Commissioner of Taxation v Douglas decision
The Australian Government is taking action to make sure parents are not financially worse off as a result of the Federal Court’s decision in Commissioner of Taxation v Douglas (the Douglas decision).
The Douglas decision can reduce taxable income historically from the 2007-08 financial year. Child support payments and family assistance payments such as Family Tax Benefit (FTB) and Child Care Subsidy are based on taxable income. The Douglas decision means some people’s lower taxable income may affect their child support payments or family assistance entitlement. This is relevant for previous financial years and payments going forward.
The Government recognises that a parent’s lower taxable income (for previous financial years) resulting from the Douglas decision is a special circumstance. This is because the effect of the Douglas decision was not foreseeable and not within the control of parents.
The Government will ensure no parent is worse off due to the Douglas decision by:
- committing $31.4 million to repay any child support debts and overpayments,
- waiving all FTB debts that may be raised.
Parents with a child support assessment do not need to take any action.
What do child support parents need to do?
Parents do not need to take any action. Services Australia will contact affected customers. The Government will take responsibility to repay any child support debt or overpayment resulting from the Douglas decision.
Example: Adrian and Angela are separated. They have a child support assessment for their daughter Jo.
Adrian’s taxable income for the 2017-18 and 2018-19 financial year is affected by the Douglas decision. It will reduce from $60,000 to $50,000 for each year.
Services Australia contact both Adrian and Angela to explain their child support assessment has been updated with Adrian’s amended income. Services Australia explain that Adrian has overpaid $1,000 in child support.
Angela will not need to repay Adrian the $1,000 because the Government will take responsibility to repay this amount to Adrian.
Services Australia started contacting customers in January 2023. Parents will start receiving payments in early 2023. Payments for most affected customers are expected to be completed by 30 June 2024.
Contact Services Australia on 13 12 72 for more information about child support.
If you believe your child support assessment is unfair, you can seek a review under the change of assessment process.
The change of assessment process allows Services Australia to review the circumstances of both parents. This will determine an appropriate amount of child support payable.
If you believe your child support assessment is incorrect, you can seek an internal review by lodging an objection.
Parents can lodge an objection by using the Objecting to a Child Support decision form (CS1893) available at the Services Australia website. If a parent lodges an objection more than 28 days after receiving the notice of a child support decision they will also need to apply for an extension of time.
More information is available at:
- see topic 2.6 of the Child Support Guide for information about the change of assessment process
- see topic 4 of the Child Support Guide for objections and appeals
- call Services Australia on 13 12 72.
What do family assistance customers need to do?
In many cases affected parents do not need to do anything.
If a parent has received family assistance payments in the last 3 years, Services Australia will receive their amended income for these years automatically from the Australian Taxation Office, and pay a top-up payment if they are eligible. All FTB debts related to the Douglas decision will be waived.
Parents who received family assistance payments for earlier financial years going back to 2007-08, and were affected by the Douglas decision for those years can contact Services Australia to confirm their entitlement has been updated.
If you are an FTB customer with a child support assessment, Services Australia will update your FTB entitlement at the same time they update your child support assessment.
Contact Services Australia on 13 61 50 for more information.
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