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Tax & Parenting benefits for Dad who has 40% share

Can I claim any tax benefits or any family tax benefits if I have shared residence of 40%


Hi,

This is a great site and I am glad that a work colleague advised me of this place.

I have a question about what I can claim in tax and in parenting payments, given that I have my child for 40% of the year, and I pay what is still a huge amount of child support to my ex.

I earn about $80k per year, and my ex earns about $95k.

I have been paying her a significant amount in child support in order to keep the peace, and to gradually increase my parenting time with my child without her creating obstacles for me.

Well, now I have my 7 year old for about 40% of the year, and I think its time that I stop (or reduce) my child support payments to the ex (I am thinking of going to the CSA and letting them assess what I should be paying). I am currently paying her $250 per week (yes I know, its a lot, but it was the only way I could see my kid).

Since I am doing this, I also want to claim what is rightfully mine tax wise, and from benefits like the family tax benefit and the parenting payment.

(i) Can someone please list for me, in plain simple language, whether I can claim my child as a dependent tax wise, or claim  my child support as a tax deduction, or get some other type of tax concession  for my efforts with my child?

(ii) Can someone also list for me what benefits there are for parents in total, and whether I can claim part of these benefits for looking after my child, like the Family Tax Benefit, the Parenting Payment, etc, etc?

(iii) I also heard that the law changes this coming July, so I would like to know whether the answers to my questions would be different pre and post July.

Thanks

Jacob






Hi Jacob, welcome to the site. First some advice, then answers:

One thing you haven't specified is do you have a parenting plan or parenting agreement. In other words, if your arrangement is not ratified by court, you may find your ex begins to reduce time and there would be little you can do about it.

So, get your agreement signed off by the courts.

If you get an assessment done by CSA, before ratifying your agreement,  they may notify the ex  about this and she may react. CSA may be able to give you a rough guide (or you could use the calculator on this site or the CSA site) to work out what you should be paying. I believe the one on this site shows the new 08/09 tax rules?

Answers:

You cannot claim your child as a dependant. The tax system has not done that for some time, or income splitting with spouses for that matter. If you place the child in childcare you will get CCB (Childcare benefit) which reduces the cost of child care (not by much on your income) and you would get the 30% childcare rebate from Centrelink/FAO after you (and your partner) complete you tax returns. As for family tax part a and b - you will not see much of this, but it's wort applying. Read the family assstance office website for full info.

Under the new laws you would probably be paying practically nothing. You will need to verify this, but basically, your ex earns more than you. The assessible threshold is now the same for the payer (you) and the payee (her) so there would not be the discrepency between wages (withe the payee having a higher threshold) that there was under the older rules. Also, the fact that you have 40% time with also counts into the equation. In fact, under the new rules, if you had the child 50% of the time, you ex would be paying you, as you earn less.

Before you get excited: remember to sign off the parenting agreement. You are under a "private agreement" with CSA and to break it you must get an "assessment". Then you must notify them that you wish to break from the agreement. Your ex can object and there may be a stoush with this - that's why it's important you do all your research before you do anything rash.

And lastly (although this should be first) remember the changes that all of this may make to your child and act accordingly.

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. 
Artemis, I thought I recalled somewhere in the new legislation, measures to protect against reduction in contact being used to increase CS payments.

If this is the case, then it may well be wise to get the % care recorded by the CSA, this can be done online (although being private asses and collect this couldn't be done until registering with the CSA). Although they do check with both parents (uhhm not sure what happens if their is a disagreement). I'd say that Jacob would be wise to collect any proof of care/residence past, present and future, as this may well be required to ensure that the % care is accurately recorded and used.

As for Family Tax, you may be able to claim the last couple of years, although again this needs % care to be calculated, again this can be initiated online although there may be the need to lodge documents at a Family Assistance Office (I did this earlier this year and got a reasonable sum back for the last 2 years).
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