Winslow and Garrod (Child support)

[2020] AATA 4303

Winslow and Garrod (Child support) [2020] AATA 4303 (2 September 2020)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2019/SC017387 & SC017517

APPLICANT:  Mr Winslow

OTHER PARTIES:  Child Support Registrar

Ms Garrod

TRIBUNAL:Member H Schuster

DECISION DATE:  2 September 2020

DECISIONS:

The decisions under review are affirmed.

CATCHWORDS

CHILD SUPPORT – percentage of care – whether there was a change to the likely pattern of care – existing percentage of care determinations revoked and new determinations made – decision under review set affirmed

CHILD SUPPORT – non-agency payment – payment made while no enforceable maintenance liability – intention of both parents – 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. Mr Winslow has sought review of two objection decisions made by the Department of Human Services - Child Support Registrar (the Registrar) on 25 August 2019:

   a)The Registrar disallowed an objection to a decision made on 15 March 2016 to accept that the care for [Child 1] was 62% to Ms Garrod and 38% to Mr Winslow from 12 January 2016. This decision is the subject of review number 2019/SC017387.

   b)The Registrar also disallowed an objection to a decision made on 25 June 2019 to refuse to credit a number of non-agency payments against Mr Winslow’s child support liability. This decision is the subject of review number 2019/SC017517.

2. The hearing was conducted on 24 January 2020 with both parties present by telephone. The Tribunal also considered the documents prepared by the Registrar in relation to each matter: Folios 1-425 for the care percentage decision 2019/SC017387 and folios 1-86 for review number 2019/SC017517 in relation to the non-agency payments.

Care percentage decision (SC017387)

Brief chronology

1. Mr Winslow and Ms Garrod are the parents of [Child 1] who was born [in] November 2009. The child support case, under which Mr Winslow was liable to pay child support to Ms Garrod, commenced on 26 August 2010. From 6 September 2010 child support was based on care percentages for [Child 1] of 72% to Ms Garrod and 28% to Mr Winslow. Child support was at that time privately collected.

2. In 2016 Mr Winslow notified the Registrar that his care had increased and that he would have 166 nights of care for [Child 1] over a 12 month period (about 45% care). Ms Garrod disputed that her care had reduced so significantly.

3. On 15 March 2016 the Registrar accepted that Mr Winslow’s care for [Child 1] had increased to 38% and Ms Garrod’s care had reduced to 62%. Notice of the decision was sent to both parties which noted that any objection should be made within 28 days. All assessment notices thereafter stated that the child support assessment was based on Mr Winslow having 38% care. Neither party objected to that decision until 2019.

4. On 2 May 2019 Ms Garrod asked the Registrar to commence collecting child support.

5. On 24 May 2019 the Registrar informed Mr Winslow in writing of the requirement to pay child support directly to the agency with effect from 2 May 2019 at an annual rate of $9,685 which was based on his having 38% care of [Child 1].

6. On 19 June 2019 Mr Winslow advised the Registrar that there had been a change of care on 14 June 2019 and that he had had 100% care of [Child 1] since that date. Eventually, on 26 September 2019 a new care percentage decision was made that Mr Winslow had had 100% care of [Child 1] from 14 June 2019 to 13 July 2019, and that from 14 July 2019 his care was 42%. There was no objection sought in relation to that determination and the decision of 26 September 2019 is thus not before the Tribunal in this case.

7. On 1 July 2019, while the new care decision was pending, Mr Winslow also lodged an objection to the decision made on 15 March 2016, stating that he had had increased care of [Child 1] from about 2017. He submitted to the Registrar that he had 51% care in 2018 and, 50% in 2019.  

8. On 26 August 2019 the objection officer disallowed Mr Winslow’s objection as there was not sufficient evidence that Mr Winslow’s actual care for [Child 1] in 2016 was greater than the 38% determined at that time. Mr Winslow applied to the Administrative Appeals Tribunal (the Tribunal) for a review of that decision on 11 September 2019.

Issues

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 Registration and Collection Act).

