Income contributions in bankruptcy

Fringe benefits from a spouse

Each year in bankruptcy, a bankrupt's income is assessed to determine if part of that income should be contributed to their bankrupt estate for the benefit of its creditors. As readers would be aware from previous articles and our income contributions factsheet, it's the bankruptcy trustee's role to assess a bankrupt's income both actual for the past 12 months and expected for the next 12 months.

That assessment, usually conducted annually, involves writing to the bankrupt asking them to complete a questionnaire regarding their income. The bankrupt completes a questionnaire, returns it to the bankruptcy trustee along with evidence of their income, and the trustee completes the assessment. The bankruptcy trustee includes all sources of income, including benefits from third parties. For income contribution liability purposes, the Bankruptcy Act 1966 refers to certain provisions of the Fringe Benefits Tax Assessment Act 1986 to include