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CSA assessment

Hi everyone, I have a question for all. How come CSA assessed a parent on their before tax income? Before tax income is not the real income a person earns. For example if a person earns $40000 a year and then pay $10000 in tax, the real income the CSA assess this person should be $30000 not $40000? Any thoughts?
I once heard a rumour that when the child support formula was originally set up, somebody ticked the wrong box and instead of assessing on net income, they ticked gross.

Either way, you've got buckleys in being able to fight/change it.  The formulas aren't fair but neither is the system.  CSA recently declared that 17 yr old living with us is self sufficient because he earns $13,000 per year yet this is well under the 'self-support' amount quoted for parents.

Good news for the BM who is getting $900 per month from us for 14 yr old who lives with her.  

I take it your new to the whole thing?  
The formula, while not perfect, takes into account the 'adjusted taxable income" of both parents. It also considers some income reduction/evasion techniques to try to deteremine the "actual" income of parents (things like fringe benefits, some salary sacrifice, rental losses etc) that are acceptable to the Tax Office as income reductions but not to the CSA.

"I know that you believe you understand what you think I said, but I'm not sure you realise that what you heard is not what I meant."

 
You forgot to mention depriciation and bank interest that gets added back onto income and all that is, is a paper loss and the CSA say its income.
Hows that for BS
I agree with Jay_S that there is a flaw in the formula. I am new with CSA and have recently been slugged with a $1213.67 per month CS for a 17yo step child (am currently single have no biological kids). CSA have taken into account some overestimated grossed out fringe benefit (FB). Half of the FB is in fact a value on paper NOT hard cold cash. If the CSA assessment stands, after I pay CS and tax, I can only pay my mortgage leaving me with $400…way too small to pay for my car loan, her car loan, my bills, council rates, health insurance, groceries, fuel. Yes it leaves me in the crimson red and am considering filing for bankruptcy!!! I wanted a negotiated aggreement to continue supporting my step kid but the mum thumbed her nose at me and went to CSA instead.
Hold on a second…

Why are you paying for your stepchild? Who's car loan are you paying on top of yours? I don't get it, CSA can only make adoptive and biological parents pay. Did you adopt your stepchild? I would check how they figured out this amount, as CSA is wrong sometimes too. Also don't pay anything on top of CS what is hers, unless you are required to do so by a court order. My husband was silly enough taking on half of his exes car loan, as a thank you, she lies to CSA in regards to care and income and we are supposed to pay 2000. If we want to see the kids, she makes it extremly hard. Withholding the kids over Xmas and so on. And she says we are going to have to pay all the airfares of 500 if we want to see them. Hubby just started mediation and we are taking her to court to get a patenting plan and travel costs, since she moved. We were pretty fair in what we offered, but it's not enough. We both have hecs debts to pay for all up 3 degrees, a car loan and his personal debt from the divorce. Then rent and CS, 7k are gone, there isn't much left. But uni, CSA doesn't care about, regardless of that being the reason DHs income is quit good, cause he has 2 degrees. It annoys me a lot as they really could take this into account.
Thanks sm10
I adopted my ex's kid a yr aftr we got married (kid was 9/10 yrs at the time) due to plans to emigrate to Oz and didn't wish to be always asking for bio dad for permission to travel etc. Did it in good faith not knowing the decision would haunt me in future…!

RE ex's carloan repayment…a silly decision on my part (done in good faith once again) to take loan under my name when the ex needed a new car then(the bank wouldn't have wanted to know her otherwise). When I did consent orders I opted to keep repaying the loan in lieu of a super split; as a goodwill gesture to minimise her level of debt as I expected the kid would go with her since despite the adoption, I am only stepdad anyway!

Will chat with CSA to see whether they can review their assessment. Otherwise am going back to uni next yr, full-time and pinning my hopes on this reducing my CS payment-will have 0.2EFT of taxable income! Uni isn't CSA avoidance strategy but planned it months before CSA came into the scene.
Problem there is, that she can ask for a COA and you will be stung paying a large sum based on your current income, even if you earn nothing, since that is your capacity to earn. We recently applied for a COA, as BM decided to quit her job.
Yep if you go uni you and she tries to get you on a capacity to earn (CTE ) you will need to convince CSA that uni, isn't a way of reducing CS.
Thanks all for giving me insights into the sorry saga that CS through CSA is.

I guess I am totally stuffed! So stressed couldn't even go to work today! Had a chat with CSA and their view is I have no grounds to have the assessment reviewed and so I have to cough up $$!

I can understand how CSA would like to close the loophole of using fringe benefits (FB) to avoid CS, but bottom line is it can distort things…the fairest thing would be to look at real income earned. CSA approach to Fringe benefits suggests I am getting $33K on top my pre-tax+allowances salary which is grossly inaccurate because the FB comes out of my $80K pay package and it's not on top of it!!

RE going back to uni…I applied for this 4 months ago and CSA only came into the scene a month ago. So if it gets to that it'll be very easy to prove it's not a CS counter strategy-never thought CSA would come into the picture! In fact I was wallowing in comfort and victory that consent orders allowed me to keep my house against ex mrs' wishes (she worked but never paid a cent of mortgage, let alone rates, utility bills, groceries etc)-I guess her $$ were for shoes, clothes and the drink!-yet she wanted to force sale of the house
Dont listen what they tell you over the phone, they told us many things which I know for a fact are not true.

