Wareing and Cotterill (Child support)

Wareing and Cotterill (Child support) [2018] AATA 1728 (1 May 2018)

DIVISION:Social Services & Child Support Division
REVIEW NUMBER:  2017/SC012724
APPLICANT:  Mr Wareing
OTHER PARTIES:  Child Support Registrar
Ms Cotterill

TRIBUNAL:Member W Kennedy
DECISION DATE: 1 May 2018
DECISION:

The Tribunal sets aside the decision under review and, in substitution, decides to vary Mr Wareing’s adjusted taxable income to $92,300.00 for the period from 16 December 2016 to 31 December 2019 and to increase the annual rate of child support by $5,407.84 for the period from 16 December 2016 to 31 January 2018.

CATCHWORDS
Child support – Departure determination – Significant costs of child care – Income and financial resources of parents – 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

This decision concerns an application for a departure from the formula assessment of child support. Mr Wareing and Ms Cotterill are the parents of [Child 1], who was born in May of 2012. There has been a child support assessment in place for [Child 1] made by the Child Support Agency of the Department of Human Services (the Department) since 15 November 2013. The assessment is based on Ms Cotterill having a care percentage of 100%.
For the period from 1 September 2016 to 30 November 2017 Mr Wareing was assessed to pay an annual rate of child support of $1,373.00, based on his provisional income of $0.00 and Ms Cotterill’s 2015/16 adjusted taxable income of $132,643.00. The assessment in this case is a fixed annual rate.
On 19 December 2016 Ms Cotterill applied to the Department for a departure from the formula assessment based on her high child care costs (known, for administrative purposes, as Reason 6) and the income, property and financial resources of Mr Wareing (known as Reason 8).
On 30 May 2017 a delegate of the Child Support Registrar considered the departure application and decided that Reason 6 and Reason 8 had been established and that it was just and equitable and otherwise proper to change the assessment. Mr Wareing’s adjusted taxable income was set at $60,106.00 for the period from 1 July 2017 to 31 October 2019 and the annual rate of child support was increased by $6,375.00 for the period from 1 June 2017 to 31 January 2018.
On 30 June 2017 Mr Wareing lodged an objection to that decision. On 12 September 2017 a Departmental objections officer partly allowed the objection, setting Mr Wareing’s adjusted taxable income at $62,868.00 for the period from 1 July 2017 to 31 October 2019 and adding $13,200.00 to the annual costs for [Child 1] for the period from 1 June 2017 to 31 May 2018.
On 19 October 2016 Mr Wareing lodged an application for a review of the Department’s decision with this Tribunal. The Tribunal had access to the statement and documents provided by the Department. The documents are at folios 1 to 271 of the hearing papers, and were provided to the parties in advance of the hearing. Following a directions hearing held on 6 March 2018 Mr Wareing and Ms Cotterill were directed to provide the Tribunal with specified documents. The parents generally complied with the directions.
Before the hearing Mr Wareing provided the Tribunal with the documents at folios A1 to A83 of the hearing papers and Ms Cotterill provided the Tribunal with the documents at folios B1 to B70. Copies of those additional documents were provided to the parties in advance of the hearing. The matter was heard and determined in Sydney on 1 May 2018. Ms Cotterill attended the hearing in person and gave her oral evidence under an affirmation. Mr Wareing attended the hearing in person and gave his oral evidence under an affirmation. The Child Support Registrar was not represented at the hearing.

