Wong and Wong (Child support)

[2018] AATA 3799

Wong and Wong (Child support) [2018] AATA 3799 (8 August 2018)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2017/BC012703

APPLICANT:  Mr Wong

OTHER PARTIES:  Child Support Registrar

Ms Wong

TRIBUNAL:Member K Buxton

DECISION DATE:  8 August 2018

DECISION:

The decision under review is affirmed.

CATCHWORDS
Child support - Departure determination - Whether there is a ground for departure in relation to necessary commitments for self-support, payments made to the child or income, property and financial resources - No ground established - Refusal to depart - 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 Wong and Ms Wong are the parents of [Child 1], born March 2007. Mr Wong has sought review by this tribunal of a decision of the Child Support Agency (CSA) about the amount of child support which had been assessed as payable by him to Ms Wong for [Child 1], who is recorded by the CSA as in Ms Wong’s 93% care and Mr Wong’s 7% care.

2. On 13 June 2017 Mr Wong applied for a change of assessment, under Part 6A of the Child Support (Assessment) Act 1989 (the Act). The administrative assessments in place had required payment of child support by Mr Wong for the period 1 October 2016 to 10 January 2017 at the annual rate of $11,552, calculated using Mr Wong’s 2015/16 adjusted taxable income of $96,264 and Ms Wong’s 2015/16 adjusted taxable income of $17,651. Using the same 2015/16 adjusted taxable income for Ms Wong of $17,651, child support payable by Mr Wong was then calculated using various income estimates lodged by Mr Wong as follows:

   ·For 11 January 2017, Mr Wong was assessed to pay child support at the annual rate $1091, using Mr Wong’s estimated income of $30,172.

   ·For the period 12 January 2017 to 1 June 2017 Mr Wong was assessed to pay child support at the annual rate of $3,056 calculated using Mr Wong’s estimated income of $41,726;

   ·For the period 2 June 2017 to 30 June 2017 Mr Wong was assessed to pay child support at the annual rate of $455 calculated using Mr Wong’s estimated income of $26,431.

3. Mr Wong has lodged further income estimates since applying for a departure. For the period 1 July 2017 to 16 August 2017 Mr Wong was assessed to pay child support at the annual rate of $414 calculated using Mr Wong’s estimated income of $13,791 per annum. Then, from 17 August 2017 to 30 November 2017, a replaced estimated income of $91,562 per annum was used by the CSA to calculate child support payable by Mr Wong at the annual rate of $10,884. For the period 1 December 2017 to 22 April 2018 child support was calculated at the annual rate of $10,836, calculated using Mr Wong’s replaced estimated income of $91,562 per annum and Ms Wong’s 20616/17 adjusted taxable income of $19,645. On 23 April 2018 Mr Wong lodged an income estimate of $0, informing the CSA that he was no longer working, and this reduced his child support for the period 23 April 2018 to 30 June 2018 to the annual rate of $1,390. However, based on information provided by Mr Wong that he had resumed working, his estimated income was then increased to $75,049 per annum for the period 23 May 2017 to 30 June 2018. The information provided by the CSA to the tribunal did not indicate whether a further income estimate had been lodged by Mr Wong for the period commencing 1 July 2018. The CSA documents provided to the tribunal in July 2018 indicating that the administrative assessment the in place for the period 1 July 2018 to 28 February 2019 required payment of child support by Mr Wong at the annual rate of $11,748, calculated using Mr Wong’s deemed income of $97,600 per annum and Ms Wong’s 2016/17 adjusted taxable income of $19,645.

4. When applying for a departure, Mr Wong submitted that his own self support costs significantly affected his ability to maintain [Child 1]. He also submitted that he had given money, goods or property to [Child 1], or to the receiving parent, Ms Wong, for the benefit of [Child 1]. He further submitted that Ms Wong’s income, financial resources and earning capacity were not fairly reflected in the assessment.  

