Whiteford and Whiteford (Child support)

[2021] AATA 5195

Whiteford and Whiteford (Child support) [2021] AATA 5195 (23 November 2021)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2021/SC021685

APPLICANT:  Mr Whiteford

OTHER PARTIES:  Child Support Registrar

Ms Whiteford

TRIBUNAL:Member Y Webb

DECISION DATE:  23 November 2021

DECISION:

The Tribunal sets aside the decision under review and, in substitution, decides that:

• for the period 1 November 2020 to 16 March 2021 Mr Whiteford’s adjusted taxable income is varied to $99,338 per annum; and

• for the period 1 November 2020 to 30 April 2022 the annual rate of child support payable by Mr Whiteford is increased by $2,697 per annum in relation to the youngest child’s orthodontic treatment.

CATCHWORDS

CHILD SUPPORT – departure determination – whether there was a ground for departure - costs of orthodontic costs for the child – income, property and financial resources of the liable parent – a ground for departure established – decision to depart – 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 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

1. This review relates to the issue of child support regarding two of the three children of Mr Whiteford and Ms Whiteford (‘the children’). The children for whom a child support assessment is in place are aged 17 and 14. According to Services Australia’s (Child Support Agency) records the children are currently in the 100% care of Ms Whiteford and the 0% care of Mr Whiteford.

2. The child support case was registered from 6 July 2017. Until very recently the parents have had a “private collect” arrangement.  However, from 8 July 2021 child support has been collectable by the Child Support Agency.

3. On 9 October 2020, Ms Whiteford applied to the Child Support Agency for a change to the administrative formula assessment on the basis of Reason 2.  Specifically, Ms Whiteford stated that she was seeking that Mr Whiteford contribute 50% to the costs associated with the youngest child’s orthodontic treatment[1]. 

   [1] C1–page 92

4. At the time of the application for a change to the assessment the formula assessment calculated that for the period 1 August 2020 to 31 October 2021 Mr Whiteford was assessed to pay an annual rate of child support of $15,884 based on his 2019/2020 adjusted taxable income of $93,784 and Ms Whiteford’s 2019/2020 adjusted taxable income of $143,898.

5. On 21 January 2021 a Child Support Agency officer decided that Reason 2 had been established. The officer decided that it would be just and equitable to increase Mr Whiteford’s adjusted taxable income to $101,700 for the period 3 November 2020 until 31 October 2021. In addition, the annual rate payable by Mr Whiteford was increased by $3,021 for the period 1 December 2020 to 5 April 2022 in relation to the orthodontic treatment for the youngest child.

6. On 17 February 2021, Mr Whiteford objected to that decision.

7. On 25 May 2021, an objections officer partly allowed Mr Whiteford’s objection. The objections officer decided to set aside the original decision and replace it with the following decision:

   ·For the period 3 November 2020 to 16 March 2021 Mr Whiteford’s adjusted taxable income is set at $101,240;

   ·For the period 1 December 2020 to 31 March 2022 the annual rate payable by Mr Whiteford is increased by $3,034 (in recognition of his share of the (youngest child’s) orthodontic costs).

8. On 7 June 2021 Mr Whiteford requested review by the Administrative Appeals Tribunal (‘the Tribunal’).

9. A telephone directions hearing was conducted with both parents on 21 September 2021.

10. Both parents attended the hearing on 11 November 2021 by way of a conference telephone hearing.  Mr Whiteford gave evidence on affirmation and Ms Whiteford gave sworn evidence.

11. The Tribunal deferred making a decision pending further information from Mr Whiteford regarding a possible [Country 1] military pension.

12. Mr Whiteford provided documentation to which Ms Whiteford responded.

13. On 23 November 2021 the Tribunal made its decision.

ISSUES

1. The central issues for the Tribunal to determine in this case are:

   · Whether one or more of the grounds for departure referred to in subsection 117(2) of the Child Support (Assessment) Act 1989 (the Assessment Act) exists; and if so,

   ·      Whether it would be:

   (a)  just and equitable as regards the child, the liable parent, and the carer entitled to child support; and

   (b)  otherwise proper

   to make a particular determination to depart from the administrative assessment of child support.

DOCUMENTARY EVIDENCE

1. The Tribunal had before it a number of documents, organised into exhibits as set out in the attached Schedule. The Tribunal had regard to all of the relevant evidence and refers specifically to particular items in this Statement of Reasons.

