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Estimate vs Tax year

Thought I would post a recent experience.

On tax time June 2007 CSA had my taxable income for 2007-2008 as $90,000 (figure changed to protest the innocent).

In Feb 2008 I changed jobs and was unemployed for a 4 week period (Jan/Feb).  At that point I had a CSA year income based on my last tax return of $90,000 as stated above.

So started the new job end of Feb and informed CSA that I was employed and would earn for the tax year $90,000.

Tax time comes in june 2008 and I earn $89,000.  All is good as I over estimated.

I get a pay rise Later that year 2008 which is not applied until March 2009.

 This year I am contacted and advised that because I called and told CSA that I was earning $0 for 4 weeks in Feb and then called and told them I would earn $90,000 for that tax year, once I started my new job that I had switched from a tax year based assessment to an estimate.

 This estimate period was from Feb 2008 Feb 2009.  They then took my tax return from 2009 and applied it to the estimate period 12 months Feb to Feb.  As my pay rise did not kick in until March I was assessed for an income feb feb which was  higher than I earn't during the period??????????? I owed them $2500 and $358 in fines????????????? After lengthy discussions they agreed the payrise did not count.  However I still owe them $750! But they will wave the fines because they dont want to persecute me!.

 Obviously I was not happy and was told that if I had not rung them I would have paid less as my estimate period would have been on the tax year and not Feb to Feb by the CSA rep.

 So advice do not ring CSA about any change in income unless you are 100% sure you will earn less during the next 12 months than your last tax year.  Trying to do the right thing just gets you burned.  On top of that they had the cheek to slug me $358 in fines.

 I could give my thoughts on CSA but would be banned.

 The system currently is grinding me down to a point where working is not worth it.  I can't afford to have more kids with my new wife because I am paying over $15000 a year to the x and I have all the same bills with 35% care.  The x takes the money and pays a lawyer to take me to court in an attempt to reduce my time so she can get more money. 5 times in 24 months at least she has lost every time.
Thanks necroyp, I am in a simialr situation doing estimates, but have not yet had one reconciled (as far as I know). From what you've said the CSA reconciled your Feb 2008 - Feb 2009 estimate against a June 2008 - June 2009 income - is that right ? If so that's a worry.
Did you have much trouble to getting them to compare Feb-Feb estimate against Feb-Feb income instead? I had been wondering how they reconcile estimates when they don't match a financial year. If you don't mind me asking, how did you verify this to them? Thanks
So normally if you work 2007-2008 and lodge a tax return in June 2008 they take the income from this period and determine your payments for next 12 months or that tax year.  This is when you go on a tax year estimate.

In affect if you get a pay rise in August its effectively 11 months before your next tax return and 11 months before CSA catch up and raise you payments.  Or in my case I had a pay rise in March so 4 months behind.

However if you lodge a estimate mid year or as I did in Feb your next estimate period is 12 months from the estimate lodgement date.  In my case I lodged the estimate in Feb and so it was from Feb 2008- Feb 2009.  Of course Feb to feb crosses two tax periods (in effect 7 months for the 2007-2008 and 5 months for 2008-2009 period).  In the second period I recieve a pay rise.  CSA cant determine when I recieved the payrise because it does not show up the group certificate.  So they take my pay rate for the work year of 2008-2009 and backdate for the entire feb-feb period which raises the 2007-2008 period payment incorrectly.

End result is never inform CSA of any change unless you are going to earn less money in next 12 months as maintaining a tax year estimate is far better.

Once I explained when my payrise took place they altered their records and it reduced my payment to $789.  Then they dropped the fines.  I believe because I have never missed a payment in 7 years and they did not want to upset the golden goose.

Question:  Is there anyway to have house hold incomes taken into account.  The x drives a $110,000 car while I drive a bomb (the x and her husband own a business and are making a fortune - on paper she draws $50,000 from the business - surely as they are married the buisness profits should be taken into account as her income as well = which it currently is not).  Meanwhile after this tax year I am looking at having to pay around $700 per fortnight.

Also she has just dropped another child and my payments are going up because it lowers her taxable income.  End result I pay more.

I might be coming across a bit angry but its getting to a point where working harder to make a better life for my family just cant happen.  My current wife and new born son are going without so the x can take holiday and drive in brand new cars every 6 months.
necroyp - Yes you are correct - never inform them of changes unless your income is dropping.

What you are describing is a reason 8 change of assessment application. If the kids have a greater financial lifestyle when they are with the ex than with you, then you should be able to argue this reason with success.

Your special circumstances could be that she has dropped another child and that it is not fair that you are subsidising her decision to have a child with her new partner.

You are justified in your frustration and anger.

Where can I find these reasons I keep reading about ie number 8?

