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Earning Capacity of Ex - Reason 8

Trying to figure out if I should lodge a change of assessment

Hi Guys,

I am trying to figure out if I should bother lodging a change of assessment under reason 8.

My ex has stopped working 6 months ago to have a baby with her new husband and submitted an estimate of $xx,xxx. I recently received a letter from C$A stating that her income for last financial years was now $xxx,xxx. which reprersented a large difference of about $90k extra that she earnt from the previous tax year before and the difference between her estimate and last years income is about $150k. She is now earning close to $100k more than I am.

My child support payments went up by nearly 50% when her estimate was accepted.

As she is not working to look after the new born(6 months old) but has earning capacity to earn more do you think I would be successful in applying for a change of assessment? It is my understanding that her husband earns much less than her. Therefore she could return to work, as she is the one earning more, and he could look after the baby.

In brief no.

For Capacity to Earn to stand there are 3 criteria that must all be met. One of the three is not met if the reason for the changed(lower) income is due to the responsibility of caring.

The legislation (Section 117(7b)) states:-

(7B)   In having regard to the earning capacity of a parent of the child, the court may determine that the parents 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 parents 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 parents caring responsibilities; or
   (ii)   the parents state of health; and
   ©   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.

I don't believe you would be successful because the other parent now has a caring responsibility. You would also need to prove that the major reason the other parent stopped work was to reduce child support.
Thanks guys. I thought this was going to be the case.

I'm sure that I read somewhere or was told by the C$A that if she was at home looking after the child but that the child was able to be looked after by someone else and she could return to work, as she earned more money, then that would be a reason to allow a change of assessment.

I don't believe that the caring responsibility is just on her though but her husband as well. I mean isn't this the whole point of the C$A. They have a 50/50 responsibility….

This situation sucks big time and has been highlighted by many a paying father over time. I did see a Current Affairs article about this on this site somewhere.

My view is that in the exact situation you are facing then should in no way be liable for greater child support. Sadly the legislations says otherwise.

As a comparison take the example where a parent dies in an intact family. The immediate cost of raising the children doesn't reduce but the financial capability available to the family is reduced. In that case the children and the family would get less and have to live with it. In the case of your ex the arrival of a new child suspends the earnings of the mother (in the same way a death would do) so that family should live on less until she gets back to earning her previous income.

It annoys me how the arrival of a new biological child affects the child support payable however taking on Step children does not.

"I know that you believe you understand what you think I said, but I'm not sure you realise that what you heard is not what I meant."

I don't believe that the caring responsibility is just on her though but her husband as well. I mean isn't this the whole point of the C$A. They have a 50/50 responsibility….
While I agree it sucks that you now are liable to pay more and they way payments are determined is flawed. I don't believe CSA should ever be able to ever dictate which parent stays home and cares for a baby, especially when that baby and one of its parents is not party to the assessment. The CSA process allows one party to medal far to much in the life of the another party post separation as it is.
GMAB, how long will you be paying Child Support? Is it worth the worry?
I have another 5 years of paying but I know that she will go back to work at some time but I don't think that this is 'fair or equitable' and that the CSA has double standards……….but no surprise there
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