Child support payments for employees / contractors

Child Support payments may be made various ways, commonly through payroll. If an employer is asked to make payments to the Child Support Agency (via the Department of Human Services) on behalf of an employee, then the employer is legally obliged to deduct payments from the employee’s wages. This may also apply to subcontractors.

DHS has two types of payments according to the status of the employee:

1.   Section 72A Notice is based on a given cents per $ rate, & there is no protected earnings amount. This is typically used for casual, contract or seasonal workers. The amount is deducted from the GROSS wage & then the wage is taxed.

2.   Payment Schedule which is a specific amount to be paid per pay period as notified by DHS. This amount does not change unless notified by DHS. The payment is deducted from the NET wage. Used for permanent or regular casual employees whose income tends to vary little or not at all.

The employer must take care of the protected earnings amount, currently set at $333.53 per week. Generally with this method the amount instructed by DHS will preserve the protected earnings amount, however if the worker’s earnings varies for any reason it is up to the employer to preserve this amount.

Section 72A Payroll Setup

 

1.   Set up a new wage category in the Deductions section, called Child Support Payments. Set up a liability account for the CSA payments.

                            i.       Setup the deduction as a percentage rate & exempt the category from PAYG Withholding.

                          ii.       Link the category to the relevant employee

                         iii.       Select “show on pay slip”

                         iv.       Exclude from Superannuation Guarantee calculation.

2.   Set up a liability account for the CSA payments

3.   Link the expense account (deduction category wages expense) to the liability account.

4.   Process the payroll.

5.   Either set up an automatic payment from the business bank account to Child Support Agency or process with other electronic payments

 

 

Payment Schedule Payroll Setup

1.   Set up a new wage category in the Deductions section, called Child Support Payments.Set up a liability account for the CSA payments.

                            i.  Setup the category as a fixed dollar amount per pay period as notified by DHS.

                          ii.   Link the category to the relevant employee

                         iii.   Select “show on pay slip”

                         iv.   Exclude from Superannuation Guarantee calculation.

2.   Set up a liability account for the CSA payments

3.   Link the expense account (deduction category wages expense) to the liability account.

4.   If you need to set up Protected Earnings:

5.   Process the payroll.

                            i.    Set up a Wages Category called CSA Protected Earnings

                          ii.    Create the category as a fixed amount set at the current Protected Earnings amount of $333.53

                         iii.    In the standard pay details, adjust the wage amount to reflect the total less the protected Earnings amount

6.    Link the category to the relevant employee

7.   Check that entitlements & superannuation are accruing correctly. 

8.   Process the payroll

9.   Either set up an automatic payment from the business bank account to Child Support Agency or process with other electronic payments.

End-of-year Payment Summary
Child Support deduction is to be detailed on the payment summary in the deduction fields. Within the payment summary setup, link the child support deduction wage category to one of the Deductions fields, listing Child Support Agency in the Description field, so it will appear separately on the Payment Summary.

Busting the myths in the workplace

When starting their first job or changing jobs, it is important that employees understand their rights and obligations. Employers have a responsibility to ensure employment terms, contracts and other employment related rights and obligations are acknowledged.

 

Employers may face penalties for breaching an employee's rights. Therefore it is important that employers keep themselves aware of any changes made to employment law.

 

Some of the myths the Fair Work Ombudsman has dispelled include the following:

 

Myth	Fact
You don't need to pay employees for time spent opening/closing a store or attending training outside normal work hours.	You must pay employees for all the time they are required to work.
Casual employees don't get leave.	Casual employees are entitled to some unpaid leave.
You don't have to give employees pay slips.	You must give all employees pay slips within 1 working day of pay-day.
As an employer you have to give employees three warnings before firing them.	There is no legal requirement that says you have to give three warnings.

 
To find out more about employee rights and obligations, click here.

To find out more about other workplace myths and facts, click here.

Keeping in Touch while on Parental Leave Pay

In addition to taking PPL, an employee has the option to remain in contact with their workplace under the Keeping in Touch provisions.

Keeping in Touch is an arrangement between an employer and employee that allows an employee to remain connected to their workplace, assists in the transition back to work and has no effect on the PPL payments.

Once an arrangement is in place, the employee has access of up to 10 Keeping in Touch days that can be used during the start and end of their PPL period. However, there are some restrictions which apply when choosing to use one of the days, which include:

• An employee cannot use a day within the first two weeks following birth or adoption of their child;
• An employer cannot ask an employee to use a day within their first six weeks of birth or adoption;
• Both the employer and employee must agree in unison to do a Keeping in Touch activity on the chosen day, otherwise it will not proceed;
• An activity only counts towards an employee’s 10 day limit if the duration is one hour or more on the day that it is taken; and
• An employee using more than the 10 day limit will result in their PPL to end and be considered to have returned back to the workplace.

An important note to consider is that there is a distinction made between paid work and a Keeping in Touch activity. If an employee participates in paid work during their PPL other than a Keeping in Touch activity, their PPL will cease immediately.

For more information on Keeping in Touch provisions, including related activities click here.

ASIC - National Business Names Register

As of 28 May 2012, ASIC took over the administration of the business names register from the states and territories and has created a new online business names register.

 

To ease the transition, ASIC has released a guide in form of a printable booklet to assist businesses in navigating the online business register.

The booklet addresses the advantages of the new online business register, such as:

• Time savings - one central location to renew, register, update and search for business names;
• Lower compliances costs;
• A lower annual registration fee of $33 or $76 for 3 years;
• Single registration with nation-wide effect; and
• Free online searches for name availability, registration details and business ownership.

To have access to the business register, you will need to sign up to ASIC Connect. Once registered you can link all your business names you have registered using your ASIC key to your ASIC account.

An ASIC key is a unique 11 digit number that is used for verification for each business name you have registered.

The booklet also goes through further points, which include:

• How to register for a business name;
• How to renew a business name;
• How to transfer a business name; and
• How to use the search function

To access the National Business Names register guide, click here.