CHILD SUPPORT - departure determination - potential grounds for departure - cost of maintaining the children - earning capacity - resignation from employment - medical treatment - financial resources - 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 pursuant to subsection 16(2AB) of the Child Support (Registration and Collection) Act 1988.

1. Ms Milford and Mr Milford are the parents of [Child 1] who was born in 2017. A child support case was registered with Services Australia - Child Support ("Child Support") in February 2022.
2. The Child Support (Assessment) Act 1989 ("the Act") provides for an administrative assessment of child support payable. It uses a formula which contains variables such as the parents' adjusted taxable incomes and their percentages of care for the child. The Act also provides for a departure from the administrative assessment in certain circumstances. Ms Milford lodged a departure application on 16 September 2022 which culminated in the former Administrative Appeals Tribunal ("the AAT") making the following decision on 20 December 2023:
   • from 22 February 2022 to 22 January 2023, Mr Milford's rate of child support payable is increased by $4,116 per annum (on account of Ms Milford's child care costs); and
   • from 15 February 2023 to 31 December 2024, Mr Milford's adjusted taxable income is varied to $80,000 per annum.
3. Mr Milford lodged an appeal against that decision with the Federal Circuit and Family Court ("the Court"). He subsequently withdrew his appeal. In the absence of a significant and unforeseen change in circumstances prior to 31 December 2024, one would have therefore expected the AAT's decision to remain in force until 31 December 2024. However, on 11 January 2024, a mere 22 days after the AAT made its departure decision, Ms Milford lodged another departure application.
4. On 1 October 2024 a Child Support original decision-maker granted Ms Milford's application and made the following decision:
   • from 14 March 2023 to 9 March 2024, Mr Milford's rate of child support payable is varied to $0; and
   • from 10 March 2024 to 30 September 2024, Mr Milford's rate of child support payable is varied to the minimum annual rate.
5. Ms Milford objected to that decision. An objections officer disallowed her objection. She applied to the Administrative Review Tribunal ("the Tribunal") for further review. I conducted a directions hearing on 13 June 2025 and a substantive hearing on 12 August 2025. Ms Milford and Mr Milford gave sworn evidence via MS Teams.
6. Paragraph 98C(1)(b) of the Act relevantly provides that a departure decision may be made in respect of a departure application if:

(i) ... one, or more than one, of the grounds for departure referred to in [subsection 117(2)] exists; and

(A) just and equitable as regards the child, the liable parent, and the carer entitled to child support; and

to make a particular determination under this Part; ...

1. Subparagraph 117(2)(b)(ia) of the Act, commonly referred to as Reason 2, provides as a ground for departure:

that, in the special circumstances of the case, the costs of maintaining the child are significantly affected:

1. When Ms Milford lodged her departure application in January 2024, she anticipated that [Child 1] would require surgery. [Child 1] underwent surgery in November 2024, and further surgery in 2025. Each parent paid half the associated costs. Both parents agreed that their arrangement concerning those costs was fair. Those circumstances do not constitute special circumstances. Reason 2 is not established.

1. Subparagraph 117(2)(b)(ii) of the Act, commonly referred to as Reason 3, provides as a ground for departure:

that, in the special circumstances of the case, the costs of maintaining the child are significantly affected:

(ii) because the child is being cared for, educated or trained in the manner that was expected by his or her parents; ...

1. [Child 1] has been attending a private school. The AAT effectively concluded that she was not being educated in the manner that was expected by both parents (and in particular, Mr Milford) and therefore Reason 3 was not established. It is not my role in these proceedings to review the AAT's conclusions on questions of fact. In the absence of a Court decision setting aside the AAT's decision, I will proceed on the basis that the AAT's conclusion was reasonably open on the evidence and should be treated as having finalised that issue. Reason 3 is not established.

1. Sub-subparagraph 117(2)(a)(iii)(A) of the Act, commonly referred to as Reason 7, provides as a ground for departure:

that, in the special circumstances of the case, the capacity of either parent to provide financial support for the child is significantly reduced because of:

(iii) commitments of the parent necessary to enable the parent to support:

1. Mr Milford underwent surgery in May 2024. He provided evidence that the associated out-of-pocket expenses totalled $20,276. However, he was unemployed at the time and remained unemployed until February 2025. On his account of events, his various personal costs, including the surgery fees, were met via an ever-increasing loan from his parents. The original decision-maker and the objections officer concluded that Mr Milford's surgery costs therefore did not significantly reduce his capacity to provide financial support for [Child 1]. Mr Milford did not dispute that conclusion and I respectfully agree with that conclusion. Reason 7 is not established.

