Warde and Warde (Child support)

[2018] AATA 2293

Warde and Warde (Child support) [2018] AATA 2293 (12 April 2018)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2017/SC011816; 2017/SC012352; 2017/SC013078

APPLICANT:  Mr Warde

OTHER PARTIES:  Child Support Registrar

Mrs Warde

TRIBUNAL:Member M Douglas

DECISION DATE:  12 April 2018

DECISION:

In relation to application 2017/SC011816, the Tribunal sets aside the decision under review and, in substitution, decides that:

• the adjusted taxable income for Mr Warde is $185,000 for the period 8 January 2018 to 31 December 2019;

• the annual rate of child support payable by Mr Warde is increased by $16,733 for the period 1 January 2017 to 31 December 2018.

In relation to applications 2017/SC012352 and 2017/SC013078 the decisions under review are affirmed.

CATCHWORDS
Child support - Departure determinations - Property and financial resources of parents - Significant child care costs - Decisions under review set aside and substituted

Child support - Particulars of the administrative assessment - Whether adjusted taxable income correctly applied - 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

BACKGROUND

1. Mr Warde has applied to the Tribunal for review of three objection decisions the Child Support Registrar, through his delegates, has made.  The Registrar acts through the Department of Human Services (the Department), and hereafter the Tribunal’s reference to the Department should be taken as a reference to the Registrar.

2. The first objection decision that Mr Warde seeks the Tribunal review is an objection decision made on 26 May 2017.  In that decision, the Department disallowed Mr Warde’s objection to a change of assessment decision the Department made on 20 February 2017 to increase the annual rate of child support payable by Mr Warde by $16,925.00 for the period 1 January 2017 to 31 December 2018.  That change of assessment decision was made in response to an application from Mrs Warde, in which she relied on the ground for departure provided in sub-paragraph 117(2)(b)(ib) the Child Support (Assessment) Act 1989 (the Act).  The Department refers to this ground as reason 6.  The intent behind the Department’s decision was to require Mr Warde to contribute half of the net child care costs Mrs Warde incurs for their daughter, [Child 1]. 

3. Mr Warde’s application to the Tribunal for review of that objection decision bears Tribunal reference 2017/SC011816.

4. The second objection decision that Mr Warde seeks the Tribunal review is an objection decision made on 25 July 2017.  The Department in that objection decision disallowed an objection Mr Warde made to a decision of the Department of 8 May 2017 to amend, under subsection 58(2) of the Act, the child support assessment for the child support period commencing 1 February 2017 so as to use the figure of $181,392.00 as the adjusted taxable income for Mrs Warde.  That amount was her taxable income for the 2015/16 income year. 

5. Mr Warde’s application to the Tribunal for review of that objection decision bears Tribunal’s reference 2017/SC012352.

6. The third objection decision that Mr Warde seeks the Tribunal review is an objection decision made on 8 December 2017 disallowing his objection to a change of assessment decision the Department made on 6 September 2017 refusing an application he had made on 2 July 2017 to change the assessment from 1 January 2017.  In support of his change of assessment application, Mr Warde relied on the ground for departure provided in sub-paragraph 117(2)(c)(ia) of the Act.  The Department refers to this ground as reason 8A.  Mr Warde alleged that Mrs Warde’s income was substantially greater than her adjusted taxable income used in assessment.

7. Mr Warde’s application to the Tribunal for review of that objection decision bears Tribunal’s reference 2017/SC013078

8. The Tribunal held a directions hearing on 9 January 2018 at which time the Tribunal directed both Mr Warde and Mrs Warde to lodge documents relating to their financial affairs. Following the directions hearing, the Tribunal also required the Department, under section subsection 95J(1) of the Child Support (Registration and Collection) Act 1988, to obtain information and documents from [Bank 1] , [Bank 2] and [Bank 3] relating to accounts that [Company 1] held with those institutions.

9. The Tribunal heard Mr Warde’s applications for review on 10 April 2018.  Both he and Mrs Warde participated by telephone.  Mrs Warde was represented by her solicitor.  The Department did not appear.  Both Mr Warde and Mrs Warde gave oral evidence.

