The Child Support Agency makes assessments as to the amount of child support payments in relation to a child. If a parent is dissatisfied with this assessment, there is a limited opportunity for that parent to bring a court application to depart from the Agency’s assessment. Section 117 of Child Support (Assessment) Act 1989 (Cth) permits the court to make a departure order which departs from the administrative assessment in some circumstances. In order to make a departure order, the court must be satisfied that:
- one or more of the grounds for departure set out in s 117(2) of the Act exists; and
- it would be “just and equitable” as regards the child, the carer entitled to child support and the liable parent; and
- it would be “otherwise proper” to make the departure order.
Subsection 117(2) of the Act sets out very particular requirements or grounds for departing from the administrative assessment, which generally require a finding of “special circumstances”. For example, special circumstances may include a significant reduction in the capacity of either parent to provide financial support for the child because of the commitments of the parent necessary to enable the parent to support himself or herself, or any other child or person that the parent has a duty to maintain.
The Family Court of Australia recently considered the principles set out in s 117(2) of the Act. On 17 July 2007, the court issued its decision in Aspen & Selby, [2007] FamCA 872. The case concerned an appeal by the husband against an order made by a federal magistrate dismissing the husband’s departure application under the Child Support (Assessment) Act 1989 (Cth).
The parties commenced cohabitation in 1977 and were married in 1979. They separated in 2003 and were divorced in 2005. At the time of the hearing, their four children were aged 19, 17, 15 and 10 years and resided with the wife.
The husband was the sole director, shareholder and employee of a company. He conducted a consultancy business through that company. At the date of the hearing, the husband rented a room at premises leased by his uncle and slept at commercial premises approximately three nights a week.
The wife was primarily engaged in home duties and care of the children. In addition to the parenting payment and family allowance, she earned a small of income from babysitting and ironing.
The Child Support Agency assessed the husband to pay child support from July 2003. In January 2005 the wife applied for a change of assessment to increase the amount of child support. The case officer increased the husband’s child support income for the period commencing January 2005 to $93,570, with additional increases beginning in April 2006. Both parties sought an administrative review of that decision.
The objections officer reconsidered the original decision and decided not to change it. The husband’s child support liability for the period commencing in January 2005 was therefore assessed at a monthly rate of $2,284.25 for all four children.
In July 2005, Justice Mullane made parenting orders providing for the four children to live with the wife and for the husband to have contact.
In December 2005, the husband filed an application seeking to depart from the administrative assessment. He proposed that his monthly child support payments be reduced to $653.08 on the basis that his annual income was only $40,857, not $93,570. The husband asserted that as a result of the downturn in income from his company, he was unable to provide for his own support and was incapable of meeting his assessments for child support.
The magistrate dismissed the husband’s application, noting that the husband’s spending patterns, which included the purchase of a luxury vehicle, golf and gym memberships and an overseas vacation, were inconsistent with his stated income of $40,857. The magistrate identified other oddities in his evidence noting, for instance, that expenses on the husband’s corporate catering account were consistent with the equivalent of groceries purchased for one person.
The husband appealed the decision of the federal magistrate claiming, among other things, that the magistrate had failed to give adequate reasons for her decision and made an error of law in respect of the grounds for departure from the administrative assessment. The appellate judge agreed that the magistrate’s reasons were inadequate and found that the magistrate did not structure the exercise of her discretion in the manner strictly required by the Act. As a result, she fell into error by failing to evaluate both the child support payable, in light of the husband’s income and expenses, and by failing to determine whether or not there were special circumstances which meant that his capacity to pay child support was reduced having regard to his necessary commitments.
The appellate judge allowed the husband’s appeal and ordered that the matter be reheard.