CONSIDERATION
The legislative framework and issues for the Tribunal to determine

The rate of child support payable by a liable parent is usually based on an administrative assessment under Part 5 of the Child Support (Assessment) Act 1989 (the Act). This requires the application of a statutory formula which takes into account factors such as the number and ages of the children, the level of care provided and the income of each parent.
The liable parent or a carer may apply to the Child Support Registrar for a determination to depart from the child support administrative assessment under Part 6A of the Act. Section 98C of the Act provides that the Registrar may make a determination to depart from the formula assessment and establishes a three step process for considering applications to do so. The Registrar, and the Tribunal standing in place of the Registrar, must be satisfied:
·that one, or more than one, of the grounds for departure referred to in subsection 117(2) of the Act exists; and
·that it would be just and equitable as regards the child, the liable parent, and the carer entitled to child support; and
·that it would be otherwise proper to make a particular determination
The grounds for departure from the administrative assessment are set out in subsection 117(2) of the Act. Each of the grounds, which for administrative purposes are referred to as reasons, require that special circumstances be established. The term ‘special circumstances’ is not defined in the Act. In Gyselman and Gyselman [1991] FamCA 93 the Full Court of the Family Court indicated that for there to be special circumstances, the facts of the case must establish something which is special or out of the ordinary.
If satisfied that a ground or grounds exist and that it would be just and equitable and otherwise proper to make a particular determination, the Tribunal must make one of the determinations prescribed in section 98S of the Act. These include varying the annual rate of child support payable or a parent’s adjusted taxable income.

Issue one – Does a ground exist to depart from the administrative assessment?

The Tribunal’s first task is to determine whether a ground for departure from the administrative assessment can be established. In her application to the Department Ms Cotterill asserted that there were two grounds (or reasons) for a departure from the formula assessment. The Tribunal considered each of these in turn.

Does a ground exist to depart from the administrative assessment under Reason 6?

Ms Cotterill has sought a departure from the administrative assessment on the ground that the cost of caring for [Child 1] is significantly affected by the high cost of child care. This ground for departure, which is known as Reason 6, is set out in subparagraph 117(2)(b)(ib) of the Act:
(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; or
. . .
Subsections 117(3A) and (3B) of the Act state:
(3A)     The ground for departure mentioned in subparagraph (2)(b)(ib) is taken not to exist           unless:
(a)     the costs are incurred by a parent or a non-parent carer; and
                    (b)     the child is younger than 12 at the start of the child support period.
          (3B)     Child care costs for a parent can only be high for the purposes of subparagraph (2)(b)(ib)              if, during a child support period, they total more than 5% of the amount worked out by:
                    (a)     dividing the parent's adjusted taxable income for the period by 365; and

(b) multiplying the quotient by the number of days in the period.

Ms Cotterill said at the hearing that until [Child 1] started school in February 2018 he had generally attended child care three days per week. Ms Cotterill said that [Child 1] is now attending kindergarten and that child care is no longer necessary. At the hearing Mr Wareing said that he thought the formulation of the legislation made the outcome unfair.
The Tribunal has before it documentation showing the child care provider billed Ms Cotterill a total of $24,540.00 for the period from 1 December 2016 to 29 January 2018 (folios B51 to B53). Ms Cotterill’s bank account statements (folios B15 to B21) show that she paid the accounts thus satisfying paragraph 117(3A)(a) of the Act. The period covered by the receipts is 425 days. Ms Cotterill receives child care rebate, which was $7,500.00 per annum to 30 June 2017 and $7,613.00 per annum thereafter. This reduced the net cost of child care to $15,741.34. [Child 1] was born in 2012 thus satisfying paragraph 117(3A)(b) of the Act. Ms Cotterill’s adjusted taxable income is $132,623.00, which, applying paragraph 117(3B)(a) of the Act, produces a daily quotient of $363.35. There are 425 days in the period and, applying paragraph 117(3B)(b) of the Act, the daily cost equals $37.04, which is 10.2% of $363.35. Thus subsections 117(3A) and (3B) of the Act are satisfied.
The Tribunal finds that it is a special circumstance that the high cost of child care significantly affects the cost of caring for [Child 1]. The Tribunal finds that this establishes a reason to depart from the formula assessment of child support under subparagraph 117(2)(b)(ib) of the Act.

Does a ground exist to depart from the administrative assessment under Reason 8?