10. The documents that Mr Warde provided in compliance with the directions were marked B1-B289 and received into evidence.  Mrs Warde’s documents were marked A1-A38 and received into evidence.  Subsequent to the hearing Mrs Warde’s solicitor lodged two further documents being the third page of a statement that [Bank 1] issued for the period 19 January to 30 January 2017 with respect to an account Mrs Warde held with that bank and the second page of a statement [Bank 1] issued for the same account for the period 1 July to 30 September 2017.  It became apparent in the course of the hearing that these documents had not been lodged when Mrs Warde lodged the documents that the Tribunal had marked B1-B289.  B6-280 of that bundle had also been paginated by Mrs Warde from 1 to 277, and that part of the bundle was missing pages 76 and 77 from sequencing of pagination.  The two additional documents she lodged subsequent to the hearing were paginated 76 and 77. 

11. Mrs Warde’s solicitor submitted in correspondence to the Tribunal following the hearing, when lodging these two further documents, paginated 76 and 77, that Mrs Warde’s failure to lodge these documents before the hearing was just “an administrative error in the compilation of materials”.  The Tribunal accepts that to be the case and accepts into evidence the documents Mrs Warde has paginated 76 and 77.  The Tribunal observes that Mrs Warde’s solicitor copied these documents to Mr Warde by email and Mr Warde provided a very brief written submission to the Tribunal by email dated 12 April 2018 with respect to them.

12. The documents that the Department obtained in accordance with the Tribunal’s request under section 95J of the Child Support (Registration and Collection) Act1988 are marked C1-C72 and have been received into evidence, as well as the documents the Department provided under subsection 37(1) and subsection 38AA(1) of the Administrative Appeals Tribunal Act 1975.

13. The Tribunal has taken into account all that evidence when reviewing the Department’s objection decisions.

14. It is convenient to deal firstly with application 2017/SC012352 and then to deal together with applications 2017/SC011816 and 2017/SC013078.

Application 2017/SC012352

1. Subsection 43(1) of the Act specifies the components comprising a parent’s adjusted taxable income. Insofar as is relevant to the circumstances of this matter, these components include the parent’s taxable income for the last relevant year of income.  The term ‘last relevant year of income’ is defined in subsection 5(1) of the Act as the year that ended before the child support period commenced.  The term ‘year of income’ is defined by reference to the meaning of that term in the Income Tax Assessment Act 1936, and is generally the financial year commencing 1 July in a particular year and concluding on 30 June the following year.

2. Subsection 43(1) is expressed to be subject to the other provisions of Part 5 of the Act, which includes sections 58 and 58A.  Section 58 is engaged if at the time a child support assessment is issued, the components specified under subsection 43(1) as comprising a parent’s adjusted taxable income are not known.  Section 58 regulates in that circumstance the manner in which the Department must determine the amount to be used for a parent’s adjusted taxable income.  Section 58A will subsequently be engaged if the Department later ascertains the parent’s adjusted taxable income for the last relevant year of income.  If that occurs, then the Department will be required to amend the assessment in accordance with subsection 58A(2), or if that subsection does not apply, then under subsection 58A(3). 

3. At the time the assessment initially issued for [Child 1] for the child support period commencing 1 February 2017, Mrs Warde had not lodged her tax return for the ‘last relevant year of income’, being the 2015/16 year, and hence the components specified under subsection 43(1) for her adjusted taxable income for the child support period were not known at the time the assessment for the period issued.  Given that, the Department determined her adjusted taxable income to be $149,641.00 under subsection 58(3) of the Act. 

4. It is apparent that subsequent to the child support assessment issuing, Mrs Warde lodged her tax return for the 2015/16 year, and her taxable income was assessed as $181,392.00  That became known to the Department on 8 May 2017. 

5. Subsections 58A(1) and (2) read as follows:

   (1)  The Registrar must immediately amend an administrative assessment of child support payable by or to a parent in relation to a child support period if:

   (a)  the assessment was made on the basis of a determination under section 58; and

   (b)  either:

   (i)  the Registrar subsequently ascertains the amount of the parent's adjusted taxable income for the last relevant year of income; or

   (ii)  the Registrar makes a later determination under   section 58; and

   (c)  either:

   (i)  if subparagraph (b)(i) applies--the amount that was    subsequently ascertained is different from the amount that   was determined under section 58; or

   (ii)  if subparagraph (b)(ii) applies--the later amount that the    Registrar determines is different from the earlier amount   determined under section 58.