2. The issues which arise in this case are:

   ·      Whether Mr Winslow’s actual care of [Child 1] in January to March 2016 was greater than 38% and,

   ·      if so, whether a care percentage determination may be made with effect from a date prior to 1 July 2019, the date on which Mr Winslow objected to the decision.

Consideration

1. Child support is payable on the basis of a statutory formula which, among other things, requires the cost of [Child 1] to be taken into account. The cost percentage is determined under section 55C of the Assessment Act in relation to each party to the assessment based on the percentage of care provided for each child.

2. The Tribunal has to determine the “actual or likely pattern of care” during a care period: section 50 of the Assessment Act. The period over which this is to be determined must be appropriate to the circumstances. In the case of school-age children it is generally a 12 month period which takes into account the impact of school holiday periods.

3. Under section 54A of the Assessment Act, the actual care of a child that the person has may be worked out on the number of nights that the child was or should have been in the person’s care. The child cannot be in the care of more than one person for a particular night.

4. Pursuant to section 54F of the Assessment Act, an existing percentage of care must be revoked if it does not correspond with the actual care taking place and the parties’ cost percentages would change if they reflect the current care percentage. Alternatively, pursuant to section 54H of the Assessment Act, an existing percentage of care may be revoked if it does not correspond with the actual care taking place.

5. Objections to a care decision may be made under provisions set out in the Registration and Collection Act. Section 87AA of the Registration and Collection Act limits the date of effect relating to care percentage objection decisions that are allowed. If a person lodged an objection outside the relevant time limit, in this case 28 days, and the objection is allowed, then the date of effect of the objection decision is the day on which the objection is lodged. The only exception is where the Registrar is satisfied that there are special circumstances that prevented the person from lodging the objection within the 28 day period, further time to lodge the objection may be allowed.

6. The question in this case is whether the determination made in March 2016 that Mr Winslow had 38% care (equivalent to 142 nights per year) must be set aside on the basis that the actual care was greater than this.

7. The pattern of care in relation to [Child 1] was not based on court orders or a written parenting agreement but rather arose out of the particular circumstances of the child and parents over time. Neither party maintained a contemporaneous record of care. Spreadsheets provided by Mr Winslow setting out his care were provided but cover care from 2018, well after the decision made in 2016.

8. The original decision maker noted that Mr Winslow claimed he had 166 nights of care of [Child 1] per year which consisted of:

   ·      2 nights per week (Friday and Saturday) during school terms – 104 nights,

   ·      2 nights per week in school holidays – 24 nights,

   ·      A period of 14 nights while Ms Garrod was on holidays,

   ·      10 nights when Mr Winslow took [Child 1] on holidays and

   ·      1 Sunday each month – 12 nights.

9. Ms Garrod disagreed with Mr Winslow’s summary of care: she stated that in the past he had only had care of [Child 1] on Sunday night, but had more recently started providing care on Friday and Saturday nights as Ms Garrod had commenced to work weekends. She did not agree that he would have care every weekend as she did not work every weekend. She agreed, however, that Mr Winslow had care 2 nights per week during school holidays. Ms Garrod also agreed that Mr Winslow had care for a 14 day period when he took the child on holidays but denied that she would have 10 days of holidays per year without [Child 1]. She disagreed that Mr Winslow regularly had care of [Child 1] on Sunday nights. Significantly neither party mentioned that Mr Winslow was providing care on Tuesday nights during school terms.

10. Ultimately, the original decision maker was satisfied that Mr Winslow had care of [Child 1] for:  

    ·      2 nights each week of the year.

    ·      24 additional nights of care during the school holidays and

    ·      14 nights during holiday periods.

11. Having considered the contemporaneous evidence and file notes from 2016 the Tribunal agrees with the original decision maker’s final findings about the pattern of care and finds that the decision to determine Mr Winslow’s care at 38% was based on the evidence available at the time.

