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Salary sacrificing ...

Greetings,

I have an issue at the moment with CSA over my salary sacrificing into super, a quick search on this forum found this remark by Secretary SPCA

Post from topic 'Impending jump in CSA Payment', posted on 21 February, 2008, 10:59 PM by Secretary SPCA"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."

This seems  to be contrary to the advice I have been given by CSA in that they have now reassessed my payment to take into account the amount of salary that I am sacrificing into super & in fact my ex has asked that they now back date this to last year.

If there is indeed legal advice from CSA that exempts salary sacrifice to super , how can I get access to this?? Can anyone help.

cheers
I was told recently by Family Assistance Office that salary sacrificed super was going to be counted for 08/09 onwards.

I think this issue requires more investigation.

Junior Executive of SRL-Resources

Executive Member of SRL-Resources, the Family Law People on this site (Look for the Avatars). Be mindful what you post in public areas. 
I think they do it under Capacity to Pay, via a reason 8 change of assessment. Where further methods to disclose income are used than for normal assessment.

You may wish to have a look here Valian. The Guide
Thanks for the link, here is the relevant section

Benefits that are not 'reportable fringe benefits'

Some benefits are expressly excluded from the definition of a fringe benefit and do not give rise to any fringe benefit tax liability (section 136(1) of the Fringe Benefits Tax Assessment Act 1986 the FBTAA). Examples include:

  • payments of salary or wages;
  • approved employee share acquisition schemes;
  • employer contributions to complying superannuation funds; and
  • eligible termination payments (e.g. a 'company' car given or sold to an employee on termination).
CSA will not gross up the value of a benefit of this type. CSA will consider whether the parent could restructure their remuneration package to take the benefit as wages and be in a position to use those monies to meet the child's needs. The final decision will depend on the circumstances of the case and any other reasons under consideration.



CSA havent asked me if I can pay an additional amount , they have simply re assessed my payment & then sent me a letter saying that the x has asked that they back date this to beginning of last year.
Valian

Salary sacrifice and fringe benefits are not the same thing.

Some rules are changing, but the decision you are talking about relates to the last 18 months, so the old rules apply.

How was the decision made?

Was there a formal change of assessment process?

How was the backdating justified?

What do you have in writing?



This is what happened.

My ex suspected that I was salary sacrificing, since my assessable income wasnt consistent with what my job level was. My salary scales are easily available on the web, she put 2 & 2 together & contacted CSA & asked for a COA on the grounds that my assessable income wasnt consistent with my real income.

I then get a letter from CSA saying 'it is their opinion' that my real income is x, & guess what x was my pre tax salary to the dollar, they had contacted my employer, & asked for each salary level that I have been on since I started there in 2007. A date for a phone link with a senior consultant was agreed upon. I participated in that link up , said that the figures they had been given were correct (their was no point in saying otherwise at this stage), I said however that I do not actually earn that much in cash because my salary is reduced by my sacrifice amount. She said that didnt matter & she would be recommending that I be assessed upon my 'real' salary.

The conversation ended & a week later I get a letter saying that my assessment has been changed upwards to reflect my real wage. This was at that stage not backdated & was only for the upcoming period.

ABout 3-4 weeks after that I get another letter saying that my ex had objected to this assessment & was asking for the outcome to be backdated to include all of 2007. I have been asked to comment.

So thats where I am at at present. I havent done anything illiegal, I have particpated in a perfectly acceptabel practice & CSA & my ex dont like it so I have been hammered.
I believe salary sacrifice that has been ongoing since before the separation is considered acceptable. Salary sacrificing done that reduces taxable income post-separation is not acceptable to CSA.

Given that you cannot reduce your income through salary sacrifice and still receive centrelink and other govt benefits, it is consistent.

Having said this, CSA is not my area of expertise and I am happy to stand corrected.

Junior Executive of SRL-Resources

Executive Member of SRL-Resources, the Family Law People on this site (Look for the Avatars). Be mindful what you post in public areas. 
Valian said
…My ex suspected that I was salary sacrificing, since my assessable income wasnt consistent with what my job level was. My salary scales are easily available on the web, she put 2 & 2 together & contacted CSA & asked for a COA on the grounds that my assessable income wasnt consistent with my real income.

