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Section 72A

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Child Support issues around garnishee orders and S72A - Entity, personal or company

Hi all, I'm back once again.
More bulling tactics and harassment by the incompetent CSA.
They have lodged a Section 72A notice against me ( My name ) to my Real Estate who collect money from a rental property.
The monthly statement and payments are in my Company's name and the payment are then paying of a mortgage.
I instructed the Real Estate that the 72A notice is against my name and that you are paying my company and you can not make the rental payments back to the CSA. The real estate have sort legal advise by phoning the CSA and they have told the real estate that they have to pay or they will be in trouble, hence they are paying the CSA.

I am a write only customer to the CSA agency, yet they continue to harass me with phone calls. I have yet again had a right gut full of them, so I decide to phone my case worker who would not listen to a word that I said and would not agree to the law that is written in the Act.

Section 5.2.9 states the following  - Funds held in a bank account that is in the name of a company are held by the company as a legal person, not by the child support debtor. The funds in such an account cannot be said to be payable to the child support debtor, even if the child support debtor is the sole signatory to the account or the sole director or shareholder of the company.
Before issuing the notice, the whole of the debtor's financial circumstances must be considered.

A notice under section 72A cannot be effective against a joint bank account, an Entity ( Company )  because it is “not possible to identify any portion” as belonging solely to one owner (DFC of T v Westpac Savings Bank Ltd 87 ATC 4346).


The notice must not cause a default to occur on the debtor's regular loan repayments.

Well blow and behold. I Told my case officer all the above and she totally refused to comment on the facts.
I asked to be transferred to the complaints department where by that person agreed with my case officer and also ignored the facts above.
They then advised me that I must lodge a Income & expenditure form, where by they will then see if I can pay the child support debt. Totally ignoring the Section 5.2.9
I then wrote a letter to the Ombudsman in the hope that they would contact the CSA to make the Revoke there Section 72A. The Ombudsman agreed with my claims and said that I have a very strong case against them, so I need to get further documents from the AAT and waste more of my time in an appeal when the CSA refuse to do there job to the Law.

Does anyone here have any other suggestions.
Have you thought of sacking the real estate agent and either manage the property yourself on behalf of your company or find a private agent to manage it?
You are correct in following the Act at the Guide is not law so you should go through the objection and appeals process and once you get to the AAT, they should follow the Act.
In doing so you would need to keep a record of your costs such as taking leave from work or forgoing earning opportunities to attend to these matters, so once you have completed the process and hopefully won your case, you can then file a claim against the CSP for defective administration via CDDA process. I have been there and done it and although it took some time, my claim was paid.
Hi Taylor, having read your post I am not sure what you are really after when it comes to opinions and  or advice.  I think that if money is paid into a business account and not actually nominating a specific wage structure for an employee or otherwise, then I agree with section 72A.  On the other hand, I suppose you cannot expect the Real Estate Agency to get involved in your personal business, however in some way it is still you earning an income of sorts from your only source or another source.  The legalities in this matter might be better explored, and I think if what you have stated re the Ombudsmen's comments are correct then I would pursue that line of negotiation and see where to from here. (It seems like it might be your best option at this stage perhaps)

With regards to the information you have shared there are a few anomalies for the readers that might lead to further questions especially if you were going to pursue legal action:
 * Is this money the only income you earn? You have not mentioned anything in relation to this, and from my experience CSA will target the wage of the parent concerned.
 * As stated by you:"Before issuing the notice, the whole of the debtor's financial circumstances must be considered." …. have they done that? you have not said.
CSA and DOCS are government department who do not work with emotions, they are machines with a job to do, and that is what they do very well.

It might be of some advantage to you to seek legal advice, and there are some members on FLWG who might be of more assistance to you in that area.

Cheers.
I have found that the CSA staff are supportive and helpful as far as they can be if customers are very polite and patient , even if you do not agree with them.
At times it is frustrating  as different staff members at CSA can give you different answers dependent upon their level of knowledge. You can lodge a departure from the Child Support Assessment if you believe you have sound legal grounds. :thumbs: 
The facebook group "Child Support Australia - Time for Reform and Fairness." might be able to help.
Do be aware that the CSA may be monitoring it.
Basic Instincts said
Hi Taylor, having read your post I am not sure what you are really after when it comes to opinions and  or advice.  I think that if money is paid into a business account and not actually nominating a specific wage structure for an employee or otherwise, then I agree with section 72A.  On the other hand, I suppose you cannot expect the Real Estate Agency to get involved in your personal business, however in some way it is still you earning an income of sorts from your only source or another source.  The legalities in this matter might be better explored, and I think if what you have stated re the Ombudsmen's comments are correct then I would pursue that line of negotiation and see where to from here. (It seems like it might be your best option at this stage perhaps)

With regards to the information you have shared there are a few anomalies for the readers that might lead to further questions especially if you were going to pursue legal action:
 * Is this money the only income you earn? You have not mentioned anything in relation to this, and from my experience CSA will target the wage of the parent concerned.
 * As stated by you:"Before issuing the notice, the whole of the debtor's financial circumstances must be considered." …. have they done that? you have not said.
CSA and DOCS are government department who do not work with emotions, they are machines with a job to do, and that is what they do very well.

