Weadall and Sjoberg (Child support)
[2024] ARTA 960
•20 December 2024
Weadall and Sjoberg (Child support) [2024] ARTA 960 (20 December 2024)
Applicant/s: Mr Weadall
Respondent: Child Support Registrar
Other Parties: Ms Sjoberg
Tribunal Number: 2024/BC027904
Tribunal: Senior Member S Trotter
Place:Brisbane
Date:20 December 2024
Decision:
The Tribunal affirms the decision under review.
CATCHWORDS
CHILD SUPPORT – departure from the administrative assessment – income, property and financial resources – family trust – father’s businesses and farm – losses from first business and farm, and interest on loan and expenses for second business – regularity and amount of expenses – personal benefit from expenses – financial statements and tax returns – intermingling of personal and business affairs – share of rental income – mother’s income and expenditure, and gifts and loans from parents – self-support amount – 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 pursuant to subsection 16(2AB) of the Child Support (Registration and Collection) Act 1988.
Statement of Reasons
BACKGROUND
Mr Weadall and Ms Sjoberg are the parents of [Child 1] (born September 2013) and [Child 2] (born May 2015) (the children). A child support case was registered with Services Australia – the Child Support Agency (Child Support) in relation to the children in 2013. The children are recorded as being in the shared care of Mr Weadall and Ms Sjoberg.
The Child Support (Assessment) Act 1989 (the Act) provides for an administrative assessment of the child support payable. It uses a formula which contains variables such as the parents’ adjusted taxable incomes, their percentages of care and ages of any relevant children. The Act also provides for a departure from the administrative assessment (commonly termed a change of assessment) in certain circumstances.
On 22 August 2023, Ms Sjoberg lodged a departure application with Child Support seeking a change from the usual administrative assessment of child support on the basis of the income, property and financial resources of Mr Weadall.
Absent a departure from the administrative assessment, child support was assessed as payable by Mr Weadall as follows:
(a)$0 for the period 9 August 2023 to 31 August 2023 (based upon 2021/2022 adjusted taxable income of nil for Mr Weadall and $18,348 for Ms Sjoberg); and
(b)$1,302 per annum for the period 1 September 2023 to 30 November 2024 (based upon 2022/2023 adjusted taxable income of $36,395 for Mr Weadall and $19,832 for Ms Sjoberg).
On 3 January 2024, Child Support varied Mr Weadall’s adjusted taxable income to $157,631 per annum resulting in child support payable by Mr Weadall of $17,560 per annum from 1 September 2023 to 30 November 2024.
Mr Weadall objected to this decision and, on 2 May 2024, a Child Support objections officer partly allowed the objection varying Mr Weadall’s adjusted taxable income to $108,785 per annum, resulting in child support payable by Mr Weadall of:
(a)$11,654 per annum from 1 September 2023 to 7 January 2024; and
(b)$9,744 per annum from 8 January 2024 to 30 November 2024.
Mr Weadall applied to the AAT on 8 May 2024 seeking independent review of Child Support’s decision stating as follows (unedited):
… does not agree with the CSA OD re income issues. The decision also refers to care percentages which App says are incorrect also.
At a directions hearing on 19 September 2024, directions were made in relation to the conduct of the matter and the provision of further documents from the parties prior to hearing.
From 14 October 2024, the Administrative Appeals Tribunal (AAT) became the Administrative Review Tribunal (the Tribunal). Under the transitional provisions in the Administrative Review Tribunal (Consequential and Transitional Provisions No. 1) Act 2024 (the Transitional Act), applications for review to the AAT that were not finalised before 14 October 2024 are taken to be an application for review to the Tribunal. The Transitional Act gives the Tribunal the authority to continue and finalise any aspect of the review not already completed by the AAT. This decision and statement of Reasons is made by the Tribunal.
The hearing took place on 21 November 2024. Mr Weadall attended the hearing in person and Ms Sjoberg participated by conference telephone. Both gave sworn oral evidence.
11. The Child Support Registrar did not seek leave to participate in the hearing.
12. The following documents (copied to each party) were before me at hearing:
(a)the documentary material provided by Child Support (Exhibit 1, pages 1 to 472);
(b)documents received from Mr Weadall (Exhibit A, pages A1 to A617); and
(c)documents received from Ms Sjoberg (Exhibit B, pages B1 to B246).
13. Subsequent to the hearing, Ms Sjoberg emailed the Tribunal. The email does not raise any additional issues not already addressed at hearing to the extent relevant, has no bearing on my decision and has not been accepted into evidence.
ISSUES
The statutory provisions relevant to this review are contained in the Act.
15. A parent can apply to the Child Support Registrar for a determination to depart from the administrative assessment of child support (a process known as a change of assessment). Such an application is made under Part 6A of the Act. Under section 98C, a decision‑maker can make a change of assessment only if satisfied that:
(a)a ground for a change of assessment has been established;
(b)a change of assessment would be just and equitable as regards the children and each parent; and
(c)a change of assessment would be otherwise proper.
