Child support assessment adjusted

Child support assessment adjusted

Marshall & Armstrong [2016] FCCA 816 (12 April 2016)

The following is annotated. For full case: http://www.austlii.edu.au/cgi-bin/sinodisp/au/cases/cth/FCCA/2016/816.html?stem=0&synonyms=0&query=family%20law%20act

History

11. The Applicant father was born in (country omitted) on (omitted) 1962. He is currently 54 years of age. He is unemployed and in receipt of Centrelink payments. The Respondent mother was born in (country omitted) on (omitted) 1972. She is aged 44 years and engaged as both a (occupation omitted) and (occupation omitted). The parties were married in 1989 in (country omitted). They emigrated to Australia in or around (omitted) 2001. At that time they had four children who emigrated to Australia with them. Those children are:-
    1. T, born (omitted) 1991, currently 24 years of age;
    2. U, born (omitted) 1993, currently aged 22 years;
    100. V, born (omitted) 1995, currently aged 19 years; and
    4. W, born (omitted) 1998, currently aged 16 years.
12. In 2003 the Applicant father was granted Australian citizenship. On (omitted) 2003 the parties’ fifth child, X was born. He is currently 11 years of age.
13. In 2006, the Applicant father was involved in a motor vehicle accident. He suffered serious injuries, including internal bleeding, a crushed sternum and chest, vertebrae damage and knee injury. He was hospitalised for a period of six months. He was required to undergo surgery eight months after the collision and had small bags attached to help drain any further internal bleeding. He was required to undertake significant rehabilitation work. In 2009, he received a lump-sum payment of approximately $300,000 in settlement of his TAC claim. As a result of that settlement, he was precluded from receiving Centrelink benefits until May 2014.
14. The Applicant father applied the lump-sum payment received by him from the TAC as follows:
    1. to purchase the home in which he resides in (omitted);
    2. to purchase a property in the Respondent mother’s name at (omitted);
    100. for his family in (country omitted), including for his mother;
    4. a further amount of $54,000 toward a home for the Respondent mother after the sale of her (omitted) property;
    5. to his children for the purchase of computers and trips to (country omitted) for (hobby omitted) and three trips to the (country omitted) for (hobby omitted);
    6. for two motor vehicles, being a Toyota Camry for the Respondent mother and a Toyota Camry for the child T.
15. In March 2011, the parties separated for approximately six weeks with the Applicant father vacating the former matrimonial home when the Respondent mother obtained an Intervention Order against him. That Intervention Order was subsequently withdrawn at the request of the Respondent mother and the Applicant father returned to resume occupation in the home.
16. In August 2013, the parties separated on a final basis and the Applicant father departed the former matrimonial home. Since his entitlement to Centrelink payments has resumed, he is on a pension and in receipt of a weekly benefit of $244.
17. In March or April of 2015, the Applicant father received a telephone call from the Child Support Agency. Thereafter, he received a letter from the Child Support Agency, advising that he had child support arrears. I accept the Applicant father’s evidence that, prior to those communications with the Child Support Agency, the Applicant father was unaware that the Respondent mother had applied for a child support assessment, and unaware that any arrears had been accruing. The monies said to be owing at that time by the Child Support Agency, inclusive of penalties and costs, was $31,113.48.
18. The Applicant father was unaware that, during the period he had nil or nominal income, he was required under Australian law to lodge taxation returns. He first became aware of that requirement in May 2015. He immediately attended to the lodgement of taxation returns for the years ended 30 June 2010 to 30 June 2015. His annual taxable income from 2011 to the present has been nil or nominal, but the Child Support Agency has provided a provisional income of between $44,000 to $47,000 per annum to the Applicant father.
