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Redundancy Payout - Change of Assessment

Departure from administrative assessment of child support (departure determinations)

Hi All,  it's been a long time since I have written anything here at the Forum.  However, the calm before the storm is over, and I am in the process of lodging an objection with CSA over a decision to change our child support assessment.  Ex lodged an Application to Change the Child Support Assessment with lightning speed when she realised for the first time in nearly 6 years that she would need to put her hand in her pocket to pay some child support.

My partner was made redundant from his job on 1st August this year.  He made sure he contacted CSA to get advice on what to do, and also put a huge effort in and found a job within a month of being made redundant.  We were advised very clearly on what to do in regards to notifying CSA on the Redundancy details, and told how to go about advising them of the anticipated income from the new job etc etc.,  We felt relieved by the information we were given, and understood that it would be appropriate to apply the payout money to our mortgage.  And we did just that.

My partner's ex got her new assessment and it required her to pay approx. $62 per week in child support, as two of the three children live with us full time.  Within what seems like hours, we got the mail advising us of her intention to request that my partners redundancy be used as his taxable income etc etc.,  We had our phone call from CSA, and we felt relatively comfortable with the conversation.   We were told not to fill out the Response to Application to Change your Assessment, and that we should sit tight until the ex was contacted and some negotiating take place.  We understood that we would be contacted by CSA once they had spoken to the ex.  We waited a couple of weeks, and then decided to phone CSA to double check that we should not fill out those forms.  We were told once again, no, sit tight, the ex is not returning calls. The CSA officer we spoke to said that they have been unable to get a response from ex, and just to sit tight and wait some more.  So we did.  Bad move.

On Thursday, my partner got a call from CSA stating that they had made a decision to take his redundancy payment into consideration as his taxable income for the next 29months.  When my partner challenged the fact that he hadn't had a call to discuss further, he was told that CSA had tried calling him, but no answer.  Hmmmm,  considering my partner carries his phone on him 24/7 due to fear of missing a CSA Call, and normally if he can't answer due to work conditions, there is a message advising that he needs to call back. Nothing.  He was told that they had tried to call and no answer and no response.  The woman then proceeded to tell him the deal, and basically said that he was up for $780 per month, and that was her decision to make. When my partner exclaimed that he didn't understand and that he had used redundancy money to reduce his mortgage on the house that houses his children, he was told that he shouldn't have done that, and that the money should have been made available for the benefit of the children. What the f&*k?  Seriously!  Ex can earn $85,000 and have one child, my partner can earn under $60,000 and have two children full time, but he needs to pay her to care for the children she doesn't care for?  I'm sure by now you can all tell that I'm ranting!! Sorry!

Anyway, as with all situations, there is more to the whole story, however the fundamentals of this one don't vary from the crux as described above.  

To cut a long story short, my partner who just simply could not fathom what had happened, has been told that he must back pay $3,000 by 7th Dec, and that his income for the next 2 years is going to be set at 3 times the amount he actually earns.  

I have started the objection process, and it was by fluke that I ran into a CSA representative at work.  An informal conversation with her helped me immensely.  Firstly she confirmed for me that there indeed had been a total breakdown in the CSA phone system, email notification system, and, that she was aware of another case almost identical to what I described as our situation occurring with another client whom also was made redundant from the same workplace as my partner.  She clearly implied that I needed to object and challenge the decision, and was very interested in knowing the identity of the person who made the decision to see if there was a pattern etc.,  I will be glad to provide that information.  

I will upload a copy of the letter that will accompany our objection form (names changed).  It's not perfect, but it will do the job.  My sincere hope, is that anyone who is likewise experiencing the total violation of a money hungry ex, or a bias CSA representative, that they get something out of knowing they are not alone.  I sincerely hope that the people in decision making roles within the CSA one day get to know that most dads are not dead beat.  I hope that they stop to really contemplate the reality of a situation before making a decision.  You will note in my attachment, that I refer to misleading information from the ex in her application.  I am gob smacked that the CSA person did not put two and two together to realise the same.

