Caine v Caine [2011] SSATACSA 18

DECISION UNDER REVIEW

A decision made by an objections officer on 5 May 2011 to disallow an objection by Ms Caine to a decision made on 4 March 2011 to credit prescribed non-agency payments of $10,371 for school fees for 2010 for Nigel under section 71C of the Child Support (Registration & Collection) Act 1988.

HEARING BY TRIBUNAL

The application was heard on 22 July 2011 by Member XXXXXXXX.

ATTENDANCE

Ms Caine and Mr Caine both attended the hearing by conference telephone and both gave evidence by affirmation.

A representative of the Child Support Registrar did not attend the hearing.

DECISION OF THE TRIBUNAL

On 22 July 2011, the Tribunal decided to set aside the decision under review and substitute its decision that the amount of $10,317 is not to be credited against Mr Caine’s child support liability.

DATE OF DESPATCH 4 August 2011

REASONS FOR DECISION

HISTORY

Ms Caine and Mr Caine are the parents of Nigel, born 1998. Nigel lives with Ms Caine. A child support assessment has been in place since 21 November 2007. On 5 August 2009, Ms Caine applied for collection of child support and for collection of three months arrears by the Child Support Agency (the CSA) and the CSA made a determination giving effect to the applications.

On 23 November 2010, Mr Caine provided the CSA with a spreadsheet of payments of Nigel’s school fees made by him for the period from 5 August 2009. He stated that it appeared that not all of the payments had been credited by the CSA. He also provided information about payments for the internet service for Nigel’s computer that had been made by him. Mr Caine requested the CSA to review and ensure that the correct amounts had been credited against his fortnightly child support payments during the period in question.

When contacted by the CSA, Ms Caine indicated that the school fees for 2010 were to be paid by Mr Caine under a court order. She did not believe those payments should be credited.

On 4 March 2011 a CSA officer decided to credit the amount of $10,371 paid by Mr Caine towards Nigel’s 2010 school fees as prescribed non-agency payments.

On 7 March 2011, Ms Caine lodged an objection to the decision with the CSA.

On 5 May 2010, an objections officer disallowed Ms Caine’s objection. In reaching this decision the objections officer referred to a copy of Short Minutes of Consent Orders as to Property Settlement signed by Ms Caine and Mr Caine and filed in the Federal Magistrates Court on 22 January 2011. In addition to the consent orders the document contained a number of notations including notation M, which provided:

The husband agrees to pay the school fees for the child Nigel at a private school for 2010. In so agreeing, he does not admit any liability to pay for Nigel’s school fees at that school thereafter and his liability to pay in ensuing years shall depend (in the absence of agreement between the parties), upon the equity of his doing so as determined by the Child Support Agency or the Court.

The objections officer observed that notation M was not an order. She stated that although it indicated Mr Caine’s intention to pay Nigel’s school fees for 2010 it was not an order and could not vary the (child support) assessment. She said that the payments made by Mr Caine met the criteria for acceptance as prescribed non-agency payments, which she listed as:

the payments for school fees were of the kind specified in Regulation 5D (of the Child Support (Registration and Collection) Regulations 1988);

at the time the payments were made Mr Caine had less than 14% care of Nigel;

notation M of the court order did not prevent Mr Caine from seeking credit under section 71C (of the Child Support (Registration and Collection) Act 1988); and

the CSA had no reason under section 71D (of that Act) to refuse the application.

On 18 May 2011, Ms Caine applied to the Social Security Appeals Tribunal (the Tribunal) for a review of the decision.

ISSUES

The issue to be determined by the Tribunal is whether the payments made by Mr Caine towards Nigel’s school fees for 2010 should be credited towards the enforceable maintenance liability.

DOCUMENTARY EVIDENCE

The Tribunal had access to the Subsection 95(3) Child Support (Registration and Collection) Act 1988 Statement and Documents file provided by the Agency.

INFORMATION PROVIDED AT HEARING

The following is a summary of the information given by Ms Caine and Mr Caine at the hearing. It is not a transcript.

Ms Caine’s Evidence

Ms Caine told the Tribunal that the decision was wrong because the whole purpose of going to court in January 2011 was for the property settlement, not maintenance.

She feels strongly about the decision. Nigel is suffering from a number of conditions and he requires extra care, including seeing a specialist and taking medication.

