Selling IP and child support calculation

I am paying child support to ex who is main custody of the child. The child support is calculated based on the percentage of each person's taxable income. The ex tried to reduce significant working hours to grab more child support from me. I am happy to pay for my child but I am not happy as my money is used for her own and to support her parents. Her parents live with her and do not work at all.

If I sell my IP and have capital gain, it means that I have to to pay a lot more child support because of taxable income increase. Are there any rules/laws which adjust child support to be a fairness in this case?

 

According to my current understanding you will need to pay child support based on your taxable income in the year you made the CG.

The only way around it would be via negotiation with the ex but if a settlement has already been granted then this may be futile.

Did you consider the CG in the settlement if you have already signed of on it?

Get legal advice as well.

 

Yep capital gains can impact things like family benefits, child support and HELP debts. If there is a arrears of maintenance they can also claw that back from windfall income.

Speak to the Child Support Agency. The rules are fair...Capital gains are income and a portion of income is used to pay support. Sometimes they dont adopt a linear growth in the support paid.

Property settlements normally consider the after tax value of property in the family asset split and if you still own the IP then it was assessed at some point.

Adjusted taxable income however may be reduced for the value of child support paid. Its important that people who pay child support make sure they correctly report ATI when they lodge. ATI does NOT equal taxable income.

 

A little off-topic but this scenario is one of the main reasons I've considered going MGTOW.

I feel for you OP. Hopefully you and your ex can come to an amicable resolution.

Good luck

 

Hi Paul and Air Bender

Thanks for your replies.

Paul, can I ask what ATI means?
Air Bender, what is MGTOW?

Thanks once again.

 

@PropertyInsight you can also ask child support to adjust the payments on your ex’s ‘ability to earn’ rather than the hours she is earning. If she is trying to be dodgy this can make the assessment fairer...

 

I don't want to derail your thread @PropertyInsight, I'll send you a PM.

Ta

 

There certainly are rules. You should look at the child support agency for starters and then look at the relevant legislation.

 

Adjusted Taxable Income - Referred to earlier in thread.
A common way used by agencies to measure income. Taxable income would not include maintenance and losses from Ips and fringe benefits. ATI compensates for that and counts non taxable items etc
Adjusted taxable income - Australian Government Department of Human Services

 

Hi Paul
Thanks a lot.
Regards