Woods and Boone (Child support)

[2019] AATA 5118

Woods and Boone (Child support) [2019] AATA 5118 (15 August 2019)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2019/SC016012

APPLICANT:  Mr Woods

OTHER PARTIES:  Child Support Registrar

Ms Boone

TRIBUNAL:Member K Dordevic

DECISION DATE:  15 August 2019

DECISION:

The tribunal sets aside the decision under review and, in substitution, decides that Mr Woods’ adjusted taxable income is varied to:

·     $79,000 for the period 2 July 2018 to 28 February 2019; and

·     $53,300 from 1 March 2019 until a terminating event occurs. 

CATCHWORDS

CHILD SUPPORT – departure determination – 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 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. Relevant to this application, Mr Woods and Ms Boone are the parents of [Child 1] (born 2005). Ms Boone is recorded as having 100% care of [Child 1]. The case was registered with the Department of Human Services (the Department) on 14 June 2005 and has been collectable by the Department since 13 October 2010.

2. The Child Support (Assessment) Act 1989 (the Act) provides for an administrative assessment of the child support payable. It uses a formula which contains variables such as the parents’ adjusted taxable incomes and their percentages of care of the children. The Act also provides for a departure from the administrative assessment in certain circumstances.

3. On 2 July 2018 Ms Boone lodged a departure application with the Department.

4. On 29 October 2018 a senior case officer determined that for the period 1 July 2018 to 31 December 2020 Mr Woods’ annual rate of child support is varied to $5,000.

5. Mr Woods lodged an objection to that decision on 21 November 2018. On 21 February 2019 his objection was allowed. It was determined that for the period 1 July 2018 to 31 December 2020 Mr Woods’ adjusted taxable income is varied to $83,076 per annum.

6. On 27 February 2019 Mr Woods sought further review with the Social Services and Child Support Division of the Administrative Appeals Tribunal (the tribunal).

7. A telephone directions hearing was held on 28 May 2019. The matter was heard on 15 August 2019. Mr Woods and Ms Boone appeared by conference telephone. The Child Support Registrar was not represented at the hearing.

8. In reaching its decision the tribunal has considered the sworn evidence of Mr Woods and Ms Boone. The tribunal also considered the documentation provided by the Department (folios 1-401), Mr Woods (folios A1-A39) and Ms Boone (folios B1-B34) and, following a request from the tribunal, additional information provided by Roads and Maritime Services NSW (RMS) (C1-76).

ISSUES

1. The statutory provisions relevant to this review are outlined in paragraph 98C(1)(b) of the Act, which states that a decision to depart from the administrative assessment may be made if the following three requirements are met:

   (i)that one, or more than one, of the grounds for departure referred to in [subsection 117(2)] exists; and

   (ii)that 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 under this Part …

2. Therefore, the issues which arise in this case are:

   ·     Does a ground exist for departure from the administrative assessment of child support? And, if so

   ·     Would it be just and equitable and otherwise proper to make a particular determination?

CONSIDERATION

A ground for departure

1. Subparagraph 117(2)(c)(ia) of the Act provides a ground for departure if the administrative assessment would result in an unjust and inequitable determination of the level of financial support to be provided by the liable parent because of either party’s income, property and financial resources. The central issue in this matter is whether the administrative assessment accurately reflects Mr Woods’ income and financial resources.

2. For the period 1 July 2018 to 24 July 2018 Mr Woods was assessed to pay an annual rate of child support of $2,956. This assessment was based on Mr Woods’ 2017 adjusted taxable income of $61,128 and Ms Boone’s provisional income of $19,537.  From 25 July 2018 Mr Woods was liable to pay the minimum annual rate ($420) on the basis of his income estimate of $23,646.  

3. Mr Woods submits that the formula assessment accurately reflects his income and financial resources, as he lost his job in August 2017 and has been in receipt of disability support pension since that time. At hearing Mr Woods submitted that he has supplemented his income by selling his cars and other possessions, thus explaining the deposits into his bank account which the objection officer calculated totalled $84,037.96 during the period 15 November 2017 to 14 May 2018.  

4. Mr Woods’ explanation regarding these deposits has been inconsistent. On 3 August 2018 he stated that the unexplained deposits into his account were explained by the fact that he sold his car for $15,000; later in the conversation he stated that he sold about four to five cars and other items from his shed. In his written submissions to the tribunal Mr Woods stated that he sold his boat for $11,000, his father’s boat for about $10,000 (and so that deposit should be disregarded) that he sold three of his cars for approximately $30,000.

5. The tribunal requested that RMS provide all documents relating to the sale or purchase of motor vehicles and marine vessels by Mr Woods for the period 1 June 2017 to 31 May 2019. In support of his submissions Mr Woods provided a statement dated 4 November 2018 which stated that he sold [Car 1] for $1,000 cash; there is no record of Mr Woods selling [Car 1] on or around this date held by RMS. Furthermore, this sale was apparently made outside the period corresponding to the bank statements in evidence.  Mr Woods also provided another statement indicating that on 18 November 2017 he sold another motor vehicle (a [Car 2]) for $4,500, with a deposit being paid to him on that date and $4,000 to be paid at a later date; again there is no record of Mr Woods selling [Car 2] on or around this date held RMS. Mr Woods’ bank statements show, however, on 22 November 2017 a deposit of $4,000 was made, which the tribunal concludes evidences the sale of this car.  There is no record of the cash deposit of $500 being deposited into his accounts on or around this period.