It might be of some advantage to you to seek legal advice, and there are some members on FLWG who might be of more assistance to you in that area.

Cheers.

Its  a long drawn out process. Numerous letters to the CSA and there refusal to respond to any letter is very frustrating.
* My only source of income is through the business. The rental does not produce an income, the rental money pays for 3/4 of the monthly loan repayments.

* As stated by you:"Before issuing the notice, the whole of the debtor's financial circumstances must be considered." …. have they done that? you have not said
  No they have not. They did it back in 2008 stealing money from my business account and the mortgage account. They have done the same thing on this matter and now they have contacted my previous accountant asking them for information about my company details so they can issue a section 72A notice against the company.
Its amazing how they can take the Law into there own hands and ignore the Law as it is written.
  
Are you up to date with your tax returns??? They don't like it if you are behind.
Guest said
Have you thought of sacking the real estate agent and either manage the property yourself on behalf of your company or find a private agent to manage it?
You are correct in following the Act at the Guide is not law so you should go through the objection and appeals process and once you get to the AAT, they should follow the Act.
In doing so you would need to keep a record of your costs such as taking leave from work or forgoing earning opportunities to attend to these matters, so once you have completed the process and hopefully won your case, you can then file a claim against the CSP for defective administration via CDDA process. I have been there and done it and although it took some time, my claim was paid.

I did sack the Real Estate after showing them the CSA Law as its written and they refused to follow my suggestions as they had an obligation to fulfil with the section 72A notice.
I am in the process of a CDDA but I just need a dam good solicitor who knows the Law
So who's name is on the title to the house. Is it yours or the company. If it's yours then the CSA would be in the right.
We know the law extremely well when it comes to Child Support matters. There are many questions in your posts that leave gaps. What sort of Company is it? Are you a  Shareholder, or Director and an employee? Are their other shareholders/directors employees? Do you pay weekly or fortnightly wages and are you paying PAYG.  How is your income structured? Regardless of protestations income is income at the source so if you are collecting rent from a rental property and it goes into any entity it is income to that entity. If the property is in your name it is your income. Regardless of what it is paying contemporaneously and or any other outgoings. ie mortgage. This is especially so if you simply use your current account through the company bank account to ebb and flow daily operating funds. It is simply a recipe for disaster to use the company (pty Ltd) account as a slush fund for daily expenditure OR any sort of entity. I have seen case after case where business owners or majority shareholders treat the operating account as their own when it is not. This gets you into strife with CS and with ATO.

The big question is what sort of arm's length transactions are going on. Are you simply creating entities and or conducting transactions through entities to avoid Child Support or to reduce amounts. Are you running a current account where you take lump sums from the company into your own personal account and operate your life expenses and repayments through that?  You cannot mix funds without significant problems.

The Realtor, in this case, was doing what they were instructed to do by CS  via the s72 notice. it seems via way of a garnishee order which CS issue many. Often they do issue them against the wrong entity. It was not their problem to query it but yours. Dumping the agent was hardly a reasonable approach as the order required them to deduct from rental income. The rent income would have gone into their consolidated rent account earmarked for you and been paid to your nominated account LESS the order amount. Are you suggesting that the Realtor rent receivable account was a shared or mixed funds account and as funds were mixed therefore your rental income was unable to be garnished?

Child support is straight forward where you have a PAYG based regular income. It becomes very problematic where you have rental properties, sole trader business arrangements, Pty Ltd or Offshore companies or any entity that generates income from multiple sources and where the Payer is not clearly defined through business accounting practice. Few Payers understand the impact of depreciation on calculations, and as well as a potential earning ability where CS consider payments are low and where the Payer (or the receiver in cases) has an ability to earn more.

If you want to write up the scenario and exact circumstances we will take a look at it. You can send a private post and attachment.

Executive Secretary - Shared Parenting Council of Australia
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I totally agree with you taylor. How can this agency ignore the Law and just take the Law into there own hands. Hope that you can get some solid advise on this matter as I am going down the same path. 
Twilight said
So who's name is on the title to the house. Is it yours or the company. If it's yours then the CSA would be in the right.

I here you and I understand what the CSA can do.

But my point is that I am reading the CSA Law and it tells me the following. I believe that they have Breached that Law.
Am I not understanding the written terms of the CSA Law ?
or is this matter Defective administration ?

A section 72A. Before issuing the notice, the whole of the debtor's financial circumstances must be considered. The debtor must be allowed ordinary living expenses and the notice must not cause a default to occur on the debtor's regular loan repayments.  
How does the CSA gain knowledge that you have funds in an account ?

How do they distinguish if an account is in a joint name ?

Are they reading information from your tax return or gaining knowledge from the ATO ?

Are they able to look into your banking details - Credits & Debits - to see what funding transaction are taking place ?
 
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