Westwell and Baines (Child support)

[2018] AATA 1727

Westwell and Baines (Child support) [2018] AATA 1727 (18 April 2018)

DIVISION:  Social Services & Child Support Division

REVIEW NUMBER:  2018/MC013633

APPLICANT:  Mr Westwell

OTHER PARTIES:  Child Support Registrar

Ms Baines

TRIBUNAL:  Ms Hamilton-Noy, Member

DECISION DATE:  18 April 2018

DECISION:

The tribunal affirms the decision under review.

CATCHWORDS

Child support – Particulars of the administrative assessment – Estimate of income election – Whether estimated income is likely to be less than the actual income - Estimate should be refused - Decision under review affirmed

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

REASONS FOR DECISION

BACKGROUND

1. This application relates to a decision by the Department of Human Services – Child Support (the Department) to refuse to accept an estimate of income provided by Mr Westwell in June 2017.

2. Mr Westwell is the father of [Child 1] and is the payer in this matter.  Ms Baines is the grandmother of [Child 1] and is the payee.  A child support case has been registered with the Department since 7 June 2017 and child support has been collectable by the Department since that time.

3. On 29 June 2017 Mr Westwell contacted the Department and provided an estimate of income for the 2017/2018 financial year.

4. On 29 June 2017 an employee of the Department made a decision to accept the estimate of income of $30,086 for the period 1 July 2017 to 30 June 2018.

5. On 5 September 2017 Ms Baines lodged an objection to this decision and on 22 September 2017 an employee of the Department granted an extension of time in which to lodge the objection.

6. On 14 February 2018 an objections officer of the Department allowed the objection and made a decision to refuse to accept the estimate of income.

7. On 2 March 2018 Mr Westwell made application to the Administrative Appeals Tribunal (the tribunal) for an independent review of the Department’s decision.  The hearing was held on 18 April 2018, on which date both of the parties spoke to the tribunal by conference telephone and gave evidence on affirmation.  The tribunal was assisted in this matter by documents provided by the Department (1 to 252).  A copy of the documents was provided to the parties prior to the hearing and they both confirmed receipt of the documents with the tribunal. 

CONSIDERATION

1. The statutory provisions relevant to this review are contained in the Child Support (Assessment) Act 1989 (the Assessment Act) and the Child Support (Registration and Collection) Act 1988.  The legal issue for the tribunal in this case is whether the Department’s decision to refuse to accept Mr Westwell’s estimate of income was legally correct.

2. Section 60 of the Assessment Act provides for a parent to elect their estimate of their adjusted taxable income for a year of income, either before a year of income starts or during a year of income, in circumstances where they are to be assessed in respect of the costs of a child for a day in a child support period; the amount that would apply is not more than 85% of their total adjusted taxable income for the last relevant year of income; and the Registrar is satisfied that the declared amount is correct.

3. Section 63AA of the Assessment Act provides that the Registrar may refuse to accept an income election where they are satisfied that the amount worked out is less than the amount the Registrar considers is likely to be the parent’s actual adjusted taxable income for the year of income to which the income election relates (subsection 63AA(1) of the Assessment Act).

4. The tribunal accepted from the evidence before it that Mr Westwell contacted the Department on 29 June 2017 to provide an estimate of income of $577 per week.  Based on this estimate, the Department calculated an annualised income of $30,086 for the period 1 July 2017 to 30 June 2018.  The tribunal accepted that this amount was less than 85% of Mr Westwell’s 2015/2016 adjusted taxable income of $113,109.

5. However, the tribunal must also be satisfied that the amount declared to the Department was correct.  The tribunal heard from the applicant that he based this estimate of $577 per week on his knowledge that he would not be employed for the full year and this is what he would be earning, based on $30,000 annual income. 

6. At the time of the hearing, the tribunal had before it information obtained by the Department about Mr Westwell’s earnings.  The Department stated that it had issued a notice to the employer that Mr Westwell reported he was working for at the time he lodged his estimate, and the employer advised that Mr Westwell had ceased employment in March 2017.  The Department then conducted searches of Mr Westwell’s Australian Taxation Office records and determined that he was working for another employer.  The Department obtained information from this employer that Mr Westwell’s gross fortnightly income from 1 July 2017 had been:

   Pay date 12 July 2017  $2,389.85 gross

   Pay date 26 July 2017  $1,839.85 plus $500 reportable superannuation

   Pay date 9 August 2017                  $2,218.85 plus $500 reportable superannuation

   Pay date 23 August 2017                $2,029.85 plus $500 reportable superannuation

   Pay date 6 September 2017            $2,029.85 plus $500 reportable superannuation

   Pay date 20 September 2017          $2,029.85 plus $500 reportable superannuation

   Pay date 4 October 2017                $2,659.70 plus $500 reportable superannuation

7. The tribunal took Mr Westwell to this information during the hearing and he agreed with the tribunal’s observation that he was earning in excess of the estimated amount per week at the time he lodged the estimate with the Department.  The tribunal observed that, based on his actual earnings at the time, his income was likely to be higher than what he had estimated to the Department.  Mr Westwell stated that up to October 2017 that was correct.  He noted, however, that his eventual taxable income for 2017/2018 would be in line with the estimate he provided to the Department.

8. Ms Baines responded to the evidence before the tribunal by stating that she agreed with what the Department had decided.

9. The tribunal noted that both parties were focused at the hearing on Mr Westwell’s earning capacity. The tribunal noted that the term earning capacity is a term defined in the Assessment Act and is a decision available to the Department separate to the matters in this application. Questions of Mr Westwell’s earning capacity were not before the tribunal in this matter. Rather, the tribunal is only able to determine whether, as at 29 June 2017, Mr Westwell’s estimate of income provided to the Department was 85% or less than his total adjusted taxable income for the last relevant year of income, and whether the declared amount was correct.

10. The tribunal found from the evidence before it that, as of 29 June 2017, Mr Westwell represented to the Department that he was earning $577 per week. Subsequent investigations by the Department indicated that this was not correct: Mr Westwell was working for an employer other than that named to the Department, who he had ceased work with in March 2017, and was earning between $1,839 and $2,659 per fortnight, plus reportable superannuation amounts, from the new employer. The tribunal found from this evidence that, at the time the estimate was provided to the Department, the amount declared to the Department was not correct. The requirements set out in section 60 of the Assessment Act for the Registrar to accept the application were not met. The Department’s decision to refuse to accept the estimate of income is legally correct and is affirmed.

DECISION

The tribunal affirms the decision under review.