5. On 31 July 2017 a delegate of the Child Support Registrar determined that a ground to depart from the administrative assessment had not been established and therefore refused the application to depart from the administrative assessment. Mr Wong objected to the delegate’s decision and, on 10 October 2017, an objections officer also determined that no departure ground had been established and therefore disallowed the objection. The tribunal notes that Mr Wong had lodged an earlier departure application on 28 November 2016 which was refused by a delegate of the Child Support Registrar on 16 January 2017. In that application Mr Wong had also raised the issues of his self-support costs and Ms Wong’s earning capacity that he raised again in the application the subject of this review.

6. Mr Wong applied to the tribunal for review of the objection decision dated 10 October 2017. The tribunal hearing was held on 8 August 2018. Mr Wong and Ms Wong participated in the hearing by telephone and gave sworn evidence. In reaching its decision, the tribunal has considered the sworn evidence given by Mr Wong and Ms Wong and the documentation provided by the CSA (Exhibit 1), Mr Wong (Exhibit A) and Ms Wong (Exhibit B).

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 which 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. The legislative intent is that the administrative formula will apply in the ordinary run of cases.

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), a change of assessment can be made only if:

   ·     a ground (or more than one ground) for departure exists; and

   ·     departure from the administrative assessment would be:

   i.just and equitable as regards the children and each parent; and

   ii.otherwise proper.

3. Subsection 98C(2) of the Act provides that the grounds for departure are the same as those set out in subsection 117(2). 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 range of determinations, prescribed in section 98S of the Act, which include varying the rate of child support payable, the adjusted taxable income or the cost percentage for a child.

High costs of self-support

10.  Sub-subparagraph 117(2)(a)(iii)(A) of the Act provides as a ground for departure:

(a)   that, in the special circumstances of the case, the capacity of either parent to provide financial support for the child is significantly reduced because of:…

(iii) commitments of the parent necessary to enable to parent to support;

(A)   himself or herself.

11.  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 unless there is a special reason to do so. In Gyselman and Gyselman [1991] FamCA 93, 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.

12.  During the hearing, Mr Wong stated that he requires surgery for [a specified purpose] and that he plans to undertake this surgery as soon as he is financially able to do so. He gave clear evidence that he would incur minimal expenses for the surgery itself and that he had already set aside money to meet those costs. However, Mr Wong submitted that he was likely to incur financial hardship in the future unless he was able to amass savings in the sum of around $50,000 from which his regular living expenses for a period of about one year could be met whilst he undertakes and recovers from the surgeries.  Mr Wong submitted that this future need was the financial commitment which, in the special circumstances of the case, significantly reduced Mr Wong’s current capacity to provide financial support for [Child 1].

13.  Mr Wong stated that he did not have the capacity to meet his assessed child support payments and save for his living costs when recovering from future surgery at the same time. He submitted that, as a result, his child support payments should be reduced to allow him to save in order to meet his living expenses for about a year whilst he is unable to work. However, Mr Wong did not produce any medical evidence as to how long he would be unable work following the surgeries. Mr Wong also submitted that his financial circumstances had been adversely affected during the marriage and that, as a result, he had higher levels of debt which would also lead him into financial hardship whilst not working. The tribunal notes that parents’ property settlement following dissolution of their marriage has not yet been settled and that Mr Wong continues to live in the former family home in the meantime.

14.  Mr Wong stated that he also has [other medical conditions]. He stated that he is [age] years of age and, even without his health issues, it is difficult for him to gain employment in [his] industry. He anticipates it will be increasingly difficult to maintain employment into the future.

15.  The tribunal accepts that Mr Wong is a man in his [number] decade who works in physical roles in [his] industry and who has genuine health concerns which may affect his future income. The tribunal notes that Mr Wong may be able to access income support payments if he cannot work for health reasons. Mr Wong is in a similar position to any parent who requires medical care and does not have an insurer or employer to cover related expense. Ms Wong stated at the hearing that she had surgery [prior] to the hearing and required a further a further operation soon and stated that she had to meet her own costs during recovery.

