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Income Estimate Strange outcome!

Can anybody here help me work out what would be an amended assessment (annual rate of CS) given the following?  

ATI Income estimate (payer) for 2012/13 is $10,500
ATI for payee for 2012/13 is $120,000
One child <13 y.o. lives with me (payer) for 122 nights
Actual ATI (payer) for 2012/13 is $40,000
Current assessment is $1,269 (FAR is applied)

What would be a new amended assessment?

Is  MikeTs calculator (advanced) going crazy (resulting in $0.0) or is it me?
Thank you  O_o  O_o
In theory the formula would have the Payee paying 24% of the $14400 cost of the child. However, in this scenario the over 65% rule kicks in and the result is that the payee's liability (i.e. 24% of $14400) is negated. The rule says that if a parent has over 65% of care then any liability upon that parent is negated (As per section 40C of the Child Support Assessment Act:

The Child Support Assessment Act 1989 said
40C  Parents with more than 65% care
      The annual rate of child support payable by a parent for a child for a day in a child support period is nil if:
   (a)   the parents annual rate of child support for the child is worked out under section 35 or 37 (income of both parents, no non parent carer); and
   (b)   the parents percentage of care determined for the purposes of the administrative assessment of child support for the child is more than 65%.


As such it is neither the Calculator going crazy nor you.
Mike, I understand that according to the legislation the outcome is as you say - NIL and this is correct.
But from the logical point of view, ( I know there is no such thing as logic there :) ) for this particular case, the outcome suggests that more income for a payer  less payment in child support!
When you loose your job and struggle to survive you are hit by FAR, but once you get back on track and start earning you are in zero CS. Marvelous system indeed!
How could you or anyone explain that?

rom007 said
But from the logical point of view, ( I know there is no such thing as logic there :) ) for this particular case, the outcome suggests that more income for a payer  less payment in child support!
Not really, a greater income, until a threshold is reached, will result in no change i.e. still zero.

However, the underlying calculations, if the greater amount exceeded the self-support amount (any "genuine" income below SSA is effectively an income of $0 so that a parent has sufficient money to support them-self), would see that the cost of the children would increase and also that the percentage of the child support income would change. It's just the 40C ruling that negates the changed liability from being applied. If, using 2013 data, your income were to increase to $53216 then you would become the liable parent. This is because your percentage of the child support income then exceeds the cost percentage (24% for 15-34% care) (the threshold, in this scenario, previously mentioned).

You mention that FAR (I assume Fixed Annual rate) is applied. If the income estimate in this scenario were for an amount that equalled or exceeded the maximum basic amount of "parenting payment single" then FAR would not have been applied. The calculator, when you input the scenario, does provided information that could assist in determining this:

The Advanced Child Support Calculator said

Minimum Payment(s) may apply for A1

Annual Payments of $391 per case, for 1 cases, totalling $391.
Weekly payments per case are $7.49, totalling $7.49 per week.Cases are 1
Minimum payments may apply for A1
The calculated annual payment of $0 is less than the Minimum Payment Rate of $391.
The highest care level for A1 is 33%, the ATI is $10000 the Parenting Payment Single is $17256.
Whether or not the minimum payment is applied depends upon; level of care, whether income support is provided and the ATI.
If on income support and care is less than 14% (52 nights) the minimum rate is paid per child support case.
If on income support and care is 14% or more, then no minimum payment applies.
If not on income support and care is less than 35% (128 nights), and your ATI is less than the Parenting Payment Single($17256), then a fixed assessment rate of $1294 applies per child (up to a maximum of 3 children).
If you are unable to claim income support and you can genuinely support your low income then an application can be made to be placed on the minimum payment rate.
Note that the figures given are approximate and they are indexed annually.It is advisable to seek expert advice with regard to minimum payments.

An alternative would to have applied for a "genuine low income".

Rom007 said
When you loose your job and struggle to survive you are hit by FAR, but once you get back on track and start earning you are in zero CS. Marvelous system indeed!
How could you or anyone explain that?
A means to tax the otherwise untaxable through potential claw-back of FTB. If the system were really about the support of children, rather than a means of taxation, then the missing 50% of the legislation related to ensuring that payment of monies received for a child or children were actually spent on that child or those children. Furthermore the best interests of children would ensure that children were not deprived of their humane right to know and be cared for by their parents and that this would be enshrined within the system, rather than the current case where the legislation actually supports such exploitation of children by child abuse, as it overrides the hierarchically greater Family Law legislation for the sake of this all but in name tax.

Perhaps the word albintax should be added to the Macquarie dictionary. :)
This is where I find this advanced calculator silly because if you have a partner and are on a low income then you are unable to claim Centrelink benefits if they earn a certain income. Therefore you may be on a genuinely low income and the CSA makes you even poorer and the partner is then actually supporting the other family indirectly. How does this make sense?

Sometimes they acknowledge a partner and other times not.
MikeT said

If you are unable to claim income support and you can genuinely support your low income then an application can be made to be placed on the minimum payment rate.


Mike, of course it is genuinely low income. Otherwise, I would claim/estimate that I am making 20.5K (not 10.5K) per annum, which would result in NIL liability for me.  
Unfortunately, the CSA does not care whether you income is genuinely low or not, as there is no definition of "genuinely" in the legislation. Yet, there is a definition of NON ATI income according to sec 66A(4) of CS(Assessment) Act, which would classify any money passing your hands as an income. This includes borrowings, personal loans, proceeds from the bank robbery, etc. Yes, thats right  ANY MONEY! And if that amount happens to be greater (and it will be greater) than the Parenting Payment Single your application pursuant to sec 65A  for FAR not to be used will fail.

Now, there is the most interesting part.  Assume that after 11 months of struggle to survive you've done some work for which you have received a one-off payment of 20.5 K, just 5 days before the end of financial year. Now you lodge you tax return (among the first 10 taxpayers in Australia :) ) in great expectation that your assessment will be amended using your actual income, per provisions of Division 7A of Part 5 of the Act. All of a sudden your amended assessment according to the advanced calculator is NIL. What happens to overpayment of $1294 due to FAR, which you have already paid?

I would be grateful if anyone can share his/her thoughts on this.
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