16. There are 10 possible grounds for a change of assessment set out in section 117 of the Act. Under the legislation, each ground for departure is prefaced by the words ‘in the special circumstances of the case’. It is not possible to define with precision the meaning of that term. It is intended to emphasise that the facts of the case must establish something which is special or out of the ordinary. That is, the intention of the legislature is that the Tribunal will not interfere with the administrative formula result in the ordinary run of cases. In Gyselman and Gyselman (1992) FLC 92-279 (Gyselman), it was held that ‘special circumstances’ were ‘facts peculiar to the particular case which set it apart from other cases’. My approach to the interpretation and application of the particular grounds in subsection 117(2) must be guided by that qualification.
17. If one ground is established, it is sufficient for me to proceed to the next step even though the application may have raised more than one ground for departure (Marsh & Eccles [2008] FMCAfam 1417).
18. If satisfied that a ground or grounds exist, and that it would be just and equitable and otherwise proper to make a particular determination, I may make one of the determinations prescribed in section 98S of the Act. It permits a range of determinations, including varying the rate of child support payable, the adjusted taxable income or the cost percentage for a child.
The issues which arise in this case are:
Does a ground exist to depart from the administrative assessment?
Would it be just and equitable as regards the children and each parent to depart from the administrative assessment of child support? And
Would it be otherwise proper to make a particular departure determination?
CONSIDERATION
Issue 1 – Does a ground exist to depart from the administrative assessment?
20. Subparagraph 117(2)(c)(ia) of the Act – commonly referred to as ‘Reason 8A’ – provides as a ground for departure:
(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
21. The default position is that the child support liability should be calculated pursuant to the administrative formula utilising the parents’ adjusted taxable incomes, their percentages of care and the ages of any relevant children. Each ground set out in the legislation to establish consideration of departing from the default position is prefaced by the words ‘in the special circumstances of the case’, indicative of a change occurring only in special circumstances. It is not possible to define with precision the meaning of that term. It is intended to emphasise that the facts of the case must establish something which is special or out of the ordinary. That is, the intention of the legislature is that the Tribunal will not interfere with the administrative formula result in the ordinary run of cases. In Gyselman and Gyselman (1992) FLC 92-279 (Gyselman), it was held that ‘special circumstances’ were ‘facts peculiar to the particular case which set it apart from other cases’. My approach to the interpretation and application of the particular grounds in subsection 117(2) must be guided by that qualification.
In her 1 April 2023 written change of assessment application, Ms Sjoberg submitted that Mr Weadall’s income and financial resources were not fairly reflected in the usual administrative assessment of child support given a change in his income from $49,509 in 2020/2021 to $0 in 2021/2022. She stated that Mr Weadall runs four business and had purchased a home in October 2021, sold a house in April 2022 for a $190,000 profit and bought a [business 1] in [Town 1] in July 2022. She further referred to Mr Weadall having purchased cars and regularly selling and buying cars for his car collection.
23. Mr Weadall’s evidence was that he has two ABNs, one for his family trust, the [Family Trust] and one for running the [business 1] he has recently purchased. He says he owns the business but rents the premises – the rent is $3,965 per week. He said he recently took out a large loan to buy the [business 1] using his farm, that he has had since 2009, as security. The farm is in New South Wales and he has attempted growing some low THD medical grade marijuana on the farm. He has spent a lot of money setting up greenhouses, bores, sheds and infrastructure but amidst COVID-19, bush fires and heavy rain it hasn’t worked out. He has had one crop but overall, it has been a huge failure – he has made quite a large loss from his efforts in that regard.
24. Mr Weadall said he previously also ran a [business 2] under the same ABN. It had its good years and bad years and during 2022 started to go downhill quite quickly so he started the [business 1], under the Family Trust’s ABN, instead. Initially for about five months he did also run the [sub-business] in the [business 1], [Business name], under his own ABN. He then took over the [business 1] and the [sub-business] was also run by the Family Trust. The staff for the [sub-business] were initially employed by him and therefore were paid from his bank account to start with but since he has taken over the [business 1], both the [business 1] and [sub-business] are conducted by the Family Trust, so all wages are now paid by the Family Trust (since about September this year).
25. The [business 1] is close to his home and also employs his partner as the duty manager and [work task]. His income is therefore reflective of all his losses from the farm and the [business 1]. Further, he has paid a lot of interest on the loan for the [business 1] in the last year – about $93,000.
26. Mr Weadall’s evidence was that he pays himself $1,100 a week in the hand and has done since 1 December 2022. Although there have been some weeks, he thinks between 8 and 10 weeks in that time, when the [business 1] has been struggling and he hasn’t paid himself and rather has put his own money back into the [business 1] and paying its bills and expenses. The [business 1] is operated under the Family Trust. Rent expenses for the [business 1] in the 2022/2023 financial year were about $100,000, but that was only for a half year and then the rent expense in the 2023/2024 financial year was about $200,000 for the full year. One of the [business 1] employees resides at the [business 1] as part of their salary package. The accommodation is in residential quarters at the back of the [business 1] and in return they are able to keep an eye on the [business 1] out of hours.
27. Mr Weadall said that he did a little bit of work in the [business 2] at the beginning of the year because the person who he sold it to had a stroke, but otherwise his only income is from the [business 1]. He runs the office (for the [business 1]) from his house, doing all of the administrative work. The [business 2] was sold in October 2023 with $30,000 paid in instalments. The purchaser has recently finished paying everything off.
