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Cabe and Farrell (Child support) [2020] AATA 5098 (15 October 2020)

Last Updated: 17 December 2020

Cabe and Farrell (Child support) [2020] AATA 5098 (15 October 2020)

DIVISION: Social Services & Child Support Division

REVIEW NUMBER: 2019/BC018123

APPLICANT: Mr Cabe

OTHER PARTIES: Child Support Registrar

Ms Farrell

TRIBUNAL: Member J Thomson

DECISION DATE: 15 October 2020

DECISION:

The Tribunal sets aside the decision under review and, in substitution, decides that:

CATCHWORDS

CHILD SUPPORT – departure determination – income, property and financial resources of the liable parent – reduced income and reduced capacity to work – 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 omitted 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

Table of Contents


BACKGROUND

  1. Mr Cabe and Ms Farrell are the parents of [Child 1], born 2005. [Child 1] is in the 100% care of Ms Farrell.
  2. The administrative assessment of child support presently in place requires Mr Cabe to pay child support to Ms Farrell as follows:
  3. On 28 June 2019, Ms Farrell applied to the Child Support Agency (the Agency) for a change of assessment on the ground the income, property and financial resources of Mr Cabe made the child support assessment unfair, commonly referred to as Reason 8A.
  4. On 19 September 2019, an Agency decision-maker, DM Vardy, found Reason 8A in Ms Farrell’s application, and changed the assessment, setting Mr Cabe’s adjusted taxable income (ATI) for the period 1 April 2019 to 31 December 2020 at $68,023.
  5. On 3 October 2019, Mr Cabe objected to DM Vardy’s decision, and on 11 December 2019, an Agency objections officer partially allowed Mr Cabe’s objection, setting aside DM Vardy’s decision of 19 September 2019, and in substitution, deciding that:
  6. On 27 December 2019, Mr Cabe applied to the Tribunal for review of the objections officer’s decision of 11 December 2019.
  7. The Tribunal heard the matter over the course of two days, on 18 June 2020 and 23 July 2020. The hearing on 18 June 2020 was rescheduled due to a combination of conference telephone technical difficulties, Mr Cabe’s request for an adjournment to allow him to provide further medical evidence with respect to [Ms A’s] medical condition, and his commitment to take [Ms A] to a doctor’s appointment. Both parents consented to the rescheduling of the hearing at a later date.
  8. The Tribunal rescheduled the hearing of the matter for 23 July 2020. Both parents attended the hearings on 18 June 2020 and 23 July 2020 via conference telephone and gave affirmed evidence. The Tribunal had before it documents provided by the Agency and each of the parents. The Agency’s documents were admitted into evidence and marked Exhibit 1. Mr Cabe’s documents were admitted into evidence and marked Exhibit A and Ms Farrell’s documents were admitted into evidence and marked Exhibit B. Mr Cabe had copies of these documents with him at the hearing on 18 June 2020. However, Ms Farrell informed the Tribunal at the hearing she had discarded her copies of the Agency’s and Mr Cabe’s documents, Exhibits 1 and A, and had only copies of her Exhibit B documents with her at that hearing.
  9. Mr Cabe provided additional documents in the interregnum between 18 June 2020 and 23 July 2020. After discussion with the parents at the commencement of the rescheduled hearing on 23 July 2020, and with Ms Farrell’s consent, these documents were admitted into evidence as part of Mr Cabe’s documents, Exhibit A.
  10. With the exception of some of the documents provided by Mr Cabe, referred to in the preceding paragraph, neither parent had copies of the documents Exhibits 1, A and B with them at the rescheduled hearing on 23 July 2020, but both were content for the hearing to proceed.
  11. The Tribunal directed Mr Cabe to provide copies of a report evidencing the condemned status of his residential property and related reports by the mould testing laboratories he referred to in his evidence regarding the condition of this property and its market value. These reports have been added to his documents, Exhibit A. Copies of these documents were provided to Ms Farrell for comment: she has indicated she has no comment on these additional documents.
  12. At both hearings, Mr Cabe acknowledged the issues he wanted the Tribunal to consider were:
  13. Ms Farrell’s issue was the accurate determination of Mr Cabe’s income, property and financial resources available to him for child support purposes.