6. RMS provided a registration history for Mr Woods, which indicates the following purchases and sales during the period 15 November 2017 to 14 May 2018 (the period corresponding to the bank statements in evidence):

Registration	Description	Date sold	Sale price
[plate number]	[Car 2]	[October] 2018	$1,500
[plate number]	[Car 1]	[May] 2018	$20,000
[plate number]	[Car 3]	[September] 2018	$500
[plate number]	[trailer]	[November] 2017	$100

1. The RMS records indicate that Mr Woods has registered in his name a [Car 3] (acquired [in] April 2018 for $1,500) and a [trailer] (acquired on [in] October 2017 for $1,800 and registered [in] May 2018).

2. The tribunal carefully considered the objection officer’s calculations and has found them to be incorrect. After analysing the bank statements in evidence the tribunal determined that during the period 1 November 2017 to 31 October 2018 Mr Woods received $13,911 in disability support pension and a further $56,605.93 in deposits (excluding private health insurance rebates and family tax benefit payments) during the same period. The discrepancy between the calculations appears to be because the objections officer also attributed transfers from Mr Woods’ [bank] account [to] the quantum of deposits received.  Taking into account the sales outlined at paragraphs 15 and 16, the tribunal concludes that Mr Woods is unable to account for $31,006 deposited into his account during the same period ($56,605.93 - $22,100 - $4,000 + $500).

3. The tribunal is unable to reach any firm conclusions regarding what financial resources were available to Mr Woods from 1 November 2018. Mr Woods was directed to provide all bank account statements for the period 1 June 2017 to 31 May 2019. In response, he provided the front page of a [Card 1] account [for] the period  [February] to [March] 2019 and undated balances of his  [card 2] [and] his personal loan [account]. The only account which he did fully disclose is his [bank] account [for] the period [October] 2018 to [March] 2019. This account is where his family tax benefit payments are deposited. He failed to provide any statements for accounts [Account 1] and [Account 2], the latter being the account where the majority of the unexplained deposits were made during the period [November] 2017 to [October] 2018.

4. In Humphries & Berry (SSAT Appeal) [2008] FMCAfam 209, Federal Magistrate Slack dealt with the issue of the disclosure of financial information in matters before the tribunal. His Honour stated that the principle of full and frank disclosure applicable to proceedings in the Family Court was also applicable to proceedings before the Social Security Appeals Tribunal. This principle also applies to a review by this tribunal. He stated that a tribunal should not be “unduly cautious about making findings in favour of the other party” when proper disclosure has not been made. A failure to make proper disclosure about income and financial resources allows the tribunal to accept what evidence there may be with more confidence than would otherwise have been the case: Thomas & Harry(SSAT Appeal) [2010] FMCAfam 310. Clearly Mr Woods’ failure is unsatisfactory and leaves him open to adverse inferences being drawn as a consequence of his failure to provide a full and frank disclosure of his financial circumstances, including expenses associated with the sales of the motor vehicles.

5. Ms Boone provided screen shots of a social media conversation between Mr Woods and [Child 1] dated 9 April 2018, in which Mr Woods stated “just cooking dinner after working a 24 hour shift” and later said “i (sic) need to get some sleep before my next shift”. On 11 April 2018 he wrote to [Child 1] “your in melbourne (sic)? I have a place in [suburb] (sic)”. On 24 May 2018 Mr Woods advised [Child 1] that he did not have time given his work.  At hearing Mr Woods explained that [Child 1] contacted him through social media; they had had no contact for many years. He stated that he had lied when he stated that he was working and had a home in [suburb], so that [Child 1] would not think that he was a “no hoper”. He also confirmed that he cut short his discussion with [Child 1], after not hearing from him for many years, by stating that he had to sleep before his next work shift when in fact this was not true as he was not working.  In response to why he would make such a gratuitous comment, he stated that he did not want [Child 1] to think he was a “loser”. In his written statement to the tribunal he stated that he was intoxicated at the time he made the comments.

6. In response to other [social media] posts provided by Ms Boone that Mr Woods authored (including frequent posts that he had attended gym) and on 26 March 2019 “Does anyone have a tattoo artist they could recommend me must be well known $is not an issue”,  Mr Woods stated that they were false and he only posted them out of “boredom” as his days are long. For example, in response to Ms Boone providing a [social media] post which stated [he was looking for parts for his cars], Mr Woods stated that this is a project of his father and [sibling], and not his. He did not dispute that he authored the post, apparently “out of boredom” and he stressed that he had no intention of undertaking any project.

7. The tribunal concluded that Mr Woods was not a witness of credit. His testimony to the Department and at hearing can be characterised as inconsistent and evasive. He is unable to account for over $31,000 deposited into his account. It is possible that this relates to employment income that Mr Woods alludes to in his social media posts. However, the tribunal was unable to reach a conclusion as to the source of the deposits. These deposits, his disability support pension in addition to the $26,100 he received in car sales are all, in the tribunal’s view, correctly characterised as a financial resource available to him for the benefit of [Child 1]. The tribunal finds that Mr Woods’ income and financial resources are conservatively estimated at $79,000 per annum.

