Tribunal: Member M Kennedy
The amount of child support to be paid by a parent is usually based on an assessment using the formula in the Child Support Assessment Act 1989.[1] The formula takes into account factors such as the number and ages of children, the level of care provided and the income of each parent. It is designed to ensure that children receive proper financial support from their parents which is proportionate to their capacity to contribute.
The parents in this matter applied to the Child Support Registrar (the Registrar) to depart from the assessment of how much child support the father was liable to pay.[2] The father’s reasons for applying for a departure were that his income, property and financial resources were less than that reflected in the adjusted taxable income (ATI) used for him in the child support assessment, and the mother’s earning capacity was higher than was reflected in the ATI used for her. The mother also applied for a departure, arguing that there are extra costs involved with private school education. The administrative assessment at the time of the applications was based on an ATI for the father of $89,500 and $31,091 for the mother.
The Registrar decided to depart from the assessment by varying the ATI of both parents and increasing the annual rate to account for private school fees. The father objected to the decision and applied to the AAT for a review of the objection decision.
The AAT found that the difference between the father’s ATI and his most recent tax return was a “special circumstance” and that the impact was sufficient to establish a ground for departure. The AAT did not find that the mother had an earning capacity but found that her income, property and financial resources were not properly reflected in the assessment.
The AAT also found there were significant costs associated with private school education for one of the children and that both parents expected the child to be educated privately.
Accordingly, the AAT found that it would be just and equitable and otherwise proper to depart from the assessment. The AAT set aside the objection decision and varied the ATI for each parent. This variation factored in the increase in private school fees paid by the father.
Read the full decision on AustLII.
[1] Part 5 of the Child Support Assessment Act 1989
[2] Part 6A of the Child Support Assessment Act 1989