Ms Cotterill has sought a departure from the administrative assessment on the ground that Mr Wareing’s income, property and financial resources are greater than is reflected in the adjusted taxable income used for him in the child support assessment in effect at the time of his application. This ground for departure, which is known as Reason 8, is found in subparagraph 117(2)(c)(ia) of the Act, which states:
(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; or
…
At the hearing Mr Wareing described his circumstances. He said that he came to Australia from [Country 1] in 1999. He was employed as [an occupation 1] but found the work unsatisfying. In about 2006 he liquidated his assets in [Country 1] and began [a different occupation]. By 2014 he had run out of capital and had to rely on his family for support. He said that he has relied on his family since that time. He said that he is living in [Region 1] and that he has been trying to earn a living through private [appointments]. He said that he has been providing [occupation 1] services to small businesses but this has not generated any income for him. He said that he had tried collaborating with his [relatives] in [Country 1] (who also work in [occupation 1]) but it proved impractical. When asked why he had not sought income support, Mr Wareing said that he does not believe in welfare. When asked why he had not moved somewhere with greater opportunities for employment, he said that he was required to maintain the marital home and that he could not afford to maintain two homes. He said that since the property settlement, he had not considered whether to move somewhere with greater work opportunities.
The Tribunal has before it a Statement of Financial Circumstances (SOFC) provided by Mr Wareing (folios A1 to A9). In his SOFC Mr Wareing states that he has no income at all. He states that his expenses total $791.00 per week. At the hearing Mr Wareing said that he is supported by his parents who have provided him with loans. The Tribunal has before it two documents headed “Loan Agreement”. The first is dated 1 September 2017 (folios A79 to A80) and states that [his father]Wareing will provide “100,000 euro (being the accumulated monies advanced to-date)” to Mr Wareing. The document states that the loan is secured against the property in [Region 1] which, as a result of the property settlement is owned by Mr Wareing. It is stated that the repayment provisions “will be the subject of negotiation” and that the term of the loan is 15 years. The second is also dated 1 September 2017 (folios A77 to A78) and the terms are identical except that the amount loaned is 300,000 euro and there is no reference to the monies having already been advanced.
At the hearing Mr Wareing explained that the lender is his father and that the arrangement has been in place since early 2015. He said that it had only been formalised in the written agreements because the Department was sceptical about the arrangement. Mr Wareing said that although the loans are secured against the property, there is no registered mortgage or lien. He said that he did not know how much interest had accrued but assumed that his father was keeping track of it. He knew that the interest rate was the “[a specified] bank interest rate” but did not know what the current rate is.
Since he completed the SOFC there has been a property settlement between the parents. Mr Wareing stated that his assets now consist of the house in [Region 1], which he values at $650,000.00, a car and some household goods. Against this he stated in his SOFC that he owes his father $550,000.00 and that he has a $10,000.00 credit card debt.
In accordance with the Tribunal’s directions Mr Wareing has provided statements for two personal bank accounts. The first, [Bank 1] Account …1869 (folio A28 to A30), has a small balance of less than $300.00 and appears to be completely inactive. The second, [Bank 2] account …9705 (folios A59 to A66), is an active account. The account received an overseas transfer of $446,070.00 on 15 September 2017 (folio A61) which was used to pay out a line of credit (from folio A62 to folio A34) and to complete the property settlement with Ms Cotterill (folio A62). Aside from that transfer, during the period between 2 May 2017 and 8 November 2017 the account received five foreign exchange transfers with a total value of $34,320.04 (folios A59 to A65). Otherwise the account received no income.
Aside from the payments which accomplished the property settlement and paid out the line of credit, the account shows no unusual or unexpected payments. The account is used to pay Mr Wareing’s credit card account (see below), the homeowner’s levy, his child support liability and his legal fees. Prior to it being paid out this account had made the monthly payments to service the line of credit.
Mr Wareing has also provided credit card statements for [Bank 2] credit card account …1649 for the period from 26 June 2017 to 26 December 2017 (folios A36 to A58). The statements disclose all the expected payments, including for utilities and the normal costs of living. The credit card repayments come from the [Bank 2] account described above.