   Retrospective determinations

   (2)  If:

   (a)  at the time the Registrar is to amend the administrative assessment under this section, the parent could lodge his or her tax return by the date required under Part IV of the Income Tax Assessment Act 1936 (taking into account any deferral under section 388‑55 in Schedule 1 to the Taxation Administration Act 1953); or

   (b)  paragraph (a) of this subsection does not apply and:

   (i)  the amount subsequently ascertained, as mentioned in                    subparagraph (1)(b)(i), is higher than the amount that was   determined under section 58; or

   (ii)  the later amount that the Registrar determines, as   mentioned in subparagraph (1)(b)(ii), is higher than the   earlier amount determined under section 58; or

   (c)  neither paragraph (a) nor (b) applies, but circumstances prescribed by the regulations for the purposes of this section apply in relation to the parent;

   then the Registrar must immediately amend the administrative assessment for the child support period on the basis that the parent’s adjusted taxable income for that year of income is, and has always been, the amount that was subsequently ascertained or later determined (as the case requires).

6. Mrs Warde’s adjusted taxable income for the last relevant year of income relating to the child support period commencing 1 February 2017, as comprised by the components specified under subsection 43(1), was greater than the amount the Department determined under section 58 for her adjusted taxable income.  Hence, paragraph 58A(1)(c) applied requiring the Department to amend the assessment for that child support period.  Further, because Mrs Warde’s adjusted taxable income, as comprised by the components specified under subsection 43(1), was greater than the amount the Department determined under subsection 58(3), the amendment the Department was required by virtue of paragraph 58A(3)(i) to make was to use Mrs Warde’s adjusted taxable income, as comprised by the components specified under subsection 43(1), for the whole of the child support period.

7. In his objection to the Department’s decision of 8 May 2017, Mr Warde contended, in substance, that Mrs Warde had access to sophisticated financial planning advice and tax minimisation strategies as a consequence of her working in a [certain workplace]. He contended that, as a consequence of that, her taxable income is unlikely to be her “true income”. 

8. These matters are irrelevant to the decision the Department made on 8 May 2017 under subsection 58A(2) to amend the assessment so as to use Mrs Warde’s adjusted taxable income for the last relevant year of income in the assessment for the child support period commencing 1 February 2017.  As the discussion above reveals, the Department had no discretion but to do what it did.  Accordingly, the Tribunal affirms the Department’s decision. 

9. It is relevant to note, at this point, that the matters Mr Warde raised as part of his objection were subsequently agitated by him in the change of assessment application he made that ultimately led to the objection decision the Department made on 8 December 2017, which the Tribunal is also reviewing.

Applications 2017/SC011816 & 2017/SC013078

1. Part 5 of the Act contains the provisions by which the Department assesses the annual rate at which a liable parent is to pay child support to the carer entitled to child support.  A liable parent or the carer entitled to child support may, if they believe there are special circumstances, apply to the Department under section 98B of the Act for a determination to depart from the provisions relating to the assessment of child support.  The Department, or the Tribunal in the Department’s place, if satisfied that the criteria of subsection 98C(1) are met, can make one or more of the determinations listed in subsection 98S(1) to depart from the provisions of the Act relating to an administrative assessment of child support.  The criteria as specified in subsection 98C(1) are:

   (i)     that one, or more than one, of the grounds for departure referred to in subsection 2 exists; and

   (ii)    that it would be:

   (A)just and equitable as regards the child, the liable parent, and the carer entitled to child support; and

   (B)otherwise proper;

   to make a particular determination [under subsection 98S(1).]

2. Subsection 98C(2) stipulates, essentially, that the grounds for departure are those provided in sub-section 117(2) of the Act.  Further, subsection 98C(3) requires the Department, and hence the Tribunal standing in the Department’s place, to apply subsections 117(4) to (9) when considering whether a determination should be made under subsection 98S(1).

Consideration

Is there a ground to change the assessment?

High child care costs

1. As earlier mentioned, Mrs Warde in her change of assessment application relied on the ground for departure provided in subparagraph 117(2)(b)(ib) of the Act.  That provision of the Act reads as follows:

   117(2)(b) that in the special circumstances of the case the costs of maintaining the child are significantly affected:

   (ib) because of high child care costs in relation to the child. 

