DIVISION: Social Services & Child Support Division

CHILD SUPPORT - non-agency payment - whether payment made to a third party in lieu of child support - intention of both parents - decision under review affirmed

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 so as not to identify involved individuals as required by subsections 16(2AB)-16(2AC) of the Child Support (Registration and Collection) Act 1988.

1. Mr Minami (the applicant/father) and Ms Minami (the mother) are the parents of two children (born in 2004 and 2009, respectively) who are the subjects of an administrative assessment of child support. The child support case was registered on 11 February 2020.
2. On 9 October 2020, an objections officer from Services Australia (the agency) made a decision to disallow an objection by the father to a decision made by an officer of the agency on 18 June 2020 to refuse to credit a non-agency payment of $7,000 made by the father on 16 June 2020, in respect of the children's school fees.
3. On 27 October 2020, the father lodged an application for a review of the agency's decision with the Administrative Appeals Tribunal (the tribunal).
4. On 7 December 2020, the tribunal conducted a hearing into the application. The parents participated in the hearing via telephone conference. Prior to the hearing, the agency provided the tribunal and the parents with a bundle of documents taken from its files (folios 1-72). On 7 December 2020, the tribunal deferred its decision-making process to enable it to obtain additional documents from the agency. These documents (C1-C5) have been provided to the parents.

1. The statutory provisions relevant to this review are contained in the Child Support (Registration and Collection) Act 1988 (the Act).
2. The issue which arises in this case is whether the $7,000 payment made by the father can be applied to the father's child support liability.

1. When a child support liability is registered under the Act for collection, the amount payable is a debt due to the Commonwealth and must be paid to the agency not the payee. In some circumstances the agency may credit payments made directly to a third party against a child support liability that is registered for collection (section 71A of the Act).
2. Section 71C of the Act provides for the crediting of payments even if the payee did not intend the payments to be credited as non-agency payments. Such non-agency payments are called prescribed non-agency payments. Section 71C of the Act is not applicable to this case because the father provides more than regular care to the children.
3. For section 71A to apply it is necessary the amount paid was intended by both the payer and the payee to be paid in complete or partial satisfaction of an amount payable under the enforceable maintenance liability.
4. In this matter it is agreed a payment was made by the father to the school on 16 June 2020, and that at the time there was an enforceable maintenance liability. The issue before the tribunal is whether the parents intended the payment made by the father to be in partial satisfaction of the enforceable liability.
5. The father and mother explained that they are in the process of separating their financial affairs. The agency's papers provided a draft minute of consent orders. The parents agreed these are unsigned and not in force.
6. A parenting plan signed by the parents on 17 March 2020 sets out:

The father and mother agree to share the cost of the children's private education fees and associated costs based on an assessment by the Child Support Government Agency.

1. The father explained he received billing accounts from the children's school. On 16 June 2020, the father sent the mother a message:

I intended to pay $7,000.00 towards school fees. Child Support has asked me to verify with you that you will accept it as such. That will ensure I remain liquid as the money will be paid back. Your say by the end of the day will be appreciated due to my liquidity.

1. The father explained that if the mother pays her share of the fee, he is not seeking a reduction in child support. In effect, the father's fear is he will pay 100% of the school fees and not receive a reduction in his child support liability.
2. The mother explained she had advised the agency she understands she is liable for the outstanding portion of the school fees.
3. The tribunal appreciates the father's intention in sending the text message to the mother was that the payment be deducted from his child support liability.
4. However, given the context of the parenting plan the tribunal is not satisfied the mother understood the father's intention that his payment of his portion of the school fees would be deducted from her child support payments.
5. The mother has said she did not intend the father's payment would reduce the amount of child support she received.
6. The tribunal cannot find there was mutual intent that the payment would be deducted from the father's child support liability.
7. The tribunal agrees with the agency's decision that the payment does not reduce the father's child support liability. It is not appropriate to accept the payment as a non-agency payment.
8. The tribunal notes the objections officer's decision relevantly stated:

I will highlight in the case one parent is incurring the full cost of the children's school fees, then it is open for them to contact the agency to discuss our Change of Assessment process to account for these costs under the administrative assessment.