I will upload as soon as I have finished the letter.  
Rant over.

Cheers
LM

Attachment

Last edit: by lgm0305

If an officer has told you that they tried to contact you but there were problems with the system that prevented contact then that officer has lied. I would suggest complaining bitterly about the officers misconduct and breach of the APS guidelines. I would suggest complaining not only to the CSA but to your local federal MP, to the federal MP who has the DHS portfolio, to the ombudsman and also to the media.

I'd also suggest using the calculator on here (or the CSA's Estimator) to come up with what this really means formula wise. Running figures into it based upon what you have said; other parents taxable income $85K, three children (2 full-time in your care (I've assumed under 13's), the third over 13 and full time in the other parent's care); then the redundancy payout would have to be over $1 million, as to pay $780 CS per month your income would have to be over $430000, subtract the $60,000 taxable income from the job leaves $370. Multiply this by 3 (for the 3 years) and the payout would have to be at least $1,110,000.






Keep us informed as this is not the first time we have heard that there has been no communication and that the CS has been altered. There is a "Three strikes" and you are OUT! policy in relation to phone and contact. That is if they dial you three times and if you don't pickup you are marked as not contactable and they will make a decision. We have heard about some very unsatisfactory practices in relation to this.

Redundancy is not protected. It is income that you have had in a particular year.

What you needed to do was advise of your future and current income from the date of termination. An example as follows:

You worked June to December 2013 and were made redundant in December 2013. Your income was 100k pa

You received 50k in redundancy.

Your income to end of June 2014 (the tax year) is therefore 150k. That kicks off a change of assessment with a new assessed amount to June 14.

You informed them your income is nil for the period  January 2014 to June 2014

You informed them your assessed income for the period July 2014 to June 2015 is 20k or a realistic income figure.

July 1 2014 should have a new assessment based on 20k.

Is that how you see it ?






Executive Secretary - Shared Parenting Council of Australia
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Hi Mike,

Thank you for your response.  We will indeed be complaining bitterly about the officers misconduct and will be following through with holding them accountable for their gross mishandling and decision making in this matter.
The following are the facts and figures of our case.

Child 1  17yrs old  lives with father full time  (76% according to CSA)
Child 2 - 12 yrs old  lives with father full time  (76% according to CSA)

Child 3 - 15yrs old  lives with mother full time  (100% according to CSA)
             (Manipulated into no contact with his father)


Mother earns - $83,800
Father earns -  $60,000

Results  according to the calculator
Estimated amount of child support payable by Mother
Per year:   $3,587.00
Per month:   $299.00
Per fortnight:   $137.00
Per week:   $69.00

The above was assessed by CSA and an Assessment was sent out to both parties advising of this result.  This is what triggered the ex to submit an Application for Change of Assessment based on Reason 8.  The result of which I outlined in my initial post.

Dear Secretary,

Thank you for your response also, I am now in the process of responding to your comments and will post shortly.

Cheers
LM


Dear Secretary,

My partners 2014 Taxable Income was $109,000.

He continued working in that job until 31st July 2014.  

My partner had worked for this company for 25 years, and his redundancy payout figures were as follows:

Annual Leave Gross (13 wks)         $ 29,270  (taxable)
Long Service Leave (12 wks)         $ 27,014  (taxable)
Redundancy ETP component (83 Wks)   $ 25,831  (taxable)
Redundancy Payout (83 Wks)         $123,706  (not taxable)

                  
Sub Total   $205,821
                  
Less Tax   -$  26,276

                  
Paid TOTAL   $179,545

(***Note that the taxable income portion of the above is $82,115 ***)
                  

Normal taxable income for work in the period 01/07/2014 to 010/08/14 was $10,000.

So with the above in mind, we phoned CSA to discuss what we needed to do.  

We received $180,000 into our account for the redundancy, of which $82,115 was considered taxable income.

