Property Settlements and the Impact on Child Support Assessments

Property Settlements and the Impact on Child Support Assessments

There are certain payments or transfers that may be made pursuant to a property settlement that can impact how a Child Support Assessment is determined or reviewed.

In the recent decision of Ely & Ely & Anor [2019] FCCA 503, the Court was required to consider whether a Total and Permanent Disability Payment (‘TPD’) and superannuation entitlements retained by the Father should be treated by the Child Support Agency as income or financial resource, or in the alternate they were property that had already been considered in the parties’ property settlement.

In this case, it was the Father’s position that the Child Support Registrar and Tribunal had misinterpreted section 79 of the Family Law Act 1975 (Cth) in circumstances where they treated his TPD and superannuation as income or a financial resource which resulted in his taxable income being significantly increased and therefore his child support obligations increased.

In this Judgment, Judge Terry of the Federal Circuit Court at Newcastle determined the Tribunal had erroneously characterised the Husband’s TPD lump sum payment and superannuation entitlements retained by him as a financial resource rather than forming part of a property settlement reflected in Court Orders. In particular, Her Honour commented that a Child Support Departure Order should not undermine a property settlement which is what the Child Support Registrar had effectively done.

If you are unsure how your TPD payments or property settlement may impact upon your Child Support Assessment, we encourage you to contact our office and speak with one of our experienced family law practitioners on (02) 4929 2225.

Sarah Goldfinch