The Child Support Agency (hereinafter referred to as the “CSA”) assesses child support based on a formula that takes into consideration several factors, one key factor being the income of the parties.
What happens when the taxable income of the paying parent is not a true reflection of their real income?
The carer parent can apply to the CSA for a change of assessment based a number of factors, one being that the taxable income is not a correct reflection of the other parent’s income. This might happen in circumstances where the payer is self-employed and has minimised their income for tax purposes. Evidence is required so that the agency can look beyond the taxable income of the payer. When investigating the claim, the assessor will ask for the disclosure of documents held by either party to support the claim.
As a result of any assessment it is possible for the agency to “nominate” an income which may be above the taxable income of the payer and assess the child support based on this income.
In some circumstances it is accepted by the payer that their taxable income will not be a true reflection of their real income, such as individuals that are self-employed or have multiple investment properties. In these cases it may be in the best interests of the parties to consider reaching a private agreement as to child support and having this reflected in a Binding Child Support Agreement.
If you are having issues with the payment of or receipt of child support, please contact one of Macrossan & Amiet’s experienced Family Lawyers to discuss the options available to you.