Waterfield and Partridge (Child support)
[2023] AATA 2163
•31 May 2023
Waterfield and Partridge (Child support) [2023] AATA 2163 (31 May 2023)
DIVISION:Social Services & Child Support Division
REVIEW NUMBER: 2023/BC025619
APPLICANT: Ms Waterfield
OTHER PARTIES: Child Support Registrar
Mr Partridge
TRIBUNAL:Member M Baulch
DECISION DATE: 31 May 2023
DECISION:
The decision under review is affirmed.
CATCHWORDS
CHILD SUPPORT – particulars of the administrative assessment – estimate of income – whether the estimate should have been refused – estimate of income correctly accepted – decision under review affirmed
Names used in all published decisions are pseudonyms. Any references appearing in square brackets indicate that information has been omitted 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
Ms Waterfield and Mr Partridge are the separated parents of three children, in respect of whom Services Australia – Child Support (Child Support) has made administrative assessments of child support.
On 25 October 2022, Mr Partridge contacted Child Support and made an election to have an estimate of his adjusted taxable income applied to the child support assessment. On 25 October 2022, a Child Support employee decided that Mr Partridge’s estimated income of $98,289 per annum should apply to the child support assessment from 22 October 2022 (the decision under review).
Ms Waterfield objected to that decision and, on 13 December 2022, that objection was disallowed. Ms Waterfield has now applied to this tribunal seeking an independent review of Child Support’s decision.
A hearing into the application for review was held by the tribunal on 31 May 2023. Ms Waterfield and Mr Partridge both participated in the hearing by telephone, and both gave evidence under affirmation during the hearing. A representative of the Child Support Registrar (the Registrar) did not participate in the hearing. The tribunal had before it relevant documents provided to it by Child Support pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 (132 pages), copies of which both parties confirmed they had received prior to the tribunal hearing.
ISSUE
The statutory provisions relevant to this review application are found within the Child Support (Assessment) Act1989 (the Act).
The issue which arises in this application for review is whether an estimate election made by Mr Partridge on 22 October 2022 should be accepted or refused.
CONSIDERATION
Child Support makes child support assessments using a formula outlined in Part 5 of the Act. The elements of this formula include, amongst other things, the adjusted taxable income of each parent.
Section 43 of the Act defines a parent’s adjusted taxable income to be the sum of the following:
· The parent’s taxable income, as determined by the Australian Taxation Office.
· The parent’s reportable fringe benefits total.
· The parent’s target foreign income.
· The parent’s total net investment loss.
· The total of the tax free pensions or benefits received by that parent.
· The parent’s reportable superannuation contributions.
Section 60 of the Act permits a parent to elect to estimate his or her adjusted taxable income for a year of income and use the estimated income to replace their adjusted taxable income that was determined in accordance with section 43 of the Act. The parent can make an estimate prior to the year of income based on their estimate of their income for that year; or they can make an estimate during an income year based on what they estimate they will earn for the rest of the year. The term year of income is defined in subsection 5(1) of the Act and generally means a financial year.
Where a parent has provided an estimate of their income for a part of a year of income, section 63AA of the Act provides that the Registrar (or myself standing in the Registrar’s shoes) may refuse to accept that estimate of the parent’s income if:
· The estimated amount is less than the amount the Registrar considers is likely to be the parent’s actual adjusted taxable income for the period to which the estimate relates (paragraph 63AA(2)(a) of the Act); or
· The amount provided as the parent’s income for the period starting on 1 July and ending on the day before the estimate is made, is likely to be more than the parent’s actual adjusted taxable income for that period (paragraph 63AA(2)(b) of the Act).
Child Support’s file notes record that Mr Partridge made an estimate election on 25 October 2022, specifying his income would be $1,885 per week (which equates to $98,289 per annum) for the remainder of the financial year (22 October 2022 to 30 June 2023). At hearing, Mr Partridge’s evidence was that he ceased working in [City 1], where he worked on a two week off, one week on, roster and was paid extra for working weekends and allowances for working away from home. Mr Partridge’s evidence was at the time of his estimate, he commenced working in Brisbane where he no longer worked weekends and was no longer paid additional allowances for working away from home.
Mr Partridge has provided payslips for the period 10 October 2022 to 30 November 2022, which disclose his average weekly earnings for that period to be $1,836.94; less than the amount he estimated. Ms Waterfield submitted that the payslips had been “dodgied up” under some arrangement between Mr Partridge and his boss, who Ms Waterfield asserted is Mr Partridge’s best friend. Ms Waterfield stated that she had no evidence to support this allegation.
Mr Partridge denied that the payslips were false and advised that he was not directly employed by [named company], but rather by a labour-hire firm called [name], and this precluded him and his boss, whom he did not deny was a friend, from falsifying his payslips.
I note that in making an estimate, a person is attempting to forecast future income, so absolute precision cannot necessarily be expected. The provisions in the Act provide for the amendment of estimates if circumstances change by a parent, or by the Registrar, and for estimate reconciliation after the end of the income year once the actual income is ascertained. This suggests that an overzealous approach in scrutinising an income estimate is not warranted. Consistent with this, it is also relevant to note that the power to refuse to accept an estimate is discretionary, not mandatory, even if the Registrar is satisfied that the estimated amount is too low.
I was not satisfied that the payslips provided to Child Support by Mr Partridge are false, and I was satisfied that, at the time the estimate was made, Mr Partridge’s actual income was not more than the amount estimated.
Ms Waterfield alluded to text messages she had received from Mr Partridge which suggest a motivation to avoid or reduce his child support liability. However, in circumstances when the evidence supports the reasonableness of the amount estimated by Mr Partridge, I did not consider Mr Partridge’s motivations to be a relevant consideration. I noted that the objections officer has already advised Ms Waterfield about applications for a change in assessment in special circumstances, and she might like to discuss this option with Child Support if she believes that Mr Partridge is manipulating his work arrangements to reduce his child support liability.
Having considered the evidence, I was not persuaded that Mr Partridge’s income was likely to be more than $1,885 per week for the period 20 October 2022 to 30 June 2023. I therefore concluded that Mr Partridge’s estimated adjusted taxable income is not likely to be less than his actual adjusted taxable income for the period 20 October 2022 to 30 June 2023 and paragraph 63AA(2)(a) of the Act does not apply.
There was no dispute that the estimated adjusted taxable income for the year-to-date period is not more than the likely actual amount for that period, so paragraph 63AA(2)(b) of the Act does not apply
As section 63AA of the Act is not satisfied, there is no basis for refusing Mr Partridge’s estimate election and it must be accepted.
Therefore, and for these reasons, I decided to affirm the decision under review.
DECISION
The decision under review is affirmed.
Waterfield and Partridge (Child support) [2023] AATA 2163
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