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Salary Sacrificing
The CSA is working with the Australian Taxation Office (ATO) to automatically add salary sacrificed amounts to income for child support purposes, to ensure child support assessments are correct and people aren’t salary sacrificing in order to reduce their child support income. These changes will commence 1 July 2009.
Why are you doing this?
There have been a number of high income earners salary sacrificing their superannuation, which reduces their taxable income and effects the amount of child support they pay or receive. To put fairness and integrity back into the tax system, the government has decided this salary sacrificed superannuation will be included as income for child support purposes.
Can’t I salary sacrifice anymore?
Yes, you can still enjoy the tax benefits of salary sacrificing into super, but you will not be able to use it to boost the amount of chid support you receive (if receiving parent) or reduce the amount you have to pay (if paying parent).
Can you explain how this works?
You will still be able to salary sacrifice your superannuation, as you do now. However, the extra superannuation you choose to sacrifice to reduce the tax you pay will be added back into your income when you do your child support assessment. This is still very new and the change will not come into effect until July 2009. You will be able to find out more details about how this will work closer to the time it will be implemented.
How can you take my super?
The CSA will not actually take your superannuation. You can still choose to salary sacrifice extra superannuation to reduce the tax you pay. The change is that this extra super will be added back in to your overall income before the CSA works out your child support assessment.
Why 1 July 2009 - Are you going to backdate this?
This is a complex initiative and it will take the Government some time implement the change. No we are not going to back date this, however, you can still apply for a change of assessment (under reason 8) in the meantime.