1. Subparagraph 117(2)(c)(ia) of the Act, commonly referred to as Reason 8, provides as a ground for departure:

that, in the special circumstances of the case, 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

(ib) because of the earning capacity of either parent; ...

1. The Tribunal can only find that a parent's earning capacity is greater than their actual income if the requirements of subsection 117(7B) are satisfied. That subsection states:

In having regard to the earning capacity of a parent of the child, the court may determine that the parent's earning capacity is greater than is reflected in his or her income for the purposes of this Act only if the court is satisfied that:

(a) one or more of the following applies:

(i) the parent does not work despite ample opportunity to do so;

(ii) the parent has reduced the number of hours per week of his or her employment or other work below the normal number of hours per week that constitutes full-time work for the occupation or industry in which the parent is employed or otherwise engaged;

(iii) the parent has changed his or her occupation, industry or working pattern; and

(b) the parent's decision not to work, to reduce the number of hours, or to change his or her occupation, industry or working pattern, is not justified on the basis of:

(i) the parent's caring responsibilities; or

(c) the parent has not demonstrated that it was not a major purpose of that decision to affect the administrative assessment of child support in relation to the child.

1. On 30 January 2023 an original decision-maker granted Ms Milford's previous departure application and made a decision which had the following effect (at page 49 of the hearing papers):

From 16 September 2022 to 30 September 2022 the annual rate of child support payable by Mr Milford increases from $3,840 to $7,351. From 1 October 2022 to 31 December 2022 the annual rate of child support payable by Mr Milford increases from $3,116 to $6,918. From 1 January 2023 the annual rate of child support payable by Mr Milford increases from $5,217 to $12,410. Arrears of approximately $1,090.08 will be created. As Mr Milford currently has a credit on his account, the agency will take this into consideration when advising the final arrears component.

1. On 14 February 2023, Mr Milford resigned from his employment as [an occupation 1]. In the current proceedings he said he remained unemployed until 24 February 2025 when he started working part-time in his parents' business. The AAT considered whether regard could be had to Mr Milford's earning capacity. On 20 December 2023 it concluded that Mr Milford was not working despite ample opportunity to do so, his decision to not work was not justified on the basis of his state of health, and he had not demonstrated that his decision to not work was not for a major purpose of affecting the rate of child support payable. The AAT's analysis of those issues appears in paragraphs [47] to [71] of its Reasons for Decision (at pages 197 to 201 of the hearing papers).
2. In the current proceedings, an original decision-maker at Child Support concluded (at pages 641 and 642 of the hearing papers):

I have referred to the decision by the AAT and note that the tribunal was not satisfied that Mr Milford had rebutted the presumption that a major purpose of his decision about his working arrangements was to affect his child support assessment. The tribunal said "I accept Mr Milford has [medical condition 1] and has had one clear instance of [related medical condition 2] requiring hospital treatment. Mr Milford is consulting a specialist and it is evident at this stage that his [medical condition 1] is not of a severity requiring surgery although medication is needed to address [symptoms 1]."

Mr Milford has provided new evidence that was not considered in the previous decision. The evidence shows that there have been hospital admissions on [dates in] December 2022, [February] 2023, [December] 2023 and [February] 2024. Mr Milford said he has had surgery [in] May 2024. He has also provided copies of three medical certificates which state he is unfit to work from 14 February 2023 to 31 March 2024, from 5 April 2024 to 5 May 2024 and from 1 August 2024 to 30 October 2024.

The new evidence provided shows that the circumstances regarding Mr Milford's health are significantly different to that considered by the AAT.

I am satisfied that Mr Milford's decision to change his working arrangements was justified by his health. The second criterion is not met and I am therefore unable to consider his earning capacity.

