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Impending jump in CSA Payment

Hi Ho all,

Just a quick question to all you learned people, My husbands CSA payments jump dramatically come July, so much so it is to a ridiculous amount for one child.

Anyhow we sat down and calculated just exactly what it would cost to raise this daughter as if she were exposed to that income living with us. Now she gets free schooling (free list as Mum is on disability), gets Abstudy payments to study, doesn't catch a bus to school (hardly attends sadly), doesn't participate in any kind of sport just cigarettes LOL, she has no major medical ailments and also receives free medical blah blah as the government provides. Now we calculated her share of the rent, her share of electricity, her clothing and food expenses and general entertainment and this was still way way way under what we have to pay.

If we were to object/opt for change of assessment would we have any hope? Not only do we worry that Mum has the ability to budget properly (see payee has severe mental health issues), we can see excess is going to go to other siblings. We would not spend 1100.00 per month on any child with the income available or not. We currently have a teenager living with us (my daughter - husbands step) and she participates in sport and we don't get free schooling etc, etc and it still maximum to raise per month is 700.00 and that's exaggerating.

How would we go or waste of time bite the bullet and pay? We initially thought our payments were going to be 800.00 per month but husbands got a promotion today and according to calculators around its going to be 1100.00 or close to.

Thanks in advance

Jodie
Jodie.

First thing if the payrise was recent, this won't filter fully into tax returns until 2009 and it will only be when that tax return is done that you'll pay the full whack. In July the new assessment will be based upon the 2007 tax return, then when your tax return for 2008 is lodged, you'll jump by about one third of the difference.

However as it's just the one child I think your payments under the new system will be a lot fairer than under the old. The new system does take into account other, biological or adopted, children of either parent, however, it appears to make little difference.

I assume that you have used one of the calculators for the new legislation, that also have the latest base data (the MTAWE which is the basis of all values). Have you tried the one here? or the CSA's calculator? The latest figure can make quite a difference as the Self Support amount raises from 16833 to 18252 (although bracket creep can result in some paying extra).

Oops was getting the link for the CSA's calculator and it came up with this:
CSA's Online Estimator said

Family Assistance / Child Support - An estimate of what your payments might be from 1 July 2008

This estimator service is currently unavailable and is expected to be available soon

To estimate what your child support assessment might be from 1 July 2008, visit the detailed information worksheet.

The worksheet can only give you an estimate - the Child Support Agency will work out your new payments and send you a new child support assessment before May 2008.

For detailed information about the new Child Support Scheme visit the Child Support Scheme Reforms website.
Thanks Mike.

WE have used the latest calculator, but we are not waiting until the next tax return. We will inform CSA of new income immediately as we don't want arrears and therefore paying Mum when daughter is no longer living there. Also we have to give this new income estimate to Centrelink the two go hand in hand. We just wanted to know if there was any way of having this amount reduced as it clearly does not cost that much for a teenage girl whose highly inactive school wise etc.
Jodie you wouldn't get arrears. The latest tax return is what is used by the CSA, under normal circumstances. However you can perhaps pay 33% of CS toward support needs (not sure of the exact wording). If you have high contact costs, greater than 5% of CS you can claim them.

There's also things such as NAPs (Non Agency Payments, however they are risky as if she denies them you may not get them taken of the CS). Perhaps you could try to use some of these to persuade her to be more active.
LifeInsight said
Jodie a simple solution would be for your hubbby to salary sacrifice extra pay into super before July - that will help with C$A and FTB problems. I do this not to reduce C$A to the ex, but to maximise FTB for my step children as their father is not alive to support them.
We have confirmed advice from CSA legal that indicates that there are certain Salary Sacrifice packages that are exempt from disclosed income. That is they do not appear as FBT (Fringe benifit Taxable) and do not require to be added to the Group Certificate which is provided to ATO. ONE of these is Salary Sacrifice into a Super Fund.

LifeInsight should be well pleased with the accurate advice given to site members as this is spot on and in fact I will now humbly request permission to retract from a previous thread that all income was considered for purposes of CSA calculation. I have changed from that view after further advice and my assumption was quite wrong in that regard. I am informed that there are a couple of other salary sacrifice packages that also comply and will investigate these further at some stage.

The point should also be noted that it is only the higher earners who can in fact leverage these type of packages anyway.

With the demise of the Salary Cap on July 1 2008 to be replaced with a Cap on the Costs of Children, which this year is set at $136,890.00 plus add back the "Self Support Amount" of $18,252.00 (Where the PAYEE doe not have any income) makes a total of $155,142.00. If you take a look at the Costs of Children tables you will see the ceiling amounts of costs of children are set therefore at the maximum salary amount of $136,890.00 or $155,142.00 where Payee doesn't have any income. These amounts are $16,700.00 for 1 child, $26,010.00 for two and $32854.00 for three children all including and under 12years of age. There are other tables for 13 years and over and children of mixed age.

Thanks you for the information LifeInsight

Executive Secretary - Shared Parenting Council of Australia
 Was my post helpful? If so, please let others know about the FamilyLawWebGuide whenever you see the opportunity
 
HubbyPays said
…..but we are not waiting until the next tax return. We will inform CSA of new income immediately as we don't want arrears and therefore paying Mum when daughter is no longer living there. Also we have to give this new income estimate to Centrelink the two go hand in hand.
I am glad you have raised this issue. The two do not actually go hand in hand. CSA run a 15 Month "Assesment Period" whereas Centerlink run a 12 Month financial year pertiod based on taxable income for purposes of FTB part A which is really all we are concerned with here.