We made numerous calls to CSA to discuss our options.  We indicated that my partner had finished up at his old job, but that it looked like he had a new job that would start within month.  After firstly being given the wrong advice, we were then given what I believe was the correct advice.  We were to phone CSA as soon as the redundancy was paid to advise of the amount, and to submit an estimate of earnings from the date after the redundancy payout to the end of the 2015 financial year.  We calculated what we expected my partners taxable income would be from 26th August 2014 to 30th June 2015 as $60,000.

All was accepted and we were strongly advised to call CSA before the end of the 2015 Year with a new estimate?  We didnt quite understand how this was going to work, accept to say that they indicated that it would kind of override the 2015 Income Tax Return which was going to show all the redundancy income?  Still not quite sure how all that was going to pan out, but until now we thought we would start questioning it sometime early next year.

All was fine, and we received a new assessment based on my partners new income of $60,000 and the exs 2014 Taxable income of $77,000.  This assessment indicated that the ex was to pay $60 per week in child support.
Of course that was never going to happen, because as soon as she received that assessment she started filling out her Application to Change it based on my partners redundancy payout.

I feel the need to explain something here, as we are aware that the percentage of care is often overlooked by CSA when we are speaking with them on the phone.  As you may note in my attachment to my initial post, we do not pay for the childrens private school fees.  This is often raised by CSA as some sort of reason to divert from the normal child support calculation.  However, this should never be the case.  There is good reason why my partner does not pay for private schooling, and CSA agreed.  For every time that the issue is raised by the ex, she is told the same thing, that my partner is not liable for those fees.  Without going into some extremely lengthy explanation as to why, I will just say that my partner has always paid a more than reasonable amount of child support, even when the three children were living 50/50 between us and their mother.  When two of the boys decided to stay with us full time, the child support amount reduced, however he was still paying enough child support to the ex to cover all school fees.  We were comfortable knowing that we had full financial responsibility for two children, her one, and that the amount of child support being paid by my partner to his ex meant she wasnt putting her hand in her own pocket.  We of course pay for all uniforms, books and extras in relation to school for the two children with us, as well as health insurance, dental, podiatry etc etc.,

Of course that was all going to be forgotten when she was asked to put her hand in her pocket.  And here we are.

As outlined in my initial post, a new assessment has been made, and we are now in the paying position.  This is what the old and new assessments look like!


**OLD *** For the period 7 August 2014 to 3 February 2015  
Ex to pay Annually $3,150
My partner      The Ex
Estimated $56,490   Adjusted Taxable Income   2014 Taxable $77,268
$23,523   Less self support amount   $23,523
$32,967   Child Support Income   $53,745
$86,712   Combined CS Income   $86,712
38.02%   Income Percentage   61.98%

**NEW *** For the period 7 August 2014 to 3 February 2015
      My partner to pay Annually $9264
My partner      The Ex
2015 Taxable $166,513   Adjusted Taxable Income   2014 Taxable $82,750
$23,523   Less self support amount   $23,523
$142,990   Child Support Income   $59,227
$202,217   Combined CS Income   $202,217
70.71%   Income Percentage   29.29%


Child 1  17yrs old  lives with father full time  (76% according to CSA)
Child 2 - 12 yrs old  lives with father full time  (76% according to CSA)

Child 3 - 15yrs old  lives with mother full time  (100% according to CSA)
             (Manipulated into no contact with his father)


In the end, I would like to add, that my partner and I have no issues at all in being financially supportive and responsible for his children.  My personal opinion has always been the same.  Both parents are equally responsible for the care and welfare of their children, including financially.  Child Support is a necessary evil in helping some parents to honour their responsibilities to their children, however it also steps beyond those boundaries and I have witnessed my partner, many others and experienced the absurd when it comes to money grabbing and total misconduct.  

In our personal situation, we now have to explain to the two children why we cant afford to pay for xyz, and why mum is now the one receiving the money that would have paid for those things.  When the children go on their yearly overseas holiday with mum, we will hold back the urge to ask them to thank us for paying for it!

