One of the least understood, yet highly feared, aspects of the Australian child support system is the capacity to earn assessment. However this assessment doesn't need to be feared if you understand what it entails.
What is the capacity to earn assessment?
The capacity to earn assessment looks at the ability of each person to earn an income in the workplace. The most common assessment of the capacity to earn is the salary that the person has earned most recently, but other factors that can be considered include training levels, ability to access jobs in the area and experience in the field.
Does it apply to both parents?
One of the misunderstandings about the capacity to earn assessment is that it is designed to apply equally to both parents. However if one parent has been in the workforce and the other parent has spent much of their adult life out of the workforce caring for children, then the stay-at-home parent may have a relatively low capacity to earn. There is no work requirement in the child support legislation, unlike the government parenting payments.
What happens if I lose my job?
If you chose to take a voluntary redundancy and take some time off work to consider your options, you may still be considered liable for child support at the rate of your previous salary. However, if you become unemployed due to a disability and cannot take up work at your normal casual rates, you may be able to apply for a reduction in child support reflecting that you no longer have the same capacity to earn.
If you lose your job in a non-voluntary way (such as being fired) and cannot find a new job at the same salary, you may need to prove to the court that there are no jobs at the same salary and show the process that you have been using to look for jobs in order to get your child support reduced.
Can I reduce my hours?
Generally speaking, if you take a reduction in hours, such as going to a roster that has less hours per week and a lower salary, you will be liable for child support at your old rates. This is because you are making a voluntary decision to reduce your salary.
If you are unsure on how the capacity to earn assessment might affect your child support obligations, you should meet with a family lawyer to discuss your case.
Share26 August 2016
I love all of those quirky laws that are still on the law book. It's a little hobby of mine to track down some of those laws and try and work out if there was a story behind how they got on the books. I've been doing it for 14 years and have accumulated a lot of material that I have researched. I thought it would be fun to start a blog with some of these stories to share with other people who like to know a little more about law and about history. I hope you enjoy my site.