CONSIDERATION

The child support law

1. The legislation relevant to this review is contained in the Assessment Act and the Child Support (Registration and Collection) Act 1988.

2. The rate of child support payable by the liable parent is usually based on an administrative formula assessment under Part 5 of the Assessment Act. This requires the application of a statutory formula which takes into account factors such as the number of children, the level of care provided and the income of each parent.

3. The liable parent or carer may apply to the Child Support Registrar for a determination to depart from the child support administrative assessment under Part 6A of the Assessment Act (section 98B). Section 98C provides that the Registrar may make a determination to depart from the formula assessment and establishes a three-step process as described in paragraph 14 above.

4. The grounds for departure from an administrative assessment of child support are those set out in subsection 117(2) of the Assessment Act. Each ground for a departure from the administrative formula is prefaced by the words ‘in the special circumstances of the case’. Therefore, when considering whether a ground exists in this case, the Tribunal must be satisfied that there are ‘special circumstances’ in the case. If satisfied that there are ‘special circumstances’ and 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 Assessment Act. Section 98S sets out a range of determinations that may be made under the departure provisions.

5. The phrase ‘special circumstances of the case’ is not defined in the Assessment Act. In the case of Gyselman and Gyselman (Gyselman),[2] the Full Court of the Family Court of Australia held that:

   Section 117(2) sets out the grounds for departure from administrative assessment. Each of those grounds is prefaced by the words “in the special circumstances of the case”.

   Whilst it is not possible to define with precision the meaning of that term, as a generality 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 court will not interfere with the administrative formula result in the ordinary run of cases.

   [2] (1992) FLC 92-279

6. Subsection 98C(3) of the Assessment Act provides that subsections 117(4) to (9) of the Assessment Act apply to the Registrar and therefore the Tribunal must consider those provisions when deciding whether, if a ground is established, it would be just and equitable or otherwise proper to make the departure decision.

Does a ground or grounds exist to depart from the administrative formula assessment?

1. In considering whether a ground or grounds exist which justify departing from the administrative formula assessment, the Tribunal considered the extensive information contained within the documentation provided by the Child Support Agency as well as the additional documentation provided by the parents.

Reason 2

1. In relation to Ms Whiteford’s claim that the costs of maintaining the youngest child were significantly affected by her special needs, the legislative test is detailed in subparagraph 117(2)(b)(ia). The test is whether:

   in the special circumstances of the case, the costs of maintaining the child are significantly affected because of special needs of the child;

2. This reason is informally referred to as Reason 2. The child support assessment in its usual form is intended to cover the ‘normal’ costs of raising a child. However, it does not cover costs which are out of the ordinary or ‘special’ which may be the case where the child has a particular medical or dental need. Lightfoot and Hampson[3] established the principle that if these costs are necessary or desirable for the child’s welfare and they impact significantly on the costs of raising the child, a change to the formula assessment may be required.

   [3] (1996) FLC 92-663

3. Ms Whiteford, in her application for a change to the assessment – and citing Reason 2 – stated that the youngest child requires braces and that the cost is not affordable without assistance from Mr Whiteford.  She provided a letter from [Agency 1] which advised that the child had ‘overjet’ which ‘puts (the child) at higher risk of trauma and erosion of the front teeth and which without correction will lead to further dental issues as she ages.  The mandibular midline also requires treatment to prevent issues in later adulthood that stem from poor jaw alignment… The treatment recommended while (it) has an aesthetically pleasing result is also necessitated from a medical standpoint in terms of assisting to prevent issues regarding (the child’s) future functioning from an oral/maxilla point of view’.[4]

   [4] C1–page 205

4. Ms Whiteford provided invoices/quotations from [Agency 1].[5] The invoice of 8 October 2020 related to a consultation, photographs and a digital scan with a total cost of $275.  Ms Whiteford provided a receipt showing that she had paid this amount on 8 October 2020.  The quotations related to two options for orthodontic treatment: one using [specified] aligners at a total cost of $8,590 and one using fixed appliances at a total cost of $8,090.  Ms Whiteford advised – and the Tribunal accepts – that she arranged for the child to have the less expensive fixed appliances at a total cost of $8,090.  Ms Whiteford also provided an invoice/receipt confirming the total fee of $8,090 and also confirming payment of the first instalment of $2,240 on 19 October 2020.[6]

