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Ridiculous Situation

Neither Party Putting In Tax Return

My ex recommenced work last financial year after taking three years off to have another child. I expected when she recommenced work she would immediately let CSA know that she now has an income and give them an estimate on what her earnings would be for last financial year. This should then have lead to a reduction in child support payable by me.

Well no such luck as she did not let CSA know she was earning again. I spoke to CSA and they said that she didn't have to let them know as it will all come out in the wash when she does her tax return. So I have spent most of last financial year paying more child support than I should have been.

Anyway we are a few days out from Christmas and she has still not put in a tax return for last financial year. As such I continue to pay a higher rate of CS. She is not going to put in a tax return as she knows this will result in a reduction of child support. So the end of year provisional assessment from CSA is that she is still earning nothing.

I also have not put in my tax return because I know my earnings are going to be somewhat higher last financial year. As such if I put in a tax return (and she doesn't) I am going to be paying more child support again which I'll be damned if I'm going to do that.

So we have this ridiculous stand off where neither of us is prepared to put in a tax return because of the effect on child support payable. And the system seems to allow this.

I'm in a dilemma as to what to do. I've never been late putting in a tax return before,  but I refuse to pay her more child support when she is already getting more than she should be. She may never put in a tax return again….

Any thoughts as to what needs to happen here?
The problem is that the legislation is designed to bite those who earn. There are provisions for not submitting tax returns and these will hit the higher earner hardest.

Initially I would suggest that the CSA are not the ones to approach. They are basically only interested in what they can collect.

I would suggest that the fraud is reported to the agencies/departments that are more concerned about not receiving or giving the correct amount. That is, report the fraud to the ATO and to Centrelink.

Not doing your tax return will not really be of benefit as there are provisions in the legislation to allow the CSA to adjust your income. You could end up being hit with a large arrears.

The legislation is a pretty daunting read, the main reason is due to the way that CS is based upon tax returns so CS for year X is based upon the tax return of year x -1, the "last relevant year of income". If the tax return is not available when the assessment becomes due for re-assessment (1.5 years is the maximum period, so in your case 1.5 years after you last submitted a tax return) then an indexation factor will be applied, as per :-

The CS Guide - Determination of Adjusted Taxable Income said
Determination where ATO income is available for an earlier year of income

Determination where ATO income available for the year before the last relevant year of income

If there is no ATO assessment for a parent for the last relevant year of income but there is an ATO assessment for the previous year of income, the Registrar may determine that the parent's adjusted taxable income for the last relevant year of income is the amount worked out by multiplying the parent's adjusted taxable income for the previous year by the adjusted taxable income indexation factor.

This would then apply for the following year:-

If there is no ATO assessment for a parent for the last relevant year of income, or the previous year, but there is an ATO assessment for an earlier year of income, the Registrar may determine that the parent's adjusted taxable income for the last relevant year of income is the greater of the following amounts:

    the amount worked out by multiplying the parent's adjusted taxable income for the most recent income year by the adjusted taxable income indexation factor,
    two-thirds of the annualised Male Total Average Weekly Earnings (MTAWE) figure for the child support period. The ⅔ MTAWE figure for each year is included in the table of basic values.

When the most recent ATO assessment has been located, the 'tax year' used in the indexation factor calculation (as described above) is that year.

For 2016 the indexation factor is 1.3%, the ⅔ MTAWE for 2016 is $47,504. (CS Guide - 2.4.2 Formula Tables & Values)

May roughly equates to "only if it suits the collect, collect, collect policy". If after reading this and you decide to do your tax return, then perhaps, in writing, ask the CSA why they are not applying this to the other parent.

Hi Mike and thanks for response.

I would happily report fraud but where exactly is that fraud? Nothing requires her to submit a tax return, yes she can get fined by the ATO if she doesn't but from my reading of it, fines will not normally be applied where there is a tax refund owed to her (probably the case). In any case, she would be paying tax directly out of her salary on a weekly or fortnightly basis so I presume Human Services must be aware of this and would be adjusting her FTB A & B accordingly. So I'm just not sure where the fraud is?

What I don't understand is that CSA have indicated a provisional assessment for her of pretty much $0 income for 2016-17. She works, tax is extracted from her pay which shows she works. How can CSA then apply a provisional income of $0? They could call her up, ask her if she is working, (which she can't lie about as the government is collecting tax) and on that basis either get an estimate from her or provide a high provisional income. If they applied a higher provisional income than what she was actually earning then you can guarantee that she would submit a tax return ASAP. By applying a $0 provisional income they are giving her an incentive NOT to do her tax.

