Unfortunately, “till death do us part” is not how every relationship story ends and when relationships break down a world of decisions and changes lie ahead. It’s during this time, people have a choice of either working through the issues rationally or fighting with every last breath to make sure “he doesn’t get a thing” or “she doesn’t see the kids”. This isn’t everyone’s story but sadly it is common.
If you are self-employed, or were in a relationship with a self-employed person, you probably received advice from an accountant about the different ways you could minimise your tax. For example, you might have been told you could be paid in different ways for goods / services you sold. Or that you should purchase a bunch of items that you need to run your business, which just so happens to double as adult’s / kid’s toys i.e. iPad, new laptop, new work car **.
Sometimes, self-employed ex-partners work out ways to reduce the amount of child support they have to pay, using one or more methods which may not always be entirely legal. Quite often the parent, caring for the children, will be lumped with the kids’ expenses because they don’t receive child support or if they do, it’s only a fraction of the expenses. At its worst the self-employed ex-partner, rather than taking financial responsibility for their children, starts living the single life all over again with frivolous spending including going on regular holidays, buying a new jet ski or even buying that beautiful, red sports car they’ve been drooling over since they were 16! Often adding insult to injury, by posting photos of their “new life” all over social media!
The Child Support Agency (http://www.humanservices.gov.au/customer/dhs/child-support) is tasked with “helping separated parents provide the necessary support for their child’s wellbeing”. Sounds great in theory, but unless both people are willing to be a part of the process, things become complicated. The Child Support Agency is criticized by partners wanting better, more extensive investigations into the complicated business dealings of their self-employed ex-partner. They hope the Agency will find where the money’s been hiding and organise for it to be paid to them! The reality is somewhat less successful with many ex-partners finding new and ingenious ways to hide the cash!
So, what can be done?
Self-employed ex-partners tend to operate in similar patterns. One of those patterns is to understate their income when reporting to the ATO (Tax office) to minimise tax and child support liabilities. The flip side of the pattern is, when trying to buy the new jet ski or the new car or the new bachelor pad, the ex-partner puts a higher income on the loan application or credit card application. These applications are a wealth of information, with many previously known but unproven details being filled out, usually in the ex’s hand writing because they wanted the loan application to be successful. What’s more the ex usually signs a statutory declaration confirming the information given is true!
So whilst shirking their responsibilities isn’t what all ex-partners do at the end of a relationship, it is a reality we see in the legal profession time and time again. If you’re bearing the brunt of an ex-partner not paying the right amount of child support, seek legal advice.
Ultimately, the child support you’re seeking is in the interests of the child you share together and their future.
(** for more information on deductions see https://www.ato.gov.au/business/income-and-deductions-for-business/what-you-can-claim-and-when and talk to your accountant or tax agent).
Lighthouse Law Group Solicitors are a small inner-west law firm who have a dedicated Family Lawyer with over 15 years’ experience. The firm is owned and operated in Queens Road, Five Dock by an Inner West Mum and her husband. For various legal advice please call (02) 9744 9236 or 1300 LAWGROUP or visit our webpage www.lawgroup.com.au