Refunding Child Support
When DNA testing shows payer is not the biological father
By John Eades and Justin Dowd
As DNA testing becomes more readily available, instances will arise where child support payers discover they are not the biological father of a child. What then happens to child support that has already been paid?
Section 143 of the Child Support (Assessment Act 1989) (the Act) makes it clear that when child support or urgent maintenance has been paid, and it is subsequently determined that no liability exists, a payer can make an application to a court for a repayment of the amount.
It is equally clear from the Act that the court exercises a discretion in determining a repayment application, and can make such order as it considers just and equitable to give effect to the rights of the parties and the child concerned.
In a determination made by Federal Magistrate Reithmuller in Melbourne last year (DRP & AJL [2004] FMACAfam 440), the effect of s.143 was considered. The Magistrate discussed a number of decisions on the area in para 20 of his reasons. Then, in relation to the provision of “justice and equity” under s. 143, he observed:
“21. The requirement that the Court make orders that are “just and equitable” is contained in a number of provisions of the Child Support (Assessment) Act.
“26. In determining the relevant factors under section 143 the features of the Child Support Scheme and general law that relate to these issues should be considered to place section 143 in its broader context.”
Liability under the Child Support Assessment Act
Magistrate Reithmuller observed that a person may become a liable parent in a variety of circumstances, and that the court “would not wish to encourage payers to challenge an assessment unless there are circumstances warranting such a challenge: in some cases those circumstances will only be known to the other party and must first be communicated to the payer.”
He then went on to discuss the duty of step-parents to maintain a child as one of the factors, and said “the only appropriate way to balance these competing considerations is to treat the lack of knowledge or the deception as a significant factor with respect to the relationship, but one which could be outweighed by other factors such as the extent of the relationship (both in quality and time) with the child”.
He discussed whether one of the factors that may have influenced the interpretation of s.143 (3) in the past was the effect of the views of the Registrar of the Child Support Agency on refunding cases where there are ongoing assessments for other children.
“In those cases,” he said, “the Registrar managed the repayment by deducting it from the ongoing payments in respect of the other children, this had the effect of creating two classes of case: those where there was no ongoing assessment and those where there were other children. Because the refund was deducted from the child support payable for the other children, in the second category of cases it effectively shifted the cost onto other children without any consideration of justice or equity. It is now clear that this anomalous (and often unjust) result was contrary to the legislation … and presumably will not continue.”
Damages for deceit or wrongful birth
Magistrate Reithmuller also addressed the law of tort and considered some of the authorities on a father’s right to sue for deceit. However, he observed that he was not required to make a judgement on that point.
After considering some of the authorities on wrongful birth, the Magistrate observed “whilst a relationship with a dependant child may well be such as to lead to an obligation of support, the support must be seen as an instant of the relationship, and not payment in exchange for the relationship or some form of set-off against the benefits of having a personal relationship”.
Factors relevant to an application
Magistrate Reithmuller then went on to set out a number of factors relevant in an application for an adjustment of rights under s.143(3). He said that “Whilst it is clearly inappropriate to attempt to limit or prescribe the factors that may be relevant to the exercise of the discretion to adjust rights in a just and equitable manner under sections 143 (3), it appears that the following factors will generally be relevant when considering an adjustment reducing or removing the payers right to repayment:
“(a) the state and knowledge and conduct of the parties;
“(b) the relationship with the payer with the child;
“(c) evidence as to the circumstances of the biological father; and
“(d) the financial circumstances of the parties”.
In any application for an order in accordance with s.143(3) evidence should be of use in relation to each of those four factors, but it should not be assumed that determination of non-liability would invariably lead to a refund of child support.
Further legislation
Practitioners should be aware that the current s.143 of the Act is likely to be replaced by a new s.143 if the Child Support Legislation Amendment Bill 2004 currently before Parliament is passed. The new section should not affect Magistrate Reithmuller’s reasoning, as the Bill merely makes it clear that a payer who has overpaid has a claim against the carer.
The Family Law Amendment Act 2005 introduced into the Family Law Act a new 2.66X which mirrors the provisions in s.143 in terms of recovery of maintenance to the Child Support Agency and then on-paid to another party.
CHILD SUPPORT (ASSESSMENT) ACT 1989
Amounts paid where no liability to pay exists etc
Section 143
(1) Where:
(a)an amount of child support is paid by a person to another person; and
(b)the person is not liable, or subsequently becomes not liable, to pay the amount to the other person; the amount may be recovered in a court having jurisdiction under this Act.
(2) Where:
(a)an amount is paid by a person to another person for a child in relation to a period under an order made under section 139 (Urgent maintenance orders); and
(b)child support does not become payable by the person to the other person for the child in relation to the period; the amount may be recovered in a court having jurisdiction under this Act.
(3) In a proceeding in a court under this section, the court may make such orders as it considers just and equitable for the purpose of adjusting or giving effect to the rights of the parties and the child concerned.
(4) An amount paid to the Commonwealth under section 30 of the Child Support (Registration and Collection) Act 1988 is to be taken, for the purposes of this section, to have been paid to the person to whom, apart from that section, the amount would have been payable.