Mr Weadall’s evidence was that all of the business income and expenses for the [business 1] are now transacted through the Family Trust and all transactions in the Family Trust’s bank account statements now relate to the [business 1] and [sub-business]. Mr Weadall stated that there is no personal spending through the Family Trust bank account.
Responsive to Ms Sjoberg’s evidence that the children have told her that Mr Weadall is selling big bags of marijuana to friends for $2,000, he said the marijuana he had previously grown was very low in THC and was for health purposes only. He hasn’t grown it in the last few years and he denies selling bags of marijuana to friends as suggested.
30. Mr Weadall told me that he also recently ran, unsuccessfully, in the local elections. He spent about $4,000, and based on his percentage of the primary vote he is entitled to reimbursement. He hasn’t yet completed the paperwork to claim his expenses.
31. I discussed with Mr Weadall that his estimated taxable income for the most recent year ($27,695) is much lower than the income noted in his 20 May 2024 Statement of Financial Circumstances[1] dated 20 May 2024 provided to the Tribunal. Further, the stated income is exceeded by the disclosed expenses.
[1] Page 2 of Exhibit A
32. Mr Weadall discloses average weekly income in his Statement of Financial Circumstances of $1,537[2] per week made up of $1,401 from the Family Trust and $138 family tax benefit with personal expenses of $301 (tax), $154 (superannuation) and child support ($220) per week[3]. Further, he has estimated household expenditure of $1,070 per week[4]. As to the motor vehicle expenses included in his household expenses, they are made up of $200 (petrol) + $20 (maintenance) + $20 (registration) per week. Mr Weadall’s evidence was that he doesn’t pay for the fuel or vehicle costs because that is a taxable expense for the business and so that should be deducted from the $1,070 per week. Mr Weadall said he rarely uses a motor vehicle for personal reasons because he works seven days a week. He does a lot of the administration and a lot of the deliveries and pickups for the [business 1]. I suggested to Mr Weadall that I would find it difficult to accept that he had no personal use of a motor vehicle, noting that he had 50% care of the children and no doubt had associated transport costs when caring for the boys such as taking them to school and other usual personal use. Mr Weadall said the personal use would only be very little because he would do things such as transporting the children or doing his own shopping or banking at the same time as he was undertaking work chores and using a vehicle for the [business 1]. He estimated that 95% of his motor vehicle use would be for work and only 5% for personal sue.
[2] Page 2 of Exhibit A
[3] Page 7 of Exhibit A
[4] Page 8 of Exhibit A
33. I also discussed with Mr Weadall a number of the Family Trust expenses including depreciation, entertainment expenses, telephone, internet and travel expenses.
I discussed with Mr Weadall that depreciation, although a valid tax deduction, represents a non-cash expense and that depending upon the circumstances of the business, might be reflective of additional cash or resources available for a person’s expenses of self-support and child support given its non-cash nature. Mr Weadall said that he really wasn’t sure what the depreciation expenses in the accounts are and that was all left to the accountant.
As regards entertainment expenses, I noted that there were numerous transactions in the bank statements of the Family Trust in and around south-east Queensland at other pubs and entertainment venues. Mr Weadall’s evidence was that those expenses were all business meetings. He said he has a bit of a local syndicate going on - he has to keep an eye on other [business 1s] to remain competitive. It is sometimes him travelling and incurring these expenses and sometimes other staff. I noted, for example, that there were transactions in the Family Trust’s bank account statements at [coastal Town 2] and asked whether those expenses related to personal or holiday expenses. I also noted that there were expenses in the Trust’s bank account statements suggested expenses to and from and at [an island resort]. Mr Weadall said those expenses were all business expenses.
I also noted that there were also very regular expenses shown in the Trust’s bank account statements at the [Town 3] hotel. Mr Weadall said that, again, those expenses are necessary for the business to keep an eye on the competition. Mr Weadall said there are also trips to the Gold Coast a couple of times a year – again networking expenses, learning about new products and the like.
I discussed with Mr Weadall that I understood there may be a need for networking, training etc expenses and the like but suggested that the regularity and variety of transactions appearing in the Family Trust bank account statements suggested that there were also personal expenses being paid for by the Family Trust. I noted that, for example, there were numerous transactions on one day in early November 2023 at the [named club]. Mr Weadall said that he thinks that was a Christmas party for work. I noted there were several expenses at many, many hotels, eating establishments and restaurants on the Gold Coast such as, for example, [Business names 2 and 3] etc. I also discussed with Mr Weadall expenses in the Family Trust’s bank account statements for transactions at the Gold Coast and [Town 3] golf clubs. Mr Weadall said those expenses are not always for him but also for his staff undertaking networking duties. He said it is probably only him incurring these expenses 10% of the time and always for work purposes and otherwise it is other staff or his partner. He said this is an important part of the business for the [business 1], promoting awareness of their small country [business 1] and they even have people they meet that then want to come and work for the [business 1]. When queried as to which staff would incur these expenses, Mr Weadall said that it would be the [business 1 and sub-business occupations] – and also his partner in her role for the [business 1] – he said they need to see what other people are [doing in the industry] – they need to get ideas. I again suggested to Mr Weadall that the regularity and amount of the expenses appeared out of proportion to the size of the business. As discussed with Mr Weadall, I accept that there might be some component of expense associated with business. Although, not able to be ascertained with precision, I consider there is likely some personal benefit derived from these expenses.