1. Mr Milford was admitted to hospital [in] December 2022 and discharged on 1 January 2023: page 341 of the hearing papers. The AAT referred to that evidence: page 198 of the hearing papers.
2. The original decision-maker's reference to a hospital admission [in] February 2023 appears to be a reference to Mr Milford's attendance at the Emergency Department of [Hospital 1], where it appears that he was given medication and sent home: page 339 of the hearing papers. I am not persuaded that it is properly categorised as a hospital admission. In any event, the AAT referred to that evidence: page 198 of the hearing papers.
3. The original decision-maker's reference to a hospital admission [in] December 2023 appears to be a reference to Mr Milford's attendance at the [Hospital 1] to obtain medication: page B47 of the hearing papers. Again, I am not persuaded that it is properly categorised as a hospital admission.
4. The original decision-maker's reference to a hospital admission [in] February 2024 appears to be a reference to Mr Milford's attendance at the Emergency Department of [Hospital 1] with "acute on chronic [symptoms 1] for 1 week": page 343 of the hearing papers. The hospital noted:

[Mr Milford] has a background of chronic [symptoms 1] since complicated since complicated [medical condition 2] in Dec 22, multiple presentations with acute [medical condition 2] since then

- was managed by GP mainly last year, saw [a specialist] who treating him with amitriptyline

- has not worked in last 12 months due to [symptoms 1]

1. It appears that Mr Milford attended the hospital, was examined, and was presumably given medication and sent home. There is no evidence that he was admitted as an inpatient.
2. The original decision-maker also referred to medical certificates which stated that Mr Milford was unfit to work during certain periods. Of particular relevance are the medical certificates on the following dates (for the following periods): 1 January 2023 (for 1 January 2023 to 7 January 2023); 22 June 2023 (for December 2022 to date); 11 September 2023 (for 14 September 2023, when he would be unable to attend a required Court appearance); and 2 November 2023 (for December 2022 to date). Those medical certificates predate the AAT hearing on 7 December 2023, and its decision which was made on 20 December 2023. Mr Milford either provided that evidence to the AAT, or he omitted to do so, and such an omission would not warrant a revisiting of the AAT's decision. It would not be correct to say it was new evidence.
3. Further, the AAT noted at paragraph [13] of its Reasons for Decision:

Mr Milford said he was seeing his treating doctor, [Doctor A], on 9 December 2023. I asked him to provide a medical statement by close of business on 13 December 2023 essentially addressing the matters outlined in my earlier written directions of 26 October 2023. As nothing was received by this date and Mr Milford had not contacted the Tribunal to indicate a need for further time, he was informed by voicemail on 18 December 2023 that I would proceed on the available documentation in the absence of any contact by the morning of 19 December 2023.

1. The AAT had directed Mr Milford on 26 October 2023 to provide "[a]ny medical documentation in his possession, not already provided, that he seeks to rely on in the proceedings". It also directed that:

Any other evidence that a party wishes to bring before the AAT must also be provided to the AAT by close of business on 10 November 2023. In this regard, if Mr Milford seeks to rely on his medical condition, it is highly desirable that he provide a report from his treating specialist that identifies when the specialist was first consulted, the nature of his illness, the effect on his function, the treatment being undertaken, whether surgery is anticipated, the likely effect on his ability to undertake work, and the likely prognosis. An extension of time in which to supply this report can be granted if the specialist is unable to complete it by 10 November 2023.

1. As noted earlier, Mr Milford ceased his employment in February 2023. In the current proceedings the original decision-maker calculated that Mr Milford's final payments from his employer equated to ongoing wages until 13 March 2023. The original decision‑maker varied Mr Milford's rate of child support payable from 14 March 2023 to 9 March 2024 to $0, and from 10 March 2024 to 30 September 2024 to the "minimum annual rate", which was $493 per annum. At a practical level, the original decision‑maker effectively set aside the AAT's decision so far as Mr Milford's earning capacity was concerned.
2. The AAT considered the evidence that the parties had provided and found against Mr Milford on the issue of his earning capacity. The AAT found against Ms Milford on the issue of the parents' expectations concerning the manner in which [Child 1] would be educated. Other decision-makers might have reached different conclusions, but that is beside the point. If any of the parties believed that the AAT had not reached a conclusion that was reasonably open on the evidence provided, the appropriate course was to appeal to the Court. Mr Milford did so, but then withdrew his appeal.
3. The AAT stated at paragraphs [66], [67], [68] and [70] of its Reasons for Decision:

I accept Mr Milford has [medical condition 1] and has had one clear instance of [medical condition 2] requiring hospital treatment. Mr Milford is consulting a specialist and it is evident at this stage that his [medical condition 1] is not of a severity requiring surgery although medication is needed to address [symptoms 1].

