In recent times, we have written extensively with respect to the various impacts upon family law of the COVID-19 pandemic.
While all the signs now seem to be that governments are continuing to relax restrictions and there is some general improvement to the economy, the effects of COVID-19 and the related impacts are likely to be ongoing for some considerable time yet.
If you have been financially impacted in terms of your employment by COVID-19 and are currently paying child support in accordance with an administrative assessment, there may be a number of important matters to consider.
In the majority of circumstances where parties are using an administrative assessment from Services Australia (the government agency responsible for assessing, collecting and transferring child support payments) to determine child support liabilities, this will take into account each party’s taxable income as recorded in their personal income tax return. As we near the end of the financial year, many people are beginning to get ready to complete their income tax return for the last financial year.
If, as a result of COVID-19 or other impacts, you have lost or reduced your employment during the last 12 months and you are personally paying or receiving child support, it may well be in your interest to lodge your tax return sooner rather than later. The lodging of your tax return will then likely trigger a change of assessment from Services Australia. It is absolutely essential that the assessment has up to date information in respect of each party’s personal income tax return. While there can be steps taken to backdate retrospective assessments for a period of time, it is far easier and far better that any change in financial circumstances is promptly advised to Services Australia, including by lodging your tax return.
While we always recommend that you take independent financial and accounting advice when it comes to matters of tax, and with regard to child support, if your income has reduced because COVID-19 has seen you lose your job or otherwise your working hours reduced, then getting that tax return prepared and lodged early this year may be an exceptionally important and timely step you can take. For any further queries about child support, please contact one of our experienced solicitors.