38. I also discussed examples of other expenses such as pharmaceutical expenses that appear in the Family Trust’s bank account statements. Mr Weadall’s evidence was that those expenses would be for things like sunscreen, paracetamol for the bar and first aid kits – that sort of thing.
39. As regards telephone and internet expenses claimed by the Family Trust, Mr Weadall says he has very little personal telephone and internet expenses. He said everything is mainly for the [business 1].
Ms Sjoberg submitted that Mr Weadall derives personal benefit from the [business 1] by way of provision of meals both for Mr Weadall and the children when in his care. When queried, Mr Weadall said that the children used to eat at the [business 1] when in his care but he is trying to get them to have a healthier diet and not having them eat at the [business 1]. He said when the children are not with him, he eats at home and also eats at the [business 1], but said he doesn’t eat much – only one or two meals a day.
The evidence shows that there are a number of vehicles owned by either Mr Weadall or the Family Trust. Mr Weadall disclosed [a Vehicle 1] valued at approximately $40,000 in his Statement of Financial Circumstances. Notably, that vehicle is listed as an asset, on hire purchase, of the Family Trust. The evidence was that other vehicles include a [vehicle 2], a [Vehicle 3] and the old [business 2] van. Additionally, Mr Weadall owns a [Model] [classic car] worth about $40,000 and various other [Model] car bodies and parts.
As regards travel expenses of the Family Trust, noted to be $10,410 in the 2023 financial year and $17,425 in the 2024 financial year, Mr Weadall said that the Family Trust pays for the travel between the farm in New South Wales and coming back to work in the [business 1]. I noted Mr Weadall’s earlier evidence that it hadn’t effectively operated the farm as a business for the last two years. Mr Weadall said that he has nonetheless still been doing work on the farm, working on the greenhouse and trying to review the plans, and the expenses were claimed on his accountant’s recommendation. He is hopeful that he might be able to revive things and have crops growing again soon. He is probably at the farm seven days a month across two or three visits. The farm is located 1,300 kilometres from the [business 1]. About six months ago, he had been doing week about between the farm and the [business 1]. Mr Weadall said that up until COVID-19 he was also undertaking [business 2] work in New South Wales, using the farm as a base. Mr Weadall confirmed that at present and for many, many years there has been no income generated from the farm.
43. Consistent with information as disclosed in his Statement of Financial Circumstances[5], Mr Weadall’s evidence was that he has an interest in two real properties: the farm in New South Wales, which he purchased in 2009, and his home, which he purchased with his partner in October 2021 for $721,000 and which is currently encumbered by a mortgage. He is tenants in common with his partner in their home, however his partner put in a very large share of the deposit and so he considers it is like he has a 1/3 share and his partner has a 2/3 share. He said his home mortgage payments are $800 - $900 per week. He has an arrangement with his partner whereby he pays $320 per week but that also covers electricity and rates. When queried by me as to whether he derives any rent income, Mr Weadall said that since last December 2023, his partner has arranged for two people to be living in the granny flat at their home. They have been paying $300 per week since December 2023. That money goes directly to his partner towards the rent. I noted that as a 50% owner of the property, that rent was income attributable to Mr Weadall in relation to a property in which he has a legal interest.
[5] Page 4 of Exhibit A
Responsive to queries raised by Ms Sjoberg, Mr Weadall said there had previously been other people living in the granny flat – they were working in the [sub-business] and the accommodation was provided as part of their wage but they were only there for a few months until they bought their own home. Other friends have come and gone, staying there previously as well, but didn’t pay any rent.
45. The farm was purchased in 2009 and is 105 acres. It has an estimated value of $400,000 with a mortgage of $407,000. He borrowed against the farm to buy the [business 1]. He borrowed from a private lender.
46. Financial statements and tax returns in evidence show the following for Mr Weadall and the Family Trust:
2021/2022 2022/2023 2023/2024
[Family Trust]
Business income $897,810 $1,692,911
Business expense $817,760 $1,717,119
Reconciliation adjustments $ 6,319 $ 23,835
Total income (loss) distributed to Mr Weadall $ 86,369 ($ 373)Mr Weadall
Wages $ 22,416 $72,852
Interest $ 424 $ 1,161
Trust distribution $ 86,369
Business income (loss) ($22,599)[6] ($ 48,137[7]) ($44,857)[8]
Deductions ($ 2,078) ($ 1,461)
Carried forward loss ($ 22,599)Taxable income $ 0 $ 36,395 $27,695[9]
[6] $201,030 income less $213,629 expenses, less $10,000 expense reconciliation adjustments
[7] $529,988 income less $604,597 expenses, plus $26,472 expense reconciliation adjustments
[8] $520,621 income less $559,277 expenses, less $6,201 reconciliation adjustments
[9] Tax return provided by Mr Weadall but yet to be lodged
47. Mr Weadall’s adjusted taxable income to be utilised in calculating the child support liability pursuant to the usual administrative assessment would be based upon adjusted taxable income of $0 (2021/2022), $36,395 (2022/2023) and $27,695 (approximately) for 2023/2024 following lodgment of that tax return.