2. Subsection 117(3A) of the Act stipulates that the child care costs must be incurred with respect to a child younger than 12 at the start of the child support period and that they are incurred by a parent or non-parent carer. 

3. [Child 1] is under 12 years of age.  The evidence establishes that Mrs Warde incurred child care costs.  Accordingly, the requirements of subsection 117(3A) are met.

4. Subsection 117(3B) requires, in effect, that for child care costs to be high, the child care costs that have been incurred must be higher than 5% of the adjusted taxable income of the parent who incurred the costs. 

5. Mrs Warde produced a statement that the pre-school at which [Child 1] attends issued to her with respect to the 2017 year.  That statement reveals that a weekly fee of $790 was charged for [Child 1] to attend the pre-school.  Mrs Warde’s evidence, which the Tribunal accepts, is that those fees were payable every week irrespective of whether [Child 1] attended or did not attend on a particular day or week.  In other words, if [Child 1] was absent due to holidays or illness or the like, the fee was still payable.  That will remain the case going forward.

6. It is also apparent from that statement that Mrs Warde received child care rebates amounting to $7,613.00 for the year, meaning her net costs for the 2017 year were $33,467.00.  As the Tribunal understood Mrs Warde, that will likely be her net costs this year. 

7. Mrs Warde’s adjusted taxable income for the period 1 January 2017 to 31 January 2017 was $147,430.00.  As mentioned, her adjusted taxable income for the child support period commencing 1 February 2017, which ended on 30 September 2017, was $181,392.00.  Her adjusted taxable income for the child support period commencing 1 October 2017 has been set under section 58 of the Act at $184,476.00.

8. It is apparent therefore that her childcare costs in the relevant child support periods are and have been well in excess of 5% of her adjusted taxable income. They are accordingly high. 

9. The Tribunal is satisfied, given the level of the child care costs she incurs, that the cost of maintaining [Child 1] is significantly affected by Mrs Warde’s high child care costs. 

10. It follows that this ground for departure is established.

Subparagraph 117(2)(c)(ia) – the income, property and financial resources of either parent

1. Mr Warde, in his change of assessment application, lodged with the Department on 2 July 2017,  relied on the ground for departure provided in subparagraph 117(2)(c)(ia) of the Act, which reads:

   117(2)(c) that, in the special circumstances of the case, application in relation to the child of the provisions of this Act relating to administrative assessment of child support would result in an unjust and inequitable determination of the level of financial support to be provided by the liable parent for the child:

   (ia) because of the income, property and financial resources of either parent.

2. Mr Warde asserted in support of his change of assessment application to the Department that Mrs Warde’s income is significantly higher than her adjusted taxable income.  As indicated earlier, it was his contention that Mrs Warde has financial planning advice and legal advice available to her that makes it likely that she is minimising her taxable income.  Consequently, her adjusted taxable income is not, according to Mr Warde, a true reflection of her actual income.  Mr Warde also contended to the Department that Mrs Warde is from a wealthy [family] and has “the connections” and knowledge to conceal foreign assets and conceal her income offshore. 

3. Mr Warde repeated these contentions to the Tribunal during the hearing.  He said that he is aware of Mrs Warde having “connections in [Country 1]” from having lived with her for 10 years.  He also said that he is aware that Mrs Warde buys and sells shares.   He said he is aware of this from overhearing her telephone conversations with third parties and also from having walked past her while she was using her laptop.  He said that he would ask her “are you making money today?” to which she responded positively.

4. Mr Warde also referred to a deposit of $655,711.51 made to one of Mrs Warde’s [Bank 1] accounts on 14 February 2017 and to deposits of $259,231.32 and $102,287.63 that were made to another of her [Bank 1] Accounts on 9 February 2017, as indicating her receipt of income from sources other than her onshore employment. 

5. Mrs Warde disputes that she has any income other than that disclosed in her Statement of Financial Circumstances that appears at B281 of the documents that she lodged.  That is to say, her evidence was that her income comprises wages she receives from her employment as a project manager with  [Bank 1] and interest income and dividend income which is of a modest amount.  She denied receiving any income from overseas sources or from “connections” in [Country 1].  She denied being engaged in share trading and stated that for her to do so would create a conflict between her duty to her employer and her personal interests.  She said that for a brief period around the time that she took maternity leave from her employment when [Child 1] was born, she did transact on a very small scale in share trading but has not done so since.