Ordinarily, I would accept a treating doctor's view that a person cannot work where the full details of the condition are clear from the report and an inability to work is a conclusion drawn from those details. In my view, [Doctor A's] report is too brief to draw the appropriate conclusion. In this regard, it is not clear from the report the extent to which [Doctor A] is reliant on Mr Milford's description of his condition.

As [medical condition 1] can vary from symptomless to a severity requiring surgery, and as the condition generally has a good prognosis with appropriate lifestyle changes, it is relevant to consider not just what Mr Milford says but also what he does.

Although Mr Milford has [medical condition 1], overall it is not established to my satisfaction that he is unable to work and in particular that he was unable to continue working for [a named employer]. Further, as Mr Milford was relying on his medical condition as the justification for not working, I do not consider he has demonstrated that a major purpose of this decision was to reduce his child support liability [sic]. To the contrary, Mr Milford's decision to stop working occurred within two weeks of when he would have received [the decision-maker's] adverse departure determination.

1. In the current proceedings, Mr Milford provided medical evidence of his ongoing treatment for [medical condition 2] during 2024. During the course of questioning him about that evidence, he indicated that he had not provided all the available medical evidence to the Tribunal, and if given further time, he could obtain additional evidence. He did not expressly apply for further time in which to obtain that evidence, but at the end of the hearing I noted that the issue of his earning capacity had been on foot for approximately two and a half years and he had been given ample opportunity to provide all relevant medical evidence on that issue.
2. On 28 February 2024, [Specialist A], [surgeon], provided a fee estimate for surgery. During the hearing, Mr Milford said [Specialist A] told him on 28 February 2024: "You need surgery or you will die." Mr Milford did not provide any medical evidence, such as a statement from [Specialist A], to corroborate his recollection of [Specialist A's] assessment. Mr Milford underwent surgery via the private health system. Despite the apparent urgency implicit in Mr Milford's recollection of [Specialist A's] assessment, the surgery occurred [in] May 2024.
3. On 27 June 2024 a doctor noted in a letter to the [Hospital 1] that Mr Milford "is 5 weeks post-op [treatment] for recurrent [medical condition 2]." (Mr Milford provided the first page of the letter which does not include the doctor's name.) On 6 September 2024, [Doctor B] completed a Centrelink medical certificate which stated that Mr Milford had one medical condition, "recurrent [medical condition 2]", and he was unable to work from 1 August 2024 to 30 October 2024. On 4 November 2024, [Doctor B] completed another Centrelink medical certificate for 4 November 2024 to 31 December 2024.
4. On 20 December 2023 the AAT made a departure decision which included varying Mr Milford's adjusted taxable income to $80,000 per annum from 15 February 2023 to 31 December 2024. The AAT concluded that Mr Milford had [medical condition 2], he was receiving treatment for his condition, doctors opined that his condition prevented him from working, and most importantly, there was other more persuasive evidence which led the AAT to conclude that his condition did not prevent him from working. I am not persuaded that there was a subsequent, significant and unforeseen event which warranted a reconsideration of the AAT's conclusions. It is true that the AAT stated that "at this stage [Mr Milford's] [medical condition 1] is not of a severity requiring surgery although medication is needed to address [symptoms 1]." However, the ultimate issue was not whether Mr Milford required surgery, or more broadly how his treatment plan may have changed from time to time, but whether his condition prevented him from working. Mr Milford's doctors repeatedly stated that his condition prevented him from working. The AAT considered Mr Milford's actions, including taking overseas holidays, to be the more probative evidence. On 13 June 2025, I directed Child Support to provide "evidence of the dates of Mr Milford's departures from Australia, and his arrivals into Australia, during the period from 1 December 2022 to the current date". It did not comply with that direction, but Ms Milford said that Mr Milford was most recently overseas from 29 December 2024 to mid-February 2025. Mr Milford said he could not recall the precise dates but he was overseas around that time for about four to five weeks.
5. The AAT made its decision on 20 December 2023. Mr Milford departed Australia [later in] December 2023. Ms Milford lodged her departure application on 11 January 2024. At that time, there was no evidence to suggest that there had been a significant and unforeseen change in Mr Milford's circumstances which rendered the AAT decision unfair. Mr Milford returned from overseas [in] February 2024. He underwent surgery [in] May 2024. For the reasons stated above, I am not persuaded that the surgery was a significant and unforeseen change in Mr Milford's circumstances which rendered the AAT decision unfair. Returning to the wording of Reason 8, there were not special circumstances that resulted in an unjust and inequitable determination of the level of financial support to be provided by Mr Milford for [Child 1] because of his income, property or financial resources, or because of his earning capacity. Reason 8 is not established in respect of Mr Milford.
6. It is also necessary to consider Ms Milford's financial circumstances. The AAT did not vary Ms Milford's adjusted taxable income. On 9 January 2024, Ms Milford lodged the first of several estimates of income for the remainder of 2023-24. Child Support subsequently reconciled her estimates of income against her actual adjusted taxable income for 2023-24, which was $63,643. There is no dispute that Ms Milford's income and financial resources are fairly reflected for child support purposes in her adjusted taxable incomes as assessed by the Australian Taxation Officer from time to time. There is no basis for varying Ms Milford's adjusted taxable income prior to 30 June 2024.
7. From 1 July 2024 the default administrative assessment would use Ms Milford's 2022-23 adjusted taxable income of $122,549. From 1 October 2024 it would use her 2023-24 adjusted taxable income of $63,643.
8. In fact, Ms Milford was unemployed from prior to 1 July 2024 and receiving a minimal income, and she remained unemployed until 11 September 2024 when she started earning approximately $130,000 per annum.
9. I considered whether the changes in Ms Milford's earnings during the period from 1 July 2024 to 31 December 2024 rendered the AAT's decision unfair. Throughout that period, Mr Milford's adjusted taxable income was varied to $80,000 per annum and Ms Milford was recorded as providing 100% care for [Child 1]. I compared Mr Milford's child support payable pursuant to Ms Milford's default incomes which are listed in paragraph 35, and his child support payable pursuant to Ms Milford's actual incomes which are listed in paragraph 36. During the six-month period from 1 July 2024 to 31 December 2024, the difference is about $6. Reason 8 is not established in respect of Ms Milford.