Based on the evidence, there is an intermingling of the personal affairs of Mr Weadall and the businesses he conducts, including not only the previous [business 2] and farm, but also the [business 1]. This is understandable given Mr Weadall’s businesses. The Courts on numerous occasions have recognised that a parent may have legitimately arranged their financial affairs for tax purposes in a particular way such that their adjusted taxable income does not correspond with their actual income or financial resources available for child support purposes.
49. In Voss & Child Support Registrar & Anor (SSAT Appeal) [2009] FMCAfam 1296, the Court commented on the common situation of a self-employed person's taxable income not corresponding with his or her income or financial resources for child support purposes as follows:
There is a body of cases where simple reference to a person's tax return does not provide an appropriate quantification of their capacity to provide financial support. Most commonly this occurs in cases involving the self-employed, where it is well accepted that legal structures and arrangements may generate taxable income that doesn't properly reflect the realistic capacity of the person to provide financial support for their children.
50. In Shearer & Benson & Anor (SSAT Appeal) [2011] FMCAfam 623 (Shearer), the Court made similar comments as follows:
…when a person conducts their business through an intermediary company or trust, it is proper to lift the corporate veil to that person with regard to the determination of a parent's income for child support purposes[.]
51. In Costa & Fairbank (SSAT Appeal) [2010] FMCAfam 39, the Court observed as follows in relation to "financial resources":
“Financial resource" refers to something which is not property but from which financial benefit is or may be gained. In light of the objects of the Act, the term should be broadly defined and would refer to any financial benefit that would enhance the capacity of parents to provide a proper level of financial support for their children.
52. The Courts have recognised, including in Charnock & Bullions (SSAT Appeal) [2008] FMCAfam, that the Tribunal’s task in considering whether a ground for departure exists in relation to a parent’s income, property and financial resources, is not to determine their “adjusted taxable income” but rather to consider and make findings about their income, property and financial resources. It has also been recognised that having regard to the Tribunal’s obligation to provide a mechanism of review that is fair, just, economical, informal and quick[10], the Tribunal is not required to undertake a “forensic audit” or major investigation but rather must be satisfied on the balance of probabilities as to a party’s income, property and financial resources (Morse & Potts (SSAT Appeal) [2010] FMCAfam 1305 and Shearer).
[10] The Courts in making this observation were referring to the objective of the AAT. I note that the Tribunal has similar objectives being to provide an independent mechanism of review that includes to ensure that applications are resolved as quickly, and with as little formality and expense, as a proper consideration of the matter permits: section 9 of the Administrative Review Tribunal Act 2024
I am satisfied on the balance of probabilities that Mr Weadall’s actual income available for expenses of self-support and child support is more than is reflected in his taxable income as Mr Weadall himself recognises that, in noting that the [business 1] pays him $1,100 per week. Further, although difficult to specify with precision, and noting that neither a “forensic audit” nor major investigation is required, I am satisfied that Mr Weadall has derived and derives personal benefits from the conduct of his businesses including at least the motor vehicle and telephone/internet expenses paid by the [business 1] but also possibly other benefits including the provisions of meals at the [business 1] and possibly a personal component of other expenses such as entertainment and travel expenses. Mr Weadall and his partner have also been receiving rental income from tenants since December 2023 from renting out part of their home. That income does not yet appear to have been disclosed for tax purposes. I am satisfied, however, that Mr Weadall’s share of that income, which would usually be found to be in proportion with his legal share of the property, is additional income available to Mr Weadall not currently otherwise reflected. I am satisfied based on these matters that Mr Weadall has additional income or resources available to him not reflected in his adjusted taxable income and that there are special circumstances in this case such that the application of the administrative assessment of child support would result in an unjust and inequitable determination of the level of financial support to be provided by Mr Weadall.
A ground for a departure from the administrative assessment of child support therefore exists pursuant to subparagraph 117(2)(c)(ia) of the Act as regards Mr Weadall’s income, property and financial resources.
Issue 2 – Would it be just and equitable as regards the children and each parent to depart from the administrative assessment of child support?
55. Relevantly, subsection 117(4) of the Act requires that regard must be had to the following in determining whether it would be just and equitable to make a particular departure determination:
(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.
56. I am not limited by the matters listed in subsection 117(4) and may consider any other relevant matters (subsection 117(9) of the Act).
57. The Full Family Court, in the case of Gyselman, stated that:
some of the matters listed in sub-section [117](4) may overlap with matters already considered under sub-section [117](2) and some of the paragraphs in sub-section (4) may be more significant in one case than they would be in another or of little relevance in a particular case. It is an essential part of the s.117 exercise to carry out the obligation under sub-section (4). However, that does not mean that it is necessary in each case to slavishly go through each of the paragraphs. The extent to which it is necessary to do so will depend upon the facts and conduct of the individual case and the analysis already performed under sub-section (2).
58. I have considered all matters set out in subsection 117(4) of the Act but will only refer to those considerations pertinent to the application.
Duty to maintain children
As regards paragraph 117(4)(a) of the Act, I recognise that Mr Weadall and Ms Sjoberg have a duty to maintain the children. Further, I note the statements contained in sections 3 and 4 of the Act to the following effect:
(a)The duty of a parent to maintain his or her child has priority over all commitments of the parent other than commitments necessary to enable the parent to support himself or herself and any other child or person that the parent has a duty to maintain.