8. Applying an adjusted taxable income of $79,000 to the administrative assessment would result in an annual child support liability of $5,751, an increase of about $5,300 per annum. As Mr Woods’ income and financial resources are not properly reflected in the child support assessment, there are special circumstances such that the application of the administrative assessment would result in an unjust and inequitable determination of child support payable. The tribunal therefore concludes that the ground provided for in subparagraph 117(2)(c)(ia) of the Act is established.

Just and equitable

1. The requirement to consider whether a departure would be just and equitable directs attention to what is fair to the parents and their children. Regard must be had to a variety of factors such as the needs of the child, the parents’ commitments and any hardship that would be caused by departing or not departing from the formula.

2. Ms Boone is unemployed and is in receipt of parenting payment (single), as she has three other children (not subject to the assessment) aged 8, 5 and 2 years. She reports savings of $200, a motor vehicle valued at $8,300 and household items and other personal property valued at about $6,750. She has a car loan with $8,300 outstanding and other personal liabilities of $40 per fortnight. She pays rent of $390 per week and estimates $200 in food per week. She reports no out of the ordinary expenses.

3. [Child 1] attends a public high school and has no out of the ordinary expenses, with the exception of his [sports] fees. He is in good physical health. Ms Boone is encouraging him to attend counselling to deal with anger management issues and trauma associated with past bullying at school and frequent changes of school.

4. In his Statement of Financial Circumstances (which he partially provided), Mr Woods stated that he is unemployed and is in receipt of disability support pension of $405 per week. He is single and has two children in his care who both attend public school. He is also in receipt of family tax benefit and child support of $49 per week. He reported nil savings, a motor vehicle valued at $3,000 and household contents and other personal property of $2,000. He reports a personal loan of $33,300, credit card liabilities of $19,250 and a Centrelink debt of $15,000, with withholdings of $100 per fortnight from his pension. He declares necessary personal expenditure of $330 per week (including $139 in private health insurance) and weekly household expenses of $1,185, which does not include accommodation or food expenses, but does include $100 in entertainment costs per week. At hearing he stated that he lives in Department of Housing accommodation costing $150 per week.  At the conclusion of the statement he declares that he is in debt and may have to declare bankruptcy.  At hearing Mr Woods confirmed that he spends about $100 per week on entertainment, including Foxtel (which does not appear in his bank statements) and taking the children to 10 pin bowling. The tribunal notes that the discretionary spending evidence is his bank accounts is not consistent with Mr Woods’ assertion that he has no capacity to meet a child support liability greater than $420 per annum.

5. Mr Woods was reluctant to disclose the grounds on which he was granted disability support pension. He eventually stated that he was granted the payment at a young age and that he suffers from [Medical Condition 1] and [Medical Condition 2]. He reports no out of the ordinary costs associated with his health or otherwise.

6. It is clear that Ms Boone’s financial circumstances require her to receive as much child support as Mr Woods’ income and financial circumstances allow. The tribunal finds it is appropriate to vary Mr Woods’ adjusted taxable income to $79,000 from the date that Ms Boone lodged her change of assessment application, this being 2 July 2018, until 28 February 2019. From 1 March 2019 the tribunal determined that it is appropriate to vary his income to $53,300 (his pension + unexplained deposits) on the basis that it was no longer appropriate to include in his adjusted taxable income the financial resources available to him from the sale of his motor vehicles and trailers.

7. The tribunal determines that it is unlikely that Mr Woods’ ongoing taxable income will accurately reflect his income and financial resources. To provide certainty to the parties and minimise the need for repeat proceedings, it is appropriate to vary the assessment until a terminating event occurs. Given Mr Woods’ income and financial resources, the tribunal is satisfied that his ongoing child support liability will not cause him undue hardship. Furthermore, these funds are necessary for Ms Boone to adequately provide for [Child 1]. Certain hardship would arise were Mr Woods not to provide support to [Child 1] at the levels determined above.

8. The tribunal is satisfied that the administrative assessment is unfair given the income and financial resources available to Mr Woods. For all the reasons above, the tribunal finds it just and equitable to depart from the administrative assessment of child support.

Otherwise proper

1. The requirement to consider whether a departure would be otherwise proper directs attention to what is fair to the community. It is necessary to consider the effect of any departure from the administrative assessment on entitlements to income-tested pensions, allowances and benefits. Parents rather than the community have the primary duty to maintain a child. Ms Boone receives family tax benefit in respect [Child 1]. Increasing the child support payable by Mr Woods will result in a more appropriate apportionment of financial responsibility between the parents and the community.

2. The determination is otherwise proper.

DECISION

The tribunal sets aside the decision under review and, in substitution, decides that Mr Woods’ adjusted taxable income is varied to:

·     $79,000 for the period 2 July 2018 to 28 February 2019; and

·     $53,300 from 1 March 2019 until a terminating event occurs.