Ms Caine now has to meet the costs of all of these things.

Nigel is now attending a public school. He hated the private school. Now he is at the top of his class and seeing a specialist.

Ms Caine said she has not yet paid Nigel’s public school fees for this year of $600. Nigel’s father won’t pay. She has paid for Nigel’s uniform and his pack. She noted that due to his medical condition Nigel needs particular items.

She said that she is on income support and the decision has placed her under financial stress.

Ms Caine said she had understood that the court proceedings in January 2011 were totally separate to child support. She understood that Mr Caine had agreed to pay Nigel’s school fees for 2010 but nothing else.

Ms Caine said she was concerned that she was told by the CSA first of all that the payment of Nigel’s school fees for 2010 would not be accepted as prescribed non-agency payments and later that decision was changed.

Mr Caine’s evidence

Mr Caine said that notation M in the court orders was not an order. It was a notation. Notation M was added by him after the property settlement was completed. He wanted it recognised that he was prepared to pay the school fees for Nigel for 2010. Ms Caine was not contributing towards Nigel’s school fees and he had thought it would be terrible for Nigel’s welfare if he were unable to attend the private school.

He said there was no discussion about the inclusion of notation M. (The Tribunal asked Ms Caine to respond to this statement. She said there was discussion about notation M. She said she sat down with her sibling and her solicitor to consider the notation before signing the consent orders).

The Tribunal asked Mr Caine how he thought his payment of 2010 school fees would affect his child support. He indicated that his intention had been that his payment of school fees would affect child support. He said he had continuously asked the CSA in the past to accept his payment of school fees as non-agency payments.

Mr Caine told the Tribunal that his payments of child support were up to date except for the arrears arising from CSA’s decision to accept Ms Caine’s application for three months arrears, which he noted had been subject to a review by this Tribunal (differently constituted). He is paying those arrears by instalments.

DISCUSSION OF EVIDENCE

The section 95(3) documents do not contain copies of receipts for the payments claimed by Mr Caine as payment of school fees for Nigel in 2010. A copy of a school invoice at folio 77 confirms some payments and a handwritten notation on the document appears to record some other payments made. Mr Caine has stated that the payments were made and Ms Caine has not asserted that the payments were not made. The Tribunal understands that while Ms Caine considers the claimed payments totalling $10,371 should not have been credited as prescribed non-agency payments, she accepts that the payments were made. In these circumstances the Tribunal accepts that Mr Caine paid a total amount of $10,371 to the private school as payment of school fees for 2010 for Nigel and that the payments were as recorded by the CSA in the decision notices of 4 March 2011 (folios 37 to 40).

Mr Caine told the Tribunal that notation M to the orders filed in the Federal Magistrates Court on 22 January 2010 was added by him after the property settlement was completed and that there was no discussion about the inclusion of the notation. Ms Caine told the Tribunal that she discussed the notation with her sibling and her solicitor. The Tribunal is unable to determine whether there was discussion between the parties about the effect of notation M before they signed the minutes of order.

The Tribunal agrees with the parents and the objections officer that notation M is not an order and that it cannot be used to vary the child support assessment. Notation M is an indication of the intention of the parties who signed the short minutes of order, that is, Ms Caine and Mr Caine.

The Tribunal takes notation M to acknowledge an agreement by Mr Caine to pay for Nigel’s school fees at the private school for 2010 only. The Tribunal takes the notation to mean that Mr Caine would pay the school fees for 2010 without regard to his child support liability but payment for future years would be have to be determined with regard to his child support liability.

FINDINGS OF FACT

Mr Caine is the person liable to pay child support to Ms Caine for Nigel.

As at the dates of payments made by Mr Caine in 2010 for Nigel’s school fees the maintenance liability was enforceable by the CSA.

The amounts paid and the dates they were paid were:

Amount Date paid

$615 22 April 2010

$650 12 May 2010

$650 26 May 2010

$708 21 June 2010

$708 20 July 2010

$708 27 July 2010

$708 3 August 2010

$708 24 August 2010

$708 1 September 2010

$708 10 September 2010

$500 4 October 2010

$750 11 October 2010

$750 21 October 2010

$750 4 November 2010

$750 17 November 2010

The payments were made to the private school as school fees for Nigel for 2010.