   [5] C1–pages 99–101

   [6] C1–page 118

5. Mr Whiteford told the Tribunal that he was not contesting that the youngest child required braces.  He accepted that the orthodontic treatment was necessary.  His issue is that he was not consulted and did not have an opportunity to be part of the decision-making process.  He stated that he needed time to plan for the additional costs.  He also did not think it was reasonable that Ms Whiteford went ahead with the orthodontic treatment without waiting for the private health insurer’s waiting period to expire.  Mr Whiteford stated that he thinks it would be fair if he paid 25% of the costs.

6. Ms Whiteford responded that she took out private health insurance in September 2020 and she was required to wait until October 2021 to claim orthodontic treatment.  She stated that in October 2020 (when the orthodontic treatment started) she had recently received a refund from her income tax return so she went ahead with the treatment at a time when she had the money for the first instalment and she was earning a higher income.  She believes that it is fair that Mr Whiteford pays 50%.  In relation to the claim by Mr Whiteford that she did not consult with him about the treatment Ms Whiteford stated that when she has attempted to communicate with Mr Whiteford about various matters he does not respond.  She stated that he refuses to  communicate with her; that she has tried to consult with him but that he does not respond.

7. The Tribunal is satisfied that the orthodontic treatment was reasonably necessary for the youngest child.  The letter from [Agency 1] detailed the issues with the child’s teeth and the risks and detrimental outcomes if the orthodontic treatment was not pursued.  Orthodontic treatment is not factored into the child support formula as an ordinary expense.  The Tribunal is therefore satisfied that the orthodontic treatment is a special circumstance.  Hence the Tribunal finds that the youngest child has special needs that are out of the ordinary.  In relation to the issue of whether the costs of the orthodontic treatment significantly affect the costs of maintaining the youngest child the Tribunal is satisfied that the $8,090 cost is very significant and that it affects the costs of maintaining her.  The Tribunal accepts as reasonable Ms Whiteford’s reasons for commencing the orthodontic treatment prior to the expiry of the waiting period of her private health fund.  Hence, the Tribunal finds that Reason 2 has been established.

Would it be just and equitable to depart from the administrative assessment?

1. Section 3 of the Assessment Act states that parents have the primary duty to maintain their children and that this duty takes priority over all commitments of the parents other than commitments necessary to enable the parent to support themselves or any other child or another person that the parent has a legal duty to maintain. The Assessment Act contemplates not only that both parents contribute to the support of their children but that the parents’ capacity to contribute must be taken into account.

2. Having found a reason for departure, the Tribunal must consider whether it is just and equitable to depart from the administrative formula assessment. The Tribunal must have regard to a range of matters set out in subsection 117(4) of the Assessment Act. This requires an assessment of the duty of the parents towards their children; the needs of the children; any income, earning capacity and financial resources of the children; the income, earning capacity and financial resources of the parents; self-support commitments; and an evaluation of hardship on the parties (and/or the children) if the Tribunal increased or decreased the amount of child support payable.

3. In considering these issues, the Full Family Court, in the case of Gyselman, stated that:

   However, some of the matters listed in sub-section [117](4) may overlap with matters already considered under sub-section (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).

4. Of particular relevance in this matter are the following aspects of subsection 117(4) of the Assessment Act.

The proper needs of the children

1. In determining the proper needs of the children, subsection 117(6) of the Assessment Act requires the Tribunal to have regard to the manner in which the parents expected the children to be cared for, educated and trained as well as a consideration of any special needs of the children.

2. The Tribunal has found that the youngest child has special needs in that she is undergoing orthodontic treatment.  The Tribunal has found that the costs of that treatment are $8,090. Ms Whiteford also requested that the costs of photographs and scans in the initial consultation (a sum of $180) be added to the costs of the treatment.  However, the Tribunal considers that initial scans and photographs are separate from the orthodontic treatment and that they were exploratory and preliminary in nature.

3. The parents did not raise any other issues in relation to the proper needs of the children although Ms Whiteford referred to the educational costs such as laptops which she had purchased for the children.  Ms Whiteford stated that she had sent a message to Mr Whiteford seeking a contribution to the children’s laptop costs but she had not received a response to her request which she sent in February 2021.  The Tribunal accepts that there are significant costs associated with the children’s education but items such as laptops would not be considered ‘special’ and therefore would not result in an increase in the amount of child support payable.

