CHILD SUPPORT - taxable income - updated estimates - termination payout, jobseeker payments and commencement of new job - reconciliation of estimates - error in child support's calculations - decision under review remitted

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 pursuant to subsection 16(2AB) of the Child Support (Registration and Collection) Act 1988.

1. This review is about a decision of Services Australia (Child Support) about reconciling an estimate of income.
2. Ms Hines and Mr Vincent had a child support assessment for their child which ended on 28 June 2024.
3. From 1 October 2022 the assessment used Mr Vincent's 2021/22 taxable income of $64,107. On 30 August 2023 Mr Vincent lodged an estimate of his 2023/24 adjusted taxable income of $0, with a year to date (YTD) income of $0. Child Support accepted this estimate and applied it to the assessment from 30 August 2023 until 28 June 2024.
4. On 11 December 2023 Mr Vincent updated his estimate to take into account his jobseeker payments from 3 November 2023. His estimate of $11,809 for the remaining period of the estimate (3 November 2023 to 30 June 2024) was annualised to an income of $17,885 and used in the assessment until the case ended.
5. On 11 April 2024 Mr Vincent advised Child Support he had started work, but did not update his estimate. On 23 May 2024 Mr Vincent again said he had commenced working but did not update his estimate as he wasn't yet sure of his income. He was advised to update Child Support once he knew.
6. On 2 July 2024 Mr Vincent provided payslips to Child Support for the period 27 May 2024 to 23 June 2024 showing his new income (YTD gross $11,461.76), however by this time the case had ended, and no further updates to the estimate were made.
7. On 7 September 2024 Child Support reconciled Mr Vincent's estimate as his actual taxable income of $32,376 had been provided by the Australian Taxation Office (ATO). As he had only estimated that he would receive $11,809 during the estimate period from 30 August 2023 to 30 June 2024 and provided a YTD income of $0 for the period 1 July 2023 to 29 August 2023, Mr Vincent was considered to have underestimated by $28,007.
8. On 18 October 2024 Mr Vincent objected to the estimate reconciliation. During the objection process additional material was considered by Child Support about a termination payout Mr Vincent had received in July 2023. On 10 January 2025 child support allowed his objection, stating:

'We have made the decision to include Mr Vincent's termination payout of $17,503.41 to his 2023/24 estimate of adjusted income bringing the total estimated adjusted taxable income to $35,388.41. As this amount is higher than his 2023/24 ATO assessed income of $32,376, reconciliation will not occur.'

1. On 30 January 2025 Ms Hines applied to the Tribunal for a review of this decision.
2. The Tribunal and the parties received hearing papers from Child Support numbered 1-200. These have been considered by the Tribunal.
3. The Tribunal held a hearing on 4 June 2025 with Ms Hines attending and giving evidence by telephone. Mr Vincent did not attend the hearing. The Child Support Registrar did not participate in the hearing as per usual practice.
4. After the hearing the Tribunal issued directions to child support under section 79 of the Administrative Review Tribunal Act 2024 requiring the provision of further documents and information relating to the income and estimate system screens, missing records of conversations with Mr Vincent, and information explaining the objection decision. Additional documents were sent to the parties and the Tribunal from Child Support (received by the Tribunal on 12 June 2025 as 14 unnumbered pages) that partially complied with these directions. A further request was sent to Child Support on 12 June 2025 for missing information.
5. Additional documents D1-D5 were received from Child support on 27 June 2025 and exchanged with the parties who were given 7 days to make any submissions in response. Ms Hines made additional brief written submissions that, in effect, the estimate should be reconciled against the ATO income as Mr Vincent had underestimated. No submissions were received from Mr Vincent.

1. The statutory provisions relevant to this review are contained in the Child Support (Registration and Collection) Act 1988 (the Act) and the Child Support (Assessment) Act 1989 (the Assessment Act).
2. The issues which arise in this case are whether Mr Vincent's estimate ought to have been updated and whether the estimate ought to be reconciled.

