2011 Budget - Child Support compliance measure (default incomes)
This measure changes the use of default incomes in child support assessments. A new and more accurate default income arrangement will be introduced in cases where a child support customer has not lodged a tax return. The new default income uses a parent's
Description of the measure
This measure changes the use of default incomes in child support assessments. A new and more accurate default income arrangement will be introduced in cases where a child support customer has not lodged a tax return. The new default income uses a parent's previous taxable income instead of a lower default income.
Currently, a default income of two thirds of male total average weekly earnings (MTAWE) is used in child support cases where a child support customer has not lodged an income tax return for more than two years.
Under the proposed changes, when a persons old taxable income is higher than two thirds MTAWE, the last known taxable income for a person will be indexed by wages growth and used to calculate the amount of child support to be paid. The default income of two thirds MTAWE will only be used if a persons old taxable income is less than two thirds MTAWE.
This will encourage parents to lodge their tax returns to ensure accurate child support assessments.
It will also further increase the Child Support Agencys ability to base assessments accurately on parents real capacity to pay.
Who will be affected by this Budget measure?
Only child support customers who have not lodged tax returns for more than two years, or who have not provided the Child Support Agency with their income information will be affected.
Who will not be affected by this Budget measure?
Child support customers who have lodged tax returns in the last two years or who have provided their income information to the Child Support Agency will not be affected.
Is it a new measure that will affect my family or me? If so, how will they be affected?
This will change the way provisional incomes are calculated for child support customers who have not lodged tax returns or provided their income information to the Child Support Agency.
When will the changes be implemented?
These changes will apply to child support periods that begin on or after 1 July 2011. Child support customers will not be affected until a new child support period begins and then only if they have not lodged their tax return or have not contacted the Child Support Agency about their income.
Do I need to do anything?
Child support customers should lodge tax returns on time, or tell the Child Support Agency about their income details.
Note that this doesn't appear to be a legislative change at all. The current legislations states:-
Section 58(3) If the parent also has not lodged a tax return for the year of income before the year of income referred to in subsection (1), the amount determined for the parents adjusted taxable income for the year of income must be determined to be at least two thirds of the annualised MTAWE figure for the relevant September quarter.