(b)The level of support should be determined in accordance with the costs of children, and according to the parents’ capacity to provide financial support.
Proper needs of the children
60. In determining the proper needs of the child for the purposes of paragraph 117(4)(b) of the Act, subsection 117(6) of the Act requires me to have regard to the manner in which a child is being, and in which the parents expect them to be, cared for, educated or trained and any other special needs they may have.
61. There is no evidence before me to suggest that the proper needs of the children are other than the usual costs of providing for children of their respective ages. Both parents referred to Mr Weadall’s intention to privately educate the children for high school at [School], at a cost of $8,000 per year, to be paid by him, when they commence high school. However, that has not yet occurred, with their oldest child not due to commence high school until 2026.
Income, property and financial resources and earning capacity of each parent
As regards paragraphs 117(4)(d) and (da) of the Act and the income, property, financial resources and earning capacity of Mr Weadall, I have already canvassed Mr Weadall’s income earlier in these Reasons.
63. Ms Sjoberg’s adjusted taxable income to be utilised in calculating the child support liability is as follows for the previous two financial years:
2021/2022 2022/2023
Adjusted taxable income $18,348 $19,832
64. Ms Sjoberg’s previous employment history was in hospitality. Just prior to separation she was [an occupation 1] at the [workplace], working part-time. Following separation, she decided to change to an occupation more suited to her care of the children. She commenced studying to become [an occupation 2] and started working at a couple of places and working a little bit from home. She then realised there was a need for services additional to [occupation 2] and started studying [related subject]. She has been studying [related subject] for the last three years. She is just about to finish paying off the course, has a few more assessments to be done and will then be finished. She expects her income will then increase but it may take a while to get things going. She is not sure what her income will be in the future but she is hoping maybe $1,500 per week gross before expenses because she won’t be studying or traveling. However, it is too early for her to be sure; however, whatever income she makes will be reflected in her tax return.
65. I noted that Ms Sjoberg’s 2022/2023 profit and loss statement[11] suggests an overall loss for the year. I noted the claimed business expenses included rent (20%), electricity (20%), telephone (95%), internet (80%) and car costs (53%). Ms Sjoberg confirmed that the percentages indicated are the proportion of her expense attributable to her business and, for example, her car costs are apportioned based upon a log book she keeps. Ms Sjoberg said that her 2023/2024 tax return has just been finalised and is fairly consistent with her 2022/2023 tax return.
[11] Pages 65 to 66 of Exhibit B
Mr Weadall submitted that Ms Sjoberg receives cash income. Ms Sjoberg said that everything is put through her books, as can be shown from her profit and loss statement where she discloses some cash income. She said that most of the sessions can be claimed under private health insurance and need to be recorded in any event.
Mr Weadall again submitted that Ms Sjoberg receives additional cash income. When queried as to what evidence there is in support of that submission, Mr Weadall said that it is just based upon what other people have told him.
Ms Sjoberg also receives a partial parenting payment from Centrelink and family tax benefit. Ms Sjoberg confirmed she has to provide fortnightly statements in relation to her business to Centrelink.
Ms Sjoberg said she has previously sold [animals]. She hasn’t claimed money from the sale of [animals] in her tax return because the accountant said that she could do it as a hobby. She said that last year she sold five [animals] for about $10,000. After expenses, her best estimate of what she netted was $7,000. Ms Sjoberg said that this year she has only sold four [animals] at $1,600 per [animal]. Ms Sjoberg said that her [animals] are booked in for desexing next Wednesday as she has decided that she will no longer be continuing to breed and sell any [animals].
Mr Weadall said there had been three litters of [animals] and they have been selling for $2,000 each. I asked Mr Weadall what evidence he had to support his submission. I noted that Mr Weadall had provided a statutory declaration dated 23 February 2024 to Child Support[12] stating that Ms Sjoberg was breeding and selling [animals] for $2,000 each and that she had sold as many as 20 [animals] in the last three years with advertisements placed on Gumtree.
[12] Page 285 of the T Documents
Ms Sjoberg responded that over the last three years she has only sold two litters of [animals] as per her earlier evidence. I asked Mr Weadall if he had additional evidence to support the sale of more [animals] by Ms Sjoberg. Mr Weadall said it was only based upon what his children had told him and seeing an ad on Gumtree in the last 12 months.
The commitments of each parent
72. I have already canvassed Mr Weadall’s personal and household expenditure earlier in these Reasons.
73. Ms Sjoberg’s 17 October 2024 Statement of Financial Circumstances notes personal and household expenditure including a mortgage expense for her of $1,051 per week and the usual household expenses and personal expenses including rent, food, household supplies, electricity, heating fuel, water, telephone, clothing, children’s activities, child minding, insurance and other commitments. She rents her home from her parents – it is a private rental agreement. To the extent that her expenses are more than her income, she receives assistance from her parents, and when she did sell the [animals], that did help out as well.
Ms Sjoberg discloses a loan of $70,000 from her parents. Ms Sjoberg said that her parents do assist her from time to time, sometimes by way of gift and sometimes by way of loans as can be seen with various transfers to her from them in her bank account. She has recently bought a new car and her parents loaned her the money for that – that is definitely a loan. Her parents, for example, did assist her in undertaking a trip overseas to [Country] for a friend’s 50th.