1. Section 60 of the Assessment Act allows a parent to elect to use an estimate of their income in the assessment in circumstances where their current income has dropped by at least 15% from their last relevant year of income. When lodging the first estimate in a financial year, the parent must provide their YTD income for the period 1 July of that financial year to the day prior to the estimate commencing. They must then provide their estimated income from the date of the estimate until 30 June of that financial year.
2. Section 62 and 62A of the Assessment Act allow parents to revoke their estimate and replace it with a new estimate of income if their estimated income changes during the financial year.
3. Section 63AC allows a parent to elect a new YTD income amount if the year to date income they have already provided with their estimate is incorrect. Section 63AE allows Child Support to determine a new YTD income amount where a parent has already done so under section 63AC and the registrar is satisfied that the YTD income is incorrect.
4. Section 64A applies where a parent has made more than one income estimate during an income year, and their actual adjusted taxable income has since been obtained by Child Support. Subsection 64A(3) provides that if the difference between the actual adjusted taxable income and the YTD income is more than the total estimated income, the estimate will be reconciled so that the amount of the actual adjusted taxable income applies to the assessment instead of the estimated amounts.
5. The decision under review addresses two matters relating to Mr Vincent's estimates, although they are not clearly explained in the objection decision. Firstly, the objections officer, before considering the estimate reconciliation that was being objected to, appears to have made a decision that Mr Vincent had in effect updated his YTD income in accordance with section 63AC of the Assessment Act, but Child Support had not actioned it, and so Child Support were correcting that by updating the YTD income as part of the objection.
6. Secondly, the objections officer considered whether the estimates ultimately needed reconciling once that correction of the YTD income had occurred. Because they found that the updated estimated income (taking into account the increased YTD income) was higher than the taxable income received from the ATO, the objections officer decided that the reconciliation would not go ahead. The result was that the assessment reverted to using the estimates of income that had previously been in place for the period 30 August 2023 to 28 June 2024.

1. The updating of the YTD income was not clear from the hearing papers (which stated that the 'estimate' had been increased, not the YTD income) and could only be ascertained once Child Support responded to directions, providing at D3 - D5 screens and explanations demonstrating that the YTD income was updated on 13 January 2025 from $0 to $17,503.
2. When Mr Vincent first lodged his nil estimate on 30 August 2023, Child Support's records at page 93 of the hearing papers show the following:

'I discussed with Mr Vincent YTD income, including all sources of income. The detail of YTD income is: NIL YTDI.

- PP has been unemployed since prior to the 01/07/2023.

* Mr Vincent advised they have not received or are not expecting a lump sum payment. I reminded that any lump sum will be included in their estimate income.'

1. Letters were issued to both parties showing the YTD income was $0. Ms Hines immediately objected to the estimate on 31 August 2023 stating that Mr Vincent would have received a large lump sum payout from his former employer[1].
2. On 11 December 2023 there are two records in the hearing papers about a conversation between Mr Vincent and Child Support (page 116 of the hearing papers and page 3 of the additional material provided by Child Support on 12 June 2025). While this likely would have been one conversation, Child Support separated their notes into a call where Mr updated his estimate to include job seeker payments, and a call about a change of assessment in special circumstances application that had been made by Ms Hines. The note about the change of assessment shows the following discussion between Child Support and Mr Vincent:

'He received his last payment through his employer on 16/07/2023 and that was around $15,000, but Mr Vincent could not articulate what he received and why he received this money, he kept saying that was his payout. he only had 105-hour sin LSL as he had been using his leave.

* Mr Vincent has stated he will provide the following evidence by 02/01/2024: Payslip and details of his payments from his employer.'

1. As a result of this conversation, on 13 December 2023 Child Support received from Mr Vincent a copy of his termination payslip paid 14 July 2023 for the period 3 July 2023 to 16 July 2023. It included the following figures, made up of mostly accrued sick leave, long service leave and annual leave:
   • Gross payment $14,975.50 (this pay)
   • Gross YTD $17,503.41 (including this pay)
2. The Tribunal has determined from the papers that while the conversations with Mr Vincent on 11 December 2023 had been about his estimate and the change of assessment, Child Support only treated the evidence he sent about his lump sum payment as relevant to the change of assessment application. The change of assessment application was primarily about Mr Vincent's lump sum payment. The application was refused on 10 January 2024, with the decision maker stating:

'It is also noted that Mr Vincent cease his employment with the [employer] on 7 July 2023. He did not estimate his income with child support util 30 August 2023, this is approximately 7.5 weeks after his resignation from his employer. It could be argued that the assessment from 7 July 2023 to 29 August 2023 is also unfair as Mr Vincent was paying on an income of $64,107, an income that he was not earning.

