Donate Child Support Calculator
Skip navigation

COA Reason 8 Advice

Are the CSA correct here……
Other parent is claiming disability pension.
CSA refused a COA reason 8 capaity to earn I put in. Yet CSA did not even investigate the other parents working ability's.
CSA said that because centrelink have the other parent on file as claiming disability thats all the proof they need !!
Is this correct procedure.?

Other parent has below regular care of children, and worked for 6 months until CSA made them pay a very minimal amount.
Other parent then quits work, claims disability and goes on a month long holiday.
Other parent is now working again, yet CSA won't investigate their earnings just yet.

So does anyone know if CSA are correct in dismissing a COA reason 8 based on a shonky centrelink disability claim without gaining further evidence from the other parent such as a medical certificate etc ?
State of health is a ground for dismissing a capacity to earn (section 117(7B)(b)(ii)).

Here's an extract from the CSA Guide regarding state of health:

The CSA Guide - 2.6.14: Reason 8 - a parent's income, property, financial resources, or earning capacity said
Parent's state of health

(section 117(7B)(b)(ii))

As with a parent's caring responsibilities, if a parent has health problems, this may mean that he or she does not have an earning capacity that makes the assessment 'unjust and inequitable'. If the Registrar is satisfied that the parent's state of health is such that he or she does not have an unexercised earning capacity that makes the assessment 'unjust and inequitable', it will not be necessary to consider whether the parent's circumstances satisfy the criteria in section 117(7B).

CSA will take into account any evidence that the parent presents about his or her state of physical and mental heath. It would usually be expected that a parent who claims to have made a decision to change his or her work arrangements because of his or her health will have been diagnosed by a qualified medical practitioner; treated for the condition and have made that decision based on medical advice. Therefore, the parent would usually be able to provide medical certificates or reports from his or her treating doctor, and/or reports from any specialist to whom the parent was referred.

The following factors are relevant in considering whether the parent's decision about his or her working arrangements is justified on the basis of the parent's state of health:

    the fact that the parent is suffering from a medical condition and the effect that this has upon his or her capacity to work;
    the expected duration of the condition;
    any recommended treatment, and the impact that this has on the parents capacity to work;
    the availability of light duties, if the parent could work in a restricted capacity.

CSA will weigh up the evidence about these and any other relevant matters in order to decide whether it is satisfied that the parent's state of health is such that it justifies his or her changed work arrangements. If the parent's state of health does justify his or her decision about his or her working arrangements, then CSA must not make a decision to base the child support assessment on the parent's earning capacity. However, if the parent's state of health would not preclude work, or additional work, CSA must proceed to consider the third criterion below, namely, the parent's purpose in making the decision about his or her working arrangements.
Thanks for that Mike T.
But do you think CSA themselves should be investigating or getting proof from parent about their inability to work ?
Or Is ok for them to just go by what CL says ?
Acacia,
           considering that Centrelink are the main department that deals with validity of disability/health issue relating to benefit payments then their records should be fine, as should a doctor's certificate. As for investigation as to the validity then if the person in question is claiming benefits then the matter should be reported to Centrelink as a potential fraud. I have little doubt that the CSA would only investigate if they thought that it might result in an increase in the liability as they very consistently show bias toward collecting from the liable parent and thus actively assist contravention of the very object of the CS acts. The legislation does not protect against such abuse as it does not require the CSA to investigate very often they simply need to be satisfied.

I know of one situation where the CSA's policy, as handed down by a TSO (Technical Services Officer), was that the evidence of a parent, the parent's parent and a friend was acceptable but the evidence of a registered investigator was not. This was later proved to have been wrong i.e. that the very obvious certified, as such, evidence was correct. I have no doubt if the parent was the liable parent then the reverse would have been applied.

It is for this reason, not excluding other reasons, that the CSA should never be allowed to make a decision, rather they should be forced to follow and administer rules. Very much along the lines of the ATO. In fact I believe that E-CS should be the way forward and part of that would be automated fraud reporting (which did not happen in the above, even though there were 3 very clearly fraudulent persons).
Ok cheers for that.

Last edit: by acacia

Acacia said
If the other parent has started a new job and is not declaring the income to CSA what happens?
The new income will be shown and applied with the next tax return. However, the CSA Website says:

CSA Website - Your Income said
Its important that you tell us about changes to your income as soon as it happens, because we may not be able to backdate the change. Learn more about income changes.

CSA Website - If your income changes or is wrong said
Lodge an estimate of your income

Child support assessments use your adjusted taxable income from a previous year. You can ask us to use an estimate of your adjusted taxable income for the current year if:

    your current assessment uses an adjusted taxable income from your tax return
    or
    your current assessment uses an adjusted taxable income that you have previously advised us, and
    your current adjusted taxable income has reduced by 15 per cent or more than the income used in the assessment.