Mr Weadall submitted that Ms Sjoberg gets a lot of support from her parents and queries why he is paying child support if her parents are subsidising so much of Ms Sjoberg’s lifestyle, including taking holidays, when no-one is subsidising his lifestyle. As discussed with Mr Weadall, it is he and Ms Sjoberg who have a primary duty to support their children, not Ms Sjoberg’s parents.
Proposed departure/Hardship
When queried as to what child support he has capacity to pay, Mr Weadall said he can afford the child support he is currently assessed to pay, about $230 per week. He said he was not experiencing hardship based on the current assessment, however he doesn’t think he should be paying any child support given the recorded care of 50% to each of the parents. Mr Weadall said that Ms Sjoberg should be proven to have a similar taxable income to him and he shouldn’t have to pay child support on that basis.
Ms Sjoberg said that she had no particular submissions as to what Mr Weadall’s income should be for child support purposes, or what the child support liability or the duration of any change to the administrative assessment should be, other than she just doesn’t agree that Mr Weadall’s income could be changed from $56,000 down to $0 in his 2021/2022 tax return. It was the letter from Child Support of 16 August 2023[13] stating that Mr Weadall’s new income was $0 that prompted her change of assessment application. Her FTB Part A and B reduced from $460 to $60 per fortnight when Mr Weadall’s income reduced to $0. She does not understand why but that is what happened and it made it very difficult. She doesn’t know what Mr Weadall’s income is; she just knows that it can’t be $0. Getting some child support is a huge help to her because it helps her to pay the bills. As regards how much assistance she needs by way of child support, any support is amazing. She makes sure the children don’t go without – she goes without instead of the children. Ms Sjoberg said that there are currently child support arrears of $8,410. She receives the child support very sporadically; it makes it hard for her – she has to learn to live on a very low budget because she never knows when it is going to come – over the last 10 weeks she has received $80 per week on average.
[13] Page 78 of Exhibit 1
Mr Weadall said that he had been paying more than the weekly amount towards child support arrears but when he sought review of Child Support’s decision, he reduced the payment to $800 per month pending finalisation of the review. He said that is hurting him. I noted that he had earlier told me that he could afford to pay the assessed amount and he was managing it and asked for clarification. Mr Weadall responded that he can’t afford to go overseas for holidays to [Country] like Ms Sjoberg. He said that he doesn’t think he should be paying child support in circumstances where there is 50/50 care and he and Ms Sjoberg have similar incomes. However, the evidence clearly shows that Mr Weadall’s income and financial resources are greater than Ms Sjoberg’s.
79. Whilst both parents have a duty to meet a child’s needs, the Courts have recognised that that does not mean that the duty must be discharged equally. In Tyagi & Meares (SSAT Appeal) [2008] FMCAfam 886 (Tyagi & Meares), the Court stated as follows:
It is, to use the common law phrase, a ‘joint and several liability’: if one party has no financial resources the other must meet the whole of the children’s financial needs. Indeed, in many cases the difference in income of the parents (often impacted upon by the need to care for the children) means that one parent simply doesn’t have the income to meet half of the children’s financial needs, and thus those needs must be apportioned having regard to the financial capacity of the parents.
80. The apportioning to meet the needs of the children as discussed in Tyagi & Meares is also what occurs pursuant to the formula for administrative assessment of child support and is also appropriate for me to take into account in considering a departure from the administrative assessment. It may be that, in time, Ms Sjoberg’s business income increases to a level of a similar nature as Mr Weadall’s, particularly given she has now completed her studies and expects her business income to increase. However, the evidence before me is that at present Mr Weadall’s income and financial resources, including as derived through his business interests, is significantly more proportionally than Ms Sjoberg. Ms Sjoberg does not dispute that her expenses exceed her income. She also agreed that income from selling [animals] in 2023 and 2024 has assisted her with expenses. I accept that her parents assist her wherever possible: sometimes by way of gifts and sometimes by way of loan. As discussed at hearing, it is the primary duty of parents, not grandparents, to support children and any support provided by Ms Sjoberg’s parents is in my view relevant only to explaining how Ms Sjoberg has been able to continue to meet expenses. She is left with a not insignificant debt to her parents in addition to money they have gifted to her.
81. In considering a departure from the administrative assessment, section 98S of the Act permits a range of determinations, including varying the rate of child support payable or the adjusted taxable income of one or both of the parents.
As to an appropriate income to be utilised for Ms Sjoberg, I am satisfied that her taxable income accurately reflects her income from business, noting that her expenses have been specifically apportioned between personal and business use, including by reference to a log book kept for her travel. However, given her evidence that she has received income from the sale of [animals] in the last two years, it is appropriate that that consideration be given to that income being recognised. I acknowledge Mr Weadall’s submission that Ms Sjoberg has sold 20 [animals] over the last few years, however absent any corroboratory evidence of her having sold 20 [animals], I accept Ms Sjoberg’s sworn evidence as to the number of [animals] sold and the likely net income from those sales. I note and accept that Ms Sjoberg received advice that she did not have to claim that income for tax purposes, however, that income is nonetheless appropriately taken into account for child support purposes.
