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Child Support Payments and Salary Sacrifice - requesting a change of assessment to be back-dated

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A recent change of assessment due to Special Circumstances supported my claim but was not back-dated as requested.

Hi All,

My ex-wife has been salary sacrificing for the last seven years. This has resulted in her having a significantly lower adjusted taxable income (up to 50% lower than her gross income), even when Reportable Fringe Benefits were included. Based upon these low income figures, I have been paying significant child support payments (even though the children were in 50% shared care). I considered this to be unfair, but was not aware of any way to address this inequity at the time.

However, I was recently advised that I could submit a request for a change of assessment based upon Special Circumstances (Reason 8), in that her adjusted taxable income did not reflect her ability to contribute to child support. After quite a drawn out process, my claim was established and a new assessment was issued. Despite requesting any change of assessment be back-dated 18 months (the maximum allowable in this process), CSA would only back-date the change to the date of lodgement. As a result of this decision, I am not eligible to recoup any of the approximately $8k over-payment made during the period. (Note, I am not expecting my ex-wife to pay any outstanding amount immediately, but rather will recoup the over-payment by reducing my still significant on-going payments by $100 per fortnight.)

I am now planning to object to the assessment, and request that the new assessment be back-dated 18 months. Just wondering:

1. Does anyone have any experience with requests for a change of assessment to be back-dated?

2. If so, are there any hints or tips that might help achieve a positive outcome?

Furthermore, also wondering if anyone has any general advice about how to go about attempting to get a change of assessment for periods beyond 18 months in the past? Unfortunately, I have a feeling that CSA aren't going to be supportive of my efforts in this regard. If this is the case, are there any other options available to get my ex-wife to repay these over payments?

Thanks heaps.
      
As far as I am aware, consideration of salary sacrifice is applied via the formula, in that the taxable income is adjusted accordingly when tax returns are processed.

With regard to a change of assessment for periods over 18 months ago. You have to apply to court as per
CS Guide - 2.6.1 When Can the Registrar Consider Changing an Assessment? said
If the person applying for a change of assessment wants the Registrar to consider changing the assessment for a period more than 18 months prior to his or her application, he or she can apply to a court under CSA Act section 111 for leave.

A court may grant leave for the Registrar to make a change to the assessment for up to 7 years prior to the day on which the person applied to the court for leave (CSA Act section 112(7)).
A court may alternatively grant leave and itself make an order to change the assessment for up to 7 years prior to the day on which the application to the court was made.
It is not necessary for the applicant to have applied for the court to make the order itself, only that the court is satisfied that to do so would be in the interest of the parties (CSA Act section 112(3A),
see 4.3.2 for an application for amendment of administrative assessment that is more than 18 months old).

CS Guide - 2.6.1 When Can the Registrar Consider Changing an Assessment?

You may also wish to have a look at
CS Guide - 2.6.14 Reason 8 - a Parent's Income, Property, Financial Resources, or Earning Capacity - alary packaging, fringe benefits, Defence Force benefits & allowances

Only reportable salary sacrifice arrangements are used for tax return assessments. Although the Gov tightened up on these a number years back there still are a few remaining non-reportable salary sacrifice arrangements available.
I would think that if you have 50/50 care and similar incomes then it is unfair for one parent to reduce their CS liability, although with 50/50 care I don't believe CS should be involved if both parents are sharing child expenses equally. Otherwise CS becomes spousal maintenance.
guest said
Only reportable salary sacrifice arrangements are used for tax return assessments. Although the Gov tightened up on these a number years back there still are a few remaining non-reportable salary sacrifice arrangements available.

Correct, so they could only possibly be taken into consideration via a Change of Assessment Application or via a court decision. With the well founded bias toward the CSA actively and even illegally making decisions that increase the amount paid via Change of Assessment it would be a near miracle if non-reportables were applied if they were to reduce CS, but of course very likely to be considered paramount if they increased CS. This is one reason why I believe that Change of Assessment decisions should be based solely upon fixed rulings.

With 50/50 care and assuming due to both parents working they do not qualify for any FTB then there is no loss to the Gov in terms of FTB clawback if the liability changes, so if both parents are contributing equally to child costs then perhaps a fair decision might be made from CSP and failry certain from the court although the property settlement may become an issue if one parent was disadvantaged.
Thanks all for the advice provided. The information regarding the Court application process may definitely come in handy for the future…

My focus at the moment however, is on convincing CSA to back date the change of assessment for the maximum 18 month period (where as it has only been back dated for 3 months). The change of assessment did acknowledge that it was appropriate to determine a parent's income before any salary sacrifice amounts are taken out. However, the reason cited by CSA for limiting the back dated period to 3 months was that any further would create a significant over payment situation for my ex-wife.

As noted, I am planning to shortly submit my Objection to the decision. My main argument is that I have been financially disadvantaged over the 18 month period, and that I could have alternatively used this money to support my kids whilst in my care.

The second aspect to my objection is that I believe that the over payment can be corrected over an extended period (such that it will not cause my ex-wife any financial hardship - or detract from her ability to meet the day-to-day expenses for the children whilst in her care).

Can anyone advise if the Objection process is indeed the best process to achieve such an outcome? If so, are there any other considerations that I may have missed?

Thanks again.      
You need to follow the process as outlined so there is only one option for now. If your ex earns less than you then she could argue the salary sacrifice bring her income closer to yours. Also if she has been salary sacrificing for a long time then she could argue that it is not something she has done to reduce her liability. If you are not fighting over sheep stations the SAP or court might not take your claim seriously enough. As I said before the property settlement may become relevant in any arguments.
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