12. At the hearing of this matter Mr Winslow initially told the Tribunal that his care of [Child 1] increased in 2017 by an additional night each week during school term because he would take her to [Sport 1] on Tuesdays.  When the Tribunal noted that changes subsequent to the 2016 decision would have required notification of the Registrar and would require a fresh consideration of the care percentage, and thus be beyond the scope of this review, he demurred from his earlier statement and insisted there had been no change since 2016. He contended that in March 2016 he had care of [Child 1] about three nights a week.

13. Mr Winslow had evidence from third parties. A written statement by Ms [A], signed on 10 September 2019, states that by March 2016 [Child 1] stayed with her father generally from Friday night to Sunday afternoon and that from April 2016 Mr Winslow also had care on Tuesday nights when he took [Child 1] to [Sport 1] practise and the following morning took her to school. Ms [A] did not give evidence in person.

14. At the hearing Ms Garrod disputed that Mr Winslow’s additional care of [Child 1] commenced in 2016 but rather in 2017, after she commenced school. Mr Winslow conceded that the additional night of care may have commenced in 2017.

15. Mr Winslow also stated that in the 2015/16 holidays he had eight weeks of care of [Child 1], which was strongly denied by Ms Garrod and seems inconsistent with the evidence provided by either party in 2016. Ms Garrod agreed that [Child 1] went on a holiday with her father for 14 days in March 2016. She recalled that she took a Trip to [Country 1] at the same time. She stated that there was also a 7-night trip in August 2016 where Mr Winslow had care of [Child 1]. She disputed that her travelling overseas without [Child 1] was part of the general pattern: she had made two short trips overseas without her daughter as Mr Winslow did not release the child’s passport to her. Her subsequent holidays were taken in Australia and always with her daughter.

16. Ultimately, the Tribunal was not satisfied that either party’s recollection of the pattern of care that was in effect in 2016 was reliable due to the passage of time. Most significantly, all the evidence suggests that Mr Winslow’s care at some point increased when [Child 1] started [Sport 1], but also finds it more likely than not that this occurred in 2017 rather than 2016 and is thus a subsequent change not relevant to the correctness of the 2016 care decision.

17. In summary, the Tribunal had insufficient evidence that Mr Winslow’s pattern of care was substantially different than the pattern determined by the original decision maker in 2016. On the balance of the available evidence, the Tribunal finds that the decision that Mr Winslow had 38% care of [Child 1] from January 2016 was the correct and preferable decision based on the pattern of care at that time.

18. In addition, the Tribunal notes that even if there had been a doubt about the correctness of the 2016 decision, the limitation on making retrospective care percentage decisions set out in section 87AA of the Registration and Collection Act, is a significant barrier to Mr Winslow being able to obtain a more favourable decision on review. Mr Winslow did not lodge an objection to the March 2016 care percentage decision until over three years after the decision was made and provided to him. At the hearing Mr Winslow asserted he did not agree with the 2016 decision at the time it was made, but had acted on what he called incorrect legal advice which discouraged from pursuing the decision further as it was put to him that it would have no effect on him.

19. The Tribunal finds that Mr Winslow’s reason for not objecting to the care decision within the usual time frame of 28 days is not a special circumstance and thus, pursuant to section 87AA of the Registration and Collection Act, any variation of the 2016 decision would not take effect until 1 July 2019. As both parties’ evidence suggested that there had been a further change to the pattern of care in 2017, and it is common ground that there was a further change in June 2019, any variation to the 2016 care percentage decision could not be given any effect now.

20. For these reasons, the Tribunal agrees with the care percentage decision made on 15 March 2016 and thus affirms the decision of 26 August 2019 to disallow Mr Winslow’s objection.

Non-agency payments (SC017517)

Brief chronology in relation to the non-agency payments

1. While Mr Winslow’s liability to pay child support was first assessed by the Registrar from 26 August 2010, the child support payments were privately collected until 2019.

2. On 2 May 2019 Ms Garrod asked the Registrar to commence collecting child support, and also asked that child support arrears for the three preceding months be collected.