The Tribunal finds that the documentation provided by Mr Wareing provides an accurate picture of his finances, at least that part of his financial affairs that are within Australia. The documentation is consistent with the figures provided by Mr Wareing in the SOFC. There is no evidence of undisclosed accounts or sources of funds. It appears that Mr Wareing’s income comes entirely from the overseas transfers described above.
The transfer of $446,070.00 received into Mr Wareing’s account on 15 September 2017 is described in the account entry as “Mr Wareing Savings Transfer” (folio A61). The Tribunal suggested to Mr Wareing that this implied that it was a transfer of his own funds rather than a loan from his father. At the hearing Mr Wareing said that he could not explain the notation other than that it was how his father described the transactions. He was adamant that the remittances did not represent the transfer of his own savings from [Country 1]. He said that he had transferred all of his assets to Australia in 2006. It is not necessary for the Tribunal to make a finding as to the character of the transfers, but it notes that although the weight of evidence is that they are loaned capital, there remains the suggestion that they are the transfer of accrued savings.
As indicated above, leaving aside the $446,070.00 used to pay out Ms Cotterill’s interest in and the line of credit secured over the house, Mr Wareing received $34,320.04 from overseas during the six month period covered by the account statements. This represents $68,640.08 per annum. This income is not taxable. A wage earner would need to earn $92,300.00 in order to net the same amount.
At the hearing Mr Wareing said that the funds received from his father is not income and should not be taken into account in the child support assessment. It became apparent at the hearing that Mr Wareing has confused the Income Tax Assessment Act (1936 and 1997) with the legislation relevant to this matter. The child support regime is based on parents contributing to the welfare of their children to the extent that their financial resources allow. The legislation is based on assessing a person’s financial resources through their adjusted taxable income, which in the formula assessment is derived from a person’s taxable income. However the legislation recognises that a person’s taxable income does not always fully reflect their financial resources. Part 6A of the Act provides the mechanism by which the assessment may take into account financial resources that are not reflected in a person’s taxable income. The formulation, at subparagraph 117(2)(c)(ia) of the Act, provides that the assessment take into account “the income, property and financial resources” of the parents. The current matter is concerned with an application made by Ms Cotterill under Part 6A of the Act and specifically under subparagraph 117(2)(c)(ia) of the Act.
The Tribunal must determine whether the funds provided by Mr Wareing’s father are properly considered a financial resource that needs to be taken into account in the child support assessment. In Kelly and Kelly (No. 2) [1981] FamCA 78 the Full Court of the Family Court quoted with approval the formulation used by Fogarty J in Crapp and Crapp [1979] FamCA 17 where his Honour said:
it is a term which is clearly intended to be widely embracing, and that following the definition of ‘resource’ in the Shorter Oxford Dictionary it indicates ‘a source of financial support which a party can reasonably expect will be available to him or her to supply a financial need or deficiency'
At the hearing Mr Wareing said that the monies he receives from his father cannot be relied upon into the future. Indeed, a letter from Mr Wareing’s father states that “it is conceivable that in the not too distant future that these loans to you will cease and in addition we may have to request repayment from you even if it involves you having to cash in your share of [Region 1] property” (folio 88). At the hearing Ms Cotterill pointed out that the letter from Mr Wareing’s father also states that Mr Wareing will vigorously pursue employment and that he will provide “a bi-weekly update to us of the efforts made and the success you are having with job seeking”. At the hearing Mr Wareing acknowledged that he has not been assiduously searching for work and that he has not investigated moving to an area with more job opportunities.
The Tribunal finds that Mr Wareing’s financial resources are not fully reflected in an adjusted taxable income of $0.00. The Tribunal finds that Mr Wareing has access to financial resources equivalent to the resources available to a person with a taxable income of $92,300.00. The Tribunal finds that this is a special circumstance and that failure to take Mr Wareing’s financial resources into account makes the assessment of child support in all the circumstances unjust or inequitable. The Tribunal finds that this establishes a ground to depart from the formula assessment of child support under subparagraph 117(2)(c)(ia) of the Act.