I am satisfied on the balance, that Mr VIncent could have lodged an estimate sooner than 30 August 2023 and made a decision not to, as such the assessment for the period 7 July 2023 to 29 August 2023 is likely unfair. However, the fact that he received a payment from his employer for annual leave, and long service leave (along with his sick leave) balances up the fact that he delayed lodging his estimate until 30 August 2023.'

1. While it may not be clear from the evidence whether Mr Vincent was attempting to update his YTD income for the purpose of his estimate, the Tribunal finds it was within the power of Child Support to amend his YTD income on the basis of the new information in accordance with section 63AE of the Assessment Act. The Child Support Guide at 3.4.2 states that 'If the Registrar becomes aware that the year to date income amount is incorrect, the Registrar may determine a new year to date income amount to be used in the assessment'. This decision is discretionary. The Tribunal determines that the YTD income ought to be updated to include the $17,503 payment in July 2023 so that the estimate can be correctly reconciled.
2. The Tribunal notes that despite Child Support also receiving later payslips for Mr Vincent's employment income for the period 27 May 2024 to 23 June 2024, and information that this employment commenced 11 April 2024, Child Support did not amend the estimate for that period to take into account Mr Vincent's new higher earnings.

1. Child Support decided as part of the objection to 'update the estimate' by adding the $17,503 new YTD income to the annualised estimate of income of $17,885, stating this led to a new 2023/24 estimated income of $35,388. As this amount was higher than the taxable income received of $32,376, the decision was to reverse the estimate reconciliation, as estimates are only reconciled when they are lower than the taxable income for the year.
2. However, Child Support erred in this calculation by adding an annualised figure to an actual figure. What Mr Vincent's actually estimated was $0 for the period 30 August 2023 until it was later amended from 3 November 2023 (65 days), and $11,809 total for the period from 3 November 2023 to 30 June 2024 (241 days). The $11,809 was converted to an annualised income of $17,885 for the purpose of being used in the formula assessment, as required by the Assessment Act, however reconciliation requires consideration of what was actually estimated to be the income in each estimate period, not the annualised figures.
3. Reconciliation of multiple part year estimates under section 64A of the Assessment Act requires the below calculations be made. The Tribunal has made these calculations in order to demonstrate the finding that Mr Vincent has underestimated, and as an indication for the parties of the result of a future reconciliation, however the actual reconciliation will be calculated by Child Support and may involve some minor rounding differences. These calculations reflect those initially made by Child Support when they first reconciled the estimates on 7 September 2024 (page 155 hearing papers), however the figures differ due to the updated YTD:

a) The difference between the actual adjusted taxable income and the applicable YTD income: $32,376 - $17,503 = $14,873 > > b) The estimated adjusted taxable income for each estimate period: > > * First estimate 30 August 2023 - 2 November 2023: $0 > * Second estimate 3 November 2023 - 30 June 2024: $11,809 > * Total estimated income: $11,809

1. As (a) ($14,873) is more than (b) ($11,809), the estimate will be reconciled

d) $14,873 - $11,809 = $3064 total underestimated > > e) $3064 / 306 total days of estimate = $10.013071 (additional daily rate) > > f) $10.013071 x 65 days for estimate 1 = $651 underestimated > > g) $10.013071 x 241 days for estimate 2 = $2,413 underestimated > > h) Reconciled estimate 1 = $0 + $651 = $651

1. Reconciled estimate 2 = $11,809 + $2,413 = $14,222

j) Annualised estimate 1: ($651 / 65) x 365 = $3,655 > > k) Annualised estimate 2: ($14,222 / 241) x 365 = $21,539

1. The annualised reconciled estimates are used as incomes in the formula assessment for the periods of the estimates
2. The Tribunal finds that Mr Vincent underestimated his income and that section 64A applies so that his estimate must be reconciled.
3. The decision under review will be remitted back to Child Support to process the reconciliation.

The Tribunal sets aside the decision under review and remits the matter for reconsideration in accordance with the order that:

a) The estimates lodged by Mr Vincent in the 2023/24 financial year of $0 from 30 August 2023 and $11,809 from 3 November 2023 are to be reconciled against his 2023/24 adjusted taxable income of $32,376.

b) The year-to-date income updated by the Child Support Registrar from $0 to $17,503 remains in place for the purposes of the reconciliation.

[1] There is no record in the hearing papers of the outcome of her estimate, but as the estimate remains the Tribunal must assume that objection was not successful.