1. Her evidence was that the deposits into her [Bank 1] accounts to which Mr Warde referred were monies lent to her by a third party to enable her to purchase a residential property.  She is obligated to repay that loan and does so by regular periodic instalments.  She is presently leases that property to a tenant, but she intends to move into the property at the end of the year with [Child 1] and it will then be used as their residence.  She stated that the rent she presently receives from leasing the property is less than the amount she is repaying on the loan she obtained from the third party to enable her to purchase the property. 

2. There is no credible evidence presented by Mr Warde to support his contentions that Mrs Warde has income from “connections in [Country 1]” or from share trading.  The Tribunal accepts Mrs Warde’s evidence with respect to her income, and accordingly, the Tribunal is satisfied that Mrs Warde’s only income is that which she receives from her employment, the income from leasing her property (which is less than what she is repaying on the loan obtained to purchase the property) and modest dividend and interest income.

3. Mrs Warde’s evidence was that her assets consist of the house that she purchased, which was for a price of $1,300,000.00, her motor vehicle of negligible worth and shares of which she estimates the value to be $5,000.00.  The Tribunal also accepts her evidence on this, and hence is satisfied that Mrs Warde does not have any assets that would be reasonable for her to sell so as to provide funds to assist with the support of [Child 1].  The Tribunal is also satisfied that she does not have any financial resources upon which she could rely or draw to assist in that regard.

4. In short, the Tribunal is not satisfied that this ground for departure is established as a consequence of Mrs Warde’s financial circumstances.

5. As regards Mr Warde’s financial circumstances, his evidence was that he was most recently employed by [Company 2].  His employment there ceased on 4 November 2015 following his position becoming redundant.  His evidence was that he has not worked since. 

6. Mr Warde is the director and secretary of [Company 1].  As at 12 January 2016 he was also the sole shareholder of that company.  As at 13 November 2017, the sole shareholder in the company was [Ms A]. 

7. In reasons [a Judge]. published on 8 February 2016 for a judgment delivered in proceedings between Mrs Warde and Mr Warde and [Company 1], in which Mrs Warde had sought orders for alteration of her and Mr Warde’s interests in their property, his Honour held that [Company 1] was to be regarded as Mr Warde’s “alter ego”. 

8. The Department obtained from the banks with which [Company 1] holds accounts, the statements the banks had issued with respect to those accounts for the approximate two year period to January 2018.  They revealed that the company holds an active account with [Bank 1] and substantial sums are regularly being deposited into the account.  From 2 July 2017 to 1 October 2017, they revealed $72,521.55 was deposited into the account. From 2 October 2017 to 1 January 2018 deposits into this account amounted to $79,073.45. From 1 January 2018 to 16 January 2018, $11,550.23 was deposited into its account with [Bank 1]. 

9. The statements the Department obtained from [Bank 1] revealed too that money was drawn from the company’s account to pay for credit cards, rent, gym memberships, car registration, fines, energy bills and the like.  There were also regular withdrawals from ATM machines of amounts ranging up to $500.00. 

10. Despite being the director and secretary of the company, Mr Warde denied having knowledge of who makes the deposits into the company’s [Bank 1] account and for whose benefit the debits from account are made. He said he could not remember transferring his share in the company to another person and could not remember signing the form by which he may have done so and could not remember what consideration he received for it.

11. The Tribunal does not accept his evidence in this regard.  The Tribunal considers he was evasive in answering the questions of the Tribunal with respect to the affairs of the company.  Mr Warde as director and secretary of the company would know about the financial affairs of the company.  He would know from whom the money comes that is being deposited into the bank account and who receives the benefit of the payments the company makes from its account.  He has not provided full or proper disclosure regarding these matters.  The Tribunal infers that the company remains Mr Warde’s alter ego and that its income is essentially his income and that the payments the company makes by means of its withdrawals from its [Bank 1] account are being made for his benefit.