The income, property and financial resources of the children

1. Ms Whiteford advised that the children have no significant income, property and financial resources of their own.  Mr Whiteford did not dispute her statements in that regard.  Ms Whiteford stated that both of the children have casual part-time jobs but they are arranged around the children’s full-time schooling.

2. In relation to the children working on a casual basis the Tribunal has had regard to the reasoning of the Full Court of the Family Court in Mee and Ferguson[7] which stated:

   it would, in ordinary circumstances be unreasonable to expect that pocket money and other small sources of income derived from paper rounds and casual work after school and the like ought to be taken into account in diminishing the financial responsibility of the parents for the needs of that child.

   [7] (1986) FLC 91-716; [1986] FamCA 3

3. The Tribunal adopts that reasoning in this case and finds that the children are wholly dependent on their parents for their financial support.

Mr Whiteford’s income, property, financial resources, expenses and earning capacity

1. Mr Whiteford provided a Statement of Financial Circumstances which showed that his occupation is [an occupation 1].  He estimated his current income from that occupation to be approximately $94,000 per annum.  Mr Whiteford provided payslips and the most recent – from September 2021 – showed that in that fortnight Mr Whiteford earned $3,349.25 (gross).[8]  This was approximately consistent with his earnings in other recent fortnights.[9]  The Tribunal accepts that his earnings fluctuate due to shift and overtime payments.  As at 12 September 2021 Mr Whiteford had earned $20,887.98 (gross) in the year to date according to his payslip.  This annualises to $103,028 per annum but the Tribunal accepts that this is necessarily an approximate calculation of Mr Whiteford’s annual gross earnings given that it was calculated on only 74 days of the 2021/2022 financial year.  

   [8] A31

   [9] A29–A30

2. Mr Whiteford also provided a copy of his income tax return for the 2020/2021 financial year.[10]  This showed that his taxable income was $74,828.  His reportable employer superannuation contributions were $3,900 and he had a net investment loss of $228.  Both of these items were added back resulting in an adjusted taxable income of $78,956 taking   into account that Mr Whiteford claimed deductions of $8,251. The Tribunal is satisfied that these figures correctly reflect Mr Whiteford’s earnings from his [occupation 1] position in the 2020/2021 financial year.

   [10] A16–A28

3. In addition Mr Whiteford was, since 24 January 2019, working for [Employer 1] on a part-time basis.  In response to a request from the Child Support Agency [Employer 1] provided details of Mr Whiteford’s [employment there].[11]  It confirmed that in the period 24 January 2019 to 29 October 2020 Mr Whiteford earned $17,979 (gross).   [Employer 1] advised that Mr Whiteford received $23.738333 per hour and that on average he had worked nine hours per fortnight over a two-year period.  This equates to an annual income of approximately $5,554. Mr Whiteford advised that he ceased his [Employer 1] – with his last day of work being 16 March 2021 – and now is [on inactive status] for which he receives no payments (other than $6 per fortnight which relates to his [previous work]).  He advised that he now has no [Employer 1] commitments other than in [emergency] [situations].  Mr Whiteford’s statements appear to be consistent with his [application to resign there] which confirmed that Mr Whiteford’s last day of work for [Employer 1] was 16 March 2021.[12]  Mr Whiteford also provided to the Tribunal a copy of text exchanges between himself and [Employer 1] personnel which included a text regarding Mr Whiteford transferring to inactive [status] and the associated paperwork.[13]  The Tribunal accepts that from 17 March 2021 Mr Whiteford was no longer receiving any payments from the [Employer 1] (with the exception of the $6 per fortnight which the Tribunal finds is too insignificant to consider).

   [11] C1–pages 151–153

   [12] C1–page 335

   [13] C1–page 331

1. In relation to the issue of whether the [Employer 1] payments (prior to 17 March 2021) should be included as income to Mr Whiteford the Tribunal accepts that it is tax exempt income.  However, in circumstances where a parent receives tax exempt income of this nature the Tribunal should consider whether the tax exempt income would have a significant impact on the level of child support payable if it was included in the administrative assessment. The Tribunal finds that Mr Whiteford’s tax exempt income of approximately $5,554 per annum is significant and it should be taken into account as part of the just and equitable considerations in this case. 

