1.6.1 Australian residence - parent or non-parent carer
It is necessary for the Registrar to make a determination about whether a parent is a resident of Australia for a number of purposes relating to provisions of the CSA Act and the CSRC Act.
CSA Act section 10, section 12, section 25, section 25A
CSRC Act section 4
Income Tax Assessment Act 1936 section 6
It is necessary for the Registrar to make a determination about whether a parent is a resident of Australia in order to determine, among other things:
- whether an application for administrative assessment is properly made and able to be accepted (see 2.1.1 for more information)
- whether the appropriate income rules are being used to determine an assessment (see 2.4.4 for more information)
- whether an overseas maintenance liability can be registered (see 3.6.2 for more information), and
- whether a terminating event has occurred (see 2.10.3 for more information).
A person is a 'resident of Australia' for the purposes of the CSA Act and the CSRC Act if they are a resident of Australia for the purposes of the Income Tax Assessment Act 1936 (CSA Act section 10, CSRC Act section 4, Income Tax Assessment Act 1936 section 6).
From 1 July 2016, this includes a resident of Norfolk Island, the Territory of Cocos (Keeling) Islands or the Territory of Christmas Island.
For the purposes of the CSRC Act only, the definition of a resident of Australia does not include a person who is a resident of a reciprocating jurisdiction (CSRC Act section 4). See 1.6.3 for more information about when a person is considered to be a resident of a reciprocating jurisdiction.
The Registrar will apply the same tests as the ATO when it decides whether a person is a resident of Australia for child support purposes. These tests are summarised below. More information in relation to these tests is available on the ATO website.
The primary test is whether the person resides in Australia. Where a person has always lived in Australia and continues to live in Australia they will clearly be a resident of Australia.
Australian resident leaving Australia
Where a person who was an Australian resident leaves Australia, the Registrar will consider whether the person continues to be a resident of Australia according to:
- the ordinary meaning of 'resident', or
- the statutory domicile test, or
- the statutory superannuation test.
Non-resident entering Australia
Where a person who was not previously a resident of Australia enters Australia, the Registrar will consider whether the person has become a resident of Australia according to:
- the ordinary meaning of 'resident,' or
- the statutory 183 day test.
Ordinary meaning of 'resident'
The word 'resides' has its ordinary meaning for this test. The Macquarie Dictionary defines 'reside' as 'to dwell permanently or for a considerable time; have one's abode for a time'.
Australian resident leaving Australia
When considering whether a person has ceased to be a resident of Australia according to the ordinary meaning of the word 'resides', the Registrar will take into account the person's intention in going overseas and the length of their intended stay overseas.
A person who usually resides in Australia but is overseas on holidays continues to reside in Australia during their absence.
Where it is not clear that the person who has left Australia continues to be a resident of Australia according to ordinary concepts of residency, the statutory tests will be considered.
Non-resident entering Australia
When considering whether a person who was not previously a resident of Australia has become a resident of Australia according to the ordinary meaning of the word 'resides' the Registrar will take into account:
- the person's intention or purpose of presence in Australia and overseas. For example, a migrant who comes to Australia intending to reside here permanently is a resident from arrival. A person who has travelled to Australia for a holiday will generally not be a resident of Australia.
- the person's family and business/employment ties in Australia and overseas. For example, a person who is in Australia for employment or education purposes is more likely to be considered a resident of Australia.
- the location of the person's assets and the arrangements they have made to maintain them.
- the person's social and living arrangements in Australia and overseas. Arrangements that may indicate that a person is residing in Australia may include joining sporting or community organisations, enrolling children in school, or committing to a residential lease.
- the period the person has been physically present in Australia. In most cases a visit of less than 6 months is not a sufficient time to consider that a person is residing in Australia.
The weight given to each factor will vary according to the circumstances of the individual.
This test generally applies to Australian residents who leave Australia.
A person acquires a domicile of origin at birth. This is the domicile of their parents.
A person whose domicile is Australia will maintain their Australian domicile unless they acquire a different domicile by choice or by operation of law.
Generally, a person will have acquired a new 'domicile of choice' in a particular country if:
- they are legally present in a country, and
- they have formed an intention to remain in that country for the foreseeable future, and for a period that they regard as indefinite.
A person will generally not have acquired a new 'domicile of choice' in a country if:
- they intend to leave the country in the foreseeable future, for example on the completion of a contract of employment or other project, or
- they intend to return to their country of origin on the occurrence of some definite future event, such as retirement (even if the timing for their retirement is distant and uncertain).