12. Insofar as Mr Warde has evaded questions relating to the financial circumstances of the company and has not provided details of the company’s financial affairs, and particularly the source of the funds being deposited into the company’s [Bank 1] account and the purpose of the amounts being debited from that account, he has not provided full disclosure of his financial affairs.

13. In Humphries & Berry (Social Security Appeals Tribunal Appeal) [2008] FMCAfam 409 Slack FM stated as follows at [26] - [31]:

    Although the SSAT has the power to obtain information (s103K) and the power to require the Child Support Registrar to exercise the powers under the Assessment Act and the Child Support Registration and Collection Act for the purposes of gaining information relevant to a review (s103L) there nevertheless remains a primary duty and obligation of the parties to the review to make a full and complete disclosure of their financial affairs relevant to the matter before the hearing and a duty to assist the Tribunal to come to its determination in the application. ...In financial proceedings under the Family Law Act, the authorities make it clear that a court should not be unduly cautious about making findings in favour of the other party if it is not satisfied that proper disclosure has been made (see Chang &
    Su (2002) FLC93-117).  Such principles, in my consideration, have application to these matters before the SSAT.

54.Mr Warde’s adjusted taxable income was $23,743.00 from 1 January 2017 to 16 March 2017, $14,104.00 for the period 17 March 2017 to 30 June 2017 and $27,417.00 for the period 1 July 2017 to 30 June 2017.  These were amounts he elected under either subsections 60(1) or 62A(1) of the Act to be used as his adjusted taxable income.

55.Without proper disclosure from Mr Warde regarding the financial affairs of his company [Company 1], it is hard to determine accurately the true level of his income.  For example, it is not known to what extent the expenditures that are being made from the company’s account relate to its deriving income, as distinct from being paid for the benefit of Mr Warde.  The total credits into its [Bank 1] account for the approximate six month period 2 July 2017 to 1 January 2018 were $227,440.20.  As far as the Tribunal can tell, the debits from the account over that period relating to what seems in all likelihood to the Tribunal to be the payment of personal expenses, such as the payment of rent, car registration, phone, [credit card], gym memberships, cash withdrawals from ATMs, State fines, power utility cost, and the like, which amounted to approximately $51,500.00. 

56.In short, the Tribunal considers that a large part of the money the company is receiving into its bank account is being applied for Mr Warde’s personal benefit and what is being applied to that end would seem to be of the order of $100,000.00 to $110,000.00 a year.  The Tribunal considers that Mr Warde ought to be considered as receiving an after tax income of that order.  That would correlate with his having a gross income before tax of around $160,000.00 a year.  In addition to that, he is also receiving the income that he has elected under subsections 60(1) and 62A(1) to be his adjusted taxable income.

57.In the circumstances, the Tribunal considers that Mr Warde ought to be treated as having an income of the magnitude of $185,000.00 for the purposes of considering what contribution he ought to be making towards the cost of [Child 1]’s care.  Given the discrepancy between that and his adjusted taxable income used in the assessment, the Tribunal is satisfied that this ground for departure is established by virtue of Mr Warde’s income.

Would it be just and equitable to make a determination?

1. The matters the Tribunal must consider when deciding whether it is just and equitable to make a particular determination under subsection 98S(1) are listed in subsection 117(4) of the Act. Rather than dealing with each matter separately, it is convenient for the Tribunal to group the matters and consider them by reference to the following headings.

[Child 1]’s circumstances

1. The evidence reveals that, other than the cost that Mrs Warde incurs for childcare, the costs associated with maintaining [Child 1] consist of normal costs.  As indicated above, the cost of maintaining her is significantly increased because of the high cost Mrs Warde incurs for childcare.

2. Given the costs associated with childcare for [Child 1], the Tribunal is satisfied that were it to refuse to make a determination that would require Mr Warde to make a contribution towards the total costs of maintaining [Child 1] in accordance with his capacity to do so, hardship would be caused to [Child 1].

Mrs Warde’s circumstances

1. As the discussion above reveals, Mrs Warde does not have any assets surplus to her needs that she could realise so as to provide additional cash for the support [Child 1] nor does she have any financial resources upon which she could draw or realise for that purpose.  Her income has been discussed above.  She does not have any undisclosed sources of income. 