Issue two – Would departure from the administrative assessment be just and equitable?

Relevant law and evidence

As the Tribunal is satisfied that there are grounds to depart from the administrative assessment of child support, the next step is to consider whether it is just and equitable to depart from the assessment. In deciding whether it is just and equitable the Tribunal had regard to the following matters set out in subsection 117(4) of the Act:
(4) In determining whether it would be just and equitable as regards the child, the carer entitled to child support and the liable parent to make a particular order under this Division, the court must have regard to:
(a) the nature of the duty of a parent to maintain a child (as stated in section 3); and
(b)     the proper needs of the child; and
(c) the income, earning capacity, property and financial resources of the child; and
(d) the income, property and financial resources of each parent who is a party to the proceeding; and
(da) the earning capacity of each parent who is a party to the proceeding; and
(e) the commitments of each parent who is a party to the proceeding that are necessary to enable the parent to support:
(i)      himself or herself; or
(ii) any other child or another person that the person has a duty to maintain; and
(f) the direct and indirect costs incurred by the carer entitled to child support in providing care for the child; and
(g)     any hardship that would be caused:
(i)      to:
(A)     the child; or
  (B)     the carer entitled to child support;
   by the making of, or the refusal to make, the order; and
(ii)      to:
(A)     the liable parent; or
(B) any other child or another person that the liable parent has a duty to support;
by the making of, or the refusal to make, the order; and
(iii) to any resident child of the parent (see subsection (10) by the making of, or the refusal to make, the order.
The Tribunal considered the evidence provided by both parties, including the documents and SOFC form that each party provided to the Tribunal, as well as the documents provided by the Department.

Assessment of evidence, findings of fact and application of the law

Section 3 of the Assessment Act states that it is the duty of both parents to financially support their children. The expectation is that [Child 1] should receive a proper amount of financial support from his parents in accordance with their capacity to contribute.

The children’s needs

Paragraph 117(4)(b) of the Act requires the Tribunal to consider the proper needs of the children. The Tribunal has done this in accordance with the legislation under which this determination is made. At the hearing the Ms Cotterill said that [Child 1] has no special needs or extraordinary costs.

The children’s incomes and earning capacities

[Child 1] is attending kindergarten and has no earnings. Ms Cotterill provided statements for two bank accounts which she stated belonged to [Child 1]. These accounts have small balances and will not be considered further by the Tribunal. The Tribunal finds that [Child 1] has no independent income or earning capacity that needs to be taken into account.

The income, property and financial resources and earning capacity of Mr Wareing and his necessary commitments

Mr Wareing’s financial circumstances were closely examined by the Tribunal. The results of that examination are described above.
The Tribunal is satisfied that Mr Wareing has sufficient financial resources to meet his necessary commitments. The Tribunal considered the possibility of making a finding as to the earning capacity of Mr Wareing. However as Mr Wareing has not been employed for more than 10 years a finding as to earning capacity would be problematic. Moreover the Tribunal’s finding as to financial resources means that a finding as to earning capacity would be redundant.

The income, property and financial resources and earning capacity of Ms Wareing and her necessary commitments