2. Ms Whiteford also contended that Mr Whiteford is receiving a [Country 1] military pension.  She stated that when she and Mr Whiteford were married he received that military pension for 15 years.  Mr Whiteford stated that he no longer received it and that it had ceased years ago.  He stated that it would only remain payable if he had at least 20 years of military service which he did not.  The Tribunal requested that Mr Whiteford provide evidence that the military pension from [Country 1] had ceased.  He provided (Australian) bank statements which showed that no military pension was being deposited into his account.  Ms Whiteford responded that the military pension was being deposited into [a Country 1] bank account.   The Tribunal’s jurisdiction does not extend to obtaining this type of information from overseas organisations.  The Child Support Agency confirmed that it conducted searches within its powers relating to possible overseas income but these searches did not yield any information. The Tribunal does not consider that it has sufficient compelling evidence to find that Mr Whiteford is receiving a [Country 1] military pension because no evidence was provided by either party verifying its existence.

3. Hence the Tribunal finds that Mr Whiteford’s current income (since 17 March 2021) comprises only his salary from his work as [an occupation 1].  Prior to 17 March 2021 Mr Whiteford’s 2019/2020 adjusted taxable income of $93,784 was being used in the child support assessment.  However, the Tribunal has found that additionally, in that period, Mr Whiteford was also receiving an annual payment of $5,554 from [Employer 1] for his [specified work].  The Tribunal is satisfied that it would be just and equitable to add this amount to Mr Whiteford’s income being used in the child support assessment at the time ($93,784 + $5,554): a total of $99,338.

4. In relation to his expenses these are relatively modest.  He claimed household expenses of approximately $935 per week with rent of $750 per week being the only high-cost item.  He pays income tax of approximately $25,000 per annum.  He did not refer to any debts.  He declared modest savings of approximately $3,000.

5. In relation to his earning capacity Mr Whiteford has been working full-time as [an occupation 1] for more than 16 years.  He has not changed his occupation or deliberately reduced his hours of work.  Hence, the Tribunal finds that earning capacity is not an issue in this case.

Ms Whiteford’s income, property, financial resources, expenses and earning capacity

1. Ms Whiteford is [an occupation 2] who works for [Employer 2].

2. In the 2019/2020 financial year her adjusted taxable income was determined to be $143,898 per annum and in 2020/2021 to be $137,809 per annum.  Ms Whiteford provided payslips which verified that she has consistently worked large amounts of overtime as her current weekly base rate of pay is $1,767.70; an annual amount of $91,920 ($1,767.70 X 52).

3. The Tribunal is satisfied that Ms Whiteford’s income is accurately reflected in the child support assessment as all of her income is derived from her employment.

4. Ms Whiteford does not own any real estate and has minimal savings of less than $200.  She has a car loan with a balance outstanding of approximately $45,000.  Her household expenses total approximately $1,418 per week ($73,762 per annum).[14]  She pays income tax of approximately $1,100 per week (approximately $57,000 per annum).  In addition Ms Whiteford pays for private health insurance at $68 per week.  She stated that she relies on [a specified payment service] rather than using credit cards.

   [14] B1–B7

5. In relation to her earning capacity Ms Whiteford has been working full-time as [an occupation 2] for more than eight years.  There is no issue regarding her earning capacity and the Tribunal finds that she is exercising her full earning capacity.

Necessary commitments to support themselves or others

1. The Tribunal notes that the Family Court of Australia has been prescriptive about the types of expenses that can be considered ‘necessary’ expenses and that there are only a few expenses that can be considered to take priority over a parent’s primary duty to support their children.  This includes expenses such as a reasonable amount for payment of rent or mortgage, food, utilities and some loans.  In Mee and Ferguson[15] the Full Court of the Family Court stated at paragraph 128:

   Some of the items obviously have to be taken into account before maintenance is arrived at; for example, the cost of reasonable transport, food and clothing, and other like expenses are necessary to the continued reasonable existence of a parent, and, barring legislative direction to the contrary, it would not accord with the understanding in this jurisdiction to suggest that those items should be put out of consideration before child maintenance is determined. On the other hand there is no doubt that one of the primary responsibilities of a parent is the continued support of children to the extent to which the parent continues to be able to do so and that may in appropriate circumstance mean making financial sacrifices or cutting one’s cloth to meet that commitment during the years when it applies.

