Estimating your income for child support
Your assessment normally uses last financial year's income. If your circumstances have changed — redundancy, reduced hours, a business downturn — you can ask for the assessment to use an estimate of your current income instead. It's the fastest way to correct an assessment that no longer matches reality, and the easiest way to create a debt if you get it wrong.
The 15% threshold
You can only lodge an estimate if your expected adjusted taxable income for the current period is at least 15% lower than the income currently being used in your assessment. A modest drop doesn't qualify. The estimate applies from the date you lodge it, not from the date your income actually fell — so lodging promptly matters.
What has to be included
An estimate covers the same components as adjusted taxable income, not just your salary: taxable income, reportable fringe benefits, reportable superannuation contributions, net investment losses, target foreign income and tax-free pensions or benefits. Estimating only your wage and forgetting the rest is the most common cause of a reconciliation shortfall.
Reconciliation is automatic
At the end of the financial year, Services Australia compares your estimate with your actual income from your tax return. If you underestimated, the assessment is recalculated using the real figure and the difference becomes a debt — payable in full, sometimes covering many months at once. A penalty can also apply where the estimate was substantially too low without reasonable excuse.
If you overestimated, the assessment is recalculated the other way and the overpayment is generally credited against future liability rather than refunded as cash.
Updating an estimate mid-year
If your circumstances change again — you find work, or your income drops further — you can and should update the estimate. Leaving a stale estimate in place until reconciliation is what turns a manageable adjustment into a lump-sum debt.
When an estimate isn't the right tool
| Situation | Better option |
|---|---|
| Income drop under 15% | Wait for the next assessment period |
| Other parent's income is understated | Change of assessment, reason 8 |
| You have unusual one-off expenses | Change of assessment, reasons 1–7 |
| Both parents agree on a different amount | Limited or binding agreement |
Estimates fix one specific problem: your own income has genuinely fallen. They are not a way to argue about fairness, and they are not a negotiating tool — the reconciliation at year end is unforgiving.
Estimate your child support →This is general information about how the child support system works, not legal or financial advice. For advice about your own circumstances, speak to Services Australia or a family lawyer.