Many FIFO workers earn an income in overseas jurisdictions. So what does this mean for your child support assessment?
When your income is obtained overseas, if you are deemed to be a resident of Australia, your income will remain subject to assessment by the child support agency.
Furthermore, Australia has reciprocal child support arrangements with a number of countries. This means your income may still be subject to assessment from the child support agency, even where that income is not derived in Australia and you are not considered a resident of Australia.
This article will focus on the situation where one parent lives overseas in a reciprocal jurisdiction and the other party lives in Australia with the child of the relationship.
Am I an Australian resident?
Of course, if you are an Australian resident and meet the other requirements for collection of child support you will be required to pay child support.
This becomes less clear in circumstances where, for example, you work overseas for significant or frequent periods of time or where you spend significant periods of time overseas for other reasons. In those circumstances, are you considered an Australian resident?
The test under the relevant child support legislation mirrors that in Australia’s taxation legislation. What this means is that if you are considered an Australian resident for tax purposes, the Department of Human Services (DHS) will consider you to be an Australian resident for child support purposes also.
The main test used to determine whether you are an Australian resident is whether you reside in Australia. If you have always been a resident of Australia and continue to live in Australia, you will clearly be considered an Australian resident.
This becomes more difficult where an Australian resident leaves Australia or where a non-resident enters Australia.
You will be considered a resident if you fit the definition, namely that you “dwell permanently or for a considerable time” (Macquarie dictionary definition).
Whilst it will always depend on your particular circumstances, here are a few tips to determine whether Australia is your principal place of residence.
You may not be considered an Australian resident if:
- You have moved to a country other than Australia and formed an intention to remain in that country for the foreseeable future, and for a period that you regard as indefinite.
- You have obtained a migration visa or citizenship in a country other than Australia.
- You have sold/abandoned all property in Australia and bought property overseas.
You may be considered an Australian resident if:
- You have moved overseas but intend to return to Australia upon completion of a contract of short term employment or other project.
- You usually reside in Australia but are overseas on holidays.
- You are an eligible employee under the Superannuation Act 1976.
- You are present in Australia for more than half of the year (183 days).
You should speak to us regarding your particular circumstances to receive better clarity as to whether you would be considered an Australian resident.
What if I am deemed an Australian resident?
If DHS determines that you are an Australian resident under the child support legislation and you fulfill the other requirements stipulated by the legislation, you will be liable for child support. Any income earnt overseas will be considered by DHS as assessable income.
What if I am deemed to be a resident of a reciprocal jurisdiction?
The countries outlined in Annexure A are countries of reciprocal jurisdiction. What this means is that if you reside in one of the countries outlined in Annexure A, you may be liable to pay child support, despite not living in Australia.
You will be considered to be a resident of a reciprocating jurisdiction if you are “habitually resident in the reciprocating jurisdiction”. So what does that mean? Well, if you have lived in the country permanently for a period of time, you will be considered a resident of a reciprocating jurisdiction.
Similarly, if you intend to be a resident permanently and have taken steps to establish this, you will likely be considered a resident.
Where you have just moved and your intentions as to whether the move will be permanent are unknown or unclear, your situation will require further consideration by the Registrar. The Registrar will consider factors such as:
- the reason for the person’s presence in the country
- the actual and intended length of the person’s stay
- the person’s family and business/employment ties in the reciprocating jurisdiction and any other country
- the person’s social and living arrangements in the reciprocating jurisdiction and any other country.
So, I’m a resident of a reciprocal jurisdiction. Can an assessment be made that I pay child support?
An application brought by a parent who is an Australian resident can be made for the other parent who resides in a reciprocal jurisdiction to pay child support. Under the child support legislation, a Registrar has the power to make such a decision.
We note however that limited reciprocating jurisdictions require a court order, not just an assessment from DHS, that child support is payable. This is relevant if the payer resides in Brunei Darussalam, Cook Islands, Israel, Niue, Papua New Guinea, the Yukon Territory of Canada and Samoa.
Child Support Examples:
James is a FIFO worker working a 7/7 roster. His work is based in the Philippines. Accordingly, he spends approximately 26 weeks in the Philippines each year and 26 weeks at home in Brisbane, Queensland. Although his income is earnt overseas, his home is in Brisbane and he spends approximately 183 days in Australia each year. James would be considered an Australian resident for the purposes of calculating child support and his income earnt in the Philippines would be considered assessable income.
Emily lives in Fiji and has lived in Fiji for the last five years. Michael lives with their son, Sam, in Brisbane, Queensland. Emily has expressed a desire to reside in Fiji for the foreseeable future, has purchased property in Fiji and is employed full-time. Emily would likely be considered a resident of a reciprocal jurisdiction and her income would be considered when assessing what child support she is required to pay to Michael to maintain Sam.
Scott is a FIFO worker and works two weeks on 1 week off in Papua New Guinea. Scott has a home in Brisbane, Queensland but often spends his week off relaxing in Bali. Although Scott generally spends less than 183 days in Australia, he considers Australia his home and is assessed for tax purposes as an Australian resident. His income obtained in Papua New Guinea will be considered when assessing any child support payable for his two children in Australia. We note based on legislation in Papua New Guinea a court order in respect of child support may be required.
Jessica is required to travel for work and spends 4 to 5 months of the year travelling to Europe for research and conferences. Jessica’s son Thomas lives with her ex-husband Ben. Jessica is considered a resident of Australia for tax purposes and is paid superannuation into an Australian super fund by her current employer. Accordingly, the child support agency would consider her an Australian resident.
- Bosnia and Herzegovina
- Brunei Darussalam*
- Burkina Faso
- Canada, the following Provinces and Territories: Alberta, British Columbia, Manitoba, New Brunswick, Newfoundland and Labrador, Northwest Territories, Nova Scotia, Nunavut, Ontario, Prince Edward Island, Saskatchewan, Yukon*
- Cape Verde
- Central African Republic
- Cook Islands*
- Czech Republic
- Holy See, The
- Hong Kong
- Macedonia, Republic of North
- New Zealand
- Papua New Guinea*
- Sierra Leone
- South Africa
- Sri Lanka
- Tanzania (excluding Zanzibar)
- Trinidad and Tobago
- United Kingdom (including Alderney, Gibraltar, Guernsey, Isle of Man, Jersey and Sark)
- United States of America
*These are excluded jurisdictions for the purposes of making or continuing a child support assessment where the payee is in Australia but the payer resides in that jurisdiction. A court order is still required.