CONSIDERATION

  1. In reaching its decision, the Tribunal has considered the affirmed evidence given by both parents at the hearings on 18 June 2020 and 23 July 2020, and the documents contained in Exhibits 1, A and B.

The legislative framework

  1. The statutory provisions relevant to this review are contained in the Child Support (Assessment) Act 1989 (the Act). The rate of child support payable by a liable parent is usually based on an administrative assessment under Part 5 of the Act. A formula is used. It takes into account variables including each parent’s adjusted taxable income for the last relevant year of income, the number of children, and the level of care provided by each parent. Part 6A of the Act allows for a departure from the administrative assessment (a process commonly known as a “change of assessment”). Under subsection 98C(1), the Registrar may make a departure determination if three matters are established:
  2. Subsection 98C(2) provides that the grounds for departure are the same as the grounds set out in subsection 117(2) of the Act.
  3. If satisfied that a ground or grounds exist and that it would be just and equitable and otherwise proper to make a particular determination, the Registrar may make one of the determinations prescribed in section 98S of the Act. It permits a range of determinations, including varying the rate of child support payable, the adjusted taxable income or the cost percentage of a child.

Grounds for departure

  1. Subparagraph 117(2)(c)(ia) provides as a ground for departure:

(c) that, in the special circumstances of the case, the application in relation to the child of the provisions of this Act relating to administrative assessment of child support would result in an unjust and inequitable determination of the level of financial support to be provided by the liable parent for the child...

(ia) because of the income, property and financial resources of either parent, or...

  1. The words “in the special circumstances of the case” are not defined in the legislation. Whilst it is not possible to define with precision the meaning of that term, it is intended to emphasise that the facts of the case must establish something that is special or out of the ordinary. That is, the intention of the legislation in subsection 117(2) must be guided by the qualification that the Tribunal will not interfere with the administrative formula result in the ordinary run of cases. In Gyselman and Gyselman [1991] FamCA 93; (1992) FLC 92-279, it was held that “special circumstances” were “facts peculiar to the particular case which set it apart from other cases”. The Tribunal will consider whether the application of the administrative assessment would result in an unjust and inequitable determination of child support payable, having regard to the evidence relevant to the parents’ financial position.