Anyway, Ive gone back to ranting.
Have a good day
LM

Last edit: by lgm0305

A few considerations.

1) How was the sum of $166,615 determined. There appears to be no way to reach this figure.


2) Why was this even considered for a change of assessment as everything is above board and taxable incomes, over the next few years, will result in the correct and proper child support payments being made. That is the taxable income for the 2014-2015 year will reflect the redundancy payments. Thus there are no special circumstances as redundancy payments are an ordinary happening. The CSA guide mentions the ability to use a reason 8 departure from formula based assessment if a parent has substantial financial resources that are not properly taken into account as per 'Ross and McDermott (1998) FLC 98-003'. Redundancy payments are properly taking into account as they are applied to the taxable income for the tax year in which they are received. The CSA guide further substantiates that "tax catered for" income should not constitute reason for a departure from formula based assessment when it states:
The CSA Guide - 2.6.14 2.6.14 Reason 8 - a parent's income, property, financial resources, or earning capacity said
From July 2009 a broader range of income is used for determining taxable income …… 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.

3) It cannot be just and equitable that the arrived at departure from the formula based assessment will result in a gross contradiction of the very object of the child support legislation, that is, that children are provided with the correct level of financial support. The departure arrived at will result in irreversible overpayments as the departure sets a child support period of 29 months and thus will apply the once-off redundancy payments for at least two consecutive years as it constitutes an income amount order. There is no simple recourse to corrective action as the "income amount order"  prohibits such simple corrective action. Thus the two children for which primary care is held will suffer due to a grossly inflated taxable income being applied. The only action available would be to apply for a subsequent reason 8 departure from formula based assessment. To force a parent to needlessly resort such intrusive, lengthy and stressful situations is again contrary to the child support legislation and also contrary to remit of the CSA, the DHS and the Australian Government. Additionally, the arrived at premature application of the redundancy payments will have the effect of reducing any additional income that could be gained from investment of the proceeds via accrual of interest derived.
Another consideration of where the CSA may be attempting to further obtain a greater amount than is just and equitable. The COA likely states that an amount of x is to be added to the taxable income for the period covered by the decision. This is problematic, likely purposefully so, for a number of reasons.

The amount x to be added to the ATI considers the redundancy payment but doesn't replace/negate the income estimate. To ensure that you don't get fined (potential gotcha 1) you would have to provide an accurate income estimate but in doing so you would raise the income estimate. However, if you increase the income estimate then your ATI will increase thus the CSA would more than likely basically re-add the redundancy component (gotcha 2). Thirdly, when you do your tax return this too would increase your taxable income that would then be used for the next year's ATI (gotcha 3).

I very much doubt that the CSA will have a any process that takes into consideration that the redundancy payments have actually been catered for by the COA and that the ATI should not simply be added to for the decision period. It would very much appear that you have been placed into a position where there is no way to avoid double, treble or even quadruple or quintuple dipping into the redundancy payment throughout period that the decision covers.

However, if the decision does state that an amount is to be added then this should not amount to an income amount order thus not ruling out income estimates, as previously cautioned against. Although it wouldn't surprise me if you were told that an income order exists if you tried to submit an income estimate. in short an income order has to set the ATI, Child Support Income or Annual rate. Adding an amount to the ATI is not setting (explicitly specifying) it:

The CSA Guide - 2.5.1. Income estimates for a year of income - Income amount orders said
Income amount orders

An income amount order (section 5) means:

    a departure order made by a court or change of assessment decision under Part 6A of the Act that either:
        varies the annual rate of child support payable in a child support case by setting that annual rate; or
        varies the adjusted taxable income, or the child support income, of a parent by setting that adjusted taxable income or child support income;
    provisions of a child support agreement that has been accepted by the Registrar that have effect, for the purposes of making or amending an assessment, as if they were such a departure order made by consent. That is, varying the annual rate of child support payable, the adjusted taxable income or the child support income of a parent by setting that annual rate, adjusted taxable income or child support income.
 
