Many thanks to Kathy Matri from Brazel Moore Lawyers for providing this post on how child support obligations are affected by the recent changes to income testing.
Salary sacrificing, and net investment losses, to be treated as income for calculating payment of child support…
Recent law amendments effective 1 July 2009 allow the Child Support Agency to automatically count salary sacrifice superannuation contributions, and net financial investment losses, as part of a paying parent’s child support income.
What this means for the payee is that any such losses and additional contributions made by them will automatically be added to their adjusted income and therefore are taken into account for the assessment of child support payments.
This will ensure that parents who have access to salary sacrificing arrangements will be treated on an equivalent basis to those who do not have the same access.
Compulsory superannuation payments such as employer contributions under superannuation guarantee requirements will not be considered part of the child support income. The changes will only apply to voluntary superannuation payments.
The types of losses that will be included are as follows:
- Net losses from any rental properties
- Net losses from any financial investments such as shares and managed
funds
The changes will become effective from the income year starting on or after 1 July 2009 and generally affect child support assessments commencing from 1 July 2010.
These changes will affect both the paying parent and the receiving parent.
For any questions or further information on this topic please call Kathy Matri on 4324 7699.
Ph: (02) 4324 7699
Fax: (02) 4323 2570
Website: www.brazelmoorelawyers.com.au
Email: bml@gosfordlaw.com.au
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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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