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hassall

Well-Known Member
5 September 2017
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Hello,

I am about to receive a decision from Child Support Agency that they are unable to determine the other party's earning capacity and reject my CoA application. Background first, then questions for anyone reading - I would really appreciate some practical experience:
  • Child Support Agency will only use tax returns since the CSA case started in 2011. The other party has an extensive work history including being a retail store manager and project officer and worked in between our two children being born and prior to separation
  • The other party has run an art business since 2001 never provided an income and been a source of tax deductions
  • Three years after separation and not working or studying, the other party was forced off Single Parent Pension onto Newstart, they then decided to study a double-diploma for two years and have now said to CSA that they did so - to start another business making hand-made cosmetics and works part-time in a book shop
  • The other party refused to disclose any payslips or make any submission in writing during the CoA
  • I have my wonderful kids basically 50/50
  • The other party got 70% of everything in separation and can obviously pay their bills and mortgage on Newstart, FTB and my child support, they would have between 300-400k in equity in their home (from separation)
  • My mortgage is huge and have not made a dent in it for 5.5 years - I would have nowhere near even half that equity in my home
  • Their decision is that they cannot determine an earning capacity and that the other party studied to start their new business (which I am pretty sure is registered with the NEIS Centrelink scheme) and supporting that with part-time work in a bookshop is fine
  • That the other party be allowed 12 months to demonstrate a profit in their business
  • Today the decision manager rang to get my gross salary (rather than what is in the system which is post tax) which will increase child support as a result of seeking just and equitable child support (seriously?!)
  • I have written to CSA stating if they use my pre-tax salary and increase child support and they do not use the other party's pre-tax earnings from last year I will make a complaint
My questions are:
  • Is it reasonable for me to expect the other party to work close to full-time given they have an extensive work history prior to separation but circumstances have allowed them to essentially manipulate the welfare system to date?
  • Is it possible to obtain a highest tax return prior to separation and use that (with or without indexation it would still be higher than $23k!) as their earning capacity?
  • Is it reasonable for the other party to be spending so much time and energy on a business that has a tiny turnover and will no way be a source of income for child support purposes and support that with part-time work? In other words, the business is just like the other business since 2011, a noble hobby but could be working more paid hours
  • Is it reasonable for me to suggest that the other party is using the business as a means to avoid full-time employment?
  • Is it reasonable to obtain payslips (noting they have refused to cooperation other than verbally) and calculate hourly rate X (say) 37.5 hours a week as they actual earning capacity?
  • Are CSA able to be so selective and use only my pre-tax salary and not the other party's after the phone call today? I wrote and said if I do not see the other party's pre-tax income from last year as their income in the change as of assessment that is now looming, I would make a complaint and get my MP to seek reason for such bias.
I appreciate no one can force the other party to work more in paid employment, and why would they on such a good wicket?! But I cannot move forward in life while I pay so much in spousal maintenance (it is not child support any more).

Note: I struggled to get a house after separation and as such am unable to afford the kids the same standard of living as the other parent, so the purpose of child support is also being ridiculed.

Am I so stupid to believe that just and equitable child support may eventuate if I object? I acknowledge the child support program is very much weighted in the payee's favour, but what about when the payer is doing all they can and the payee does not?

I am perplexed. Grateful for any responses and hope this made sense!
 

Lennon

Well-Known Member
11 September 2014
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719
  • Is it reasonable for me to expect the other party to work close to full-time given they have an extensive work history prior to separation but circumstances have allowed them to essentially manipulate the welfare system to date?
  • Is it possible to obtain a highest tax return prior to separation and use that (with or without indexation it would still be higher than $23k!) as their earning capacity?
  • Is it reasonable for the other party to be spending so much time and energy on a business that has a tiny turnover and will no way be a source of income for child support purposes and support that with part-time work? In other words, the business is just like the other business since 2011, a noble hobby but could be working more paid hours
  • Is it reasonable for me to suggest that the other party is using the business as a means to avoid full-time employment?
  • Is it reasonable to obtain payslips (noting they have refused to cooperation other than verbally) and calculate hourly rate X (say) 37.5 hours a week as they actual earning capacity?
  • Are CSA able to be so selective and use only my pre-tax salary and not the other party's after the phone call today? I wrote and said if I do not see the other party's pre-tax income from last year as their income in the change as of assessment that is now looming, I would make a complaint and get my MP to seek reason for such bias.