16.  The tribunal has considered whether a departure ground exists as a result of Mr Wong incurring any necessary self-support costs. The tribunal does not consider that a savings buffer, however desirable, amounts to a financial expense that can take precedence over the ongoing needs of the child and, in any event, such a buffer may not be necessary if Mr Wong is able to access income support payments for whatever period he is not working. Further, Mr Wong’s desire for a reduction in child support so that he can amass savings in order to self-fund a period of time when he is not earning income does not make his circumstances different to those of any other parents with health needs. Mr Wong stated that the allowance for self-support in the formula is insufficient to meet his expenses, including regular expenses and all the “extras” in life. However, there is nothing in the evidence provided by Mr Wong to demonstrate that his costs are higher than average costs of living. The tribunal concludes that Mr Wong has not identified specific commitments necessary for his own support which would lead the tribunal to conclude that his circumstances are sufficiently special so as to give rise to a departure ground.

17.  It is open to Mr Wong to lodge an income estimate in order to reflect any reduction in or cessation of income if and when that occurs. He would then be assessed to pay child support based on his estimated income for the relevant period.

Payments made to or for the benefit of the child

18.  Subparagraph 117(2)(c)(ii) of the Act 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 assessments 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:…

(ii) because of any payments … by the liable parent to the child, to the carer entitled to child support or to any other person for the benefit of the child.

19.  Mr Wong did not give any evidence at the hearing about expenses he had met on behalf of the child. He stated that he was the only parent meeting any expenses because Ms Wong refused to earn income to her capacity. However, [Child 1] is in the care of Ms Wong and she meets all of his costs directly from her own income and from family support payments.

20.  Mr Wong submitted Ms Wong would not incur any additional costs for [Child 1] that she would not incur herself if she lived alone, apart from some clothing for him. The tribunal notes that the formula in the child support legislation recognises that a parent with a child in their care will directly incur costs for that child and the formula operates to ensure that parents whose care of the child does not result in any cost percentage for that parent, such as in Mr Wong’s case, contribute to those expenses through the child support assessment. Mr Wong’s submission that any child support paid by him is simply money to meet Ms Wong’s expenses is inconsistent with the child support regime and unsupported by the evidence. Ms Wong meets rental, education, food, clothing and health related expenses for [Child 1].

21.  The expenses paid by Mr Wong for the former family home are not for the benefit of [Child 1] as he does not reside there. Such contributions may be relevant to the property settlement but do not provide a basis to conclude a ground to depart from the administrative assessment of child support. 

Income, financial circumstances and earning capacity

22.  Subparagraphs 117(2)(c)(ia) and (ib) of the Act 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

(ib) because of the earning capacity of either parent…

23.  Ms Wong is qualified as [an occupation 1] in her country of origin but has not ever qualified to practice in Australia. She has undertaken some part-time work but is not working at present. There is insufficient evidence available to show that Ms Wong is either not working despite ample opportunity to do so, or that she has changed or reduced her pattern of working. However, even if the tribunal were so satisfied, it would also need to be satisfied that the child support assessment was a substantial motivating factor. Ms Wong has [Child 1] in her care and has been completing her studies on a full time basis until recently. There is no evidence that her conduct would satisfy the legislative criteria which would lead to consideration of any unexercised earning capacity of Ms Wong.