Under the new legislation forms are being sent out to all payers for you to "Estimate" your number of nights and income after July 1. Both Payer and Payee will be required to send these in. The new system is fundementaly very different and will be what you need to consider. There is no immediate rush today because you have already completed "last years" tax return and all is in order, other than to review the forms you have already been provided that calculate the new regime. The assesment amount is varied after advice to the departments (CSA and Centerlink) which is automatic anyway direct from the ATO on completion of tax returns. (Unless you are dealing with Centerlink FTB on a weekly/fortnightly /monthly rebate basis.

If you have anything OTHER than a single case or Single case with Non Parent carer then my understanding is that from July 1 not only will the new formula apply but your assesment period (The 15month CSA period) will start regardless of when your previous assesment was. (This includes Multiple Case, Multiple case with no parent carer, Non Parent carer and Non Parent carer using only one parents income and where one is deceased.)

Centerlink will assess depending on your level of care as if it is falling into Regular care (under and including 34% or less than Regular care (under or including 13%) there is NO FTB Part A paid. However currently as you know you can claim a direct percentage of FTB part A related to the % of care (nights) provided you have over 10% care.

In a short while CSA will have a hot line for you to enquire in relation to the new changes and impacts.

There are many fundemental formula changes including the three core component concepts:

The actual costs of raising children
BOTH parents incomes to be combined for purposes of calculation (Income shared)
Recognises CARE (time) as a contribution towards meeting the costs of a child

Take a look at the Child support section on this site for further details and the link to CSA's new site from there.


Executive Secretary - Shared Parenting Council of Australia
 Was my post helpful? If so, please let others know about the FamilyLawWebGuide whenever you see the opportunity
 
In simple terms submit an estimate and give CSA the ability to do what they want when you file your next tax return.

CSA & tax return

It is important to put your tax return in on time; from July 2008 the CSA will not give you a refund, if your new tax return leads to a lower payment and you are late with the tax return. If you are late and it leads to an increase in payment, you will have arrears to pay. This information comes directly from the CSA.
So there you have it! An incentive to get the tax return in on time.
 

Executive Member of SRL-Resources, the Family Law People on the site (Look for the Avatars).   Be mindful what you post in the public areas. 
LifeInsight said
So in short: Get your tax return in ASAP after June.
I disagree.

Part 4A has not been amended, only Part 5

The 1999 addition of Part 4A (from child support Year to child support Period) was to make it fairer for blokes who use tax consultants who have permission from Tax Office to spread their work over the year.

So a bloke who has set up a cycle at CSA where he has just done his 2006/2007 tax has until May 2009 to lodge his next return, and until then IT DONT MATTER WHAT HE EARNS as he has been legally assessed in Feb 2008 (albeit he will probably get 40% reduction on 1 july 2008 from new formula).

Mate, get info from the Child Support ACT(s) and not from the CSA, who simply want your money and tell big lies (even have a CSA Lies  Bible called "The Guide", which is itself not law, but just CSA interpretations and procedures).

Delaying tax return

LifeInsight said
The idea of getting the return in ASAP is to possibly reduce the assessment. Estimates will be reconciled at the end of the financial year which could result in arrears and penalties if not correct.

I agree with what you are saying.

"So a bloke who has set up a cycle at CSA where he has just done his 2006/2007 tax has until May 2009 to lodge his next return, and until then IT DONT MATTER WHAT HE EARNS as he has been legally assessed in Feb 2008"

…and that was the point we were trying to make to HubbyPays.
Fact, as we know it, is hubby got a rise today.

SO it is in his interest to delay as long as possible for that to increase his CS - agreed?

Ten years ago we fought hard to make the estimate process fairer and what came out from No. 120 1998 was:

S. 60… am. No. 151, 1992; Nos. 39 and 84, 1997; No. 120, 1998 rs. No. 120, 1998

It's true, the legislature was so confused that TWO groups were working on the same thing, so s 60 got amended as well as repealed and substituted

Thus in the substituted version (and in the new Part 4A) there is a loophole on blokes' side (and we don't get many), so why not use it?

DELAY as long as possible - ie. the full 15 months allowable. He has not said when that time will be.
Thanks everybody for all the replies, albeit most of it is over my/our head. We will not be estimating now…just putting our tax returns in asap to avoid any debt. We have to lodge within a 12 month time frame otherwise we have to pay all our family tax benefit back to the government that we received the past financial year. We dont think we will salary sacrifice either after looking into it. What I can throw in CSA's face is a document released by DHHS here in Tasmania that has done a similar thing as CSA's Costs Of Children Table. This table however was done by DHHS for foster carers payment to receive to raise that particular child in that particular age group. Let me tell you it is significantly LOWER than the table generalised by CSA nationwide. I intend to go through change of assessment and give them a copy of the DHHS document that states a child over 13 in Tasmania doesnt cost what CSA are saying. And that these figures are calculated through our own government body. Yeehaarr cant wait to see what theyve got to say about it. Maybe I wont get anywhere but it will surely stick it to them. I doubt it will because if they accept it, it sets a precedent for everybody else. Initially our beef is paying too much child support for one child like we said in the beginning, we have a teenager here with us and it doesnt cost us what theyre asking!
With this amount of stress people can get sick and find themselves unable to work. If they have to leave work because of illness - with Drs Certificate - CSA cannot do anything (as happened to me) - the estimate of income (zero) has to be taken at face value (after all they are not doctors) - cant take money if no-one is earning anything. Then everyone suffers financially, government picks up the support bills but at least the sick person can concentrate on their health - until they are able to work again.

 Maybe I am not explaining myself well enough
You have always been able to depart from the formula (see Gyselman 1991) based on cost of children.

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