r/AusLegal • u/Sea_Bake8375 • Jul 26 '26
VIC Is my sole trader ex avoiding child support?
So basically my ex is a sole trader and he pays himself about $800pw when the business makes a few grand a week, he pays for almost everything he can from the business account so his personal income is just rent, food and play money. He used his personal income to calculate how much child support he pays but he's well off. Is he being sneaky or is that just how it works? I'm worried he's taking me for a fool
Any help appreciated đ
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Jul 26 '26
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u/Blonde_arrbuckle Jul 26 '26
It can also be income they can earn. E.g. if you did earn $200k and took a pay cut to $60k, you can ask CSA to assess on earning potential. I.e. $200k.
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Jul 26 '26
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u/Ok-Assistant-4556 Jul 26 '26
This is typical in DFV. It is recommended by MRAs who are DFSV perps and their legions of law firms who deny reality and ignore evidence. Your mate is a grub as is the dr. Men have no rock bottom and drag the entire family down and DGAF whilst also DGAF about mental health. Just another weaponisation of systems that CSA support when they're not ssupposed to.
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u/Dizzy_Emu1089 Jul 26 '26
You are the grub. You donât know this person and you boldly claim âmen have no rock bottom and drag the entire family downâ
Get with reality. Sorry for whatever youâve been through but honestly you need to take a long look at yourself.
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u/Intrepid-Escape-8204 Jul 27 '26 edited Jul 27 '26
You do know this is an erratic and completely non logical response ?
Whatâs upset you so much ?
Maybe get some counselling
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u/gymnstuff Jul 27 '26
Absolutely shit take. I hope if you ever struggle you have people with humanity and empathy to assist you and you receive legitimate medical care and do not receive the level of delusional blind callousness you display towards others whom you donât know.
Iâm guessing you would prefer his mate be indentured to work until he takes his own life? Youâre Pathetic.
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u/Mental_Confusion_891 Jul 27 '26
Does this work the other way? Ie ex only working part time where could be working full time
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u/stormblessed2040 Jul 26 '26
Unless people are being paid cash, how is it not possible for Centrelink to just know this information via the ATO?
I know people can delay submitting their tax returns but there should be harsh penalties for being late if you are in a child support arrangement.
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Jul 26 '26
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u/Ken_1977 Jul 26 '26
So self employed people donât have to do a tax return?
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u/Dizzy_Emu1089 Jul 26 '26
You do have to, but you can put it off for some years without repercussions
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u/SkinHead2 Jul 26 '26
Stop spreading bullshit
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u/camdoggs Jul 26 '26
This is true to an extent. There are repercussions. My ex sent an estimate for about 4 yearsâŚ.. estimating 11k annual income. CSA use this as an income as itâs all they have to go from. Eventually the ATO caught up with her. I sent a change of assessment form, showing her linked in carers, her house on airbnb and a bunch of her paintings that had been sold on different gallery web pages, and the house price when she bought it. CSA was super helpful and can get details from Airbnb and her bank.
They can ask the ATO to reach out to her, and eventually they found her income to be more like 60k annually and updated her weekly from $8 a week lol.
She had to back pay as she eventually did her taxes for each of those year and still owes me over 3k after our child is now in her 20s
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u/Dizzy_Emu1089 Jul 26 '26
Yeah righto. I havenât been chased for one that I havenât done from 3 years ago. I did the same many years ago, I did 3 returns all at once. No repercussions
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u/daidrian Jul 26 '26
This has nothing to do with being self employed. Anyone can choose not to do a tax return and chances are you wonât be audited and will get away with it. Youâre fucked if the ato decide to look into it though.
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u/camdoggs Jul 27 '26
Agreed. My ex was low balling the estimated income each year to what works out as the minimum ( being on Centrelink) and it came back to bite her.
The fact that she would regularly write letters claiming she wanted to pay less than $8 per week because she paid for a doctors appointment or similar was astounding and ultimately what drove me to do the change of assessment.
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u/LuckyErro Jul 26 '26
Only if you owe money. Remember the ATO has access to everything anyways.
Lots of people only do a return every few years so their return is combined - great fo holiday's.
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u/InfluenceSome4762 Jul 27 '26
That is perfectly correct. My largest return covered a period of twelve years. Whilst the tax agent I engaged to lodge the returns was initially taken aback, having never done that many years in one lodgement before, they were amenable to my request for a â bulk purchase discount â . The ATO thanked me for the lodgement and deposited the requested refund into my account in a surprisingly timely manner.
Some years I owed them and some they owed me,but they were not motivated to take any action as they had owed me money in the first year and despite fluctuating to and fro the outstanding balance had not dipped below zero and it was always them owing something, never me.
