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Should we pay for other children as part of CSA assements

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CSA not taking into consideration capacity to earn as mother is allowed to stay at home

My son's mother has 2 new children (new marriage) under the age of 5 and currently works 2 days per week. She earns 22k and I earn 79k once the 22k is taken off by CSA I am the sole income earner paying 100%. I have lodged 2 applications of change of assessment to CSA but they knock it back stating that under the current act she has the right to stay at home with her new children until they attend school. once then I'm able to lodge a new claim asking for her capacity to earn be set at 35hrs per week.



My son has just turned 13 and CSA amount has gone up to an unmanageable amount.



Can anyone help on another avenue as CSA won't see my side and take this into consideration


  

Last edit: by hawk

Hawk,
         unfortunately there is really nothing that you can do. The legislation does support the "caring role" as a means of capacity to earn not being invoked. Here's an extract from the CSA guide which reflects the legislation related to this aspect:

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

If the assessment is affected by a parent's reduced income, there may be special circumstances to justify changing the assessment to take into account the parent's earning capacity.
When can the Registrar take into account a parent's earning capacity?

From 1 July 2006, the Registrar can only determine that a parent's earning capacity is greater than is reflected in his or her income used in the child support formula if all of the following three matters are satisfied:

1. The parent is either:

    not working despite ample opportunity to do so (section 117(7B)(a)(i)); or
    has reduced his or her weekly hours of work to below full-time work(section 117(7B)(a)(ii)); or
    has changed his or her occupation, industry or working pattern (section 117(7B)(a)(iii));

AND

2. The parent's decision about his or her work arrangements is not justified by either:

    his or her caring responsibilities (section 117(7B)(b)(i)); or
    his or her state of health (section 117(7B)(b)(ii));

AND

3. The parent has failed to show that the decision about his or her work arrangements was not substantially motivated by the effect this would have on the child support assessment (section 117(7B)©.

The Registrar must be satisfied that all three compulsory criteria are satisfied before a change to the assessment can be made to take into account a parent's earning capacity, rather than his or her actual income.

If the parent's circumstances satisfy only one or two of the criteria, the Registrar cannot make a decision based on the parent's earning capacity.

The Registrar must also be satisfied it would be possible for the parent to increase his or her income by changing his or her work arrangements. That is, work must be available for the parent in his or her area and the parent must have the necessary qualifications and experience to perform that work.

The respective legislation is:

The Child Support Assessment Act 1989 - Part 7 - Division 4 - Section 117 - 7B said
(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.

The even worse news is very likely that when the other children (relevant dependants) reach school age that 117(7B)© (the last line) will then apply as could 117(7B)(a(i) "ample opportunity" as that many years out of the workforce is frequently taken as negating the opportunity due to be de-skilled over time.

With regard to paying for other children.You in fact are not. That is the other children "Relevant dependants" have no cost associated with them. That is because their cost is based solely upon the income of the CS parent for whom they are relevant dependants (ie the other parent in your case). In all other ways (ie except that only the one income is used) their cost is worked out (using the cost of children tables) in the same way as for CS children. However before the step of determining the cost of children, is the application of the Self Support Amount (SSA), only income above this amount is considered.

The SSA for 2014 is $23523, as $22k (the income of the other parent in your case) is less than this the other parent's income is $0. $0 fed into the cost of children table will always return $0 and thus those relevant dependants do not result in any change to the end result.

However, if the other parent's income were greater than the SSA then that amount which is above SSA would result in a positive cost of the relevant dependants. So your argument could have some strength.

However, if you were to have relevant dependant children then the same applies but on your side.  In fact as your's is the greater income then the benefit, if you had relevant dependants, favours you (ie greater income in = greater cost of relevant dependants and thus a larger amount subtracted from your child support income). eg if you had two under 13 relevant dependants then you would have $13112 subtracted from your income before determining your Child Support Income.

The argument for including relevant dependant children is that they are a cost as important as the CS children that should be taken into account. However, if you then consider how FTB looks at children then there is a glaring anomaly/hypocrisy.   That is for CS children, where the parent receiving the FTB is also in a relationship, then the partner's income will be taken into account whilst for CS purposes a new partner's income isn't.   
I am araid that MikeT is right on the mark as usual. A payees capacity to earn is negated if they have a responsibility to care for other dependents.

But, on the subject of hypocrisy, the current CS scheme does not allow a paying father to claim the mother, (new partner), of a relevant dependent child as a dependent whilst she stays home to care for the new child. So it is important that payers contemplating having children are aware that whilst their CS income amount will decrease after the birth of a child to a new partner, there will be no adjustment for the loss of income into the home due to the new partner's lack of income.

The hypocrisy here is that, in a situation where the paying father has an income that negates the new partners entitlement to any parenting payment, as the CS amount paid will not be deducted when assessed by Centrelink, and obviously a new baby will need to be cared for, the second family can quite often find themselves in severe hardship with the loss of income from that new partner. Whilst the CS scheme is allegedly designed with the aim of ensuring all parents meet their liability to their children, it is backhandedly putting these second families into severe hardship.

So it is acceptable for a CS payee's children to have a parent carer at home, but not a payer's children. The new family must then make the choice of a) not having children, or b) placing their children in child care, no doubt also at some considerable cost.

No wonder the AIFS has found that up to 80% of second marriages fail!

Although, after considerable thought on this matter, I have come to the conclusion that, provided the new partners income is sufficient, perhaps the payer should decide to be the stay at home parent in these situations, as there is provision under the CS scheme for a payer to be able to negate a capacity to earn due to caring responsibilities. If the new partner's income is below the threshold amount, the payer who now stays at home may even be entitled to parenting payment.

Does that make sense MikeT, and would it work? Just theoretically?

A child is a gift, not a weapon. To be a parent is a privilege, one which unfortunately some parents do not deserve.
Kathg said
Although, after considerable thought on this matter, I have come to the conclusion that, provided the new partners income is sufficient, perhaps the payer should decide to be the stay at home parent in these situations, as there is provision under the CS scheme for a payer to be able to negate a capacity to earn due to caring responsibilities. If the new partner's income is below the threshold amount, the payer who now stays at home may even be entitled to parenting payment.

Does that make sense MikeT, and would it work? Just theoretically?

In theory "his or her caring responsibilities (section 117(7B)(b)(i));" should be met in such a situation so this should be feasible (1 out of the 3 is sufficient to negate CTE). However, if the parent was on any benefits the minimum rate would apply (without checking I think FTB would be excluded). If not on benefits then it's a little convoluted but in theory an application for a genuinely low income would probably be required.
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