Hi there,
I hope to seek some advice. I’m currently going through a divorce and hope to keep the house as I believe it will be a good investment. However due to the maintenance I have to pay it looks like I’ll have to move back in with my parents and rent the house out (Expected to be neutral once rates/insurances etc come out).
One thing I’m unsure about is the how the rental income will affect maintenance payments? I don’t mind if the Child Support Agency add any profit I make at the end of the year as taxable income, though my concern is that they might add the weekly rental income into their calculations regardless of the deductions claimed against it.
Has anyone had experience in this area? Would love to hear from any single parents out there who are paying child support and have rental properties?
Thank you
Wayne
Hi Wayne,
Child support is calculated using your yearly taxable income. So if the property is positively geared you will pay more, if it’s negatively geared you will pay less.
Hi Wayne,
This is a very good question :-I don’t mind if the Child Support Agency add any profit I make at the end of the year as taxable income, though my concern is that they might add the weekly rental income into their calculations regardless of the deductions claimed against it.
Things might change from year to year, and it is not an area that I ever researched as it didn’t affect me …..
BUT…..
I have some vague recollections from years back where the way that some Govt entities calculated these things just seemed wrong, and NOT what would make sense to you and me. Something like adding Income TWICE when calculating…. whatever it was, it DIDN’T benefit you. It is good that you are questioning this, as you wouldn’t be able to GUESS what should be, and you really need to KNOW before making your plans.
I hope one of our learned colleagues can add a bit more for you. Or go straight to the Govt entity and have them tell you how it will be,
Benny
When you have an investment property Centerlink counts the rent but doesn’t take into account the outgoings.
Not sure about Child Support.
Common sense would be based on your taxable income but who knows. Then again if you are claiming depreciation etc your taxable income would be a lot lower than it actually is so not fair either.
Best to get info from the source.
Hi Guys,
Thanks for the response. I plan to meet with CSA next week to get a better understanding. Will let you know how I go:)
Rgds
Wayne
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