Also how does one prepare for such and argument, how to I read up on how to prepare and lodge such as request with CSA and do I just call CSA to initiate such a request.

Also thanks all for your help.
The CSA Guide 2.6.2: What are the reasons for a change of assessment? said
2.6.2: What are the reasons for a change of assessment?

Version 2.1, Last updated 3 August 2009 5:00pm

Context

The 10 reasons for a change of assessment application are listed in the Assessment Act.

Legislative references

Sections 98C and 117 Child Support (Assessment) Act 1989

Contents

CSA can only change an assessment if one or more of 10 listed reasons is established 'in the special circumstances of the case' (sections 98C and 117(2)).

There are 10 reasons for a change of assessment (section 117(2)).

Reason 1. The costs of maintaining a child are significantly affected by high costs of enabling a parent to spend time with, or communicate with, the child.

Reason 2. The costs of maintaining a child are significantly affected by high costs associated with the child's special needs.

Reason 3. The costs of maintaining a child are significantly affected by high costs of caring for, educating or training the child in the way both parents intended.

Reason 4. The child support assessment is unfair because of the child's income, earning capacity, property or financial resources.

Reason 5. The child support assessment is unfair because the payer has paid or transferred money, goods or property to the child, the payee, or a third party for the benefit of the child.

Reason 6. The costs of maintaining a child are significantly affected by the high child care costs for the child (and the child is under 12 years of age).

Reason 7. The parent's necessary expenses significantly affect their capacity to support the child.

Reason 8. The child support assessment is unfair because of the income, earning capacity, property or financial resources of one or both parents.

Reason 9. The parent's capacity to support the child is significantly affected by:

    * their legal duty to maintain another child or person,
    * their necessary expenses in supporting another child or person they have a legal duty to maintain
    * their high costs of enabling them to spend time with, or communicate with, another child or person they have a legal duty to maintain.

Reason 10. The parents responsibility to maintain a resident child significantly reduces their capacity to support the child support child.

Prior to 1 July 2008, Reason 10 applied in cases where the child support assessment was unfair because the paying parent earned additional income for the benefit of a resident child.

If one of the reasons for a change of assessment is established, CSA must also consider whether changing the assessment would be 'just and equitable' and 'otherwise proper' (section 98C(1)).

Here's a link The CSA Guide 2.6.2: What are the reasons for a change of assessment?

Note! It is highly recommended that further information is sought before attempting to use these, especially if you are the liable parent.
necrop - You can get that info from the C$A guide or read section 117 of the Child Support Assessment Act. I think you will be better off sticking with the legislation as the guide is biased in the favour of the payee.

Ask C$A for a Change of Assessment Application form or download off their website.

In filling out this form you will have to bear all financially to them. This may not be a wise thing to do as they like might try to find a reason to raise your liability as they like to engage in witch-hunts to try to justify their 0.5% pay bonus .

Only do this if you are convinced the ex is much better off than you and that your children (including those living with you) are worse off with you than when with her.

The legislation is on your side if this is the case.

If she is collecting family benefits, then your application may not be worth it. But the benefits of your kids with the ex will be determined by the ex's partner's income and I think you said it was pretty high?
The X's partner runs his own business.  She draws about $59,000 a year as an income from his buisness (an obvious tax dodge as she actually does very little).

They both drive cars valued over $80,000 and in the last 9 months she has had 3 new cars.  I assume they would be vehicle on lease against the business.

What he earns I do not know but it would be significant.  I earn a good income low-mid 6 figure which my current child assessment is based upon.  Financally I earn no other income.  My wife earns about $900 a fortnight - but she want to resign to spend more time at home with the kids.  I have two children with the x and one with my new wife.  My x has 2 new children.

Thats about all I know so what I dont want to happen is go through this and be pinged for more.  I also want make sure I am not paying more than I should.  At present I pay about $14,000 per year.  However this is about to rise sharply when my payrise is picked up by child support and my investment property kicks in.
All I can say is that if there is a distinct difference in your living standards then you may have a shot at getting the liability reduced.

Be prepared to negotiate a long drawn out appeals process - It will take over a year. Read section 116 and you may be able to work out how you can get you case into a court rather than the SSAT as the court will be more reasonable and quicker.

If not then you are stuck with C$A and SSAT.
The problem is that C$A and SSAT may not have the same view as yourself as their objectives are to make sure they collect as much as possible from the Payer.

You will need to know sections 116 & 117 of the child support legislation very well and be able to argue your case. I'm in the middle of one at the moment and have found even the SSAT to be siding with the payee despite what the legislation states.

You might however be better off by a making a complete change of financial circumstances ie: get financial advice, sell everything, change work to suit, set up other entities etc…

Afterall with babies on the scene - you have got 18 years of family benefits that you could be receiving as well as the remaining years of child support to pay.
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