15 Jul Has Your Child Support Assessment Been Incorrectly Calculated?
Has Your Child Support Assessment Been Incorrectly Calculated?
In some cases, the Child Support Agency (“CSA”) may have calculated the annual rate of child support payable under the formulas provided by the Child Support Assessment Act 1989 (CTH) the (“Act”). Some matters are complex, making accurate assessments difficult. We recently acted for a father who was allocated a child support liability of $170,000 including nearly $40,000 in penalties.
The Background of the Case
Our client was subject to numerous contested child support assessments over approximately a five-year period. The CSA determined our client was earning far more than what he was actually was. The client’s income was assessed based on previous information available to the CSA which did not reflect his true income for the relevant period.
It is perfectly legal for individuals and entities to arrange their tax affairs to minimise their tax payable. Our client had a number of trusts, businesses and properties which collectively created a fairly diverse financial structure.
Our client and his ex-partners objected on a number of occasions to the assessments provided by the CSA. In many instances our client’s objections to the assessments were denied either because it was alleged there were no grounds for making an application or on the basis that time had run out to make an objection.
Previous decisions of the CSA were used as the starting point in assessing the child support payable by our client. These starting points were inaccurate and were unable to be challenged under the Act.
Our client was unable to pay the huge sums demanded by the CSA, instead he could only afford small payments which in turn led to the CSA applying penalties to his account.
Our client did come into a substantial amount of money via inheritance which was subsequently garnished by the CSA in an attempt to enforce the child support liability.
What we did
Firstly, we successfully applied in having the garnishee order initiated by the CSA set aside. This, among other obvious advantages, allowed our client to appropriately assess whether the costs of litigating the matter were worth it.
As the client was out of time to challenge the CSA’s previous decisions either through the CSA itself or the Administrative Appeals Tribunal, an application was made to the Court to have the annual rate of child support varied. This is known as a departure order. In seeking this, expert evidence was adduced, demonstrating the client’s income was considerably less than what the CSA had calculated. The expert report formed the basis on which settlement negotiations could be pressed.
With new evidence provided by our client before the Court in the form of the most recent tax returns and Business Activity Statements, the Court was able to then entertain the notion of making orders to vary the child support payable. Moreover, the risks to which the litigation posed to the other parties meant settling the matter out of Court became an attractive option. The costs of litigating can be high, depending on the complexity, period of time for which assessments are made and the level of detailed advice that needs to be given at each stage of the process. It is important to remember that depending on the amount that is in dispute, it may not always be worth litigating. We can assist in advising on the best possible way forward in negotiating the Courts or any settlement that may be more cost effective.
Should you require assistance with your litigation matter, please give us a call for a free assessment. Our contact details are:
Berrigan Doube Lawyers
Melbourne: (03) 9600 2577
Sydney: (02) 9251 6699
Brisbane: (07) 3229 0707