Donate Child Support Calculator
Skip navigation

ill health pension lump sum - income or asset

Add Topic
I have been involved in a child maintenance case for the last 3 years. I live in the uk and my ex in Australia. During this time I became seriously ill and have been medically retired. My solicitor wishes the court to know about my significant drop in income from 42.000 to 21,000 (ill health pension). I also received a lump from my pension which will repay debt and some money from mortgage to better help me manage monthly . The court have asked for info on monthly/yearly income only.

Will the lump sum affect what my son receives or is it exempt from the calculations as it is for ill health.  
                  basically unless the CSA(Child Support Agency) attempt a change of assessment (legally called a departure from administrative assessment), this could be initiated by the other parent or the CSA, then your taxable income (plus sum other amounts, (net investment losses, foreign income, gross reportable fringe benefits total, reportable superannuation contributions (voluntary pre-tax contributions), some tax free pensions or benefits) is used for calculation of CS. Note that as you are not in Australia the other amounts are likely not applicable under administrative assessment.

If a change of assessment is applied for, and if a reason 8 (a parent's income, property, financial resources, or earning capacity) is sought, then the lump sum could be considered. In which case the CSA guide states:-

CSA Guide - 2.6.14: Reason 8 - a parent's income, property, financial resources, or earning capacity said
Lump sum payments received by a parent

Where a parent receives a substantial amount of money (a 'lump sum') that would otherwise not form part of his or her income amount used for child support purposes, and therefore is not included in the assessment of child support, the lump sum may be taken into account in deciding whether the assessment should be changed.

Such payments may arise as a consequence of the parent:

    being retrenched from their employment;
    drawing funds from a superannuation fund;
    receiving a distribution from a deceased estate;
    being compensated for some loss or damage; or
    being successful in a lottery or some other gambling venture.

In each case it will be necessary to decide whether receiving the money makes the amount of child support payable unjust and inequitable.

A relevant factor (but not the sole factor) is whether or not the payment results in one parent being in a better financial position compared to the other parent. However, the fact that there is a discrepancy in the parents' financial positions does not automatically mean that there is a reason to change the assessment (Hampson and Lightfoot (1997) FLC 92-775). It will depend on the circumstances of each case.



Where a parent has drawn money as a lump sum from his or her superannuation fund, CSA will consider whether that superannuation entitlement was taken into account in any property settlement between the parents. It may be unjust for a parent to have his or her child support assessment based on a taxable income which includes a lump sum payment having regard to the earlier distribution of superannuation and property between the parents (Carey and Carey (1994) FLC 92-489).

However, if the parent has a low current income and is making an inadequate contribution to child support CSA may still consider any superannuation received by the parent in deciding that parent's capacity to contribute to the financial support of the child. CSA will also take into account whether the superannuation has been drawn prior to retirement because of severe financial hardship.

So if the CSA are involved then it is likely, as you are the liable parent (paying parent), that the CSA would consider this.

1 guest and 0 members have just viewed this.

Recent Tweets