Mr Cabe’s evidence

  1. Mr Cabe submitted his adjusted taxable income of $67,543 set by the objections officer for the period 1 April 2019 to 31 October 2019 was not an accurate reflection of his income because the objections officer had disallowed the depreciation and motor vehicle expenses claimed by him in his income tax return for the 2018/19 financial year and added back the amounts claimed for those items to his income for that year. He also submitted the objections officer’s determination of his ATI of $67,543 for the period 1 April 2020 to 31 December 2021 was not an accurate reflection of his income for the 2019/20 financial year because the [service] business he and his current partner, [Ms A], conducted under the trading name ‘[Business 1]’ had ceased trading effective from 30 June 2019, following [Ms A] being diagnosed with [specified multiple serious medical conditions], the symptoms of which he said first manifested themselves in early 2017. Because of these conditions, he said she was unable to assist in the management of their [service] business and required Mr Cabe’s full-time care to monitor her [condition] daily and take her to various medical appointments for treatment of her debilitative conditions. He said [that one specified] condition prevented her from driving a motor vehicle.
  2. He gave evidence he had not received any income for the financial year 1 July 2019 to 30 June 2020 other than his carer allowance of $12,550 per annum following his successful application to Centrelink in March 2019, for providing care for [Ms A]. The Tribunal notes Centrelink approved his application in or about September 2019, in reliance on the medical evidence Mr Cabe said he provided regarding [Ms A’s] condition.
  3. [Ms A] provided evidence at the hearing she was to be admitted to [Hospital 1] for surgery to correct her [specified serious medical] conditions. According to her evidence, this surgery to be performed later this year involves a [specified surgery].
  4. Mr Cabe also gave evidence of other respiratory-related medical conditions afflicting him and his family derived from mould and other fungal infestations in the family home at [Town 1], [named] (the [Town 1] Property), the circumstances of which are described below.
  5. Mr Cabe said the [Town 1] Property was flooded when a water pipe burst in an upstairs bathroom during the night in September 2016 while the family were asleep. According to evidence given by both Mr and [Ms A], water permeated the internal ceiling and wall structures of the house. Although extensive restoration work was carried out by the builder engaged by their insurer, it appears the work was not properly done, as the internal ceiling and wall cavities were not adequately ventilated and dried. Because of that, serious mould and fungal concentrations developed, constituting potential health hazards and rendering the premises uninhabitable. Mr Cabe and his family had been residing in temporary rented accommodation at various places in and around [Town 2] since April 2020 when they moved out of the house. He said he and his family are currently residing in temporary accommodation in [the city] to be near [Hospital 1] where [Ms A] is due to undergo the surgical procedures referred to above.
  6. Mr Cabe provided a report dated 8 May 2020, contained in Exhibit A, prepared by a microbiologist, [named], on behalf of [named company], recording the results of his testing of mould and fungal samples taken by him from the [Town 1] Property on 30 April 2020, confirming Mr Cabe’s evidence set out above. Ms Farrell did not challenge this evidence.
  7. Mr Cabe said he and his family vacated the [Town 1] Property on 15 April 2020, and his insurer has required him to sign an undertaking not to return to the property until such time as the issues between the insurer and the building company it commissioned to carry out the restoration work are resolved and a determination is made as to whether the house can be restored to a liveable condition or demolished.
  8. Mr Cabe said he has been unable to work as a result of [Ms A’s] debilitating medical conditions outlined above, and his own mental health issues of anxiety and depression arising from the circumstances in which he and his partner have found themselves.
  9. Medical reports before the Tribunal from [two named doctors], [Ms A’s] treating general practitioners at [a named medical centre] dated between January 2018 and November 2019 together with associated radiologists’ reports reflect the progressive decline in the medical condition of [Ms A] over that period, culminating in her being placed on a treatment plan and scheduled for the surgical procedures referred to earlier (see paragraph [‎‎22]).
  10. Mr Cabe gave evidence of his having suffered a mental break-down in February 2020. Consequently, he was admitted to [a named health service] from [for a week in] February 2020. He was later apprehended by police officers and incarcerated in [Town 2] for five nights due to a psychotic episode. During these periods, their [age]-year-old daughter, [Ms B] was placed in care under the supervision of the Child Safety authorities.