  • The answer to the first question depends largely on how old the children are. My children are 10 and 11 and my ex works precisely the minimum 15 hours per week required of her for Newstart purposes. She could definitely work more, but I am not doing a CoA because I don't want the CSA sniffing around my income (I've heard too many stories like yours).
  • How long ago was separation? Did she have the same number of kids at the time she earned the higher income?
  • I don't think it's reasonable for her to spend a lot of time on a business that doesn't earn an income, but the CSA are not renowned for being reasonable.
  • Yes, but again, the CSA is not renowned for being reasonable.
  • Again, yes IMHO, but the CSA is not renowned for being reasonable.
  • My understanding is that the CSA use a person's adjusted taxable income for calculating child support (that is taxable income plus fringe benefits, foreign income, net investment losses etc). They should use the adjusted taxable income of both payer and payee.
How much money is in dispute here? How much do you say she could earn if she worked full time, and how would that change your child support payments?
 

hassall

Well-Known Member
5 September 2017
22
0
121
  • The answer to the first question depends largely on how old the children are. My children are 10 and 11 and my ex works precisely the minimum 15 hours per week required of her for Newstart purposes. She could definitely work more, but I am not doing a CoA because I don't want the CSA sniffing around my income (I've heard too many stories like yours).
  • How long ago was separation? Did she have the same number of kids at the time she earned the higher income?
  • I don't think it's reasonable for her to spend a lot of time on a business that doesn't earn an income, but the CSA are not renowned for being reasonable.
  • Yes, but again, the CSA is not renowned for being reasonable.
  • Again, yes IMHO, but the CSA is not renowned for being reasonable.
  • My understanding is that the CSA use a person's adjusted taxable income for calculating child support (that is taxable income plus fringe benefits, foreign income, net investment losses etc). They should use the adjusted taxable income of both payer and payee.
How much money is in dispute here? How much do you say she could earn if she worked full time, and how would that change your child support payments?

Hello Lennon

Thank you for taking the trouble to respond. My kids are 12 and 10, separation was seven years ago and no the kids came after.

The decision manager said that life changes after separation (for the payee), sure does and I acknowledge she had the kids more then and it would have been hard for the first couple of years until my youngest went to school, but decided not to study or work part time at all until forced off Single Parent pension. But guess what, life changed for me too, I lost just about everything and have not been able to even begin to recover since.

I am not sure what their earning capacity is, because nothing was disclosed. Perhaps $40k using the hourly rate method. A heck more if they used a previous salary and applied indexation.

They completed a double diploma and the decision manager said they cannot expect them to determine an income so soon after completing studies (that the other party says was to start a business).

I have had the kids basically 50/50 for over 2 years now, as I finally managed to be in a position to do so. Smaller house etc etc than the other party.

Is the situation just and equitable to all parties? No.

Will "the system" acknowledge any of this? Probably not.

Did I just get shafted by trying to seek justice for me and my children? It would appear so.

I have asked for specific references in law and the legislation be explained in the decision when it lands.

Many thanks
 

King Neptune

Well-Known Member
9 January 2017
20
1
129
This is a pretty frustrating situation you're in and ultimately it's the kids who are missing out here of course. Have you filed the "special circumstances form" claiming that your ex has a greater earning capacity? If it were me (and it's not) I'd formalise the objection so there's a paper trail rather than just what gets advised over the phone and follow it through the process. If you were to go back to uni because "life changed" I'm sure your ex would push the issue.
 

Rob Legat - SBPL

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16 February 2017
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CSA can, and will, determine a party's income through reference to their expenditure, which I know for an absolute fact. If CSA won't do it, you can appeal to the AAT who will redo the whole exercise, and are generally more thorough/invasive than CSA.

When the taxable income is used, it is the gross income before tax deduction. That's what the ATO records show.
 
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sammy01

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27 September 2015
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Yep - go through CSA - they will stuff it up - they tend too... Then take it to AAT..

Plan B - Tell CSA that you've had a change of circumstance and your income is now $40 000... Then stop doing tax returns... They will accept the $40 000 and assess your payments on that... the ex can kick and scream but until the other parent does their tax returns they won't have a case..

Or pick your battles. Mate I'm a school teacher wage slave... I cant hide my income and I need to do my taxes because I get a decent tax return...

