Examples of deprivation of income

Deprivation of income may have occurred when an applicable person in the following situations (but not limited to):

• has not ensured that they will continue to have the right to get income from assets they have transferred to a family trust or other entity
• re-arranges their financial circumstances which reduces their income or assets after having received written advice of the income contribution they are required to make
• loans significant amounts of cash interest free
• gifts significant amounts of assets in any one particular year
• transfers or gifts a property to a trust or family member
• does not seek income from their family trust
• disclaims an inheritance
• self-employed and using assessable income for business development purposes (when in excess of reasonable amounts)
• transferring shareholdings to children or other people
• has a previous income stream such as estate income or trust income that ceases
• invested in Bonus Bonds instead of an income-earning account or term deposit
• charges rent for their property to their children or other people for an amount less than the market rent rate for the property

From 1 July 2023, an applicable person who does not apply for, or decides to end, a Child Support arrangement is not considered to be depriving themselves of income. This includes Child Support paid under a formula assessment via Inland Revenue.