When making an assessment for child support, there are several considerations
It is not sufficient that the parent’s total remuneration will simply be based on the adjusted taxable income. There are other considerations that should be taken into account in determining the capability of a parent to pay child support.
The following should be considered in the assessment of child support:
- Based on the Child Support (Assessment) Act 1989, effective after June 30, 2000, a parent’s reportable fringe benefits that is included in the employees’ group certificate is to be included in the parent’s adjusted taxable income.
- Benefits that are not reportable fringe benefits may be considered as part of ‘wages’.
- Benefits and allowances given to members of the Australian Defence Force are exempted from reporting requirements but may be included in assessing whether the child is receiving a just and equitable support.
- Lump sum payments which are ordinarily not part of the adjusted taxable income of a parent may be subject to child support assessment.
- Superannuation may be included in assessing child support from a parent who has a low income and provides inadequate child support contributions.
- A windfall is included in the child support assessment if it will likely increase the parent’s capacity to pay child support.
- A parent who becomes unemployed and files an estimate of reduced income affects the capacity to pay child support.
- Child support is intended for the everyday needs of the child, hence, investments will not excuse a parent from paying a just and equitable support.
There are times when a parent’s earning capacity is greater than the reported income. This means that the parent is not maximizing his potential to earn. In assessing the earning capacity of the parents, the CSA must be satisfied that all three criteria must be present prior to changing an assessment:
- 1. The parent:
- Is not working despite ample opportunity to do so (section 117(7B)(a)(i)); or
- Reduced weekly hours of work to below full time work (section 117(7B)(a)(ii)); or
- Changed occupation, industry or working pattern (section 117(7B)(a)(iii));
- 2. The parent's decision about work arrangements is not justified by either:
- caring responsibilities (section 117(7B)(b)(i)); or
- state of health (section 117(7B)(b)(ii));
- 3. The parent has failed to show that the decision about work arrangements was not substantially motivated by the effect this would have on the child support assessment (section 117(7B)(c).