Post separation income for Child Support parents 277-07100000

Item

Example

1

Example 1

Janet lodged an estimate of income due to having work hours reduced because of cut backs by the first employer. Having met all the criteria and after processing Janet's estimate, Janet asked if the additional income currently being earnt from the second employer can be excluded. Janet has not previously applied for PSI to be excluded.

Janet took on a second job, after separating to meet additional costs incurred when moving into a new place and setting everything up again. Janet explains this additional money is included in the estimate of income just lodged. The additional income from the second job is $7,840.

Janet started the second job on the 30 December 2015 and provides details of the income prior to separation of $50,400 for the 2014-15 financial year. The estimated income of $51,600 is higher than Janet's income prior to separation.

Decision

The decision would be to accept Janet's application to exclude additional income earned after the separation. All the criteria were satisfied.

2

Example 2

Sylvia runs a chocolate sweet shop in Blackburn. Sales increased due to the introduction of a new product that has been developed.

Sylvia calls on the 7 June 2016 asking the additional monies received from the new product be excluded from Silvia's ATI.

Sylvia advised that throughout the 5 years the business has been running no new products were created to sell in the shop. However, after Sylvia separated on 22 December 2014 more money was needed to pay for necessary bills.

Sylvia explains the idea of the new product was first thought of in January 2015 and the new product was put on the shelf for sale on 3 March 2015.

Sylvia provided the gross taxable income for 2013-14 as $18,100 (income earned prior to separation). After separation, the taxable income which includes the additional income earned is $34,500 (2014-15).

This means that Sylvia's income has increased by $16,400. Sylvia states that all the additional money earned was due to the new product line.

Decision

The decision would be to accept Sylvia's application to exclude additional income earned after separation because:

• the date of separation was 22 December 2014 which falls within the last 3 years
• Sylvia lived with ex-partner Bill for at least 6 months before separating
• there is no income amount order in place
• the income being used in Sylvia's current assessment of $34,500 is higher than the pre-separation income being $18,100
• it was established that Sylvia would not have earned this additional income prior to separation, the additional income was earned outside the ordinary course of events, and
• Sylvia started earning the additional income after the separation as the new product was introduced on 3 March 2015 and Sylvia separated from Bill on the 22 December 2014

3

Example 3

Kylie re-entered the workforce after looking after a newborn for the first year.

Kylie was ready to start working again, so applied for a job at the local supermarket and was offered a position.

Kylie started working part-time on 2 April 2015.

The monies earned from the local supermarket are included in Kylie's 2015-16 income. This is currently being used on the assessment.

Kylie called on the 5 October 2016 asking this additional income be excluded. Prior to separation Kylie received Centrelink payments totalling $15,000.

Decision

The decision is to reject Kylie's application to exclude additional income earned after the separation. The additional income Kylie was earned in the ordinary course of events. The criteria was not satisfied.