Change of Assessment Reason 8: Income, Earning Capacity and Resources
Reason 8 is the Change of Assessment ground used when the standard child support formula does not properly reflect a parent's income, earning capacity, property or financial resources. It is the ground parents usually look at for underemployment, hidden income, business structures, assets, trusts or lifestyle evidence.
Reason 8 in Plain English
The child support formula starts with adjusted taxable income. Reason 8 exists because taxable income is sometimes an incomplete picture. A parent may be capable of earning more, may control business income, may hold assets that reduce their living costs, or may have access to resources that are not obvious from a tax return.
Official source: the Child Support Guide separates Reason 8 into Reason 8A for income, property and financial resources and Reason 8B for earning capacity.
Common Reason 8 Scenarios
- A parent leaves a higher-paid job or reduces hours after separation.
- A self-employed parent declares low taxable income while the business funds personal costs.
- A company director takes a low wage while retaining profits in a company.
- A parent appears to work for cash or under-report income.
- A parent owns property, shares, trust interests or other resources not reflected in taxable income.
- A parent has qualifications and work history that suggest a higher earning capacity than current income.
Evidence Checklist
| Issue | Evidence to consider |
|---|---|
| Earning capacity | Prior tax returns, qualifications, work history, job ads, salary benchmarks. |
| Business income | Business tax returns, profit and loss statements, BAS, financial statements, director drawings. |
| Property or assets | Property searches, rental statements, mortgage information, ASIC searches, trust records. |
| Lifestyle mismatch | Bank records, vehicle records, travel evidence, school fee records, visible spending patterns. |
| Cash or hidden income | Invoices, messages, business records, industry benchmarks, evidence of regular work. |
What Services Australia Usually Tests
- Is the current assessment based on an incomplete or misleading financial picture?
- Is there documentary evidence, not just suspicion?
- Is the parent lower income explained by health, caring responsibilities, job loss or genuine business conditions?
- Would a departure be just and equitable for both parents and the child?
- What figure should replace or adjust the income used in the formula?
Reason 8 Is Not a Shortcut
A Reason 8 application is strongest when the evidence is specific. A claim that the other parent "must be earning more" is weak by itself. A file with prior income, current qualifications, available jobs, business documents and spending evidence is much stronger.
Reason 8 is only about income, earning capacity, property and financial resources. If your issue is travel costs, special needs, school costs, childcare, necessary expenses, another dependant or a resident child, use the broader guide to all 10 Change of Assessment reasons and evidence examples.
If you are still deciding whether to apply, what happens next, how long it may take, or how objections work, start with the Change of Assessment process guide.
Frequently Asked Questions
What is Reason 8 for child support Change of Assessment?
Reason 8 is used where a child support assessment does not properly reflect a parent's income, earning capacity, property or financial resources. It can apply to underemployment, hidden income, business structures, assets or financial resources.
What evidence helps a Reason 8 application?
Useful evidence can include tax returns, business financials, bank records, property records, ASIC searches, job advertisements, salary benchmarks, prior income history and documents showing lifestyle spending inconsistent with declared income.
Can either parent use Reason 8?
Yes. Either parent can raise Reason 8 if they say the standard assessment does not properly reflect the other parent's income, earning capacity, property or financial resources.