Two of the most important terms For many people, once they have made the decision that their marriage is over, they want to have the legalities Part of what makes our divorce lawyers experts in their field, is knowing what way a judge is likely to Private Client Homepage. Medical Negligence Homepage.
Notary Homepage. Back Co-habitation. Back Arrangements for Children. The Child Maintenance Service will take into account the number of children the paying parent has to pay child maintenance for. This includes any other children living with them and any arrangements that have been made directly for other children. Using information from the first 4 steps, the Child Maintenance Service decides the weekly child maintenance amount. To help us improve GOV.
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To register please select your Citizen's Advice Bureau from the list below and enter your work email address which normally ends. Back to A-Z Help pages index Income from child maintenance payments In most cases, from 12 April , any income that you receive from child maintenance payments is not included as income when calculating tax credits or when calculating benefits.
Register Login. Although these payments are not required to be spent for a specific purpose, they are intended for the personal use of the recipient, and will not be taken into account as income or a financial resource of the parent when establishing special circumstances under this reason. However, consideration of a payment received by a parent under this scheme as part of their overall circumstances may be relevant to a decision about the parent's earning capacity specifically the third criterion, see 'Purpose of the parent's decision about working arrangements' below.
Where a parent has drawn money as a lump sum from their superannuation fund, the Registrar will consider whether that superannuation entitlement was taken into account in any property settlement between the parents. It may be unjust for a parent to have their child support assessment based on a taxable income which includes a lump sum payment having regard to the earlier distribution of superannuation and property between the parents Carey and Carey FLC However, if the parent has a low current income and is making an inadequate contribution to child support the Registrar may still consider any superannuation received by the parent in deciding that parent's capacity to contribute to the financial support of the child.
The Registrar will also take into account whether the superannuation has been drawn prior to retirement because of severe financial hardship. Under the superannuation guarantee law, most employed parents have superannuation paid by their employers in addition to their wage or salary income. Self-employed parents generally fund their own superannuation contributions. Parents who are mainly self-employed may be able to claim some superannuation contributions as tax deductions Income Tax Assessment Act section However, superannuation contributions that are claimed as tax deductions are regarded as reportable superannuation contributions Income Tax Assessment Act section A self-employed parent funding their own superannuation contributions is, of itself, unlikely to lead to a child support assessment being unfair.
However, when considering a parent's overall financial situation, it is reasonable to take into account the amount the parent would have been entitled to receive under the superannuation guarantee if they were an employee. Example: Under the superannuation guarantee law, employers are required to contribute superannuation on behalf of their employees at the superannuation guarantee rate.
A self-employed parent makes superannuation contributions for themselves or others at a higher rate. The Registrar may determine that the contributions over and above the superannuation guarantee rate should be added back to the parent's adjusted taxable income amount. Information about the superannuation guarantee rate may be found at the Super for employers - How much to pay page on the ATO website.
More information on reportable superannuation contributions can be found in 2. Where a lump sum is received because of compensation for a personal injury there may be a reason to change the assessment because the payment compensates the parent for past loss of wages or a reduction of future earning capacity Harris and Harris FLC Where the amount of compensation is set by way of private settlement it can be difficult to establish the portion of the compensation which relates to loss of wages or a decrease in future earning capacity.
In these cases a decision by the department concerning the period during which the parent is precluded from applying for social security benefits can be of assistance.
The cost of the parent's future needs may be increased and a part of the compensation, if not all, may need to be preserved to meet those costs. The parent's cost of meeting their future needs will need to be ascertained to decide the extent to which the parent's capacity to contribute to the financial support of the child has been increased because of the compensation payment.
Amounts received as a windfall e. They do not form part of the adjusted taxable income and are not taken into account in a formula assessment. There may be a reason to change an assessment if it is likely that a windfall will increase the parent's capacity to contribute to the financial support of the child. The decision will depend on the circumstances of the case and any other reasons under consideration.
Any government pension, allowance or benefit received by the payee or payer that would normally be included as part of the parent's adjusted taxable income in an ordinary formula assessment will be taken into account when considering the parent's income and financial resources under this reason.
This includes any pension or benefit that is classified as taxable income, as well as certain tax-free pensions and benefits 2. FTB payments paid for any children in the payee or payer's care including a child for whom the payer is liable to pay child support will not be taken into account when considering a parent's income and financial resources.
If the assessment is affected by a parent's reduced income, there may be special circumstances to justify changing the assessment to take into account the parent's earning capacity. From 1 July , the Registrar can only determine that a parent's earning capacity is greater than is reflected in their income used in the child support formula if all of the following 3 matters are satisfied:. The parent has failed to show that the decision about their work arrangements was not substantially motivated by the effect this would have on the child support assessment CSA Act section 7B c.
The Registrar must be satisfied that all 3 compulsory criteria are satisfied before a change to the assessment can be made to take into account a parent's earning capacity, rather than their actual income. If the parent's circumstances satisfy only 1 or 2 of the criteria, the Registrar cannot make a decision based on the parent's earning capacity. The Registrar must also be satisfied it would be possible for the parent to increase their income by changing their work arrangements.
