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CSA Payee not doing tax

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Hello all, first post here.
I am a payer and have been divorced for a number of years. 3 children, Two over 13 and one under 13 that live with the payee. One child to my current partner that lives with us. As the paying parent I have been doing my tax on time every year without fail. The payee has been working for the last 5 years and only done tax one year which was last done 2013-14. As the payee didn't do tax last year CSA decided to put the payees income at under $10,000 my payments went up due to this. I waited to see if the payee would finally get around to doing tax which they have failed to do. I have just recieved a letter from CSA stating the payee has not done their tax for 2015-16 and CSA has based the new assessment on my income and dropped the provisional rate of the payee by $2000. Nett result is me paying more child support than last year. It has gone up $200 per month and I earn less than $50,000 per year. I live in a different state to the payee and children and travel each school holidays and return with the children for a week (4 times a year) and travel for birthdays for the weekend twice a year. I pay for accomodation each time and do not claim it. I also call them twice a week mobile to mobile, the payee has never called me to let the children talk.

I understand that CSA can not enforce the payee to do their tax, but it really gets on my nerve that the payee can get away with it every year. This needs to change!

Ok, so the question I have is regarding the change of assessment form.

By me filling out the form and using reason 8 on the form, can this then force the payee to do their tax? I don't have any proof to send off with the form of the payees income, I only know where they work and the hours they work. The income of the payee is substantially higher than the amount of the provisional rate stout by CSA.

Would a call to the ATO force the payee to do their tax?

I need help as I am not going to be able to pay the new amount nor travel to spend time with the children.
VicSA,
            running numbers through the Calculator. If your assessment is Formula based, then with 2 13+ and 1 under 13 child, for a taxable income of $50,000 with 26 nights care for each child. The maximum CS payable, irrespective of the other parents income would be $7743.

The other parent's income would appear to be irrelevant as you are saying that it's been dropped by $2000 to $10,000. Both figures are under what is termed as SSA (Self-Support Amount). For assessments that start in 2016 this value is $23752.

The way CS is calculated, is that each parents ATI (adjusted taxable income) has the SSA subtracted as the very first step. A figure of $0 (negative values are changed to $0) has no affect on the subsequent calculations. The combined child support income (CCSI) would purely be your income, the Cost of the children (COC) is derived from the CCSI.

In short, a reduction from $12000 to $10000 would make no difference.

Assuming the values above ($50k income, 26 nights care) the CS would reduce from 2015's, this due to the increase in the SSA (2015's SSA is $23610). That is in 2015 the annual CS would have been $7785. (In brief, the higher SSA for 2016, reduces the income and thus the resultant CS).

In regards to ensuring that the other parent's taxable income is a true reflection. The CSA are not obliged to investigate. I'm not sure about the ATO. There is a third option and that is via Centrelink as it is unlikely that  the other parent isn't receiving benefits.

I believe that the CSA would not bother investigating as it would be counter to the enshrined "Collect, collect, collect" policy.

Reporting the suspected fraud by the parent via centrelink and the ATO would be more likely to be considered.

I'd suggest that you should consider claiming for the costs associated with spending time with and/or communicating with the child (Reason 1).

You may wish to have a look at the following.

CS Guide - 2.4.4.40 Determination of Adjusted Taxable Income
CS Guide - 2.6.7 Reason 1 - High Costs in Enabling a Parent to Spend Time with, or Communicate with, a Child



Thank you for your reply. The other parents income is provisionally derived. There actual income would be in the order of 30-40k per year and they refuse to do tax to avoid revealing their income and thus increasing my obligation. I have spoken to the other parent and they said it is not there problem.
Would completing a COA under reason 8 force an investigation into the payees actual income?
VicSA said
Would completing a COA under reason 8 force an investigation into the payees actual income?

No. The CSA are under no obligation to "investigate". They do have the power to investigate to a degree and they can also make findings/determinations . However, it would be a near miracle if they used such powers to reduce what they can collect.

You would have just as much chance, perhaps more even, by objecting to the decision based upon available information (from yourself) rather than initiating a Reason 8 COA.

You have a far greater chance of getting a result via the ATO and or Centerlink, either should be applied automatically. However, note that CenterLink and CSA are all under the DHS so you would approach Centrelink as reporting the fraud (if they think CS is involved then in all likelihood they will just pass it to the CSA).

Another possible route is to try to get you local Federal MP involved.

As a sidenote, I take it that you are aware that they have at least until 31st October to submit a tax return. So in respect of this new assessment you are jumping the gun a little. Perhaps a mild hint that you will have little option but to report the the fraud to the ATO could result in the other parent submitting the tax return.
Thanks again for your reply. Yes, I understand about this years tax, I have already over paid for last year, that is what I am most upset about. And the significant jump this year has compounded financial strain.

So would I contact the ATO and list it as fraud? Do I mention that it is about CS?

I am worried that contacting Centrelink will just be handed to CSA and a dead end.

I am planing on writing to the MP, not sure of what good it will do .

Thank you again for your help in this.
VicSA said
So would I contact the ATO and list it as fraud? Do I mention that it is about CS?

You can use the following link to report the Tax Evasion. I'd suggest not mentioning anything about CS, it's basically irrelevant. What should happen is that a tax return should trigger "New Tax Information".

Tax evasion reporting form

VicSA said
I am worried that contacting Centrelink will just be handed to CSA and a dead end.
You can report via the following link, likewise don't mention CS and again your hope is that a tax return will ensue etc.

Centrelink - Report a Suspected Fraud


Thank you for the links Mike, I have done both.