3. The Child Support Registrar accepted Ms Garrod’s request for collection of child support. On 24 May 2019 the Registrar informed Mr Winslow in writing of the requirement to pay child support directly to the Registrar with effect from 2 May 2019 at an annual rate of $9,685 (daily rate of $26.51608).  On 12 June 2019 he was also advised that he was required to pay $1,456.62 to Ms Garrod as arrears for the period from 2 February to 1 May 2019.  The annual rate of child support payable by Mr Winslow at that time was $9,685 per annum (or $26.51608 per day).

4. On 19 June 2019 Mr Winslow emailed the Registrar stating that some of the expenses he paid for [Child 1] should be taken into account in the assessment of his child support liability. He provided to the Registrar the following receipts for the payments made to third parties, so called non-agency payments, from January to June 2019 in respect of [Child 1]:

Date of Payment	Payee & purpose	Amount
11 Jan 2019	[Sports] Club –[registration]	$75
19 Feb 2019	[School 1] – sports in school	$36
30 Apr 2019	[School 1] – school camp	$225
18 Jun 2019	[School 1] – excursions	$25
19 Jun 2019	[School 1] – athletics carnival	$5

1. In addition, he said that $1,405.98 per annum of his private health insurance should be credited towards his ongoing child support liability. He provided a printout from a health fund which showed he was required to pay $251.15 per fortnight ($6,547.83 per annum) on a policy which included coverage for Mr Winslow, his partner and three children, one of whom is [Child 1].

2. On 22 June 2019 the Registrar asked Ms Garrod to confirm that the payments made to [School 1] in June 2019, of $25 and $5, were payments in lieu of child support. She advised that there was no mutual intention for these payments to be in lieu of child support.

3. On 25 June 2019 the Registrar wrote to Mr Winslow to advise him that none of the payments he provided receipts for could be credited towards his liability. Payments made from January to April 2019 were unable to be credited because they were made before 2 May 2019. The payments of 18 and 19 June 2019 were refused on the basis that they were not payments which both parties intended to be in lieu of child support.

4. On 4 July 2019 Mr Winslow objected to the decision to refuse credits made in June 2019. The objection was disallowed on 26 August 2019.  Mr Winslow applied to the Tribunal for review of the Registrar’s decision not to credit his payments to third parties towards his outstanding child support liability.

Issues

1. The issue is whether any or all of the third party payments claimed by Mr Winslow can be credited against the child support liability to be collected by the Registrar.

Consideration

Non-agency payments claimed by Mr Winslow

1. Mr Winslow told the Tribunal he asked that payments made by him to third parties in relation to [Child 1] from 2 February 2019 to 19 June 2019, as well as a portion of his annual health insurance premium, be credited against his child support liability under section 71A of the Registration and Collection Act, on the basis that they were intended by him to be payments in lieu of child support. He said he understood that a payment made on 11 January 2019 was in a period where the Registrar did not seek to collect child support from him and thus no longer included it on his list of payments to be credited. Thus, the following non-agency payments were claimed by Mr Winslow for the purpose of this review:

Date of Payment	Payee & purpose	Amount
19 Feb 2019	[School 1] – sports in school	$36
30 Apr 2019	[School 1] – school camp	$225
18 Jun 2019	[School 1] – excursions	$25
19 Jun 2019	[School 1] – athletics carnival	$5
Ongoing	Portion of the health insurance premium	$1,405.98 per annum

Can non-agency payments made in the arrears period be credited under section 71A?

1. As noted above, Ms Garrod asked for the Registrar to collect child support on 2 May 2019. The Registrar also made a determination to collect arrears of child support from 2 February 2019 to 1 May 2019. The Registrar determined that no third party payments made by Mr Winslow before Ms Garrod’s application on 2 May 2019 could be credited against the enforceable maintenance liability, even though payments referrable to the period three months prior to the application were also collected.

Brief overview of the law

1. Mr Winslow’s child support liability was determined by the Registrar under the Assessment Act. The law relevant to the registration and collection of child support is found in the Registration and Collection Act.