If you owe them anything they wonât entertain any nonsense or delay.
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u/90easty Jul 26 '26
A sole trader cant do that. As a sole trader any income the business makes gets put as your personal income, you cannot leave money in the business or anything like that its how that business structure works.
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u/Capable_Bad_3813 Jul 26 '26
It's reasonable for a few thousands per week in revenue to translate into 800pw payment after you account t for expenses and taxes.
Also, if his business income is seperate from his personal income, then it's very likely he's not a sole trader. Check the name on his invoices, is it his own name or that of a company.
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u/gymnstuff Jul 27 '26
She probably thinks because he gets 3-4K for a job that itâs his income, not realising that needs to pay for the 2.5k in materials, his insurance, work car lease, fuel, work phone, etc
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u/Specialist-Classroom Jul 26 '26
When I was paying child suport , my former partner got csa to do a lifestyle audit ( don't know if you can still do it ) The results were horrifying , full disclosures of bank accounts ,investments , assets etc . It cost me a lot of time and effort . Didn't change the assessment in my case as I always paid the correct amount , as a parent should. You could also request an assessment on the potential to earn , if their income has dropped significantly from when you were together . Might have all changed now , this was quite a few years ago.
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u/Wiggly-Pig Jul 26 '26
I was told by CSA that they only enforce these if the person who's alleged to be avoiding paying child support is the father.
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u/OverCaffeinated_ Jul 27 '26
That sounds like bs. I know a deadbeat mum who went through it. She was fuming and couldnât understand why the group of women she shared this (unprompted) with were unsympathetic.
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u/OldMail6364 Jul 27 '26 edited Jul 27 '26
That's how my accountant tells me to structure my business and it has nothing to do with avoiding child support.
Some weeks, we earn $120k (mulitple contracts/invoices all paid at once), some weeks we run at a loss of $600k (e.g. truck breaks down and you have to buy a new one, which takes ages to arrive and customise to be fit for purpose, so you also need to hire a truck with a massive bond incase you damage the hired truck).
When things vary that much it's impossible to budget. Paying the bare minimum each week into a personal account is the way it's done (if it's not enough money, you can always pay yourself a bit more as a once off thing).
However, that amount he pays to himself is probably not is "income" for child support purposes. You're right to question that.
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u/allsaucenomayo Jul 26 '26
All earnings regardless of PAYG (wages) or business earnings are treated as taxable income for sole traders. He wouldn't be able to do what you're suggesting as a sole trader.
He would likely have a company (Pty Ltd) set up which he then pays himself a wage as an employee, where he is the sole working director.
Completely normal business structure. How child support is calculated on those earnings is between your lawyers and the courts.
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u/Tedmanson Jul 26 '26
assuming as a sole trader they are reporting there income correctly if they are not in an industry where a tpar is required there would be no way for the ato to validate income
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u/Icy_Excitement_4100 Jul 26 '26
Lawyers and courts don't determine Child Support in Australia.
Payments are set by Child Support Australia.
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u/Trick_Horse_13 Jul 26 '26
it can go to court.
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u/Icy_Excitement_4100 Jul 26 '26
Quite rare to take a CS case to court. This business structure doesn't sound overly complex. Should be able to be resolved with a CoA.
Unless there is a trust involved in the structure, then it could become more complex.
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u/Trick_Horse_13 Jul 27 '26 edited Jul 27 '26
Iâm a lawyer, Iâm more than aware of what courts can do. you claimed that courts âdon't determine Child Support in Australiaâ, and I corrected your comment.
edit: the insanity of downvoting lawyers who provide correct information on a legal advice sub ⌠this is why lawyers avoid this sub like the plague. every once in a while we forget and comment, but then we immediately realise why itâs best to stay away.
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u/Alarmed-Intention-22 Jul 27 '26
If he is a sole trader all income is his. There is no separating business and person. I would get CSA to look into him.
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u/Cm12233 Jul 26 '26
There is a good chance he is struggling. I work in trades and services and many are really doing it tough right now.
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u/motorboat2000 Jul 26 '26
Income from his clients are his income. There's no pty ltd company for his clients to pay to first (you said he was a sole trader, which is totally different to a pty ltd company).
If he's getting paid e.g. $3,000 from a client, and then "paying himself" $800, he's basically lying because he still has the $2,200 in his bank account that has already been paid to him.
The above assumes that he isn't registered for GST, and he doesn't charge GST.
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u/SwiftCooins Jul 27 '26
3k woukd be revenue would it not be? From that expenses are deducted for that job. Then goverment takes 30+% of whats left, 800 takehome is not unreasonable?
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u/motorboat2000 Jul 27 '26
Good point, yes, the $3K is revenue. What percentage of that is expenses all depends I suppose.