In reading the reason 1 information regarding travel costs and calculating fuel expenses I think the likelihood of a registrar finding in my favour marginal. It says you can not claim accommodation with children which sets me right on the edge of the 5% rule.

Are you aware of any plans by the government to make changes to the way CSA operate? In particular the way it does not have the ability to force both payers and payees to lodge tax assessments?

Is this something I could write to my MP about?

I understand there are a lot of issues with CSA, I feel this is one of the biggest issues people have. It would save a lot of heart ache if it was enforced.
Hi VicSa - I don't think you have to worry too much as the payee will eventually have to lodge a return etc… to continue to get Family Assistance $$$.

Balancing your family assistance payments - Australian Government Department of Human Services

You said the income is derived - what exactly do you mean?
guest said
I don't think you have to worry too much as the payee will eventually have to lodge a return etc… to continue to get Family Assistance $$$.

The worry will then be getting the overpayments acknowledged let alone returned.

VicSA said
Are you aware of any plans by the government to make changes to the way CSA operate? In particular the way it does not have the ability to force both payers and payees to lodge tax assessments?

I am only aware of the reverse the "Government" protecting what amounts to anarchistic terrorism on the part of the CSA. The Attorney General, the Federal MP for the DHS, the Head honcho (apologies for bring down honchos) of the CSA, George Christensen (heading inquiry into CSA) and the Commonwealth Ombudsman were all made aware that the CSA had invented the existence of legislation (that FBT grossing up should be applied to net income e.g a $200,000 redundancy payment magically becomes $260,000 for CS purposes) and then $345,000 (due to double/tripple dipping as the tax is applied again). Nothing was done at all about this gross abuse of power and of the people these people swear to serve. Unscrupulos methods employed to raise a liable parent's income when redundancy payements are received (or other payments).

In short DO NOT hold your breath for changes to a very fundamentally flawed system.

What few understand, is that CS in many Western Countries is not about providing support for children rather it is about backdoor taxation. In Australia it is via FTB clawback, 50% of CS paid is clawed back whilst for intact families it is 20%, increasing to 30%). Furthermore if, as is very often the case, another partner exists, then additionally that partner's income is also included. So in fact CS very often imposes yet further burdens upon the support of children. Additional taxation is gathered by implementing fines and as in VicSA's case legislation that permits the invention of incomes by pen pushers pushed to push the pens into collecting so that more pens can be purchased for the sake of pushing those pens.
Thanks again for the replies. It is interesting you mention about partners income being introduced to the equation. I called CSA yesterday and told the person I was going to record the conversation, which they had no objection about. As I have read before, there have been cases that CSA have used the new partners income in an assessment when a COA reason 8 has been used by either party. I asked if this was the case and she put me on hold to read the act, returned and said no they will not use the partners income. I am not convinced by CSA's statement and trying to avoid a COA at all costs.

On a side note I read an article on Parental Alienation last night and the ex fits it to a tee. I sent a text message yesterday to one of my children and had no reply until the evening, it was the ex using the child's phone saying the children know all about my threats and blackmail. I am made to talk on speaker phone quite often after conflict and the call terminated if I am deemed to be saying the wrong thing.

I sent a text to the ex and since have had no reply.
As with everyone on here there is much more to the story, some to horrific to post.

It looks like the kids will not be spending time with us next school holidays.

re other Partner's income. What I was talking about is the FTB side as opposed to the CSA aspect. That is when reducing FTB for a child or children, Centrelink (well CSA as well, as they now sort of share the workload; that is, as an example, if care is disputed, the the appropriate team within CSA will review the case, make their decision which may results in changed CS. They, the CSA, are then tasked with the FTB side) apply the Parent's Income, the CS and the other parent's income, so CS child effectively has 3 incomes reducing FTB and the CS one is more like 2 incomes due to the 50% reduction as opposed to the 20% then 30% reduction of non CS incomes. So CS children are basically deprived by the very legislation that purports to support them.

Re CSA doing FTB:-
If a parent mentions child changing socks (for example) this then becomes a "disputed care" so the disputed care team get passed the in-tray and at the minimum have to then pass the in-tray back in which case child's other sock was changed etc etc etc :). One of the many permutations of the "pass the in-tray" game that the mere mortals aka tax payers are paying for.
Guest said

You said the income is derived - what exactly do you mean?

A provisional amount is "derived" from income information that CSA have from other sources. Example: Family Tax benefit

Mike according to the CSA calculator and the flwg calculator there is no change to the payment if the payee is on $35,000/year so I see no point in pursuing this at all. I am so confused how this all works?? It seems the payee would have to earn substantially more to have this amount change.

At the end of the day the payee ends up with more in their pocket than I do. By the time Actual income + FTB + CS + Health Care card + rent assistance. It would be fine if I knew it was going to the kids. With knowing that they are being palmed off to others every weekend and seeing what they are dressed in and hearing what they eat, I know that there is very little going towards them.
Hi VicSa - If you increased your care percentage then a higher income would make a difference and if you reached the shared care band then you would be eligible to receive FTB. Whilst you are considered to have very little care you will have to pay a lot and even more again with the youngest child turns 13.  

The child support you pay does reduce the FTB she receives and as Mike has already mentioned, this is how the Gov pays for the Child Support Program. I think you can claim a reduction for the high cost of seeing your children in the Change of Assessment process.

With two children over 13 your child support liability will be over in 5 or so years, so it's not all that bad.



 
Bit hard to have them more when I live 800kms away. I guess I am a bit miffed as to the fact that the system seems to base CS on the payers income only.

I know it's "only" 5 years until the eldest are not part of CS by that time I will be 49 and 52 when it ends. Not a lot of working years left to setup for retirement!
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