Wendell and Beare (Child support)

[2019] AATA 5206

Wendell and Beare (Child support) [2019] AATA 5206 (20 September 2019)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2019/BC015969

APPLICANT:  Mr Wendell

OTHER PARTIES:  Child Support Registrar

Ms Beare

TRIBUNAL:Member S Letch

DECISION DATE:  20 September 2019

DECISION:

The decision under review is affirmed.

CATCHWORDS

CHILD SUPPORT – departure determination – whether there was a ground for departure – purchase of laptop computer for child does not constitute special circumstance – terms of current assessment not unfair – decision under review is affirmed.

Names used in all published decisions are pseudonyms. Any references appearing in square brackets indicate that information has been removed from this decision and replaced with generic information so as not to identify involved individuals as required by subsections 16(2AB)-16(2AC) of the Child Support (Registration and Collection) Act 1988.

REASONS FOR DECISION

BACKGROUND

1. Mr Wendell and Ms Beare are the parents of [Child 1], born June 2001, and [Child 2], born [in] 2003. The children were in the primary care of Ms Beare, and regular care of Mr Wendell. Mr Wendell has been assessed by the Child Support Agency (CSA) as liable to pay child support to Ms Beare.

2. This case has seen a number of applications for “changes of assessment”, and multiple decisions by this Tribunal. The most recent decision of the Tribunal was made on 6 April 2018. In that decision, the following was decided:

   ·     For the period from 1 April 2016 to 31 December 2016, the annual rate of child support payable by Mr Wendell to Ms Beare is increased by $4,206;

   ·     For the period from 1 January 2017 to 31 December 2017, the annual rate of child support payable by Mr Wendell to Ms Beare is increased by $2,077;

   ·     For the period from 1 January 2018 to 31 December 2018, the annual rate of child support payable by Mr Wendell to Ms Beare is increased by $2,125.50;

   ·     For the period from 1 January 2019 to 31 December 2019, the annual rate of child support payable by Mr Wendell to Ms Beare is increased by $1,782.50;

   ·     For the period from 1 July 2016 to 31 December 2019, Ms Beare’s adjusted taxable income is varied to $112,000 per annum.

3. Mr Wendell’s adjusted taxable income has consistently been in the order of $210,000 per annum; in his statement of financial circumstances dated 7 March 2019, he advises his weekly income before tax as $4,083.

4. Shortly after the Tribunal’s decision on 2 July 2018, Mr Wendell made a fresh change of assessment application. His application was refused on the basis there was no basis to depart from the assessment put in place by the Tribunal. Mr Wendell objected; on 25 January 2019, an objections officer disallowed the objection, similarly finding no basis to depart from the assessment. In the decision, the objections officer records that Mr Wendell objected on the basis that he had not “gifted” a laptop to [Child 2] in January 2018, and that he had not raised with the AAT that cost, which he submitted had yet to be recorded in the assessment.

5. Mr Wendell applied for further review by the Tribunal on 20 February 2019. The Tribunal conducted a hearing on 2 September 2019; Mr Wendell attended the hearing in person, and Ms Beare participated by conference telephone. Following the hearing, Mr Wendell submitted numerous additional pieces of correspondence which were taken into account by the Tribunal in making its decision.

CONSIDERATION

The legislative framework

1. 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). A formula is used. It takes into account variables including each parent’s adjusted taxable income for the last relevant year of income, the number of children and the level of care provided by each parent.

2. Part 6A of the Act allows for a departure from an administrative assessment (a process commonly known as a “change of assessment”). Under subsection 98C(1), the Registrar may make such a departure determination if three matters are established:

   ·       one, or more than one, of the grounds for departure referred to in subsection 98C(2) exists (subparagraph 98C(1)(b)(i));

   ·       a departure is just and equitable as regards the children and each parent (sub-subparagraph 98C(1)(b)(ii)(A)); and

   ·       it is otherwise proper to make a departure decision (sub-subparagraph 98C(1)(b)(ii)(B)). 

3. Subsection 98C(2) provides that the grounds for departure are the same as the grounds set out in subsection 117(2).

4. 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 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.

Issue 1 – Is there a ground to depart?

10.Subparagraph 117(2)(c)(i) of the Act, commonly referred to as Reason 5, provides as a ground for departure that, in the special circumstances of the case, the costs of maintaining the child are significantly affected rendering the assessment unfair because the payer has paid or transferred money, goods or property to the child, the payee, or a third party for the benefit of the child.  Mr Wendell raised during the hearing Reason 3, which provides a ground to depart if,  in special circumstances, the costs of maintaining a child are significantly affected by high costs of caring for, educating or training the child in the way both parents intended.