   [15] [1986] FamCA3.

2. Neither Ms Whiteford nor Mr Whiteford raised any issues in relation to self-support and the Tribunal finds accordingly.

3. Ms Whiteford stated that she continues to some extent to financially support their third child who is 15 years old and is not in either parent’s care.  The Child Support Agency records show that the child has not been in the care of either parent since 16 January 2020[16] and that the child has been placed in the care of the Minister.  While the Tribunal accepts that Ms Whiteford feels a moral obligation to financially support the child to some extent, the Tribunal is not persuaded that Ms Whiteford has a legal obligation to do so and therefore her contribution to the costs of this child cannot be taken into account in this decision.

   [16] C1–pages 55–65

Any hardship to either parent or the children by the making of, or refusal to make, an order

1. Mr Whiteford emphasised that whatever decision the Tribunal makes, it needs to be fair.  He stated that if the Tribunal affirmed the objections officer’s decision or if it made a decision which was less favourable to him than the objections officer’s decision he ‘would have to deal with it’.

2. Ms Whiteford stated that she is hoping that the objections officer’s decision stands.  She stated that if the decision was less favourable to her she would have to cut back on her expenses even further.  She stated that she would have to do more overtime even though she would prefer to spend time with the children.

Proposed determination

1. The Tribunal has carefully considered the evidence provided and the statements and submissions of both parents.

2. The Tribunal is satisfied that Mr Whiteford has scope within his finances to contribute to the costs of the youngest child’s orthodontic treatment.  While the Tribunal accepts that Mr Whiteford feels strongly that he should have been consulted about the orthodontic treatment and that he should have participated in the decision making surrounding it, it also accepts Ms Whiteford’s statements that it is difficult to obtain a response when she attempts to contact Mr Whiteford.  Notwithstanding these points of view, the Tribunal’s task is to decide whether the child has special needs that are out of the ordinary and whether the costs of maintaining the child are higher because of the costs related to her special needs. The Tribunal has found that these tests have been met and that Mr Whiteford has the capacity to contribute to these costs. In the Tribunal’s view there is no compelling reason why Mr Whiteford should not equally share these costs with Ms Whiteford.

3. The Tribunal has found that the costs of the orthodontic treatment are $8,090 and therefore it is just and equitable that the cost to each parent is $4,045.  The Tribunal accepts that it would be fair to spread the costs over a similar period to the orthodontic payment plan.  According to the charges detailed in the letter from [Agency 1] of 8 October 2020,[17] the costs of the orthodontic treatment are structured so that after the initial payment of $2,240 for first banding the balance is payable over the next 18 months.  Hence, the Tribunal proposes to spread the cost over the period 1 November 2020 to 30 April 2022.  Annualised this means that the annual rate of child support payable by Mr Whiteford will be increased by $2,697 per annum for the period 1 November 2020 to 30 April 2022. (This amount was calculated by dividing $4,045 by 18 months = $224.72 per month and multiplied by 12 months = $2,697 per annum (rounded).) This annual amount differs slightly from the amount calculated by the objections officer but this is because the Tribunal has calculated the orthodontic costs over a longer period (18 months rather than 16 months).

   [17] C1–page 101

4. The Tribunal also proposes to vary Mr Whiteford’s adjusted taxable income to $99,338 per annum.  It is satisfied that it would be just and equitable to commence this variation from 1 November 2020 which is the beginning of the month following Ms Whiteford’s application for a change to the assessment.  The Tribunal considers that is a fair starting point for a change to the assessment.  Mr Whiteford was advised of Ms Whiteford’s application by a letter from the Child Support Agency on 2 November 2020 and a telephone discussion on 3 November 2020 so from early November 2020 Mr Whiteford was aware that a change to the assessment was being requested by Ms Whiteford and the reasons for her application.  The variation to Mr Whiteford’s adjusted taxable income to $99,338 per annum uses Mr Whiteford’s 2019/2020 adjusted taxable income of $93,784 per annum (which was being used to calculate the child support assessment at that time) plus $5,554 which at that time Mr Whiteford was receiving from [Employer 1].  The Tribunal proposes to vary his income to $99,338 until 16 March 2021 when the [Employer 1] payments ceased.  From 17 March 2021 Mr Whiteford’s adjusted taxable income will revert to the formula assessment using both parents’ incomes with Mr Whiteford continuing to pay for his share of the orthodontic costs until 30 April 2022.