  11. In March 2019, Mr Cabe applied to Centrelink for carer allowance as [Ms A’s] medical condition had deteriorated to the extent she required full-time care and was unable to care for [Ms B].
  12. [Ms A] provided a detailed statement, admitted into evidence as part of Exhibit A, in which she summarises her current diagnosis comprising:
    1. [one condition], which she said is untreatable due to a [another condition] and requires her to constantly monitor her sugar levels;
    2. [another condition];
    1. [another condition]; and
    1. [another condition], because of exposure to mould and fungal infestations found in the [Town 1] Property.
  13. Based on this evidence, the Tribunal is satisfied of the seriousness of [Ms A’s] medical condition and from March 2019, it has been necessary for Mr Cabe to devote all his time to the care and management of her medical condition and treatment, as well as care for [Ms B].
  14. Because of [Ms A’s] declining medical conditions she said she was unable to continue working in [Business 1]. Mr Cabe gave evidence the decision was made to close down the [business] with effect from 30 June 2019 as a consequence of their respective medical conditions, coupled with the need for him to provide continuous care for [Ms A] in the day-to-day management of her medical condition, monitoring [one specified] condition, and taking her to the numerous medical appointments for treatment.
  15. Since closing down the business, Mr Cabe said he had focused on payment of most, but not all, of its trade creditors, which he estimated are between $20,000 and $30,000, using a tax refund of approximately $9,000 he received following the lodgement of his 2018/19 income tax return. He has also commenced payment arrangements with several outstanding trade creditors of the business.
  16. He gave evidence he has retained the jointly owned [Car 1] motor vehicle and [Ms A’s] [Car 2] motor vehicle. However, the [Truck 1] and another truck used in the [Business 1] are no longer serviceable or roadworthy compliant, and his tools of trade are quarantined in storage facilities at the [Town 1] Property to which he has been denied access due to the uninhabitable condition of the house and the undertaking he gave his insurers (see paragraph [‎26]). In the circumstances he said he is no longer able to return to remunerative employment.
  17. The Tribunal notes however there is no medical evidence before it to suggest the medical conditions of [Ms A] (see paragraph [‎31]) will not be resolved, following her surgical procedures, in which event Mr Cabe may no longer be required to provide full-time care for her and [Ms B]. Mr Cabe noted in his evidence his carer allowance had been extended to September 2022.
  18. Considering the evidence, the Tribunal is satisfied, on balance, it was reasonable in the circumstances for Mr Cabe to close down [Business 1] in June 2019 following Centrelink’s approval of his application for carer allowance to enable him to provide full-time care for [Ms A], and as a consequence of [Ms A’s] medical condition, he has been unable to engage in gainful employment since becoming her carer full time in April 2019.
  19. The Tribunal will now direct its attention to the income and financial resources of Mr Cabe for the periods the Tribunal is considering in the decision under review, viz:
    1. 1 April 2019 to 31 October 2019, during which he has been assessed to pay child support on an ATI of $67,543;
    2. 1 November 2019 to 31 March 2020, during which he has been assessed to pay child support at the minimum annual rate of $435; and
    1. 1 April 2020 to 31 December 2021, during which he has been assessed to pay child support on an ATI of $67,543.
  20. As noted above, Mr Cabe challenges three items, viz:
    1. the objections officer’s disallowance of the depreciation and motor vehicle expenses claimed by him in his income tax return for the 2018/19 financial year, which he asserts are legitimate deductions, based on professional advice from his accountants, [Accountants 1], set out in their letter dated 8 October 2019, included in Exhibit A;
    2. the objections officer’s determination of his ATI at $67,543 for the period 1 April 2019 to 31 October 2019; and
    1. the objections officer’s determination of his ATI for the period 1 April 2020 to 31 December 2021, as his only income for the 2019/20 financial year was his carer allowance of approximately $12,500 per annum, because he closed down [Business 1] effective from 30 June 2019.
