For the 2007/08 financial year all Child Support Agency parents must lodge a tax return.
Separated parents who do not lodge their tax returns may find themselves paying too much or receiving too little child support, following the start of the new Child Support Scheme on July 1 2008.
“The changes in the new Child Support Scheme make it more important than ever for all separated parents to lodge their tax returns,” the Minister for Human Services, Senator Joe Ludwig, said.
Taxable income forms the basis for calculating the amount of child support that should be paid or received by separated parents.
Under the scheme, if a customer has not lodged a tax return for two years, and the CSA has no information about their earnings, a default income will be used to assess how much child support they should pay or receive.
If the default income is higher or lower than the customer’s actual taxable income, then their child support assessment could be incorrect.
I recently announced several tough new initiatives to enhance the CSA’s ability to collect overdue child support, including a change to tax return rules,” Senator Ludwig said.
“This means for the 2007/08 financial year all Child Support Agency parents must lodge a tax return.”
Previously only paying parents were required to lodge a tax return for child support assessment purposes. From this year, receiving parents are also required to lodge.
The only exceptions now are parents with an annual taxable income of less than $18,252 and those who received Australian Government pensions, allowances or payments over the entire period.
Article by Christie Lewis
Christie is Practice Manager at Alan Lewis Accountants . Besides accounting, her passion is for all things small business (and blogging, of course). You can contact Christie directly at christie@lewistaxation.com.au.
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