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NSW Novated Lease Affecting Child Support?

Discussion in 'Family Law Forum' started by Edited, 27 June 2015.

  1. Edited

    Edited Active Member

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    Hi all,
    I'm looking at getting a new car on a novated lease, and am wondering if that will affect the amount of child support I pay. My understanding is that a novated lease can save you money by adjusting your taxable income, but I am not sure how this affects child support.
     
  2. AllForHer

    AllForHer Well-Known Member

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    Might be best to call child support for clarity on this one, but my understanding is that a novated car lease reduces your taxable income, which is what determines the amount of child support you pay.
     
    Tim W likes this.
  3. givingdad

    givingdad Active Member

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    Hello, just wondering if you have any more information on this at all?
     
  4. sammy01

    sammy01 Well-Known Member

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    My accountant tells me it can cause my CSA assessment to go up
     
  5. givingdad

    givingdad Active Member

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    Really, but novated leasing should decrease your taxable income and therefore decrease your CSA assessment because you are technically earning less. Very interested to know why they think that...
     
  6. Mylife

    Mylife Well-Known Member

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    I think it will very much depend on what shows on your group certificate come tax time.
     
  7. Trying2bfair

    Trying2bfair Active Member

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    Just to say I am not a financial advisor, but I do specialise in this topic. It's my industry and I hold a management position.

    It entirely depends on a few factors, novated leasing does reduce the tax you pay but not your gross annual income, so technically child support is worked from gross annual income (before tax). It does alter your tax return so you look like you earn less but not always.

    There are two methods of packaging stat method or ECM, a lot depends on reportable FBT. It also depends on if you are full FBT or a charity not for profit or public benevolent etc, etc. using your cap has greater implications.

    Reportable FBT will increase income and then increase child support.

    But even if you use ECM (which has no reportable FBT), you are absolutely meant to add all GST and Tax savings to your child support estimate, to pay based on your gross income, not doing so could leave you open to legal issues.

    I'm not a fan of telling people how to cheat their children out of money they are entitled to, so basically that's all the information you will get from me. At the end of the day, pay for your child. Child support barely covers a quarter of actually raising a child. Please love your child more than you hate their primary caregiver!
     
  8. AllForHer

    AllForHer Well-Known Member

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    Useful information, thank you @Trying2bfair.

    For the record, most parents, particularly on this forum, would rather spend time actually raising their kids than just paying for them. Let's not belittle the importance of a child's relationship with both parents by pretending it's about money.
     
    Hope this helps likes this.
  9. sammy01

    sammy01 Well-Known Member

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    So my ex doesn't pay any child support. I have 80% care of 3 young kids. So I get some Family tax benefit. I earn $90 000. So if I salary package a car, what would be the impact on my family tax benefit? Positive / negative / neutral..

    Yep, I don't think the original poster was explicitly saying "Hey, how can I get away with paying less child support? (but reading between the lines I see how it can be read that way...)
     
  10. Edited

    Edited Active Member

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    Yes, let me be clear, I'm not trying to cheat the system or not pay what I am meant to pay, or anything like that. It was a genuine concern, as I don't want to be doing the wrong thing. It's important to weigh up all aspects of any financial decision. It's already hard enough making ends meet and being able to provide for my daughter when I do have her. So less about how to get out of paying child support, and more about how to maximise the income I have left to spend on my daughter.
     

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