  21. During the course of the hearing on 23 July 2020, the Tribunal explained to Mr Cabe the basis upon which it considered the depreciation claimed by him as a deduction in his 2018/19 income tax return was not an actual expense to his business, but rather an allowance pursuant to the provisions of the Income Tax Assessment Act for tax purposes in recognition of the need for businesses to replace, at some time in the future, items of capital equipment used in the business, and unless it can be demonstrated the amount claimed has been actually outlaid in the relevant financial year, it cannot be considered an expense to the business, and for that reason, is added back to the net profit of the business for the purpose of determining income for child support purposes.
  22. This was the approach taken by the Tribunal in its decision dated 6 April 2018, albeit a reduction of one third of the amount claimed in the 2016/17 financial year’s business income tax return was applied.
  23. With respect to motor vehicle expenses, the Tribunal accepts the submissions contained in [Accountants 1’s] letter of 8 October 2019 and will not adjust the net profit for the 2018/19 financial year by adding back the motor vehicle-related expense item.
  24. The Tribunal also finds there is no evidence before it to suggest the [Business 1] partnership profit-sharing determination between Mr Cabe and [Ms A], made in its earlier decision dated 6 April 2018, should not continue to be applied.
  25. Income tax returns for the 2018/19 financial year for Mr Cabe and the [Business 1] partnership were before the Tribunal as part of Exhibit 1. They reflect a distributable net profit for that financial year of $61,448 to each of Mr Cabe and [Ms A] consistent with the Tribunal’s earlier determination as to the way the income from the partnership was to be distributed. Net of allowable deductions, Mr Cabe’s taxable income for that financial year is $60,768.
  26. As part of Exhibit 1, the Tribunal also had before it copies of the profit and loss statement for the [Business 1] partnership for the period 2 April 2019 to 30 June 2019 prepared by [Accountants 1]. This statement records depreciation at $0, and motor vehicle expenses for the [Car 2] at $3,400, and Mr Cabe’s [Car 1] at 100%. The claim for the [Car 2] has been made on the cents per kilometre basis and as such is the business use of the vehicle. Consistent with the Tribunal’s approach in its earlier decision referred to above, and the submissions contained in [Accountants 1’s] letter of 8 October 2019, the Tribunal accepts the motor vehicle expenses claimed for the [Car 2] accurately reflect the business use of that vehicle, and an adjustment to reduce the claim for the [Car 1] to 67% is warranted for that period.
  27. However, other items claimed in the statement, viz Child Support and Medical expenses are not legitimate business expenses, and will be added back to the net profit for that period, resulting in a net adjusted taxable income profit of $29,183 for the period 2 April 2019 to 30 June 2019, of which, Mr Cabe’s 50% share would be $14,592, annualised to $59,844 ($14,592 / 89 days x 365 = $59,843.59 rounded up to $59,844). The Tribunal therefore finds Mr Cabe’s ATI for the 2018/19 financial year was approximately $60,000.
  28. Before the Tribunal were profit and loss statements for the periods 1 July 2019 to 3 July 2019, 4 July 2019 to 19 September 2019 and 20 September 2019 to 30 June 2020, prepared by [Accountants 1], as part of Exhibit 1. These statements record $0 depreciation, and the motor vehicle expenses for the [Car 2] and the [Car 1] consistent with the calculation of those expenses for the earlier period, 2 April 2019 to 30 April 2019. The Child Support, Medical expenses, and PAYG expenses listed in the statement are not legitimate business expenses (the PAYG item is a liability for PAYG deductions from wages, not an expense), and will be added back to the net profit for those periods, resulting in an overall year ended 30 June 2020 adjusted net profit on the winding up of the partnership’s business activity of $7,858, of which Mr Cabe’s share would be $3,929 (see [Business 1] (Profit & Loss Accounts)).
  29. The Tribunal therefore finds Mr Cabe’s income from the partnership for the 2019/20 financial year was $3,929. In addition, he has been in receipt of carer allowance and carer payments since October 2019 of approximately $646 and $358 respectively per fortnight.
  30. The Tribunal considers the carer payments he receives are a financial resource available to him for child support purposes. Those payments, annualised, amount to $9,308. Mr Cabe’s combined income and financial resources for the 2019/20 financial year of $1,965 and his $9,308 respectively amount to $11,273.
  31. As neither of these incomes is accurately reflected in the administrative assessments referred to above, the Tribunal has found the assessments unjust and inequitable, the case special and grounds for departure 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 children, the parents’ commitments and any hardship that would be caused by departing or not departing from the formula.