That is, work must be available for the parent in their area and the parent must have the necessary qualifications and experience to perform that work. Except where the parent does not work, a parent who has not reduced their income cannot be found to have a higher earning capacity. Example: A parent who refuses a promotion at work, maintaining their income at the same level, will generally not be found to have a higher capacity to earn.
Example: A reduction from regular overtime to a standard working hours week or loss of bonuses which required additional effort beyond that required of a standard employee, cannot be considered as founding a parent's additional earning capacity. A parent who is not working is one who is not engaged in work for remuneration, or in self-employment for profit. A person can be said to be not working despite 'ample opportunity' to work if they have had offers of employment and refused them without adequate reason.
Alternatively, if the person is not seeking work but there are job vacancies for which they are suitably qualified in their local area, this could also constitute ample opportunity to work. Weekly hours of work reduced below the full-time standard for that occupation or industry.
This sub-criterion may apply when a parent is still employed and has remained in the same occupation or industry. The relevant factor is that the parent now works less hours than they did previously.
The fact that their hours have reduced is not in itself sufficient. The reduction must put those hours below the usual full-time standard for the occupation.
The parent should be able to provide information about the usual full-time standard hours for their particular industry or occupation. Alternatively, the Registrar could obtain information from the person's employer. Changed industry, occupation, or working pattern. This sub-criterion may apply when the parent is still employed, but has changed jobs, or rearranged their hours of work, or pattern of work. It is implicit that this change in industry, occupation or working arrangements has resulted in a lower income.
For a parent to change their occupation or industry requires a greater change than simply moving between employers or jobs. There needs be something in the nature of a change in career, or of working in the same type of job but in an entirely different field. A parent who has changed their working pattern may still be in the same job, or employed in the same occupation or industry. What is relevant is whether the person has changed their hours of work, e. A parent may change their working arrangements, for example, to being a consultant or sub-contractor rather than an employee.
In these situations the Registrar is satisfied that there has been a change in their working pattern. If the Registrar is satisfied that the parent meets the first criterion i.
However, the Registrar may only make a decision of that type if the parent's circumstances also meet the remaining 2 compulsory criteria outlined below. When considering this criterion, the Registrar must be satisfied that the parent's decision not to work, to reduce the number of hours, or to change their working pattern is not justified on the basis of:. This is an objective test. The Registrar must consider whether an ordinary, reasonable person would consider the parent's decision to be justified, rather than whether the parent who made the decision considers that their decision was justified.
It is also important to note that if the parent's caring responsibilities or state of health do not adequately justify the parent's decision about their work arrangements, then the Registrar must then consider the third criterion below, relating to the parent's purpose in making that decision. The type of caring responsibilities that might justify a parent's decision to change their working hours will only be a personal responsibility to care for another person.
Caring responsibilities include responsibilities to persons other than the parent's own children, such as their own parent, a new partner or step-children, elderly relatives or friends. The Registrar will take into account the following factors when considering whether the parent's decision to change their working arrangements because of their caring responsibilities is justifiable. The Registrar will weigh up the evidence about these and any other relevant matters in order to decide whether the parent's caring responsibilities are such that they justify their decision to change their working arrangements.
The parent who is primarily responsible for care of the children for whom child support is payable may not be employed, or may be working part-time in order to accommodate their child care responsibilities. Where this is a longstanding arrangement e.
A parent who has been in the workforce may cease work, or reduce their work commitments to accommodate their responsibilities to care for a child. The child for whom the parent provides direct care could be the child from a former relationship for whom child support is payable , or a child of a new relationship. In such cases, the parent whether they are the payer or payee in the case may still have an unexercised earning capacity that makes the assessment unfair.
The Registrar may consider the following relevant facts over and above those considered in other earning capacity cases:. When making a decision about the effect a parent's caring responsibilities have on their earning capacity, the Registrar must have regard to government policies and initiatives designed to encourage parents back into the workforce.
If the parent's caring responsibilities do justify their decision about their working arrangements, then the Registrar must not make a decision to base the child support assessment on the parent's earning capacity. However, if the parent's caring responsibilities would not preclude work, or additional work, the Registrar must proceed to consider the third criterion below, namely, the parent's purpose in making the decision about their working arrangements. As with a parent's caring responsibilities, if a parent has health problems, this may mean that they do not have an earning capacity that makes the assessment 'unjust and inequitable'.
If the Registrar is satisfied that the parent's state of health is such that they do not have an unexercised earning capacity that makes the assessment 'unjust and inequitable', it will not be necessary to consider whether the parent's circumstances satisfy the criteria in CSA Act section 7B.
The Registrar will take into account any evidence that the parent presents about their state of physical and mental health. It would usually be expected that a parent who claims to have made a decision to change their work arrangements because of their health will have been diagnosed by a qualified medical practitioner; treated for the condition and have made that decision based on medical advice.
The following factors are relevant in considering whether the parent's decision about their working arrangements is justified on the basis of the parent's state of health:.
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