Ms Cotterill’s financial circumstances were closely examined by the Tribunal. The Tribunal examined the SOFC (folios B1 to B10) and the other documentation provided by Ms Cotterill. Ms Cotterill said that she is employed in [occupation 2] for a [business]. Her income is from her employment and from childcare rebate, interest and child support paid by Mr Wareing. Her SOFC shows that her income equals $2,734.00 per week and that her expenditure totals $2,976.00 per week. According to her SOFC her expenditure exceeds her income by some $242.00 per week. At the hearing Ms Cotterill explained that now that [Child 1] is going to kindergarten her child care costs are reduced. The Tribunal’s calculation shows that on this basis Ms Cotterill’s expenditure roughly equals her income.
In accordance with the Tribunal’s directions Ms Cotterill has provided the Tribunal with statements for six personal bank accounts. Two of these belong to [Child 1] and will not be given further consideration. [Bank 3] account …2666 (folio B22) and [Bank 1] accounts …6584 (folio B49) and …5251 (folio B50) appear to be largely inactive. Account …6584 received the property settlement payout from Mr Wareing together with two other deposits totalling $3,500.00 while account …5251 has received a single deposit of $1,200.00. All of these deposits were sourced from Ms Cotterill’s [Bank 3] account …0454.
Ms Cotterill’s [Bank 3] account …0454 (folios B15 to B21) is the active account. It receives Ms Cotterill’s employment income as well as child support, childcare rebate and other minor amounts, such as Medicare benefits. The account is used to pay Ms Cotterill’s rent, health insurance and childcare accounts directly. It also pays Ms Cotterill’s credit card accounts.
Ms Cotterill has also provided credit card statements for [Bank 3] account …9585 for the period from 1 July 2017 to 2 January 2018 (folios B24 to B47). The statements disclose all the expected payments, including for utilities and the normal costs of living. The credit card payments come from the [Bank 3] account described above.
The Tribunal finds that the documentation provided by Ms Cotterill provides an accurate picture of her finances. The documentation is consistent with the figures provided by Ms Cotterill in the SOFC. There is no evidence of undisclosed accounts or sources of funds.
The Tribunal concludes that Ms Cotterill has provided the Tribunal with an accurate picture of her financial position. At the hearing Ms Cotterill said that she has been working four days a week since 2014 in order to provide some direct care for [Child 1]. The Tribunal finds that Ms Cotterill has no unused earning capacity that needs to be taken into account by the Tribunal. The Tribunal finds that Ms Cotterill has sufficient financial resources to meet her necessary commitments.

The parents’ duty to support others

Neither parent has a duty to support any other person than [Child 1].

Hardship

The departure from the formula assessment contemplated by the Tribunal will result in Mr Wareing’s child support liability increasing from the fixed annual rate of $1,373.00 to an annual rate of some $8,430.00. To this the Tribunal is contemplating adding an amount to cover a share of [Child 1’s] childcare costs. The notional income calculated for Mr Wareing ($92,300.00) represents 40% of the parents’ total income ($229,943.00). This percentage of Ms Cotterill’s net annual childcare costs of $13,567.05 (being $37.04 multiplied by 365) equals $5,407.84. Adding this to the assessment will result in an annual rate of child support of some $13,856.82 for the period prior to [Child 1] commencing kindergarten. It will then reduce to some $8,430.00. This is a very significant increase over the assessment that was in place when Ms Cotterill lodged her application. It is also an increase, although much less substantial, over the decisions of the original decision maker (ODM) and the objections officer. Although the ODM used a different methodology to the Tribunal he arrived at much the same result. The main difference is that the ODM elected to not gross up Mr Wareing’s financial resources for income tax. This was justified on the basis that Mr Wareing would not be paying income tax. This is precisely the reason why Mr Wareing’s income should be grossed up. The formula assessment uses a person’s “taxable” income, not their income net of tax. If a person does not pay tax then the financial resource needs to be grossed up to ensure that it maintains consistency with the assessment for persons who do pay tax.
At the hearing Ms Cotterill suggested that the self-support amount in the formula assessment should be reduced because Mr Wareing has only himself to support. In support of her position Ms Cotterill drew the Tribunal’s attention to the decision in Murphy and Murphy (Child support) [2016] AATA 2001. In fact in the case referred to by Ms Cotterill the Tribunal set adjusted taxable incomes for both parents but did not change the self-support amount. Given Mr Wareing’s actual expenses as evidenced by his bank and credit card details, and the Tribunal’s assessment that those expenses are reasonable, the Tribunal has decided to not change the self-support amount.
The decision contemplated by the Tribunal will result in Mr Wareing having significant arrears. The Tribunal does have some concern over the financial impact of this decision on Mr Wareing. However it notes that Mr Wareing has chosen to not avail himself of income support, saying that he does not believe in welfare. This might be considered a principled position, but it ignores Mr Wareing’s primary duty to contribute to the welfare of [Child 1]. Mr Wareing chooses to continue to live in an area where there are few employment opportunities and according to his oral evidence, has not actively sought employment or considered moving. Mr Wareing also owns his home free of a bank mortgage. The Tribunal is satisfied that Mr Wareing has access to sufficient financial resources to meet the child support liability contemplated by the Tribunal. Taking into account Mr Wareing’s primary obligation to support [Child 1] the Tribunal finds that the decision contemplated by it will not cause hardship to Mr Wareing.
The child support payable by Mr Wareing under the decision contemplated by the Tribunal should help ensure that Ms Cotterill is able to meet the reasonable and necessary expenses of [Child 1].