Mr Cabe’s Statement of Financial Circumstances (SOFC)

  1. The SOFC provided by Mr Cabe was dated 20 January 2020. Subject to the changes detailed below, he affirmed the contents of that document at the hearing, although he did not have a copy of this document before him at the hearing.
  2. He lists his occupation as [an occupation] and the carer for [Ms A]. He gave evidence his only source of income currently is his weekly Centrelink carer allowance of $560, annualised to $29,120. This evidence was at variance with the reported average weekly income from his carer allowance and family tax benefit of $646 reflected in his SOFC of 20 January 2020, and the total average weekly income he reported in that document of $903.66, annualised to $46,990. As noted above, his income from 1 July 2019 has been complicated by the closure of his [business] in June 2019, and the carry-over of income from that business into the 2019/20 financial year as reflected in the income estimate he lodged in July 2019 of approximately $53,000, and the analysis of his income for the 2018/19 financial year set out above.
  3. He also reports a Centrelink disability benefit paid to [Ms A] of $257 per week, annualised to $13,364. This was also at variance with the evidence he gave at the hearing, viz, [Ms A’s] benefit was $310 per week, annualised to $16,120.
  4. Regarding his assets, there was some conjecture as to the value of the [Town 1] Property. Mr Cabe listed his 11% interest in the property at $38,500. Ms Farrell challenged this valuation, asserting a similar property in the same street was listed on a real estate website at $170,000. Mr Cabe’s response was that he had a current bank valuation of between $80,000 and $90,000 and provided a copy of the [Town 2] Council’s rates notice for the property, reflecting the [state] Valuer General’s valuation of the land at $90,000.
  5. The Tribunal accepts Mr Cabe’s evidence given it suggests the dwelling on the property is currently uninhabitable and may need to be demolished.
  6. Mr Cabe gave evidence that [Ms A] had contributed funds from the sale of her former residential property to significantly reduce the debt on the [Town 1] Property. Following legal advice, the interest percentages of 11% for Mr Cabe and 89% for [Ms A] were applied to the joint tenancy to reflect each party’s contribution to the mortgage debt on the property and the value of his share at $38,500.
  7. He gave evidence of negligible balances in his current joint and savings bank accounts with [Bank 1], and confirmed the closure of the [service] business bank account.
  8. In addition to the real estate referred to in the preceding paragraphs, Mr Cabe listed his half-share in a 2015 model [Car 1] registered in his and [Ms A’s] joint names, valued at $6,000, and household contents valued at $2,000. However, he said the household furniture is quarantined in the house, and at the hearing, revised his value of that item in his SOFC to Nil, reducing the total assets from $46,500 to $44,500.
  9. He reported his superannuation entitlement at $12,600, and gave evidence of his withdrawing $4,000 from the fund under the COVID-19 early release superannuation scheme, which he said he applied to provide temporary accommodation for his family in [the city], where they were living at the time of the hearing, in anticipation of the abovementioned surgical procedures [Ms A] is to undergo in the coming months.
  10. Mr Cabe gave further evidence at the hearing, elaborating on the liabilities listed in his SOFC. He stated [Ms A] had reduced her share of the [Bank 1] mortgage debt on the [Town 1] Property to Nil from the proceeds of the sale of her former home, and the balance of the mortgage debt of $189,000 was his responsibility, which he is currently repaying. In addition, he lists his share of a debt on the jointly owned [Car 1] motor vehicle at $9,088. The Tribunal finds the total of his liabilities amounts to approximately $191,094, and not $544,734 as listed in his SOFC.
  11. No weekly personal expenditure items were reported. His total average weekly household expenditure amounting to $1,717, included mortgage payments of $250 per week, motor vehicle-related expenses totalling $81, and medical expenses of $180 per week, presumably largely attributable to [Ms A’s] medical condition, although there was evidence before the Tribunal relating to [a specified] procedure performed on [Ms B] in September 2020.
  12. Ms Farrell commented on the extraordinarily high amount ($300 per week) listed for electricity. Mr Cabe offered no explanation for this. In response to questioning by the Tribunal, he conceded the item for house repairs should be discounted. However, he also gave evidence he has weekly rental expenses of $660 for the unit he is currently renting in [the city], not listed in his weekly expenses schedule. Otherwise, the remaining items listed in this section of his SOFC were unremarkable.
  13. Except for the issues referred to above, Ms Farrell did not otherwise challenge Mr Cabe’s SOFC.