24.  Ms Wong lodges her income tax returns in a timely way although she had not lodged her income tax return for the recently completed 2017/18 financial year as at the date of the hearing.  She provided evidence of her income to the tribunal. She estimated that her total income from employment and newstart allowance for the 2016/17 year will be about $30,000. Ms Wong stated that she had begun a role as [an occupation 2] with [an agency] during 2017 but that she had been involved in training without pay for most of her time up to 30 June 2018. Her PAYG statement confirms total income from [that agency] of $982 for the 2017/18 year. However, in the current 2018/19 year Ms Wong estimates that her income will be higher. She stated that she works between eight and 25 hours per week. In the first three fortnightly pay periods of this financial year Ms Wong received a total of $2,848 in gross pay, which equates to about $24,700 per annum. She stated that she may work more hours and may also continue to receive some newstart allowance at a reduced rate. Ms Wong thought that her 2018/19 income would be in excess of $30,000. Although this is higher than the income currently used, that income will be updated when her income tax return is filed and, given Ms Wong’s higher level of care for [Child 1], the variation will have little impact on the assessment of child support. The tribunal is satisfied that the formula is operating as intended with respect to Ms Wong’s income.

25.  Mr Wong stated that his income fluctuates as a result of the variations in [his] industry in which he works as [an occupation 3]. Mr Wong regularly lodges income estimates and provides information to the CSA about income he has received. The evidence available to the tribunal shows that this income can sometime be sporadic, or paid in a lump sum, and Mr Wong expressed concern at the difficulty in accurately estimating his income on an ongoing basis. The information provided to the tribunal by the CSA in July 2018 showed that a deemed income of $97,900 has been used in the assessment from 1 July 2018, unless a further income estimate has since been lodged by Mr Wong. Mr Wong provided to the tribunal information in a statement of his financial circumstances which he stated that his current income from [occupation 3] work was about $1,800 per week on average (around $93,600 per annum). It is not clear whether he had lodged an income estimate for any part of the current 2018/19 financial year. Mr Wong was asked by the tribunal whether he was aware of his rights and obligations in terms of lodging income estimates with the CSA and he stated that he was. The tribunal notes that if Mr Wong disagrees with a decision made by the CSA in relation to estimated income, he may seek review of that decision.

26.  During the hearing Mr Wong was asked whether incorrect income had been used for him in the child support assessment. Specifically, he was asked by the tribunal whether he had been assessed to pay child support based on an income set for him by the CSA which was greater that his actual income and he stated that he had not. To the contrary, Mr Wong stated that he had, as times, underestimated his income and been “penalised” by the CSA, presumably through the statutory income reconciliation process. Mr Wong submitted that this process was flawed and that parents with sporadic incomes, such as those in [his] industry, should not be penalised in the event that they earned more income in a financial year than they had included in an income estimate for the year. The tribunal notes that the statutory regime in place in relation to the acceptance on income estimates allows for a reconciliation of those estimates against taxable income in order to ensure that the proper level of child support is assessed as payable. There is no evidence available to the tribunal to demonstrate that the administrative assessments of child support calculated over time by using Mr Wong’s adjusted taxable incomes, and estimated incomes in accordance with information provided by him, has resulted in an unjust or inequitable level of child support to be payable by Mr Wong. Accordingly, there is no basis to conclude that a ground to depart from the administrative assessment exists as a result of the incomes, financial resources or earning capacities of either parent.

Conclusions

27. It is difficult to see what about this case could be said to set it apart from others such that the circumstances could properly be described as special. The formula is operating as intended and is likely to continue to operate as intended so long as the parents lodge their income tax returns in a timely way or otherwise accurately estimate their income. The tribunal finds that the assessed amount of child support payable by Mr Wong is not unjust or inequitable as regards Mr Wong, Ms Wong or the child. The tribunal does not find that Mr Wong’s capacity to provide financial support for [Child 1] is significantly reduced due to any self-support costs he incurs. The tribunal finds that there is no ground to depart from the administrative assessment having regard to the provisions of Part 6A of the Act.

28.  As the tribunal has found that there is no ground to depart from the administrative assessments in place, Mr Wong’s application for a departure, lodged on 13 June 2017, is therefore refused. The tribunal has reached a decision in the same terms as the decision under review and that decision is therefore affirmed.

DECISION

The decision under review is affirmed.