This is criminal. The government can see she is earning - they are collecting tax from her, but they apply a zero provisional income. I'll tell you where there is fraud, the government is being fraudulent and stealing from me to pay her an excessive amount. Will I ever get that back?

Tell me where my argument is wrong?

You can report a suspected fraud without it necessarily being a fraud (sheesh all the tax that Croc Dundee did actually pay was considered fraud for years on end and that was by the pen pushers that should have know far far better), not that I suggested it for the fine/revenge aspect but rather to try forcing the matter. With regard to FTB, if Centrelink were aware of the income, then this would be applied automatically (basically Centrelink/CSA are now one, in fact CSA employees do Centrelink  work and I believe vice/versa).

With regard to applying a reasonable provisional income it again comes to collect, collect, collect. All the may's basically allow the exploitation of the hard working and of Children simply so that some pen pushers can remaining continuing the futility of pushing pens and of course amassing their brownie points etc.

As I said the legislation is designed not to provide support to children but to transfer money from an income earning/hard working person to others under the guise of supporting children. Certainly some aspects should be criminal but it is not, it's actually legislated.

To summarise it is highly unlike the CSA will make any move to reduce what they can collect, so the only tack I can suggest is to try alternative means which the CSA cannot interfere with i.e. via the ATO and or Centrelink.
So Mike I wrote to CSA about this issue and got their bulls**t standard response. Clearly they not going to do much as you suggested they wouldn't.

So they suggest a change of assessment application. Change of assessments……generally I hear that these should be avoided at all costs? I'm not sure why, I just want to pay the amount of child support payable based on the formula that incorporates accurate income estimates for both parties. Is that not what a change of assessment would calculate?
Chaage of Assessments (actually the correct and more accurate terminology is a Departure from Administrative Assessment, which means a departure form formula based assessment), yes beware.

As you are aware, the CSA are acting not to ensure that children receive a proper level of financial support from their parents, but are acting to ensure that they collect, collect, collect. This is contrary to the paramount principle of the child support assessment act as per section 4 (1) which states
The principal object of this Act is to ensure that children receive a proper level of financial support from their parents.

The legislation regarding departures allows decisions according to 10 reasons (reason 8 financial resources/earning capacity is what yours would come under).

First point is that of the 10 reason 1 can be registrar initiated (i.e. the CSA have the power to just snap their fingers and do one without a parent requesting it). Just so happens that is reason 8. So why have they not? Need I say more!

Second point is that the outcome is very often detrimental to the paying parent. I have personally assisted with a few departures. A summary of the first paying parent in relationship each running related businesses. CSA decision both put 50/50 into the businesses (not the case in reality) BUT paying parent's income from the businesses 10 times the other's???????
Appeal to court summarily dismissed after Judge (magistrate) who was VERY INTERESTED took ill and was replaced (I wouldn't dare to consider using the term WHITEWASH).

The other departure was very complicated and atrociously written, I firmly believe in order to hide the inclusion of nothing short of daylight robbery and constitutional terrorism by the way of inventing legislation and then implementing that legislation. Basically 200k in super was bumped up to 260k by applying ATO grossing up. Grossing up is applied to Flexible benefits and converts the amount of the benefit to the amount that would  have to be earned.

This additional 60K was removed. However, the objections officer then did some jiggery pokery and slammed the parent under reason 1 (i.e. initiated it when legislatively not allowed to do so) concluding that a parent's payment of part of outstanding school fees equated to agreement for that type of schooling, basically supporting a parent commit blackmail. It was abundantly clear that this distortion was enacted as revenge due to the 60K hike being detected. I also believe due to, similarities/consistencies in the response, that the objection to this was handled by the same officer and that response was contrary to the legislation as it lumped objections when the legislation clearly and consistently specifies "an objection".

LIsa Lambert, who invented this legislation and committed this act of constitutional terrorism, as per

Lisa Lambert - SCO Delegate of the Child Support Registrar said said
The Act requires the department to use the gross income when calculating the financial support that is to be provided by the parents. This being the case, net income must be "grossed up" using the relevant taxation scales

is still, according to my sources, used as a delegate.

Although not directly involved, I did give advice regarding a CSA decision that a child who lived in a home of where both parents still lived full time. Where one parent worked full time. The decision was that the working parent had under regular (14%) care (effectively 100%). Guess the gender of the parents?

The simple fact is that you would be gambling with an entity that has and does make decisions based upon gender  AND very often made not according to the principle objective enshrined in the legislation but according to the Richmond report's collect, collect, collect policy (which effectively means tax, tax tax as collection can reduce FTB payments).

This is a link to a tongue-in-cheek post in regard to the Lisa Lambert thing CSA - The incantations
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