Explanatory Memorandum
(Circulated by the authority of the Treasurer,the Hon. John Dawkins M.P.)CHAPTER 4
THE CHILD SUPPORT ASSESSMENT ACT 1989
TAXABLE INCOME FOR CHILD SUPPORT PURPOSES WHERE IT IS NOT READILY ASCERTAINABLE
Allows the Registrar to select a figure of taxable income up to the existing maximum
THE CHILD SUPPORT (ASSESSMENT) ACT 1989
DIVISION 3 - CHILD SUPPORT INCOME AMOUNT
TAXABLE INCOME FOR CHILD SUPPORT PURPOSES NOT READILY ASCERTAINABLE
Summary of proposed amendments
4.1 The Bill amends section 58 in two ways. Firstly to allow the Registrar to select such amount as a taxable income as is considered appropriate, not exceeding 2.5 times average weekly earnings (which remains the maximum taxable income amount under the legislation) for use in child support assessments and secondly to provide the legislative authority to use figures of taxable income obtained either orally or in writing or from a document.
4.2 The child support formula is based upon an historic taxable income of the parties which is inflated by a factor each year to arrive at the child support income amount. It is this amount which is used as the child support income figure in child support assessments. In the absence of a taxable income there is no starting point for an assessment.
4.3 Section 58 presently requires that an amount of 2.5 times average weekly earnings be used in all cases where a figure is not available from the Tax Office or from other oral or documentary sources. In the vast majority of cases, using this figure gives an assessment result which is unrealistic and usually causes a break in regular payments to custodians in reassessment cases or a failure of payments to start in new cases.
4.4 The Child Support Evaluation and Advisory Group has reported in its final report (Assessment Issues - Chapter 11.4) that this mechanism is somewhat of a "blunt instrument" and more flexibility should be available to the Registrar in selecting when the full 2.5 times is to be used.
4.5 Allowing the Registrar to select a figure up to the maximum will give a more realistic outcome in more cases and help the continuity of payments to custodians and continued DSS clawback.
4.6 Doubt has been expressed as to whether an amount that is obtained from other sources can in fact be used and the intent of the other amendment is to insert a new section 58(1A) to give that authority.
Explanation of the proposed amendments
4.7 The proposed amendment substitutes for "2.5 times" "such amount as the Registrar considers appropriate , not exceeding 2.5 times" [Clause 12(a)]. It also inserts a new sub section (1A) to provide the authority to use a figure from another source [Clause 12(b)].
4.8 Section 58(2)(a) is amended by inserting a reference to the new subsection (1A) [Clause 12(c)].
4.9 The amendment will apply from the date the Royal Assent is given to the Child Support Legislation Amendment Bill No.2 1992.
Clauses involved in the proposed amendments
Clause 2 proposes that this provision in the Act proposed by the Bill will commence on the date the Royal Assent is given.
Clause 12(a) amends section 58 to allow a figure of taxable income to be selected as appropriate
Clause 12(b) inserts a new subsection (1A) in section 58 to provide the authority to use another figure from a different source
Clause 12(c) consequentially amends section 58(2)(a) to take account of the new subsection 58(1A).