1. While the AAT's departure decision was in force, Ms Milford applied for another departure decision. No ground for departure has been established, at least in respect of the period covered by the AAT's departure decision. Ordinarily, that would be the end of the matter and Ms Milford's departure application would be refused.
2. Mr Milford commenced employment in February 2025. He said he earns approximately $62,400 per annum. Ms Milford remains in the employment she commenced in September 2024. She said she earns approximately $130,000 per annum. I am mindful that the parents have been engaged in a near-continuous departure process for approximately two and a half years. My decision will set aside the original decision‑maker's decision which largely set aside the AAT's decision, i.e. my decision will effectively reinstate the AAT's decision which applied until 31 December 2024. I explored the possibility of varying Ms Milford's adjusted taxable income from January 2025 and Mr Milford's adjusted taxable income from February 2025 to reflect their earnings from employment. Ms Milford was not agreeable to that suggestion. She submitted that Mr Milford should continue to be assessed on his earning capacity.
3. The preferable decision is to refuse Ms Milford's departure application which was lodged on 11 January 2024, while the AAT decision was in force, on the basis that there was no ground for departure when the application was lodged or while the AAT decision was in force. In the absence of a successful appeal against my decision, the refusal of Ms Milford's departure application will effectively draw a line in the sand so far as Mr Milford's rate of child support payable to 31 December 2024 is concerned. Each parent has the option of lodging another departure application in respect of the child support payable from 1 January 2025.

The decision under review is set aside and, in substitution, Ms Milford's departure application dated 11 January 2024 is refused.

Note: The parties are referred, in particular, to paragraph 40 of the Tribunal's Statement of Reasons.