However, a willingness to move to another country if better opportunities present themselves, or a hope of returning to one's homeland at some unspecified time in the future, will not defeat an intention to acquire a new domicile of choice.
Generally, for the Registrar to be satisfied that a person has acquired a new domicile of choice, the person needs to have demonstrated by their actions that they genuinely do have an intention to reside in the new country indefinitely, for example, obtaining a migration visa or citizenship in the new country.
If a person's domicile is outside Australia they will not be considered to be a resident of Australia under this test, and there is no need to consider their 'permanent place of abode', which is the second part of the test. If the person's domicile is Australia, their permanent place of abode needs to be considered.
Permanent place of abode
A permanent place of abode does not have to be 'everlasting' or 'forever'. A person who intends to return to live in Australia in the foreseeable future can still set up a 'permanent place of abode' elsewhere. If a person whose domicile is in Australia is residing elsewhere, the Registrar will take into account the following factors when deciding if that other country is their permanent place of abode:
- the intended and actual length of the person's stay in the overseas country:
As a broad rule of thumb a period of 2 years or more may be regarded by the ATO as a substantial period for the purposes of a person's stay in another country. However, the duration of a person's actual or intended stay overseas is not of itself conclusive, and must be considered in conjunction with the other factors listed.
- the person's intention to return to Australia at some definite point in time or to travel to another country:
Generally if a person has an intention of returning to Australia at the end of a 'transitory' stay overseas, they will not be considered to have established a permanent place of abode outside Australia. Whether a stay overseas is 'transitory' depends on the circumstances of the case, but as a general rule of thumb a stay of less than 2 years may be considered 'transitory'.
- whether the person has established a home outside Australia:
If a person has established his or her home in an overseas country (e.g. purchased a house or apartment to live in or entered into a long-term lease on a home), this would tend to show the place of abode in the overseas country is permanent.
- whether the person has abandoned their residence or place of abode in Australia:
If a person maintains a home in Australia that is available for them to live in while they are outside Australia, it may tend to suggest (in conjunction with other factors) that the person remains resident in Australia. If a person has sold or rented out their home in Australia it may tend to suggest that the person has established a permanent place of abode overseas.
- the duration and continuity of the person's presence in the overseas country:
If a person has no fixed or habitual place of abode overseas but moves, for example, from one country to another, this may tend to suggest that the person has not established a permanent place of abode outside Australia.
- the durability of the person's association with a particular place in Australia:
It is not necessary for a person to close all Australian bank accounts in order to establish a permanent place of abode overseas. For example, if a person closes their 'everyday use' accounts in Australia but maintains a long term investment account in Australia, it is still possible to establish, on the basis of other factors, that the person has a permanent place of abode outside Australia.
If a person's children are enrolled at and attend school in the overseas country, this may tend to suggest that the person has established a permanent place of abode overseas. However, if a person's children continue their schooling in Australia despite the presence of adequate educational facilities in the overseas country this would tend to show that the person has not established a permanent place of abode outside Australia.
The weight to be given to each factor will vary with individual circumstances of each case and no single factor will be decisive.
This test applies to current Australian Government employees.
The test states that a person is a resident of Australia if the person is:
- an eligible employee under the Superannuation Act 1976, or
- a member of the superannuation scheme established under the Superannuation Act 1990.
The test is designed to ensure that Australian Government employees working at Australian posts overseas are still Australian residents for tax purposes. If a person is a resident of Australia under this test, the person's spouse and any children under 16 years are also Australian residents for income tax purposes.
The effect of this test is that current Australian Government employees who are members of the Commonwealth Superannuation Scheme created by the Superannuation Act 1976 or the Public Sector Superannuation Scheme created by the Superannuation Act 1990 are residents of Australia.
A person working overseas and who is not a current Australian Government employee is not a resident of Australia pursuant to this test.
This test does not deem a person who is a member of the Public Sector Superannuation Accumulation Plan Scheme created by the Superannuation Act 2005 to be a resident of Australia.
183 day test
Under this test, a person who is actually present in Australia for more than half the income year (i.e. Australian financial year), whether continuously or intermittently, is a resident of Australia unless:
- the person's usual place of abode is outside Australia, and
- the person has no intention to take up residence in Australia.
Note: The phrase 'usual place of abode' does not have the same meaning as 'permanent place of abode'. The terms 'usual' and 'abode' should be given their ordinary and natural meanings.
The Macquarie Dictionary gives the following definitions:
- 'usual' means habitual or customary, and
- 'abode' means a dwelling place; a habitation.
The 183 day test must be applied to each income year separately, and for that reason it cannot be used to determine a person's residency status beyond the end of the particular income year being considered.