2. Section 71A of the Registration and Collection Act provides that a payment made by the liable parent to a third party may be credited against the payer’s enforceable maintenance liability if:

   ·      The payment is made to a third party to satisfy a debt owed to the payee of the maintenance, the payer or both;

   ·      The payer applies to the Registrar for the payment to the third party to be treated as if it had been made to the Registrar;

   ·      It is a payment made which both payer and payee of the maintenance liability intended to be paid in order to wholly or partially satisfy an amount payable under the enforceable maintenance liability during a child support enforcement period.

3. An enforceable maintenance liability is, in this case, the child support calculated by the Registrar under the Assessment Act and registered for collection by the Registrar from the payer, pursuant to section 24A of the Registration and Collection Act. However, if a payee elects to collect child support privately, rather than through the Registrar, the maintenance liability is not registered. Thus, unless it is registered in the Child Support Register, a maintenance liability is not enforceable by the Registrar.

1. The payee of privately collected maintenance can ask the Registrar at any time to register the maintenance liability arising under the assessment: section 25 of the Registration and Collection Act. On receipt of an application the Registrar must register the maintenance liability within 28 days of receiving such an application. Thereafter the maintenance liability becomes enforceable by the Registrar. In this case Ms Garrod made such an application on 2 May 2019.

2. As noted above, under section 71A, in defined circumstances payments made by the payer to a third party may be credited against the outstanding enforceable maintenance liability. However, only those third party payments made during a child support enforcement period can be credited under the provision.

3. Section 4 of the Act defines the child support enforcement period as starting on the day when the liability becomes enforceable under the Act and ending on the day that the liability ceases to be enforceable under the Act. Section 28 of the Registration and Collection Act states that a child support liability registered under subsection 25(2) first becomes enforceable under the Act on the day application for registration of the liability is received from the payee.

4. When a payee asks the Registrar to start collecting child support that has been assessed as being payable, they can also make an application for the Registrar to collect arrears accrued in the three months prior to the payee’s election: under section 28A of the Registration and Collection Act. While the Registrar’s determination to collect such arrears means they become part of the enforceable maintenance liability, the inclusion of arrears does not change the commencement date of the child support enforcement period.

5. The Tribunal is satisfied that Ms Garrod made an application under subsection 25(1) of the Registration and Collection Act for agency collection on 2 May 2019 and it thus follows that, pursuant to sections 4 and 28 of the Registration and Collection Act, that the child support enforcement period commenced on 2 May 2019.

6. The Tribunal is satisfied that, for the purpose of section 71A of the Registration and Collection Act, only those payments made by Mr Winslow after 2 May 2019 may be considered.

7. The Tribunal finds that non-agency payments made on 19 February 2019 and 30 April 2019 cannot be credited under section 71A against Mr Winslow’s child support liability.

Non-agency payments made after 2 May 2019

1. Mr Winslow relied on the pre-May 2019 payment arrangements between him and Ms Garrod to contend that the payments made by him after June 2019 were the type of payments which he regarded as forming part of the total child support paid by him in relation to [Child 1].

2. Mr Winslow stated that prior to the registration of the maintenance liability he had made payments of around $75 to $100 per week via BPAY to Ms Garrod and, in addition, paid some of [Child 1]’s expenses directly to third parties, such as for expenses related to the school and health insurance. Some of these he made because they were due when [Child 1] was in his care, sometimes he paid amounts Ms Garrod asked him to pay. He said that the combination of direct and indirect payments equated to what he understood to be his daily rate of child support set out in the child support assessments, taking into account the days [Child 1] was not in his care.[1] He understood payments like the payments made for [Child 1]’s excursion and athletics carnival to be part of his child support payments. Mr Winslow, however, did not state that there was a specific arrangement, agreement or conversation between himself and Ms Garrod in relation to the $30 paid by him to the school in June 2019.

