Tribunal: Senior Member F Hewson
Issue
The AAT had to decide if the original child support assessment by Services Australia resulted in an unfair amount of child support payable by either parent and if a change to the assessment was just, equitable and otherwise proper.
AAT decision
The Tribunal set aside Services Australia’s decision to depart from a child support assessment. It substituted a new decision after considering the parties' income, property and financial resources, and childcare costs.
Details
Parent A (the applicant) and Parent B (the second party) are the parents of one child. Parent A’s annual child support liability was assessed to be $0, based on their adjusted taxable income of $20,951.
On 9 November 2020, Parent B lodged a departure application with Services Australia. Parent B believed the child support assessment was unfair due to Parent A’s income, earning capacity, property, and financial resources and due to high childcare costs incurred for the child.
Services Australia found there were grounds for departure and decided that:
- for the period from 9 to 22 November 2020, Parent A’s adjusted taxable income was varied to $53,000, and the annual rate of child support payable was increased by a further $2,006 to account for a contribution to childcare costs; and
- for the period from 23 November 2020 to 30 November 2021, Parent A’s adjusted taxable income was varied to $80,000, and the annual rate of child support payable was increased by a further $3,441 to account for a contribution to childcare costs.
Parent A lodged an objection to this decision with Services Australia, but the objection was dismissed in April 2021. Parent A lodged an application for review of the decision made in April 2021 with the Administrative Appeals Tribunal.
Application of law
The Tribunal is required to consider whether any of the grounds for departure set out in subsection 117(2) of the Child Support (Assessment) Act 1989 existed, and if so, whether a particular change to the administrative assessment of child support would be just and equitable in relation to the child and the parents, and otherwise proper.
Income, property, and financial resources
Parent A provided evidence that they returned to part-time work in November 2020, and their annual income is $80,964.
Childcare costs
Federal Court orders made in April 2020 say that Parent A has care of their child from 10 am on Wednesdays, but Parent B places the child in childcare on Wednesdays; incurring childcare fees for the whole day. Parent A argued that childcare is unnecessary on Wednesdays as they can collect the child before 10 am on Wednesday mornings and care for the child all day.
Summary of reasons for decision
Considering the available evidence, such as income, property and financial resources, the Tribunal concluded that special circumstances exist and grounds for departure were established. In particular, the Tribunal was satisfied that the actual income of Parent A was significantly higher than the income used in the administrative assessment and therefore rendered the administrative assessment unfair.
The Tribunal accepted that childcare costs on a Wednesday were an unnecessary cost and that it was not reasonable for Parent A to have to contribute to that cost when the child is, in fact, in their care. However, the Tribunal found that even disregarding the unnecessary childcare costs on Wednesdays, Parent B's reasonable childcare costs were still more than 5% of Parent B's adjusted taxable income and significantly affected the costs of maintaining the child.
The Tribunal concluded that it would be just and equitable and otherwise proper to increase Parent A’s adjusted taxable income and to increase the costs of the child to account for the childcare costs.
Parent A’s adjusted taxable income was varied to $54,000 from 9 to 22 November 2020, and to $80,964 from 23 November 2020 to 31 December 2022. The costs of the child were varied to $30,000 per year from 9 November 2020 to 31 December 2022.
Full decision
Read the full decision on AustLII.
Glossary
Child Support (Assessment) Act 1989 (Cth) Provides for an administrative assessment of the child support payable. It uses a formula that contains variables such as the parents’ adjusted taxable incomes and their percentages of care for the child.
Set aside If the AAT sets aside a decision under review, the original decision no longer stands. The AAT may make a new decision or remit the matter to the original decision-maker.
Departure application Section 98C of the Act provides for a departure from the administrative assessment if the following 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 …
Disclaimer
Every case before the AAT is determined on its individual facts. These summaries may not include all information considered by the AAT and do not constitute legal advice. You should read the full decision to ensure you understand the basis of our decision.