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Is this included for Child Support Purposes

A question has been asked on another forum about Reserve Service. It is a tax free income with the Defence Force. Is this income included for Child Support purposes? It is not taken into consideration for family assistance payments, nor for tax purposes.

Thank you.

make sure you make it clear to the CSA that its tax free income because they will try and garnish it.
Some other responses I have heard are that if this persons ex decides to put in a COA, it will be taken into account and used to take extra child support? Is this correct, all the legislation I've seen discounts it but CSA have said to this person that they will take it? So is it wrong to assume that CSA only takes into account your "taxable" income? Or it takes into account your "taxable" income until they decide your non-taxable is good enough too??

Thankfully this isn't my situation, I just like to try and help out a fellow Defence member.
The CSA Guide covers this:
I am both a reservist and have been trough 2 COA's.

In my circumstance, the CSA could not include it as income via a standard assessment, but during the COA, the reservist income was classed not as 'income' but as a 'financial resource'. Both COA's went to the SSAT and classing the reservist pay as a 'financial resource' was upheld.

Unfortunately the term 'financial resource' is assessed more broadly than simply income, so it can be applied to basically any monetary asset / income that a benefit can be derived via a COA or via SSAT.

It's a shame and a double standard as reservist income is listed under the same section of the Income Tax Assessment Act as Family Tax Benefits and alot of other government payments which are also specifically excluded and indeed impossible to have included. I argued to have the inclusion of the reservist income as a financial resource on my side balanced with the inclusion of other types of income paid under the same section of the ITAA to the other parent but was unsuccessful.

In regards to the comment of garnishing reservist income, I do not believe it is possible to do so.
Given the level of knowledge and understanding of all things CS within this forum, hopefully someone can provide some insight with this, as this was/is my query with CSA.

In short, ADF Reserve Service is tax exempt in accordance with S51.5, para 1,4 of the Income Tax Assessment Act 1997. There is no requirement to declare it for tax purposes, and CSA is the only government organisation at any level of government who maintain that they can/will consider this as a component of a payer's (they specifically stated that they would treat payees differently) income. Even someone who has declared bankrupt can earn tax free money from reserves with no obligation to pay any of their earnings in reparation.

After lodging a complaint with CSA because they refused to respond, I received a cut and paste response straight from the guide, which is wrong anyway. I've since lodged a complaint with the C'wealth Ombudsman.

Reserve service is paid tax free so that members of the community who choose to volunteer their time to serve their country aren't in any way penalised for doing so. In simple terms, it's legalised cash in hand in order to retain people because they cost a fortune to train initially. CSA docking the pay of reserve members has cost reseve unit attrition rates dearly.

I will point out that CSA referred me to several 'senior' staff, all of whom responded differently, including one chap who seemed to have intricate knowledge of this issue and advised that it has been tested as a matter of law via the SSAT and the FMC. I read every case/decision on both their websites (and I mean every single one, it took several late nights to get through them) as well as contacting them direct and neither organisation had even heard of it. I can only conclude that the CSA rep lied through the teeth to shew me away.

Much like the other issues we find ourselves having to challenge with CSA, the issue of right and wrong in a legislative sense has become moot. The issue is now that I am right, but have to prove CSA wrong. S**t system, and they wonder why we get angry with them!

Any thoughts or theories on how else I might be able to drive home the point with CSA?
Sleepy if you read more on here you will learn that C$A have judicial powers and can deem anything that can been seen as a resource to you (even being kept by another person) and use if for maintaining your children. As long as the payee can show they are on the bare bones of their bum with the kids and you are better off, they will take $$$ from you and give to the payee. There is little that can stop C$A from doing this. This why C$A is known as the second settlement.
S.43 of the act excludes reserve income by definition. It's not a tax free pension or benefit (normally that would mean veteran's entitlements hence receive different treatment under assessment conditions), it's a tax free salary paid at a daily rate. CSA responded by saying that they would enforce S.117 if needed, but as part of a COA, I don't understand how it would constitute a special application to the court or special circumstances warranting a departure from the original assessment.

Wouldn't the simplest form of logic dictate that a tax exempt income isn't part of an adjusted taxable income?
The point is that the income is adjusted: it's not raw figures. It's that ability to "deem and destroy" that is one of the major flaws in the sytem.
Considering that the C'wealth Ombudsman has authority to act on matters both Defence and CSA I'd say he's well positioned to make a ruling. I won't dwell on the specifics, but the ADF has spent upwards of half a million on my training alone (I was a regular/full time member for ten years). If I leave the ADF because of CSA incorrectly applying a COA to my reserve income, then that's half a million dollars of your taxes wasted for the sake of CSA wanting to take (approx) 2K from me per year in addition to the 24K they already take. I've forwarded this issue through my chain of command for the attention of the Secretary of Defence too. Could be an interesting outcome.

CSA refused to provide a response addressing my question of whether I'd be penalised via COA/CTE if I left the military completely but they forced a higher rate of CS upon me by including reserve service in an assessment. If my study of Australian politics was thorough enough, I can say with confidence that circa 1973 Gough Whitlam put a stop to people being punished/penalised for not giving military service as a result of Gov't policy….

Could this be contested in court as it's a matter of law, not facts of a particular case?
To stop C$A from doing that you would need to leave the ADF on health grounds which I'm sure you could achieve.