19. Up to the time of the parties’ separation and save for the six weeks where the Applicant father left the former matrimonial home, the parties cohabitated and were not separated. During this period from 2011 until 2013, the (country omitted) community were aware that the Applicant father and Respondent mother continued to reside together and had not separated. The parties continued to have a sexual relationship throughout this time and indeed two more children were born during this period (the parties twins born (omitted) 2011). The Applicant father assisted in the care of the children in the home and was responsible for the payment of all outgoings with respect to the former matrimonial home, including mortgage payments, utilities, rates and the like. He also paid for groceries and other household items.
20. Likewise during this time, the Applicant father met most of the children’s expenses. He paid for those, which included:-
    1. schoolbooks and stationery;
    2. fees associated with the children’s participation in extracurricular activities;
    100. laptops and games;
    4. out-of-pocket medical expenses;
    5. clothes and shoes;
    6. trips to (country omitted) for (hobby omitted);
    7. school fees; and
    8. out-of-pocket expenses for kidney replacement.
21. During this period of time, up until separation in August 2013, the Applicant father and Respondent mother shared the care of the children. The Applicant father was involved in all aspects of the children’s lives.
22. When the Respondent mother moved out of the former matrimonial home, the Applicant father commenced spending time with the children on an informal basis. They made arrangements between themselves in respect of the care and arrangements for the children. The Applicant father estimates that he saw the children approximately two to three times per week, according to the wishes of the children, completing tasks such as dropping them off and picking them up from school and having them come to his home.
23. In 2009 and until 2014, the parties’ child W underwent a kidney transplant and was in the Royal Children’s Hospital for several months each year. The Applicant father attended the hospital regularly during this time and spent time with the other children throughout. When the child was discharged, the Respondent mother and Applicant father would look after all of the children together.
24. Throughout the Applicant father’s years of unemployment, he had limited mobility due to the motor vehicle accident. He underwent rehabilitation and was medicated throughout the time, including regular physiotherapy and other operations to his chest, rib and back. He underwent a full knee construction on 27 October 2015.
25. The Department of Health and Human Services (‘the Department’) provided a provisional taxable income for the Applicant father income that was substantially higher than the Applicant father’s nil income or nominal income over the relevant years. The Department estimated a provisional income of:-
    1. 1 November 2012 to 31 October 2013, $43,243;
    2. 1 November 2013 to 17 November 2013, $44,758;
    100. 18 November 2013 to 31 January 2015; $44,758;
    4. 1 February 2015 to 26 September 2015; $47,219;
    5. 18 November 2013 to 31 January 2015; $44,758.
26. The taxable income in respect of the above years of the Applicant father was actually:
    1. Year ended 30 June 2010 $2721;
    2. Year ended 30 June 2011 $2629;
    100. Year ended 30 June 2012 nil;
    4. Year ended 30 June 2013 nil;
    5. Year ended 30 June 2014 $4905.
27. On 29 May 2015 the Child Support Agency issued an application in a case with respect to the enforcement of child support arrears as alleged to have been accumulated by the Applicant father. On 9 June 2015 the Applicant father lodged an objection to the current child support assessment. On 1 October 2015 the Applicant father filed his initiating application seeking leave pursuant to s.111 of the Act and final orders for a departure order.
28. The outcome of these proceedings being the Applicant father’s application for a departure order will have a direct and significant effect on the amount of outstanding arrears sought to be enforced by the Child Support Agency.
29. The difficulty for the Applicant father in communicating with the Child Support Registrar is that he is (nationality omitted) and his native language, (omitted). His understanding and knowledge of English both in written and oral form is extremely limited. His documents filed in these proceedings have been translated by an interpreter and he has attended Court on each occasion assisted by an interpreter in the (omitted) and English languages.
30. Whilst the Applicant father did, between 2005 and 2013 receive phone calls from time to time from various agencies, he had little understanding of what was said. I accept that until he had a telephone communication with the Child Support Agency last year and was served with the enforcement application he had not sighted any correspondence from the Child Support Agency.