5. The Tribunal acknowledges that the variation to Mr Whiteford’s income to $99,338 per annum for the period 1 November 2020 to 16 March 2021 differs from the adjusted taxable income of $101,240 as varied by the objections officer but the objections officer’s income figure for Mr Whiteford was based on a prediction only of his income for the 2020/2021 financial year (plus $5,554).  In the Tribunal’s view it is appropriate to use Mr Whiteford’s 2019/2020 adjusted taxable income in the period 1 November 2020 to 16 March 2021 as that is the income which would apply under the formula assessment in the normal course. 

6. This proposed determination will mean that in the period 1 November 2020 to 16 March 2021 Mr Whiteford’s annual rate of child support payable will be approximately $19,639 (this takes into account the variation to his income to $99,338 per annum and an annual amount of $2,697 for the orthodontic treatment).  From 17 March 2021 Mr Whiteford’s annual rate of child support payable will be approximately $18,580 per annum (this is based on both parents’ 2019/2020 adjusted taxable incomes without any [Employer 1] payments plus an annual amount of $2,697 for the orthodontic treatment).  From 1 August 2021 to 30 April 2022 Mr Whiteford’s annual rate of child support payable will be approximately $15,871 per annum (this is based on both parents’ 2020/2021 adjusted taxable incomes plus $2,697 for the orthodontic treatment).  Please note that these figures are approximate only as 2021/2022 incomes are not yet known and these may change the actual amount of child support payable.

7. The Tribunal considers this proposed determination is fair, just and equitable and that it balances the needs and financial capacities of both parents.

Is it otherwise proper to depart from the administrative assessment?

1. The final step for the Tribunal to undertake is to determine whether it is ‘otherwise proper’ to make the particular determination 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.

2. The Tribunal must consider whether the proposed departure is ‘proper’ within the context of the public interest and welfare expenditure by the community (see Gyselman). It is a prime objective of the child support legislation that parents should be obliged to support their own children to the extent of their real capacity, and that that obligation should not be unnecessarily left to the public welfare system when the parents themselves have the capacity to maintain their children.

3. The Tribunal has reached the conclusion that Ms Whiteford needs assistance with the costs of the orthodontic treatment for the youngest child and that Mr Whiteford has the capacity to contribute to those costs. 

4. Paragraph 117(5)(b) of the Assessment Act directs the Tribunal to have regard to the effect that the making of the order would have upon the rate of entitlement to any income-tested pension, allowance or benefit.

5. Ms Whiteford does not receive family tax benefit for the children. This means that there will be no change in the extent to which the community supports the children.  In the circumstances of this case, that is a proper outcome.

6. The Tribunal is satisfied that the proposed determination is ‘otherwise proper’ and that the determination should be made.

DECISION

The Tribunal sets aside the decision under review and, in substitution, decides that:

• for the period 1 November 2020 to 16 March 2021 Mr Whiteford’s adjusted taxable income is varied to $99,338 per annum; and

• for the period 1 November 2020 to 30 April 2022 the annual rate of child support payable by Mr Whiteford is increased by $2,697 per annum in relation to the youngest child’s orthodontic treatment.

SCHEDULE

List of Exhibits

1. Services Australia – Child Support Agency marked as C exhibits:

   ·     CSA’s large bundle of 400 pages marked as exhibit – C1

   ·     CSA’s smaller bundle pages 401–462 marked as exhibit – C2

2. Mr Whiteford has provided the following documents marked as A exhibits:

   ·     A1–A11                Statement of Financial Circumstances  

   ·     A12–A14              Cover sheets

   ·     A15  Written submission

   ·     A16–A28              Income tax return 2020/2021

   ·     A29–A31              Payslips

   ·     A32  Cover email

   ·     A33-A44               [Bank] statements

3. Ms Whiteford has provided the following documents marked as B exhibits:

·     B1–B7                Statement of Financial Circumstances

·     B8–B9                Cover sheet    

·     B10–B12              Written submission

·     B13–B18               Payslips

·     B19–B21              Income tax return 2020/2021

·     B22-B23               Written submission