APPLICANT SEEKS ORDER TO AMEND THE CHILD SUPPORT ASSESSMENT AND ISSUE A DEPARTURE ORDER
MacDougal & Benson [2020] FCCA 3641 (2 October 2020)
This is an Application filed by the Applicant. The Applicant seeks orders under S.111(1A) of the Child Support (Assessment) Act 1989 granting leave to the Child Support Registrar to amend the administrative assessment and issue a departure order pursuant to part 6A of the Assessment Act.
Facts:
Prior to separation, the parties owned and operated a child care centre and ownership of that entity was divided between two companies. The Respondent was the Director and Shareholder of the company that owned the freehold and the Applicant was the Sole Director and Shareholder of the company that owned and ran the business.
That business and freehold was sold in April 2012, and when the parties separated in February 2013, they hadn’t finalised their tax position following the sale of the business. This was effected in February 2017 when all the tax returns were prepared by the parties’ agreed accountant.
There was capital gains tax payable in relation to the sale of the freehold and by agreement the parties’ affairs were arranged in such a way that reduced the capital gains tax payable. However, that involved a nominal capital distribution to the Applicant in the sum of forty-six thousand dollars ($46,000) for the 2014/2015 financial year, which had the effect of, at least on paper, raising the Applicant’s taxable income from, rounding off the figures, twenty-nine thousand dollars ($29,000) to seventy thousand dollars ($70,000). It is the evidence of the Applicant that he at no time actually received that capital distribution.
The Child Support Agency proceeded to assess the Applicant’s child support liabilities for the period of 1 July 2016 to 30 June 2017 on the basis of the figure shown in his tax return. It is this assessment of child support liability that the Applicant would like to have the Registrar re-assess.
Issue: Should the court grant the leave to amend rhe administrative assessment?
Law:
- S.111(1)(a) of the Assessment Act gives the court the power to make orders that the Registrar re-assess the Applicant’s child support liability.
- Pursuant to S.112(4) of the Assessment Act, when granting leave to amend the administrative assessment that is more than 12 months old, the courtmust consider the reason for the delay in making the Application.
Analysis:
It is the evidence on the Applicant that he was not aware of the assessment for a variety of reasons, but more particularly because the Child Support Agency didn’t know where he was and he was under the impression there was not going to be an assessment made. It therefore only came to the Applicant’s attention in August of 2019 that he had an outstanding child support liability of some thousands of dollars and that there was an order preventing him from being able to leave the country.
The court is therefore satisfied that whilst on paper, there has been a delay in the Applicant making the Application, in reality as soon as he was aware of the assessment and resultant arrears of child support he immediately took all reasonable steps to file the Application.
Clearly, the hardship to the Applicant is apparent on the basis, at least on his evidence, that there is an assessment that is not an accurate reflection of his income for the relevant period and because the penalties that are currently being imposed on him with respect to the Departure Prohibition Order.
Conclusion: Pursuant to Section 111(1)(a) of the Child Support (Assessment) Act 1989 the Court grant leave to the Child Support Registrar to amend the administrative assessment and issue a departure order pursuant to Part 6A of the Child Support (Assessment) Act 1989.