2. The Tribunal considers, having regard to her listed expenditure in her statement of financial circumstances, that her expenses for her own support are entirely normal.    She has a loan outstanding that she obtained for the purchase of the home into which she and [Child 1] will eventually move at the end of the year.  She otherwise does not have significant liabilities.

3. The Tribunal is satisfied, particularly having regard to the high cost she incurs in childcare for [Child 1], that were Mr Warde not to contribute towards the costs of maintaining [Child 1] in accordance with his capacity, Mrs Warde would suffer financial hardship.

Mr Warde’s circumstances

1. Mr Warde indicated in his Statement of Financial Circumstances that his only expenses are $70.00 for food and $10.00 for telephone for the week.  It is implausible in the Tribunal’s view, that he would have no other expenses for his self-support.  The obvious explanation is that his company meets the bulk of the cost of his support.

2. As discussed, the Tribunal considers that Mr Warde has not made full disclosure of his financial circumstances to the Tribunal. 

3. The Tribunal considers that he ought to be considered as having an income of
   $185,000.00 a year.  The Tribunal also considers that on that level of income he would have the capacity to contribute half of the net costs that Mrs Warde incurs in childcare for [Child 1] in addition to making a contribution to the other costs associated with [Child 1]’s care.

What determination would be just and equitable to make?

1. Noting the date that Mrs Warde made her change of assessment application, which she did with a view to ensuring Mr Warde made a contribution to the high childcare costs she incurs, the Tribunal considers it would be just and equitable to increase the annual rate of child support payable by Mr Warde from 1 January 2017 until 31 December 2018, by the equivalent of half of the annual net cost that Mrs Warde incurs for child care, which is $16,733.00.  The Tribunal understands [Child 1] will no longer be in childcare after the end of this year.

2. The Tribunal also notes that as from the date it held a directions hearing with the parties, Mr Warde could be under no misapprehension that his financial circumstances were a relevant consideration in terms of what contribution he ought to be making towards the cost of maintaining [Child 1].  With that in mind, and noting too that Mrs Warde did not in the processes by which the Department made its change of assessment decisions, seek to have the assessment adjusted based upon Mr Warde having undisclosed income or having financial resources, the Tribunal considers that it would be just and equitable to set Mr Warde’s adjusted taxable income to $185,000.00 from 9 January 2018 only. 

Would it be otherwise proper to change the assessment?

1. Subsection 117(5) of the Act requires that when determining whether it is otherwise proper to make a particular determination to depart from the provisions of the Act with respect to child support, the Tribunal must have regard to the nature and duty of a parent to maintain a child and the fact that parents have a primary duty to support the child.  Further, the Tribunal must consider what effect making a determination would have on any entitlement of the child or the carer entitled to child support to an income tested pension, allowance or benefit or the rate of any income tested pension, allowance or benefit that would be payable to the child or the carer entitled to child support.

2. There is no evidence that [Child 1] receives any income tested pension, benefit or allowance and the Tribunal understands that whatever determination it makes, that circumstance will not change.  Further, Mrs Warde indicated in her Statement of Financial Circumstances that she does not receive any income tested pension, benefit or allowance.  In that circumstance, any determination of the Tribunal increasing the amount of child support she receives from Mr Warde will not result in her receiving such a benefit, allowance or pension.

3. The Tribunal notes, that the primary obligation to support [Child 1] rests with Mr Warde and Mrs Warde.

4. In the circumstances the Tribunal considers it would be just equitable and otherwise proper to make a determination increasing the annual rate of child support payable by Mr Warde by $16,733.00 for the period 1 January 2017 to 31 December 2018 and also to increase his adjusted taxable income from 9 January 2018 to 31 December 2019 to $185,000.00.

5. It is tidiest for that to be effected by setting aside the decision being reviewed in Application 2017/SC011816 and affirming the decision Application 2017/SC013078.  The former involves the decision made on the change of assessment application that Mrs Warde made relating to the childcare cost.

DECISION

In relation to application 2017/SC011816, the Tribunal sets aside the decision under review and, in substitution, decides that:

• the adjusted taxable income for Mr Warde is $185,000 for the period 8 January 2018 to 31 December 2019;

• the annual rate of child support payable by Mr Warde is increased by $16,733 for the period 1 January 2017 to 31 December 2018.

In relation to applications 2017/SC012352 and 2017/SC013078 the decisions under review are affirmed.