Meanwhile for the last two years my ex has claimed that she earnt $2000 and $6000... She has business, with a business website, a car with a paint job to advertise her business... But still claims to survive on $60000 a year... Her rent would be 4 times that amount.... But I've just decided I don't have the fight in me.
 
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hassall

Well-Known Member
5 September 2017
22
0
121
Hello everyone,

Thank you for all your feedback, not a great forum to be an active participant and like sammy01, I am running out of fight. Which is sad, for me and the kids.

King Neptune, yes this will be a formal decision handed down based on lodging a CoA based on Special Circumstances. I just haven't received it yet.

Rob Legat - SBPL, thank you - an interesting aspect of the CoA is that the Decision Maker has looked into lodged tax returns and there are not huge amounts being deducted, which means that the business is actually so small that there is little turnover, so again - is this something I draw SSAT attention to? Is it reasonable for the other party to be drawing on so much resources, including child support money, for so little return and avoid the big elephant in the room - paid full-time employment.

The Decision Maker, who I think I pissed off with my tenacity for social justice and seeking legal answers in their decision, and who decided to pluck my gross salary yesterday and make me pay more child support (I will just change it and my tax return from last year is not lodged yet). They said that CSA has no say whatsoever after the money is transferred to the other party (given it is spousal maintenance and I have to ask the other party to pay for things for the kids) and also when I said what the hell am I supposed to do, they said maybe I need to take the other party to court. I mean wtf? Seriously?

Another consideration I am factoring in is that Decision Makers are often outsourced legally accredited people. They have not dug into the case in relation to calls over the last 7 years I have made and also, perhaps they are paid on a case basis and get the craps when someone like me digs their heals in.

A question then, can I at least draw on the other party's work history and the fact they have run their other business with similar projects since 2001 and never made an income and has a work history prior to having children? That they started this new business to comply with the NEIS Centrelink program (I don't know this for a fact, but would make complete sense)? That they are consistently making life choices for the last seven years to avoid seeking full-time work? That regardless of giving her an opportunity to make the business work, their actual earning capacity is their current hourly rate X 38 hours a week. Is it reasonable that I support them while they test a new business out even though there is no way that business is going to get them a salary?

Any other factors I should consider in going to objection phase within the Department? I am not entirely convinced with the AAT argument, they just stuck to the guide last thing I tried to go through which was demonstrate that settlement was (legally) child support.

Thank you
 

hassall

Well-Known Member
5 September 2017
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121
Rob Legat - I suggest a quandary for me is that because the other party's mortgage is so low (yay go separation) and they received a lot of FTB, child support and welfare for so long, that their actual expenditure is very low. My problem is that my expenditure just on my mortgage etc is so high, that if interest rates go up or my car dies, that is me bust. Child support is the only "flexible" think in my budget.
 

Rob Legat - SBPL

Lawyer
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16 February 2017
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It really does depend on who you strike, as the determination of someone's income tends to be a bit of an 'art form' (said with tongue firmly in cheek). If you get the AAT (SSAT no longer exists, having been rolled into the AAT), their process will basically be:

1. Send out a more comprehensive questionnaire to each party on assets, liabilities, income and expenditure;
2. Have a directions hearing where the AAT member will make specific requests to each party as to what documents the Tribunal wants provided, based on the answers to the questionnaire;
3. Each party will get copies of the documents from 1 and 2;
4. Once all documents are produced, a hearing will be held where the AAT will investigate and ask questions about the information in the documents of each party, and invite comments from both parties.

At point 2 I'd be raising your concerns so that the Tribunal makes orders for the production of the appropriate documents. They may decide they're not relevant, however, so be prepared for that.
 

sammy01

Well-Known Member
27 September 2015
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They run their own business?

You're screwed. How does the gov't agency know what someone earns when they are working in a cash in-hand business?

So, look even if they were to say "hey, obviously, there is more money" - how do they get it? They can't...

So in my scenario - my ex claims an income of $6000 last year...Obviously, she earnt more than that as her rent would be $20 000.... The maths don't work... I reckon by ex earns about $40 000, but when the majority of it is paid as cash - she is a massage therapist. So 90% of customers are paying cash. So even if they decided to assess her at $40 000 - How would they get the $$$ from her? They can't....