Ms Farrell’s SOFC

  1. Ms Farrell provided a SOFC dated 11 January 2020. She affirmed the contents of this statement to be true and correct at the hearing and acknowledged she did not have a copy of that document with her at the hearing. She said she had thrown all her hearing papers relating to the matter in the bin. Nevertheless, as noted above, she acknowledged she was content for the hearing to proceed.
  2. Ms Farrell’s SOFC reflects she is unemployed, and her sole source of income is her combined carer allowance and single parent benefit totalling $1,423 per fortnight, annualised to $36,998.
  3. Her SOFC provided no details of income from businesses, partnerships, companies or trusts, or from other income earners in her household. She listed only two asset items, viz, her current bank account balance at $1.00 and household contents valued at $30,000. No details of her liabilities were provided, and she listed her monthly credit card repayment of $50 as her only item of personal expenditure. Her schedule of average weekly expenditure was poorly presented in both weekly and monthly estimates, and no particulars of the other necessary commitments item of $50 were provided.
  4. However, in response to questioning by the Tribunal at the hearing, Ms Farrell conceded the weekly item of $25 for Council Rates and Levies should be discounted, as she is renting her accommodation. The item for other necessary commitments will also be discounted as no particulars were provided.
  5. With respect to the education expenses item, Ms Farrell gave evidence she purchased a new laptop computer for [Child 1], a [grade] student at the local [High School], to assist her in accommodating additional data her school laptop computer was unable to adequately process.
  6. Although she did not list a motor vehicle in the asset section of her SOFC, in response to questioning by the Tribunal at the hearing on 23 July 2020 regarding the motor vehicle-related expenses claimed in her weekly household expenses schedule, Ms Farrell gave evidence she purchased a motor vehicle in October 2019 for $7,000 using borrowed funds, in respect of which she has incurred a repayment liability of $170 per fortnight ($85 per week).
  7. Based on the material available to it, and the evidence given by Ms Farrell at the hearing in relation to her financial circumstances, the Tribunal’s estimate of her adjusted weekly household expenses is approximately $836.
  8. Mr Cabe challenged Ms Farrell’s capacity to purchase a new laptop computer for [Child 1] given her income stated in her SOFC. He also asserted she received additional income from trusts and other entities conducted by her adult children, [named], in support of which he provided a schedule of several companies bearing [her family name] in various configurations.
  9. The Tribunal has conducted Australian Securities and Investments Commission (ASIC) searches of these companies and is satisfied none of them have any relationship to Ms Farrell or her children. Although she acknowledged she received financial assistance from [her adult children] from time to time, Ms Farrell denied receiving any financial benefit from any companies or trusts. The Tribunal accepts her evidence in this regard.
  10. Other than as set out above, Mr Cabe did not challenge Ms Farrell’s SOFC, or the evidence she gave at the hearing regarding her financial circumstances.
  11. There was no evidence before the Tribunal to suggest [Child 1] had special needs. Mr Cabe gave evidence he is suffering from a depressive condition. Other than receiving adequate treatment for this condition and otherwise managing to cope with the situation and provide care and support for [Ms A] and [Ms B], there was no substantive evidence before the Tribunal to suggest Mr Cabe or [Ms B] have any special needs.