As a payer, it's hard to convince CSA that it's not to reduce CS. Trust me, they take the payees word over urs, even if you have proof. Happened to us too. I would object object and object if you believe your income is incorrectly estimated.
Yeah got to agree, don't believe what they tell you on the phone! My OH has been blatantly lied to by them so many times.

We went through the whole capacity to earn thing when my OH changed jobs and his income halved. Was a nightmare, took 5 months as we ended up having to object but won in the end.

It's a good thing you applied to uni before CS..that should mean there is no grounds to apply a CTE..but no doubt they will try.
That offers me a bit of hope. and have just drafted an objection and request for review.

But I think we need to campaign for a review of the CS formula around  the following areas:
1. the income distortion resulting from fringe
    benefits
2. net vs. gross income (unless CS becomes tax
    deductable, in fact is it or is not?)
3. Assumption of a 50/50 care in the absence of  
    court orders or formalised agreed care
    arrangements (esp that 50/50 contribution is the
    underpinning principle for marital/defacto
    property division).
4. CSA should also 'force' mediation prior to people
    running off to them (it's not like I have been
    difficult.The motivation for my ex running to CSA  
    is primarily unfounded vengeance and it's not  
    based on financial need as I would imagine would
    be the case in some instances)
Hi Poorme - C$A only use taxable income plus the add backs mentioned - salary sacrifice to super, net losses, reportable fringe benefits, foreign income (all that need to be included in your tax return)- to work out an adjusted income for child support purposes.

C$A can depart from this formula if they need to find a way to increase child support payments if the payer demonstrates that they are a lot worse off financially than the payer through the change of assessment process.

I think you should get sound financial advice on your situation to see how you can minimise tax payable.

As per the other suggestions be careful how you deal with the C$A. They use the phone to communicate to catch payers off guard to get financial information from them. The best advice is to deal with them in writing (snail mail) so you have a record of your dealings with them. Only use the phone for general inquiries. If they call, verify your identity, get a receipt no. and then politely instruct them to put their inquiry in writing to you.

Perhaps you should look on the bright side - the adopted child is nearly 18 and C$A will be over, although the ex can apply for C$A to continue if the child is continuing their education after secondary school.
Cant agree more Faigo.

I have been told so many lies by the CSA and when I got a copy of the transcript from them for a dispute, there was a number of conversations that had been left out of the transcript.

Now when they phone I tell them to ask there questions in writting and hang up the phone.
I will not talk to them.

Can't agree more. They are the biggest liars on the face on the earth!  I'm sure it's part of the selection criteria to work there, b/c the honest helpful ones never last long.  We changed hubby's phone number just to stop them ringing, because they would still keep ringing even though he requested everything be in writing.
Its funny you should say that.

I had the csa phone me once and they asked to verify my identity, name DOB and address.
I didnt answer and I said what is your name, phone number and address, who the F*&^$ are you, you could be a scamer trying to get some of my personnal details.
The dispute went on and on and they wouldnt give me there details, so i hung up.
That is so stupid that THEY ring YOU and YOU have to prove your own identity over the phone, when they are the ones that called YOU.
Happens to me all the time, they are not changing their procedures any time soon. I have requested contact in writing and they still phone.
Then i ask for a written confirmation of whatever discussion we have on the phone, and they say "oh no, we dont give written confirmations".  
jay_s said
Hi everyone, I have a question for all. How come CSA assessed a parent on their before tax income? Before tax income is not the real income a person earns. For example if a person earns $40000 a year and then pay $10000 in tax, the real income the CSA assess this person should be $30000 not $40000? Any thoughts?
Have you read any of the CSA information published by us under The GUIDE tab? There is a whole section there on how the formula works, FACT sheets, FAQ's etc.

There are two types of income. Income for ATO and Income for Child support calculation purposes. They are NOT the same. Fairgo has eloquently listed the sorts of things that are taken up. CSA need a GROSS income for both parents, age of child(ren) and number nights (broadly speaking, as significant day contact is also optioned)  to calculate a rate of payment. The formula takes into account a discount for care of 25% for care levels over 51 nights a year. If you read the CSA section here on the site it will give you a lot of background. If you are not excited about that then click on the HAVE YOUR SAY button that rotates as a banner on the home page and click on Child support and then calculation of Income and we will take that commentary up in our accumulated reports to Government. We do regularly report on suggestions, complaints and issues in an effort to try and improve the systems.

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
 
taylor said
…. had the csa phone me once and they asked to verify my identity, name DOB and address.
I didnt answer and I said what is your name, phone number and address, who the F*&^$ are you, you could be a scamer trying to get some of my personnal details.
The dispute went on and on and they wouldn't give me there details, so i hung up.
What is the difference between a bank calling you up? I usually get a number or file reference and call them back. By doing that you would identify if it is a scammer or not. As a matter of interest I did have a similar sort of conversation with a bank operative. They give you a number to call back on and usually won't tell you what it is about. When you do call back the person at the other end has no idea why either. Interestingly when you ask them to call you back the bank operative will say we can't call you back. I have found out subsequently that these bank calls are on an automated rotating cycle system and you will get a call in three or four days if you have not responded to the first call as it is automatically cycled in their computer call system. Perhaps you should count yourself lucky with CSA that they still have operators who can call you 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
 
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