I think C$A over the years have taken out a license on special circumstances as it is meant to mean something out of the ordinary but they will come up with a reason that you are better off financially than the ex etc… etc… as above.

Anyway I don't think anyone will do anything for $40 per week. I guess you will just have to pay up.
A supplementary question;

I can't imagine CSA having the capacity to subpoena the ADF for pay details for a reserve member especially since it's not frequent (I tend to to 3-5 day blocks rather than set days per week/month), so if I don't declare gross/net earnings (for which there's no difference because it's tax free, and you don't get super from it) because the ATO doesn't consider it an income, how would CSA even find out assuming my complaint with the Ombudsman yields nothing positive?

My ex can't prove when I'm giving service, and CSA can't assess/reconcile it from tax returns, so how exactly would they actually ascertain that I'm getting any income from this source at all? All ADF pay details are 'Staff in confidence', which in a strict sense means it's classified and CSA staff don't have security clearances.

FYI, the only reason I'm so determined with this is, in addition to my insistence that CSA are wrong is because I'm in the process of losing everything I've ever worked for, will be forced into debt to pay a spousal maintenance claim, in addition to paying a fortune in CS, but reserve income is the only way I can try to rebuild without CSA/FLA destroying my sole remaining option to start again unhindered. I know I can apply under s.44 to have it exempted as post separation employment, but I don't trust CSA to honour that or get it right even though it would meet the criteria.
It's not happening. Wrong is wrong, and CSA are well beyond their authority in applying an assessment in this context. Given enough time I will prove that I am correct. Out of interest, if I don't declare it at tax time as there's no obligation to do so, and ADF pay details attract an 'In confidence' header meaning it's classified and CSA staff do not hold the appropriate clearance to request it, how exactly would CSA find out anyway? I might be getting myself all worked up for nothing as it'd be a very, very easy income to pretend didn't exist. Can they check bank records?
Sleepy said
Considering that the C'wealth Ombudsman has authority to act on mattersboth Defence and CSA I'd say he's well positioned to make a ruling.

That's exactly what I would do - take it to the Ombudsman.  It really is unnerving when you get contrary advice from within CSA.  That IMHO should be taken up via the CSA complaints mechanism.  I don't really know if this is a matter for the courts, I suspect you would need to chat to a lawyer about that, but hopefully the Ombudsman can sort it out.
I have indeed spoken with a lawyer about it Oldboy. My lawyer, who also happens to be a military lawyer and a fairly savvy one at that. His response after shaking of head and furrowing of brow in disbelief was "If they're going to be like that then don't even bother telling them (CSA)". I think it will come down to communication between the Ombudsman's office and ADFHQ. At some stage within the process someone will examine why it's tax free (an actual reference for which I can't find, but it's to encourage people to volunteer without penalty and to retain trained members) and hopefully that will clarify it long term for any reservists involved with the cumbersome beast that is CSA.
C$A will do what they always do and contact your employer for your income details. If you have used a tax agent or accountant to lodge your tax returns, they will also contact these people for information as well as get info from other agencies. It doesn't matter if the income is tax exempt or not, it is a resource and the C$A believe your children should benefit from it by giving more $$$ to the major carer.

Re spousal maintenance - unless you are a multimillionaire I doubt the ex will succeed with a spousal maintenance claim. The reality with divorce is that unless you are earning at least 150K per year, your ability to recover and rebuild life will never be as viable as before. You have children to support and if you set your ex up to be a kept women, then your property settlement decision will reflect this. It would be nice to think we could wipe the slate completely an start again. Sorry mate but you will have to get used to starting again with some major baggage until your children turn 18.

Are you aware that if you have told the ex you want the children to be privately schooled in the future the C$A can hold you to this word regardless of your financial situation and make you pay whether you want to or not? They will even suggest that you sell essential assets to meet their assessment on this matter.
Hi Fairgo,

I have no problem with paying CS as I'd never want my kids living in poverty. I already pay for extras for them (never through a traceable source mind you) and will always do so. That's the situation and I accept it, and I have more money now than I ever did when my ex was effectively giving me pocket money from my pay so CS as a matter of principle is completely fair and warranted. I only begrudge this (ADF) aspect because I think CSA are wrong, and I'm stubborn. Whether that will be to my own detriment remains to be seen, but I can only press the issue until either I exhaust all avenues of appeal (for lack of a better term) or I get the response which I believe to be correct at law.

Regarding the spousal maintenance issue, I posted specifics in the Family Law - Getting started forum yesterday. If you've got time would you mind casting an eye over it? That's the real bugbear at this point…
You don't earn enough to pay SM and she has not spent a major part of her life rearing children and therefore could easily have a well paid career in the near future.
I agree with Fairgo. SM is very rarely awarded in this country.

What does a court consider?

Family Law Court Website said
Spousal Maintenance is not automatic. In deciding a maintenance application, a court considers the needs of an applicant and the respondent's capacity to pay. A court considers the following about both of you:

    your age and health
    your income, property, and financial resources
    your ability to work
    what is a suitable standard of living,
    if the marriage has affected your ability to earn an income.

A court also takes into account with whom the children (under 18 years of age or adult children who are disabled) live.
Your ex will be getting child support and possibly an adjustment in the property if she has the majority of care for the kids. Sounds like she could work if she choose to, not like she is disabled, so I doubt it would be awarded to her. 
Frenzy - you are incorrect in regards SM, it is often given or at least requested.

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