Reason 8A
A parent may apply for a change to a child support assessment because of Reason 8A and the financial capacity of the other parent. In particular, Reason 8A may apply when a parent has income, property or financial resources that allow them to better support a child than indicated by taxable income.
Reason 8A is often raised where a parent appears to have a modest income but has access to assets, business benefits, retained profits, or other resources that point to a greater financial capacity.
Definition
There may be a reason for changing the assessment if, in the special circumstances of the case, the assessment of child support results in an unjust and inequitable level of financial support to be provided for the child because of either parent’s income, property and financial resources.
Definition source: Guides to Social Policy Law, Child Support Guide, Version 4.97, released 20 March 2026, 5.2.8 Reason 8A – a parent’s income, property & financial resources.
Role in the formula
The child support formula is based on each parent’s adjusted taxable income (ATI). Reason 8A allows that figure to be replaced where it does not reflect the parent’s true financial capacity.
If established, the decision-maker sets an ATI for the parent for the relevant year. This figure is not limited to reported income and can reflect a broader view of the parent’s financial position.
The ATI set under Reason 8A may be based on income, assets, business structures, retained earnings, or financial resources, and can be applied across multiple years. It is commonly projected forward with indexed growth for future periods covered by the decision.
What Reason 8A commonly covers
Reason 8A applies where a parent’s financial capacity is not properly reflected in their taxable income. Common situations include:
- Significant assets but low reported income
- Income retained in a company, trust, or partnership
- Undistributed profits or retained earnings
- Business benefits covering personal expenses
- Salary packaging or non-taxable benefits
- Lump sum payments such as inheritances or compensation
- Income diverted to related parties or structures
- Deductions or losses that reduce taxable income but not real capacity
Business structures and financial capacity
Where a parent operates through a business or structure, the assessment is not limited to the profit shown in accounts. The Registrar can examine how the structure operates and what it provides to the parent.
The focus is on control, access to funds, and the ability to draw support from the structure. The business can be considered as a whole rather than relying only on the final profit figure.
Reason 8A is the most commonly used
In the 2008–09 Change of Assessment figures published by the Child Support Agency, Reason 8A (income, property and financial resources) accounted for 30% of accepted reasons, making it the largest single category.
By comparison, Reason 8B (earning capacity) accounted for around 24%, and Reason 3 (costs of educating or training a child) accounted for about 11%.
Difference between 8A and 8B
Change of Assessment Reason 8, consisting of Reasons 8A and 8B, is broadly concerned with a parent’s true financial capacity. A successful application under Reason 8 will usually result in the parent’s income being increased for child support purposes.
The key difference between 8A and 8B is what is being assessed. Reason 8A looks at existing financial resources.
Reason 8B is concerned with unrealised earning capacity. It applies where a parent could be earning more than they currently do, based on their qualifications, skills, work history, and available opportunities.