

Jurisdiction