Departure application

34. The term “adjusted taxable income” is defined in the s.43 of the Act. Relevantly, that section provides:-
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    “Working out parent’s adjusted taxable income

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(1) Subject to this Part, a parent’s adjusted taxable income for a child for a day in a child support period is the total of the following components:

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(a) the parent’s taxable income for the last relevant year of income in relation to the child support period;

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(b) the parent’s reportable fringe benefits total for that year of income;

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c) the parent’s target foreign income for that year of income;

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(d) the parent’s total net investment loss (within the meaning of the Income Tax Assessment Act 1997 ) for that year of income;

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(e) the total of the tax free pensions or benefits received by that parent in that year of income;

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(f) the parent’s reportable superannuation contributions (within the meaning of the Income Tax Assessment Act 1997) for that year of income.

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Note 1: Other provisions that relate to a person’s adjusted taxable income are section 34A and Subdivisions B and C of Division 7.

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Note 2: The components of the definition of adjusted taxable income are defined in section 5.

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(2) If the Registrar amends an assessment under section 44, then for the purposes of the assessment, the person’s adjusted taxable income for a child to whom the assessment relates, for a day in the child support period, is the amount determined by the Registrar.”

35. The current assessments for the relevant periods deem the Applicant father to have the following taxable income:-
    1. 1 May 2011 to 11 August 2011 $39,236;
    2. 12 August 2011 to 25 August 2011 $39,236;
    100. 26 August 2011 to 28 September 2011 $39,236;
    4. 29 September 2011 to 11 October 2011 $39,236;
    5. 12 October 2011 to 31 October 2011 $39, 236;
    6. 1 November 2011 to 31 October 2012 $41,187;
    7. 1 November 2012 to 31 October 2013 $43,243;
    8. 1 November 2013 to 17 November 2013 $44,758;
    9. 18 November 2013 to 31 January 2015 $44,758;
    10. 1 February 2015 to 26 September 2015 $47,209.
36. Each of the above incomes is described as “provisional” in circumstances where the Applicant father had not, until 2015, filed any taxation returns for each of the relevant periods. The figure is a statutory construction calculated as being two-thirds of the male total average weekly earnings.
37. The Applicant father seeks orders to vary the adjustable taxable income to his income as recorded in the notices of assessment now received by him. The Applicant father is not in receipt of any income from any other sources save his pension income now.
38. The Respondent mother has not argued before the Court that the Applicant father has income and/or financial resources available to him that have not been disclosed by him.
39. The Applicant father seeks to vary the cost percentages in each of the relevant assessment periods, noting that the current administrative assessments record the Applicant father as having a zero care and zero cost percentage. The Court accepts, given the evidence of the Applicant father as contained in his affidavit and described in these reasons, which evidence is unchallenged by the Respondent mother, that the Applicant father’s care percentages for the relevant period should be adjusted. This is by reference to s.55C of the Act. Items 2 and 4.
40. On the evidence before it the Court is satisfied that there should be a variation to the cost percentage for the relevant periods as follows:-
    1. 1 May 2011 to 11 August 2011 to 50 per cent;
    2. 12 August 2011 to 25 August 2011 to 50 per cent;
    100. 26 August 2011 to 28 September 2011 to 50 per cent;
    4. 29 September 2011 to 11 October 2011 to 50 per cent;
    5. 12 October 2011 to 31 October 2011 to 50 per cent;
    6. 1 November 2011 to 31 October 2012 to 50 per cent;
    7. 1 November 2012 to 31 October 2013 to 50 per cent;
    8. 1 November 2013 to 17 November 2013 to 24 per cent;
    9. 18 November 2013 to 31 January 2015 to 24 per cent;
    10. 1 February 2015 to 26 September 2015 to 24 per cent.
41. There shall be an amendment of the annual rate of the Applicant’s adjusted taxable income and an adjustment of the cost percentage calculated as described in the orders which are made.
42. Given the significant changes these orders will bring about in any assessment of child support liabilities of the Applicant father it is requested that the Child Support Registrar give consideration to remitting the late payment penalties incurred to the present time.