I then get a letter from CSA saying 'it is their opinion' that my real income is x, & guess what x was my pre tax salary to the dollar, they had contacted my employer, & asked for each salary level that I have been on since I started there in 2007. A date for a phone link with a senior consultant was agreed upon. I participated in that link up , said that the figures they had been given were correct (their was no point in saying otherwise at this stage), I said however that I do not actually earn that much in cash because my salary is reduced by my sacrifice amount. She said that didn't matter & she would be recommending that I be assessed upon my 'real' salary.
To be quite clear on this. From JULY 1 2008 (Not PRIOR) Salary Sacrifice of SUPER is NOT exempt and that is will be added back to Gross up income for both PAYER and PAYEE salary calculations. My take on this is that assessments made PRIOR to JULY 1 MUST allow Salary Sacrifice of Super. We will need to check Minister Joe Ludwig's speech notes agaion. You can see this in the news. The only proviso was the Government budget announcements about Salary Sacrifice in relation to Centerlink and CSA benifits. Please contcat the CSA officer and take this up. What is the commentary back?

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
 
Sec SPCA, in my case the payee has salary sacrificed nearly 25% of their income yet CSA will NOT so much as pursue it.  I am aware of another case with an even larger amount involved.  Seems to me that there is significant bias against payers.  I wonder how many silent victims are out there?


"To be quite clear on this From JULY 1 2008 (Not PRIOR) Salary Sacrifice of SUPER is NOT exempt and that is will be added back to Gross up income for both PAYER and PAYEE salary calculations. My take on this is that assessments made PRIOR to JULY 1 MUST allow Salary Sacrifice of Super. We will need to check Minister Joe Ludwig's speech notes agaion. You can see this in the news. The only proviso was the Government budget announcements about Salary Sacrifice in relation to Centerlink and CSA benifits. Please contcat the CSA officer and take this up. What is the commentary back?" Thanks folks, I'll pursue the matter based on this
Don't.

I don't think it is right.

Yours was a change of assessment under reason 8, right?

That was allowable even prior to July 2008 (the Minister's speech notes say the salary sacrifice to super changes take effect in July 2009)

The difference after the changes is that inclusion of salary sacrificed to super will be automatic and not require a change of assessment decision.

Sorry to ask more questions, but when did the salary sacrifice start - before or after separation?

That will affect your chances on objection, especially regarding backdating.



BriarRose said
Don't.

I don't think it is right.

Yours was a change of assessment under reason 8, right?

That was allowable even prior to July 2008 (the Minister's speech notes say the salary sacrifice to super changes take effect in July 2009)

The difference after the changes is that inclusion of salary sacrificed to super will be automatic and not require a change of assessment decision.

Sorry to ask more questions, but when did the salary sacrifice start - before or after separation?

That will affect your chances on objection, especially regarding backdating.
Well , I was certainly sacrificing whilst in the marriage & that was in 1999, this continued to 2005 , then I changed jobs for a while & couldn't sacrifice for 2 years, then I went back to my old employer at the start of 2007 & started to sacrifice again.
Sounds promising.

Where in those dates was the brreak up?

Was the change of assessment done under reason 8?



Break up was early 1999.



Not sure what they have got me for, I'll have to check their exact wording.
Lifeinsight that was a "yes".  They told me they wouldn't consider it if I didn't provide a statement of financial circumstances.  I told them they had breached the Privacy Act and to reconsider.  They sent my application back.  I made a Privacy Complaint (they have 30 days to respond).  I also lodged a customer compliant citing Ludwig's announcement and demanding they institute a review under reason 8 without further delay - implying they were operating outside their minister's express direction.  This has all been done in writing.    
Valian said
"To be quite clear on this From JULY 1 2008 (Not PRIOR) Salary Sacrifice of SUPER is NOT exempt and that is will be added back to Gross up income for both PAYER and PAYEE salary calculations. My take on this is that assessments made PRIOR to JULY 1 MUST allow Salary Sacrifice of Super. We will need to check Minister Joe Ludwig's speech notes again.
That is how I read it and we can get official confirmation of that. It is really important we get a clarification on this. So Prior July 1 2008 Salary Sacrifice of super is okay. Interesting salary sacrifice of a range of other "Above the line" items are added back already and this starts to sweep in the other "under the line" or previously not covered on the Group Certificate items.

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
 
Daintree Donglers Cash for Comment team goes into another huddle

sells out men once again to their Minders the FLIndustry and takes kickbacks from the NCSMC

Seems to me pre 1 July 2008 super salary sacrifice is potentially subject to change of assessment reason 8, while post 1 July 2008 it should be included but can't see how they are going to do it.   
Bigred, I imagine that they will just make employers provide the information by drawing up the appropriate legislation.
MikeT, what you suggest is that they have no authority to ask an employer for this information.  I have just checked the legislation and tnd to agree.  This means that if an employer refuses to provide the information, a savvy parent can avoid having it assessed.  Also, there is no hope that there will be a chance for a legislative amendment this year - there is way too much othyer stuff happening.
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