Mr Caine is recorded as having less than regular care of Nigel from 1 July 2008.

Notation M to court orders filed in the Federal Magistrates Court on 22 January 2011 indicated that that Mr Caine would pay Nigel’s school fees for 2010 without regard to his child support liability but payment for future years would be have to be determined with regard to his child support liability.

APPLICATION OF LAW AND REASONS

Under section 71C of the Child Support (Registration & Collection) Act 1988 (the Act), if the payer of an enforceable maintenance liability who does not have regular care of any of the children of the assessment, has made one or more payments specified in Regulation 5D of the Child Support (Registration & Collection) Regulations 1988 (the Regulations), to the payee or to another person, the Registrar must credit the payment or payments against the amount payable under the payer’s liability.

Section 4 of the Act gives meaning to certain terms found in section 71C of the Act. They are:

(i) ‘enforceable maintenance liability’ means a registered maintenance liability enforceable under the Act;

(ii)‘registered maintenance liability’ means a registrable liability under section 17, 17A, 18 or 18A registered under the Act.

Section 71C payments cannot be credited against an enforceable maintenance liability that arose because of a maintenance liability that was registered either under section 17A, 18 or 18A of the Act. The Tribunal is satisfied that the enforceable maintenance liability to which the payments relate was not registered under section 17A, 18 or 18A of the Act.

After speaking to Ms Caine and Mr Caine, the Tribunal is satisfied that the payments that are the subject of this application were actually made.

The payments claimed by Mr Caine were for Nigel’s school fees for 2010 to the private school. One of the specified payments under Regulation 5D of the Regulations is “fees charged by a school or pre-school” for the child who is the subject of the enforceable maintenance liability. After speaking to Ms Caine and Mr Caine, the Tribunal is satisfied that the payments that are the subject of this application were of a type that is specified under Regulation 5D(b).

The Tribunal considers that the payments, totalling $10,371 made by Mr Caine for Nigel’s school fees for 2010, met the requirements to be credited against the amount payable under Mr Caine’s child support liability of section 71C of the Act.

Section 71C is expressed to be subject to section 71D of the Act, which gives the Registrar, or, on review, the Tribunal acting in the place of the Registrar, the discretion to refuse to credit an amount if satisfied that in the circumstances of the particular case, the amount ought not be credited.

In this case, the objections officer considered that the CSA had no reason to refuse to credit the amount of $10,371. The Tribunal does not agree and considers that in the circumstances of the case the amount ought not be credited. In reaching this view the Tribunal had regard to notation M to the orders filed on 22 January 2011. The Tribunal considers that the notation indicates that Mr Caine’s payment of Nigel’s school fees for any year after 2010 would be subject to his child support liability. The notation indicates no such intention in relation to his payment of school fees for 2010.

The Tribunal considers that it would be unreasonable to credit the amounts paid for Nigel’s school fees for 2010 against Mr Caine’s child support liability after he expressed the intention to pay those fees without the payments being subject to his child support liability.

The Tribunal therefore determines that the discretion in section 71D of the Act should be exercised to refuse to credit the amount of $10,371 against Mr Caine’s child support liability.

DECISION

On 22 July 2011, the Tribunal decided to set aside the decision under review and substitute its decision that the amount of $10,371 is not to be credited against Mr Caine’s child support liability.

Member for the Tribunal: XXXXXXXX

Date: 4 August 2011

DISCLAIMER

 

The publication of Social Security Appeals Tribunal child support decisions is authorised under subsections 16(2AB)-16(2AC) of the Child Support (Registration and Collection) Act 1988.

Personal particulars of parties to an appeal and their children are removed to protect their privacy. Names used in all published decisions are pseudonyms. Reasons for decisions are published in full (with any information which may identify involved individuals to a member of the public removed) to ensure that the full context and basis for the decision can be understood. The Social Security Appeal’s Tribunal’s decisions in relation to child support matters demonstrate the application of the Child Support legislation to the individual circumstances of the case being decided. Different fact situations or subsequent changes to legislation may result in different outcomes.

The CSA reviews all SSAT decisions to identify opportunities to improve its services and ensure its processes and policies are robust and accurate. The CSA publishes further information about SSAT decisions on their website www.csa.gov.au/publications/1313.aspx#ssat.