11.The starting proposition is that the child support formula should apply. Only in special circumstances should a departure be made. The words “in the special circumstances of the case” are not defined in the legislation. Whilst 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 v Gyselman (1992) FLC 92-279, it was held that “special circumstances” were “facts peculiar to the particular case which set it apart from other cases”. The Tribunal’s approach to the interpretation and application of the particular grounds in subsection 117(2) must be guided by that qualification.

1. Mr Wendell purchased a laptop for [Child 2] for $1,553.53 (including insurance) in January 2018. He says this was a requirement for school; there had been a change to leasing options which meant [Child 2] was required to own her own computer. Ms Beare, in her written submission to the Tribunal, advises that she was not consulted by Mr Wendell about the “gift”. She contends she was not a party to the gift and should not be held financially accountable for the purchase. She refers to the relevant policy guidelines (2.6.11 of the Child Support Guide), which provides the following:

   …

   An uninvited, voluntary or excessive payment for the benefit of the child by a parent, outside the child support assessment, should not affect the payee's entitlement to receive child support to meet the day-to-day needs of the child (Strauss and Strauss (1998) FLC 92-797). A parent is not legally required to pay more than the amount set by the child support assessment. However, a parent may choose to pay additional amounts of child support without any expectation of a change being made to the assessment.

   …

2. There was dispute between the parties about whether a new computer was required, and whether a cheaper option would have been more appropriate. However, it appears not in dispute that the computer was used by [Child 2] for schooling purposes.

3. It is not clear why Mr Wendell did not raise the purchase in his previous application to the Tribunal. Regardless, at the time of the purchase, he was assessed to pay an annual rate of child support in an amount exceeding $20,000. Mr Wendell has a very high income; almost twice as high as Ms Beare (before tax). He clearly had, and continues to have, ample financial capacity to meet his child support liability, in addition to the expenditure he incurred for [Child 2’s] laptop. In the Tribunal’s assessment, the child support assessment is not rendered unfair by what was a relatively small additional sum in the context of Mr Wendell’s income, and the overall assessment.

4. The Tribunal therefore finds no ground to depart from the administrative assessment on the basis of the purchase of [Child 2’s] laptop.

5. During these proceedings, Mr Wendell sought to re-agitate the quantum of his contribution for school fees, in addition to raising issues surrounding Ms Beare’s income. Ms Beare confirmed during the hearing she has had a change of employment.  The existing assessment for Ms Beare varied her income to $112,000. She suggests her current income is at a similar level.

6. The Tribunal observes the scheme is not guaranteed to account for every single dollar for every single period of time. The objective of the scheme is to determine a fair level of income for each party which results in a fair level of child support on the evidence available; the interests of the child are paramount.

7. On the Tribunal’s calculations, if Mr Wendell’s income were presently assessed at $210,000 per annum, and Ms Beare’s income assessed at a higher sum of $120,000, Mr Wendell’s annual child support liability would be reduced by around $500. At $130,000 for Ms Beare, the difference would be around $1,200.

8. The Tribunal would need to be satisfied that the current assessment was unfair in the special circumstances of the case. Even were Ms Beare’s income to be assessed at the (very high) level of $130,000 per annum, the difference to the assessment would not be significant in the context of Mr Wendell’s very high income and the overall assessment, and the Tribunal is not satisfied the assessment would be rendered unfair.

9. In the Tribunal’s assessment, there was nothing else in Mr Wendell’s or Ms Beare’s financial circumstances, or in the circumstances of the children, which would justify a ground to depart.

10. Both parties urged the Tribunal to make a decision impacting the assessment from 1 January 2020 when the assessment of Ms Beare’s income, and the addition of school fees, comes to an end. The Tribunal discussed with the parties it could consider making an assessment into the future, but it was not bound to do so; the parties could make a fresh application to the CSA to change the formula assessment from 1 January 2020. Having carefully reflected upon that, the Tribunal considered it preferable that it avoid effectively making an “original decision” which in the ordinary course would be investigated, considered and determined by the CSA. Adopting that course will preserve the rights of the parties to object and, if necessary, return to this Tribunal for a review of the original decision. The Tribunal considered the preservation of those rights to trump the inconvenience to the parties in again engaging in a fresh change of assessment process with the CSA.

11. The Tribunal therefore finds no ground to depart from the existing administrative assessment.

12. As this is the same conclusion as the objections officer, the decision under review will be affirmed.

DECISION

The decision under review is affirmed.