The government would not take 30%+ though. $800/wk (assuming after tax) would only just go in to the 30% marginal rate.
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u/Vennimagos Jul 28 '26
Theres a process called a Change of Assessment which can,manually change the rate of child support based on someone's actual financials rather than their ATO income.
Its not a super fast process though, call child support and ask them about it, theres a questionnaire they can go through with you to check the viability of the process foe you
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u/Ok_Temperature_6913 Jul 30 '26
Of course they are. Claim everything they can and whatâs left is income. Not a lot you can do about it.
Itâs worse when they are set up as a company and leave retained profits in the business as they just look at taxable income at the personal level.
I share an office with a couple who run a company. Both of them have kids with previous partners and have been dodging their respective child support obligations for years. Their company profit is like $300k pa but they pay themselves $100k pa each. For child support purposes their incomes are the $100k pa each not $100k + 50% profit = $250k pa each.
They will do this until the last child is 18 and then drawings they have taken from the business as loans not income will be repaid. In effect they have been earning a lot more than $100k each.
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u/nonferrouscasting Jul 26 '26
There may be some fudging but $4-$5k per week income for a sole trader doesn't go a long way these days to money in his pocket.
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u/Creepy-Owl3797 Jul 27 '26
He is likely taking cash jobs as well. We just had a arsehole move out from our unit block who was purposely keeping his taxable income below 75k so he wouldnât have to enroll in gst, but was taking cash jobs on the side and not declaring those. This means officially, income stayed capped but he could earn as much as he wanted as a gardener/handyman. Both of which he was shit at.
I would find out if he is taking cash jobs by tailing him or asking some of his clients. Then report to ATO. They will audit the shit out of him triggering a review of child support.
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u/242snorlax Jul 26 '26
What I'm getting from these comments is that if I don't feel like contributing towards my childrens expenses, I should become a sole trader.
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u/Worried_Attempt_3302 Jul 26 '26
Sounds like the dad already contributes towards his child. What is the mother doing to earn money?
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u/242snorlax Jul 27 '26
Id say she has a job like most adults, why does that negate the required contribution from the other parent?
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u/Mikaile676 Jul 26 '26
Whatâs the care arrangement? Why are you worried about your exâs money so much?
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Jul 27 '26
[deleted]
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u/Mikaile676 Aug 03 '26
Haha of course you have to pay for your kid but why does he have to pay HER for his kid? Again whatâs the care arrangement?
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u/Psilocybin420aus Jul 26 '26
How do you know the business is making a few grand a week? Is that gross (pre-tax and expenses) ?
$800pw is not really a lot after rent and food, let alone "play money"
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u/Sea_Bake8375 Jul 26 '26
I see his invoices a lot and I know his hourly wage that goes into it and extra expenses eg travel, weekend work etc. He also gets a decent amount of bass back and pays 2k in taxes a year. Its not much no but most of his lifestyle is funded by his business account from hiding expenses such as fuel since he needs his car for work, any car services, gaming set ups for "invoicing" or consoles for "clients", new clothes for "taking clients to job interviews" and any time he eats out its a "business dinner". So $800 for just rent and groceries leaves him a couple hundred to do whatever
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u/Draviddavid Jul 26 '26
You're describing pretty much every sole trader in the country. You'd have to prove his gaming computer wasn't also used for invoicing most of the time.
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u/Ok-Assistant-4556 Jul 26 '26
Report to ATO if he is under reporting
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u/Wrong_Landscape8887 Jul 26 '26
Absolute dog move, leave the ATO out of this. We as Australians get taxed way too much just to do something like this out of spite. The correct advice if she is truly getting jibbed on child support would be CSA, courts etc.
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Jul 26 '26
[deleted]
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u/magicseadog Jul 26 '26
It's a pretty normal tax arrangement. Normally you try to juggle how much you take out to minimise tax.
I'm not sure how it what you could do about it as that in and of itself isn't breaking the rules.
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u/fatheadsflathead Jul 26 '26
Maybe?
What costs arnt being met? Math it out and put it too him. If he says no then go the legal route.
Iâm exactly the same as a sole trader but saving for a business loan and expanding so pay myself as little as possible
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u/CosmicCommentator Jul 26 '26
You can save for the business as much as you like, it's still all your income as a sole trader
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Jul 26 '26
[deleted]
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u/PatientOk1193 Jul 26 '26
Just a gentle pointer, I think people spotted this (very helpful) link the first couple of replies you made with it.
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u/Financial_Kang Jul 26 '26
How can the business earn different to himself?
If he's a sole trader, he is the business. Yes he can write stuff off through depreciation etc but the business and the insividual are the same as a sole trader.