Conclusion

  1. The Tribunal has found [Ms A] has suffered from a range of debilitating medical conditions since 2017, which progressively precluded her from continuing to participate in the management and day-to-day operation of their partnership business, [Business 1]. As a result, it became necessary for Mr Cabe to assume the role of full-time carer for her and [Ms B] in early 2019 when he applied to Centrelink for carer allowance, which was subsequently approved in or about September 2019.
  2. The Tribunal is also satisfied Mr Cabe was justified in closing the partnership [service] business with effect from 30 June 2019, due to his full-time commitment to caring for [Ms A].
  3. The Tribunal has found his income for the 2018/19 financial year was approximately $60,000, and from 1 July 2019 to 30 June 2020, his share of income from the winding up of the [service] business partnership with [Ms A] was $1,965. The Tribunal has also found the carer payments he receives from Centrelink constitute a financial resource available to him for child support, and his combined income and financial resources equate to an income of approximately $18,966.
  4. The Tribunal will therefore set aside the objection decision under review, and, in substitution, set Mr Cabe’s ATI for the period 1 April 2019 to 30 June 2019 at $60,000. As the Tribunal has found Mr Cabe’s income and financial resources for the 2019/20 financial year equate to an income of approximately $18,966, which is below the self-support level, and as he has less than regular care of [Child 1], the Tribunal will set him on the minimum annual rate of child support of $435 for the period 1 July 2019 to 30 September 2021. Thereafter, his child support can be determined in accordance with his income tax return as lodged for the 2020/21 financial year.
  5. The Tribunal is satisfied Ms Farrell’s only source of income is from her Centrelink payments, which she has been receiving for the past four years. Mr Cabe did not challenge her earning capacity at hearing and her income will be determined by reference to her current Centrelink benefits. The Tribunal will therefore not disturb the administrative assessments based on her income derived from Centrelink benefits.
  6. The Tribunal is satisfied the proposed determination is just and equitable.

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. Varying Mr Cabe’s income on which child support is calculated from that used in the administrative assessment, based on his income and financial resources which are not reflected in the administrative assessment, will result in an appropriate apportionment of financial responsibility between the parents and the community. Such a result would be otherwise proper.

DECISION

The Tribunal sets aside the decision under review and, in substitution, decides that:

ATTACHMENT A: [Business 1] (Profit & Loss Accounts)


2 April 2019 to 30 June 2019

I July 2019 to 3 July 2019
4 July 2019 to 19 September 2019
20 September 2019 to 30 June 2020
Total Y/E 30 June 2020










Sales


63,623
0
28,974
0
28,974
Cost of Sales







Materials


11,648
0
10,811
0
10,811




11,648
0
10,811
0
10,811
Gross Profit

51,975
0
18,163
0
18,163
Other Income







GST savings & refund




83
83




0
0
83
0
83
Expenses








Accounting & bookkeeping
1,800

434
434
Bank charges and fees

95
10
25
20
55
Borrowing expenses

207



0
Child support

570

790
790
Depreciation

0



0
Donations


273


15
15
Equipment rental




30
30
Fees & licences

849



0
Home office




915
915
Interest - [Car 1]

831



0
IT & software expenses

172



0
Medical expenses

40

260
260
Motor vehicle expenses:







[Car 2]


3,400

27
0
27
Registration & insurance
1,466


1,827
0
1,827
Repiars & maintenance
202


80
1,824
1,903
Fuel & oil

1,236

53
1,129
0
1,182




2,903
53
3,063
1,824
4,940
Office expenses

123
14
804
818
PAYG expenses




4,107
4,107
Protective cothing




621
123
744
Subcontractors

9,415

1,758
1,758
Superannuation

375



0
Telephone & internet expenses
557

471
32
503
Training & professional fees
60



0
Travel & meals




316
316
Wages to staff

4,636

1,042
1,042




26,305
77
14,637
2,013
16,727
Net Profit


25,670
(77)
3,609
(2,013)
1,519
Net reconciliation adjustments
0
0
0
0
0
Taxable Income

25,670
(77)
3,609
(2,013)
1,519
Adjustments to taxable income






Child support claimed

570
0
790
0
790
Medical expenses claimed
40
0
260
0
260
PAYG expenses claimed
0
0
4,107
0
4,107
MV expenses claimed
[Car 2]
3,400
0
27
0
27


Other
2,903
53
1,129
0
1,182
MV expenses allowed
[Car 2]
(3,400)
0
(27)
0
(27)


Other
67%
(1,945)
(36)
(756)
0
(792)
Adjusted taxable income
29,183
(24)
9,895
(2,013)
7,858


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