Hi,  I just thought I'd touch base.
My partner received an acknowledgement from CSA saying they had received his objection form and supporting information. The letter stated that we had until 28th December to contact them with any further information, and that they would give a decision by 28th January. Until then my partner is to continue paying according to the assessment.
I will post as soon as we hear back from CSA to let you know the outcome.
Cheers
LM
I am in a similar position although I am the receiving parent.

My x submitted a COA to include my redundancy payout that I received in August 2014. The CSA last month accepted his COA and reduced his CS by $7,000 per year and wiped his debt of $4,000.

I have not been working since August as I cannot gain employment due to various reasons (sick child and relocation). I am hopeful to gain employment now that I have moved.

The retrospective decision to back date the CS payable to August and reduce any future CS payment (for a period of 32 weeks) has severely impacted on my ability to support the children who are in my care 88% of the time.

Unlike yourself, my advice from the CSA was to submit a cross application (which I did) for them to not consider my redundancy and to take into account additional expenses that I pay for the children such as medical expenses, extra-curricular activities, additional school expenses coming to total of approx. $5,000 over a 5 month period. They did not allow any of my requests in my cross application.

I also solely pay for the children private health insurance and was knocked back by the CSA when asking for the x to pay half by way of previous COA (private health insurance was something that we had before and after the children were born). The CSA then advise me that if they are to consider the surgical expenses for the child that it must be "out of pocket" expenses that they may ask the x to pay half of (this includes after the Medicare and health insurance rebates are applied). I understand the Medicare rebate should be applied as this is not a cost born by anyone, however, I was at a loss as to why, when I pay for the health insurance, the x gets to claim half of the rebate that I receive on something that he does not contribute to.

I was also treated extremely rudely by the officer who spoke to me over the phone. She actually said to me "it was your choice to move" and that's why she wouldn't consider the increased school fees at the children's new school. I was mortified as the relocation was initiated out of need and not out of desire. It's a personal matter that I do not wish to discuss over this forum but lets just say I could not continue to live in the same city as my x.

I will be making a complaint about this case officer in the next few weeks after I lodge my objection.
Hi Help101, 

Firstly I must say that our situation still has not been resolved, and no decision has been made as yet regarding our objection to the Change of Assessment.  Since my last post, there have been two further lots of back and forth correspondence from the ex-wife via CSA, which has been tiring, frustrating and simply unproductive.  Out of it all, my partners children are the ones that are feeling the brunt of it.

When we do get a decision, I will indeed post an update here.

I'm afraid I don't feel I have any helpful advice for you in regards to your situation, however I do encourage you to challenge the attitude and lack of respect demonstrated by the CSA officer.  My partner had the same sort of experience, as you may have read in one of my earlier posts.  I work in a prison, and I can tell you that if I spoke to a prisoner in the same manner that my partner has been spoken to by CSA, I would be reprimanded.

I agree with you about the health insurance rebate.  The child support you have been receiving from your ex does not include an allowance for the cost of Health Insurance.  CSA consider this an optional cost towards the children.  However, when it comes to the parent that does not contribute towards the cost of Health Insurance, CSA consider that they have a right to take the rebate into account when contributing half of the medical/care costs.  I would have thought it fair to say that the parent who is carrying the cost of the Health Insurance Membership should most certainly benefit from the total amount of the rebate.  CSA do not agree.

I'm sorry to hear that your child is sick and in need of surgery.  I truly hope all this goes well for your child.

I wish that our situation was finalised so that I could use the outcome to help you in some way, but we are still in limbo and have no idea what the outcome holds.  Although the processes that we are forced to deal with involving CSA are exhausting, frustrating and fraught with inconsistency, you have to keep going, keep standing up for what's right and in the best interests of the children.

I truly hope that your situation improves and that fairness comes your way.

LM
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