However, increasing Ms Sjoberg’s adjusted taxable income by $7,000 in 2023 (5 [animals] sold for $2,000 each with $3,000 allowed for expenses pursuant to Ms Sjoberg’s evidence), and $4,480 in 2024 (4 [animals] sold at $1,600 each with a similar proportionate allowance for expenses as in 2023), would in any event have no impact on the child support liability. This is because Ms Sjoberg’s total adjusted taxable income for each respective year would still be less than the self-support amount utilised in the administrative assessment of child support liability meaning that there would be no change to the liability in any event. In that regard, Ms Sjoberg’s 2022/2023 adjusted taxable income was $19,832. Adding $7,000 gives a total adjusted taxable income of $26,832 which is still below the relevant self-support amount at that time of $27,508. Similarly, Ms Sjoberg’s 2023/2024 adjusted taxable income was $19,641. Adding $4,480 gives a total adjusted taxable income of $24,121 which is still below the relevant self-support amount at that time of $28,463.
As to an appropriate income to be utilised for Mr Weadall for child support purposes, Mr Weadall’s financial circumstances are more complex than Ms Sjoberg’s. As already canvassed, it is not the role of the Tribunal to undertake a forensic audit or investigation. Notably, Mr Weadall’s evidence to me was that he was managing the child support liability assessed by Child Support, although he had chosen to reduce the amount he was paying pending this review process. Mr Weadall’s current assessment child support liability was based upon an adjusted taxable income set by Child Support of $108,785 per annum. A demonstrated acknowledgement of being able to meet that liability informs a conclusion that Mr Weadall’s income is of a level that he has capacity to pay child support commensurate with him having an income of $108,785 per annum. It is appropriate for Mr Weadall’s adjusted taxable income to be varied to this amount for child support purposes. In reaching that conclusion, I note the current arrears of $8,410 as advised by Ms Sjoberg. Notably, some of those arrears have arisen due to Mr Weadall’s decision to reduce his payments pending this application. I am satisfied that payment of the assessed liability, including arrears, will not cause hardship to Mr Weadall. I acknowledge that he has large business expenses, including interest on the loan for the [business 1]. However, I am satisfied he also has discretionary spending and resources and further that he has motor vehicles excess to needs. Furthermore, he acknowledged that he has capacity to pay the assessed amount – as already canvassed, he only disagreed with paying that amount on the basis that he considers neither parent should pay child support when they have 50/50 care and similar incomes. However, I have concluded that the parents do not have similar incomes.
As to the duration of the departure, Ms Sjoberg’s change of assessment application was made on 22 August 2023. I have a discretion to backdate the departure for a child support period in the 18 months prior to 22 August 2023, however I see no basis to do so in relation to Mr Weadall’s income. I consider it appropriate that the departure commence from 1 September 2023, from the commencement of the next month after the 22 August 2023 application, in relation to Mr Weadall’s income. As to the end date for the departure, Child Support’s departure determination ceased on 30 November 2024. There is benefit to the parents, and consequentially to the children, in having a departure determination continue as far as possible in to the future to provide certainty and avoid the need for the time and commitment to applications of this nature, balanced against possible future changes in circumstances. The circumstances of the parents and the children are likely to change in the reasonably near future. Ms Sjoberg is about to increase her business activities and is expecting that her income may increase. The oldest child of the assessment is due to commence high school in 2026, that is, at the end of January 2026. Mr Weadall’s expressed intention at this stage is that he will be enrolling both children at a private school, [School], and he will have the capacity to and will be paying the associated costs. I consider it appropriate to only extend the departure for a limited time into the future. In all of the circumstances, I consider it appropriate to extend the proposed departure to 31 January 2026. Each parent is of course at liberty to lodge a further change of assessment if circumstances do change significantly in the meantime.
86. Having regard to all matters, I consider it just and equitable as regards the children and each parent to depart from the administrative assessment of child support by varying Mr Weadall’s income to $108,275 for the period 1 September 2023 to 31 January 2026.
Issue 3 – Would it be otherwise proper to make a particular departure determination?
I considered whether it would be otherwise proper to make a particular departure determination in accordance with sub-subparagraph 98C(1)(b)(ii)(B) of the Act. Subsection 117(5) of the Act sets out the matters that must be considered when deciding whether it would be ‘otherwise proper’ to make a departure determination. Subsection 117(5) of the Act focuses on the balance of support between parents on the one hand and the taxpayer on the other. It is appropriate for the children to be primarily supported by their parents rather than by government assistance. Paragraph 117(5)(b) of the Act means that I must consider whether the level of a benefit, in particular family tax benefit, received by the party caring for a child may be affected by the level of child support.
88. Both Mr Weadall and Ms Sjoberg disclosed receipt of family tax benefit in their Statements of Financial Circumstances. Child support based upon Mr Weadall’s varied adjusted taxable incomes, commensurate with his capacity to pay child support, is otherwise proper.
89. As I have reached the same decision as Child Support, the decision under review is affirmed.
DECISION
The Tribunal affirms the decision under review.
| Date(s) of hearing: | Thursday, 21 November 2024 |
| Representative for the Applicant: | Self-represented |
| Representative for the Other party: | Self-represented |
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