   [1]In child support assessment notices issued by the Registrar a person’s child support liability is generally expressed as an annual rate paid referrable to a particular assessment period. The assessment notices also provide the monthly, fortnightly, weekly and daily equivalents of the annual rate to allow parties to accurately calculate periodic payments.

   In May 2019 the child support assessment issued by the Registrar required Mr Winslow to pay child support of $9,685 per annum (Folio 205). The annual rate is converted to a daily rate by dividing it by 365.25 days, in this case resulting in a daily rate of $26.51608. The daily rate is not merely payable for days on which the payee has care but is payable on each day in the assessment period. The child support formula already includes the relative costs met by each parent in the calculation of the child care and child cost percentages (steps 4 and 5 of the child support formula – see page 205-6).

   It appeared to the Tribunal that Mr Winslow’s misunderstanding about the amount of child support payable by him explained why the parties had opposing views as to whether he was meeting his child support obligations prior to May 2019. Ultimately, the payment arrangements prior to 2 May 2019 are not relevant to this matter as the only non-agency payments that could be credited are those made after 2 May 2019 and there must be some evidence of a mutual intention in relation to the specific payments made.

3. Mr Winslow said he had always had private health insurance which included [Child 1] as a beneficiary. When he entered into a relationship the health insurance was extended to cover his new partner and her children as well as [Child 1]. He regarded the additional cost of coverage to include [Child 1] as being part of the child support costs he was meeting. However, his evidence fell short of contending that he and Ms Garrod had an agreement to that effect.

4. Ms Garrod agreed that Mr Winslow did pay a regular amount of $75 to her via BPAY and paid some additional school items but denied that there was any discussion in which she was asked or had agreed that Mr Winslow’s payments for expenses such as the school carnival or excursions would be payments she would otherwise have received by way of child support.  She said she had no knowledge at all about Mr Winslow’s health fund expenses and had never been asked whether [Child 1] should be covered by Mr Winslow’s health insurance, much less whether part of the insurance premiums were to be taken to be child support payable by him. She stated she was not aware of which health fund Mr Winslow was insured with and had never made or sought to make a claim on that insurance.

5. In order to credit a non-agency payment to a third party under section 71A, the Registrar must be satisfied that the payment was intended by both the payer and the payee to be made in lieu of child support paid to the payer directly or to the Child Support Registrar.

6. There is no dispute that Mr Winslow had such an intention and the issue is whether Ms Garrod also did.

7. A person’s intention is a personal, subjective matter and must be evidenced either by an agreement between the parties or other corroborative evidence that demonstrates that the individual had formed a specific intention in relation to the particular payment to be credited, for the payment to be made in lieu of child support payable to the Registrar. The issue is whether Ms Garrod actually had such an intention, not whether it would be reasonable for Ms Garrod to agree to particular non-agency payments being made in lieu of child support. In other words, the Tribunal cannot impose an intention on Ms Garrod that she did not form.

8. Ms Garrod gave evidence that there had never been a specific agreement between herself and Mr Winslow in relation to the $30 paid by Mr Winslow to the school in June 2019. She acknowledged that sometimes she asked Mr Winslow to contribute to certain costs, and he often did so, but had never agreed that such payments were in lieu of other child support payable to her. She had no recollection of any discussion at all about these two payments. She stated that at no time did she ask Mr Winslow to make the payments in lieu of child support and did not have any intention to consider such payments as Mr Winslow meeting his child support obligations.

9. The Tribunal notes that both the health insurance and $30 paid by Mr Winslow to the school on 18 and 19 June 2019 are sums which could reasonably be regarded as costs incurred in relation to [Child 1] due to being in her father’s care.

10. The Tribunal accepts that there was no common intention for Mr Winslow’s payments to [School 1] on 18 and 19 June 2019, or his ongoing health insurance premiums to be taken to be payments that should be offset against his assessed maintenance liability. That is, the Tribunal affirms the decision that none of the payments claimed by Mr Winslow under 71A of the Registration and Collection Act can be offset against the outstanding child support liability under that provision.

DECISIONS

The decisions under review are affirmed.