Zimmer and Wilson (Child support)

This matter concerned an appeal to the Full Court of the Family Court of Australia regarding a child support departure determination. The appeal was brought by the liable parent, Mr Zimmer, against a decision of a single judge that had set aside an earlier decision of the Child Support Registrar. The dispute centred on whether the liable parent's income, property, and financial resources warranted a departure from the standard child support assessment.

The primary legal issue before the Full Court was whether the single judge erred in finding that the earning capacity criteria for a departure determination under section 117(2)(a) of the *Child Support (Registration and Collection) Act 1988* (Cth) had not been satisfied. Specifically, the court had to consider whether the liable parent's adjusted taxable income, as determined by the Registrar, accurately reflected his earning capacity and whether this capacity was significantly different from that used in the child support assessment.

The Full Court reasoned that the single judge had incorrectly applied the earning capacity criteria. It held that the Registrar's assessment of the liable parent's adjusted taxable income, which included an imputation of income from his business, was a permissible approach to determining earning capacity. The court emphasised that earning capacity is not limited to actual income received but can include the capacity to earn income, particularly where a parent controls or benefits from a business. The Full Court concluded that the single judge had failed to give sufficient weight to the evidence of the liable parent's control over his business and its profitability.

Consequently, the Full Court set aside the decision of the single judge and substituted an order that a ground for departure existed. The matter was remitted to the Child Support Registrar for redetermination of the child support assessment, with the liable parent's adjusted taxable income to be varied to reflect his earning capacity.