If you have already lodged an estimate for this financial year, you can also lodge a new estimate for a different amount.

You may not be able to lodge an estimate for any part of your assessment that is based on one of the following:

    an agreement
    a determination made under the change of assessment process, or
    a court order.

Click here for more information about estimating your income.

To find out more about your options, including how to lodge an estimate call us on 131 272.
Lodging your tax return

The best way to ensure your child support is correct is to lodge your tax return on time every year. All parents need to lodge a tax return or tell us their income.

If you do not lodge a tax return and we cant work out your income from other information, we will use a provisional income to assess your child support. We do this by indexing your most recent Australian Tax Office (ATO) assessed income in line with wages growth.

If you lodge your tax return late, and we have used a provisional income to make a child support assessment, we may not be able to backdate any changes to your assessment if your ATO income is lower.

If you arent required to lodge a tax return, lodge a Request for Taxable Income Details form on CSA online and contact us to let us know.

This is basically a grey area as I don't believe that there is any legislated requirement to inform the CSA and the advice that would normally be given would be don't unless your income reduces by 15% or more and in that case then lodge an income estimate. Basically the use of out of date information (i.e. the latest tax return rather than current income) is what complicates the matter and causes so much hassle e.g. reconciliation which so often results in arrears and then the "deadbeat" labelling of parents who have actually done the right thing.

Acacia said
At tax time does CSA automatically change the assessment ?
Yes and often this is twice, that is  when both parents submit tax returns.

Acacia said
Or do I have to lodge a COA ?
I don't think that a COA (reason 8) would/should meet the special requirements. The CSA Guide says the following:

The CSA Guide - 2.6.14: Reason 8 - a parent's income, property, financial resources, or earning capacity said
A child support assessment is generally calculated using the parents' most recent taxable income. CSA will be satisfied that there are special circumstances if a parent's current income is not adequately reflected in the child support assessment (whether it is more or less than the income used).

However, later and under additional income, it appears to exclude, by not including it, an increased taxable income when it says

The CSA Guide - 2.6.14: Reason 8 - a parent's income, property, financial resources, or earning capacity said
Additional income, property or financial resources

Each application will be determined according to the individual circumstances of the case.

However, there is a range of circumstances that may form the basis of an application under this reason. It may be that a parent:

    has substantial property but a small child support income amount;
    has legitimately arranged their financial affairs to minimise tax;
    receives income which is not assessable or is exempt from tax; or
    received a lump sum payment that is not included in the child support income amount.


From 1 July 2008, under the new Child Support Scheme, a broader range of income will be used in determining the adjusted taxable income for a parent in the formula assessment (see Chapter 2.4.4).

This includes:

    reportable fringe benefits;
    foreign income;
    adding back of net financial investment losses;
    tax-free pensions or benefits; and
    reportable superannuation contributions.

This means it will not usually be necessary to apply under this reason to have these factors considered. That is, they may already be taken into account in the parent's adjusted taxable income used in the child support formula.

In some cases, a parent's financial circumstances or the issues associated with the case may be too complex to be determined by CSA. In these cases CSA may refuse to change the assessment and recommend that the parent apply to a court for an appropriate determination of the level of child support (section 98E).

When making a decision under this reason, CSA must disregard any entitlement the payee might have to an income-tested pension, allowance or benefit (apart from any tax-free pension or benefit that forms part of a parent's adjusted taxable income). Generally, CSA must also disregard the income, earning capacity, property and financial resources of any person who does not have a duty to maintain the child. However, CSA will consider whether a parent has capacity to earn or derive additional income including a consideration of assets that do not produce, but are capable of producing, income (section 117(7A)).

I'd suggest that it would most definitely conveniently not apply if the parent is the recipient but may conveniently do so for a liable parent, although I believe the latter would be an injustice. The legislation itself doesn't mention additional income or changed income and I believe the legislation was not intended to compensate for the fundamental flaw of the gamble that using old data (tax returns for the previous year's income) is.

Acacia said
Or can I simply ring and ask them to call other parents employer to get an income estimate ?
I believe this would be futile as the legislation allows a parent to elect to make an income estimate. The CSA cannot compel and thus shouldn't even ask a parent to make an estimate. There again the CSA do have a policy to try to make liable parents gift overpayments (i.e. elect) even though it's contrary to the very object of the CS legislation.
Thankyou muchly Mike T for all the info.
The only thing for me to do know is to relax and wait until tax time, I wont be holding my breath for anything to go my way though.
1 guest and 0 members have just viewed this.

Recent Tweets