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Capacity to Earn + ex giving up Employment to Study F/T

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Hi all,

An ex is giving up employment to do some course for 4 years.

Anyone ever has an ex do this so the other parent can pay more Child Support etc?
- Can the CSA do something about this?

Does "Capacity to Earn" rule apply if you get the sack and then decide to study as well?

Also is "Capacity to Earn" applicable to both or just to males?? or non Primary carer?

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So what is the interpretation of capacity to earn?

Less posting and more reading please. There are 66 forum posts dealing with Capacity to Earn. Use the Search facility PLEASE
Dads_R_Tops said
Hi all,

An ex is giving up employment to do some course for 4 years.

Anyone ever has an ex do this so the other parent can pay more Child Support etc?
- Can the CSA do something about this?
The changes to the legislation, made in July 2006, impose stricter rules when the CSA can impose Capacity to Earn from the times when it was commonly used to wrongfully increase the amount he CSA could say it was collecting.

Dads_R_Tops said
Does "Capacity to Earn" rule apply if you get the sack and then decide to study as well?
It's a grey area and would depend upon various factors.

Dads_R_Tops said
Also is "Capacity to Earn" applicable to both or just to males?? or non Primary carer?
There is no gender discrimination in the legislation, however when it comes down to whether there would be an increase or decrease to the monetary sum collected, then I believe that even though wrong, that decisions would tend to be made aligned with increasing the amounts collected and thus reducing FTB payments.

As there is a great bias in society towards who should be the "provider" rather than "nurturer" and that when it comes down to it, the CSA employs people and expects them to make decisions, then some decisions, especially in grey areas, may well be swayed one way rather than the other due to this societal bias. Another factor is the gender bias within the make-up of the CSA, which could well increase the power of that societal bias.
Dads_R_Tops said
So what is the interpretation of capacity to earn?
In brief there are 3 must's. Here's an extract from the CSA's guide:
CSA Guide - 2.6.14 - Reason 8 - a parents income, property, financial resources, or earning capacity said
When can CSA take into account a parents earning capacity?

From 1 July 2006, CSA can only determine that a parents earning capacity is greater than is reflected in his or her income used in the child support formula if it is satisfied about all of the following three matters:

1. The parent is either:

AND

2. The parents decision about his or her work arrangements is not justified by either:

AND

3. The parent has failed to show that the decision about his or her work arrangements was not substantially motivated by the effect this would have on the child support assessment (section 117(7B).

CSA must be satisfied that all three compulsory criteria are satisfied before it can change an assessment to take into account a parents earning capacity, rather than his or her actual income.

If the parents circumstances satisfy only one or two of the criteria, CSA cannot make a decision based on the parents earning capacity.

CSA must also be satisfied it would be possible for the parent to increase his or her income by changing his or her work arrangements. That is, work must be available for the parent in his or her area and the parent must have the necessary qualifications and experience to perform that work.
However I'd suggest reading this section of the guide in it's entirety, it expands upon this and even deals with study briefly. Here's the link to the guide.

Also please note that it is advised to also check the underlying legislation, the guide has pointers to the relevant legislation.
Thanks to all that replied and interest in this topic.

Apologise if I worded my statement inappropriately.

'As there is a great bias in society towards who should be the "provider" rather than "nurturer"' - I concur.

Cheers.
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