1.5.1: Payer's residence

Context

CSA can make or continue a child support assessment for a payer who meets the residence requirements of the Child Support (Assessment) Act 1989. These requirements can be modified if the payer is in a reciprocating jurisdiction.

Legislative references

Sections 10, 12, 25 and 25A Child Support (Assessment) Act 1989

Section 7A(2) Income Tax Assessment Act 1936

Regulations 614 Child Support (Assessment)(Overseas-related Maintenance Obligations) Regulations 2000

Explanation

CSA can accept an application for a child support assessment for a payer who is a resident of Australia on the day the application is made (sections 25 and 25A Assessment Act). CSA may also be able to accept an application if the payer is in a reciprocating jurisdiction (See chapter 1.6 Overseas cases).

A terminating event occurs when a payer ceases to be a resident of Australia. This does not apply if the payer is in a reciprocating jurisdiction that is not an excluded jurisdiction (See chapter 1.6 Overseas cases).

A person is a 'resident of Australia' for the purposes of the Assessment Act if they are a resident of Australia for the purposes of the Income Tax Assessment Act 1936 (section 10 Assessment Act). However, a person is not a resident of Australia for the Assessment Act if they are a resident of Norfolk Island, the Territory of Cocos (Keeling) Islands or the Territory of Christmas Island (section 7A(2) Income Tax Assessment Act 1936).

CSA will apply the same tests as the Australian Taxation Office when it decides whether a payer is resident for child support purposes. The primary test is whether the person resides in Australia. This is summarised below.

Resides in Australia

The word 'resides' has its ordinary meaning for this test. The Macquarie Dictionary defines 'reside' as 'to dwell permanently or for a considerable time; have one's abode for a time' and the Shorter Oxford English Dictionary defines it as 'to dwell permanently or for a considerable time, to have one's settled or usual abode, to live, in or at a particular place'.

A migrant who comes to Australia intending to reside here permanently is a resident from arrival.

A person who usually resides in Australia but is overseas on holidays continues to reside in Australia during their absence.

When a person arrives in Australia not intending to reside here permanently, or departs Australia temporarily, CSA will take into account all the following factors when deciding if they reside in Australia.

• The person's intention or purpose of presence in Australia and overseas.
• The person's family and business/employment ties in Australia and overseas.
• The location of the person's assets and the arrangements they have made to maintain them.
• The person's social and living arrangements in Australia and overseas.
• The period the person has been physically present in Australia.

The weight given to each factor will vary according to the circumstances of the individual.

If the person does not reside in Australia under ordinary concepts, there are 3 secondary tests to determine whether they are a resident of Australia for tax purposes:

Domicile and permanent place of abode test

183 day rule test

Superannuation test.

Domicile and permanent place of abode test

This test applies to individuals who leave Australia temporarily to live overseas, for example, on temporary overseas work assignments or on overseas study leave.

A person whose domicile is in Australia continues to be a resident of Australia unless their permanent place of abode is outside Australia.

Domicile

A person acquires a domicile of origin at birth. This is the domicile of their parents. If the child's parents live apart, or if one parent has died, the child's domicile is the domicile of the parent with whom they live. A person whose domicile is Australia will maintain their Australian domicile unless they acquired a different domicile of choice or by operation of law. A person will have adopted a new domicile if they can demonstrate an intention to make their home indefinitely in another country (e.g. if the person has obtained a migration visa). A working visa, even for a substantial period such as 2 years, would not be sufficient evidence of an intention to acquire a new domicile of choice.

Permanent place of abode

A permanent place of abode does not have to be 'everlasting' or 'forever'. A person who intends to return to live in Australia in the foreseeable future can still set up a 'permanent place of abode' elsewhere. If a person whose domicile is in Australia is residing elsewhere, CSA will take into account the following factors when deciding if that other country is their permanent place of abode:

• the intended and actual length of the person's stay in the overseas country
• the person's intention to return to Australia at some definite point in time or to travel to another country
• whether they have established a home outside Australia
• whether they have abandoned their residence or place of abode in Australia
• the duration and continuity of their presence in the overseas country
• the durability of their association with a particular place in Australia.

The weight to be given to each factor will vary with individual circumstances of each case and no single factor is conclusive.

183 day rule test

A person who does not reside in Australia can be a resident for tax purposes if they are present in Australia for 183 days of a particular financial year (i.e. from 1 July to 30 June of the following year) unless their permanent place of abode is outside Australia. The 183 days can be a total of several broken periods.

Superannuation test

This test applies to a person who is:

• an eligible employee under the Superannuation Act 1976, or
• a person who is a member of the superannuation scheme established under the Superannuation Act 1990

It is designed to ensure that Commonwealth government employees working at Australian posts overseas are still Australian residents for tax purposes. The person's spouse and any children under 16 years are also treated as Australian residents.

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Version 1.0

Issued 1 October 2002

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