Terms and period of departure

The Tribunal has decided to depart from the formula assessment by changing Mr Wareing’s adjusted taxable income to $92,300.00 and by increasing the assessment to cover a part of the cost of [Child 1’s] child care.
The child support assessment started on 15 November 2013. Ms Cotterill applied for the change of assessment on 19 December 2016. In her application Ms Cotterill said that she wished the departure to commence on 1 June 2016, stating that she had not applied earlier because she was “gathering information and attempting to negotiate a financial settlement” (folio 35). However at the hearing she said that she would be content for the departure to commence on the date she applied to the Department. The original decision maker decided to commence the child care component of the departure on 1 June 2017 and the adjusted taxable income component of the departure on 1 July 2017 “so as not to cause significant arrears” (folio 152). The objections officer used the same start dates but continued the child care component beyond the date that [Child 1] commenced school so that “Mr Wareing is contributing to the 2017 cost in arrears” (folio 13). The Tribunal is not drawn to either of these approaches. There is no obvious reason why [Child 1] should forego the benefit of his father’s contribution even after his mother made the situation known to the Department, and the extension of the child care provision beyond the end of child care seems awkward and inappropriate. Having regard to the matters in subsection 117(4) of the Act, the Tribunal finds that it would be just and equitable for the departure to apply from the date of Ms Cotterill’s application, being 19 December 2016. The child care component will end on 31 January 2018.
At the hearing Ms Cotterill said that she would like the assessment to extend for a reasonable period so that she does not have to go through the departure process in the near future. Mr Wareing said that he could not say how long he wanted the departure to last as he felt that there was no need for a departure. Taking into account the wishes of the parents and the general desirability of minimising proceedings and maximising predictability, but also the need to ensure that the assessment does not lose touch with changing circumstances, the Tribunal has decided to end the departure on 31 December 2019. Thus the period of departure from the formula assessment will be 19 December 2016 to 31 December 2019.

Issue three – Is it otherwise proper to depart from the administrative assessment?

The final step for the Tribunal to undertake is to determine whether it is “otherwise proper” to depart from the administrative assessment. Subsection 117(5) of the Assessment Act requires the Tribunal to take into consideration the following matters:
(a)the nature of the duty of a parent to maintain a child (as stated in section 3) and, in particular, the fact that it is the parents of a child themselves who have the primary duty to maintain the child; and
(b) the effect that the making of the order would have on:
(i)any entitlement of the child, or the carer entitled to child support, to an income tested pension, allowance or benefit; or
(ii)the rate of any income tested pension, allowance or benefit payable to the child or the carer entitled to child support.
The child support law recognises that each parent has a primary duty to maintain their children. In this case Ms Cotterill receives family tax benefit which is appropriate in the circumstances and which may change slightly as a result of the Tribunal’s decision. The Tribunal is satisfied that it is otherwise proper to depart from the administrative assessment in this matter.

DECISION

[2018] AATA 1728

1 May 2018

Key Legal Topics

Areas of Law

Family Law

Administrative Law

Legal Concepts

Jurisdiction

Judicial Review

Statutory Construction

Remedies