Deliberately underestimating income to reduce child support

I think that my ex is deliberately underestimating their income to reduce their child support payments.  What can I do?

There are a number of things that can occur which reduce a parent’s child support payments to the other parent of their child/children such as that parent spending more regular time with the child/children or having another child or children. There are also some deliberate things which a paying parent may do, to try and reduce their income and change the amount of child support that they are assessed to pay the other parent of their child/children. This can include things like:

1. Resigning from their employment and either taking up another lower-paid job, or remaining unemployed;
2. Investing funds into a business and/or becoming self-employed; or
3. Directing funds that they might have otherwise earned to be paid into a trust.

If you are in receipt of child support payments through an assessment issued by the Child Support Agency (CSA), and you believe that the other parent is doing one or more of the things listed above, then you are able to make an Application to Change Assessment – Special Circumstances with the CSA under Reason 8 that is “The child support assessment is unfair because of the income, earning capacity, property or financial resources of one or both parents”.

Under what circumstances can I apply for a change of child support assessment?

You can apply when the other parent’s:

• financial resources, income and property are not showing in the assessment; and/or
• earning capacity is greater than what is showing in the assessment.

What evidence will I need to provide for the change of assessment to be reviewed?

In terms of evidence that you can provide to support your application, you can include things like:-

• ASIC company searches or business name searches;
• Payslips;
• Profit and loss statements and balance sheets for any business the other parent may be operating;
• Evidence that the other parent is choosing to earn less than they could, for example, a list of their formal qualifications and training and job history compared to their current employment role.

What happens after I lodge the application for change of child support assessment?

Once you lodge your application:-

1. Your application and supporting documents are provided to the other parent by the CSA;
2. The other parent is given the opportunity to respond to your application and provide their own evidence (this is not compulsory);
3. Depending upon the circumstances, the CSA may make their own enquiries with third parties for example the Australian Tax Office, ASIC, the parent’s employer/s and Centrelink to obtain any other independent information to verify a parent’s income and financial resources;
4. The CSA will then consider all of the evidence and make a decision about the application.

If the parent is found to have lied about their income, then the CSA can reissue the assessment based on the parent’s actual income. The CSA can also backdate the assessment which then creates a debt (called “arrears”) for the paying parent.

The CSA can recover the child support owed in several ways including obtaining an order for the parent’s employer to deduct their wages by a certain amount each pay cycle, deducting funds from the other parent’s bank account or taxing the funds owed out of the other parent’s income tax refund.   

If you think that the other parent of your child is deliberately reducing their income in order to pay less child support to you, then we strongly recommend that you obtain legal advice to discuss your options. Contact our office to make an appointment with one of our solicitors to discuss your circumstances and obtain advice on your situation on (07) 4963 2000 or through our online contact form below.