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Post #7599 by Dean Mason on March 24th 2008, 10:32 PM (in topic “Does the CSA deal fairly with small business owners and the self-employed?”)

Does the CSA deal fairly with small business owners and the self-employed?:

You are right, but when a person's life is in turmoil (which can be for years before a break-up actually occurs) all of these otherwise sensible practices go out the window. By the time they come to the CSA's attention, there can be serious lapses in record-keeping and tax obligations which themselves may have been the trigger for the break-up. (In more recent times there have been stories of one or other partner also having a gambling problem which has compounded the situation.) My point is that once they get to the CSA, if they are not a PAYE earner, they are at a bigger disadvantage than those who are. The pressures are greater, and the CSA guidelines appear to have little flexiblility built into them.

I'm keen to identify specific aspects of the CSA operation which can be improved to alleviate the enormous stress their guidelines are often believed to be creating. (We can't exacty pin down why so many peole commit suicide in Australia, but we can acknowledge that there are significant stresses, and try to do something about them.)

According to the ABS the self-employed represent about 15% of the 10 million or so people in today's labor force.  Also, there are nearly 2million owner-operator businesses. This means that between 15% and 20% of CSA payers are likely to be self-employed. I would suggest, based only on strong anecdotal evidence, that they represent a much bigger % of payers who are at-risk (for severe depression, self-harm, etc).

Thanks for your examples, LifeInsight, I look forward to reading others.

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Post #7587 by Dean Mason on March 24th 2008, 2:46 PM (in topic “Does the CSA deal fairly with small business owners and the self-employed?”)

Does the CSA deal fairly with small business owners and the self-employed?

In several years of talking with guys going through family bust-ups,  I have found some of the most stressful situations are where a payer is self-employed and the CSA has made a number of false assumptions about the payer's income, which results in a higher payment obligation than they can support, which in turn soon results in an arrears situation accumulating to create more, and often long-term, stress.

To be fair to the case workers, they are often in an impossible situation where the payer has little or no records, has unreliable banking information and is in such an emotional state that they are not able to deal with the amount of paper work involved. What is more, the cash economy is no doubt alive and well and the CSA is sometimes right to be suspicious of income estimates that are very low. Also, case workers are not trained in business economics, or in business development, so the PAYE system is the easiest one for them to refer to as a guide.

What concerns me though, is that the case workers may not be adequately trained to take into account a whole range of factors which put the self-employed at risk and, instead, default to the 'PAYE' mindset. These include issues such as: expecting clean records to be readily available; not appreciating the need for 'working capital', for petrol to get from job to job or to buy raw materials, and; not appreciating how uneven revenue streams can be, especially where a business is either seasonal, or just not always enjoying steady sales. Furthermore, the self-employed worker, unlike the PAYE worker, is not able to take sick leave, or go on 'light duties', their time out to deal with all aspects of the family situation often results directly in reduced current income and/or reduced future sales . While it all seems obvious and like common-sense, I keep hearing stories of guys being pushed to the edge by these issues. I also hear of case workers making comments like 'why are you in business if you can't get a reliable income?' On the face of it, a fair question, but where there is long-term potential to create bigger income streams which will benefit everyone, the case worker (and the tight guidelines they operate within) is sometimes not able to appreciate (and not qualified to evaluate) the effort and resources required to develop a business over time.

There are various ways we can effectively lobby CSA to bring about changes in these aspects of their guidelines and of case worker behaviour. Is anyone willing to share their experience of these issues to kick-start the process?

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